Here’s a wide-ranging interview from Power Engineering in which I discuss the “scissors economy,” Ben Stein’s lust for poultry, the utility sector, and my mother’s wit!
Let us count the things that Todd Buchholz hasn’t done. It’ll be a much shorter list. Hedge fund manager. White House economic guru. Author. Television talking head. Entrepreneur and philosopher. Humorist.
Buchholz will bring evidence of all those labels and more when it strikes to the stage as POWER-GEN International’s final keynote speaker next week in Orlando. The mind behind such books as “New Ideas from Dead Economists” and “Lasting Lessons from the Corner Office” will offer macro-world insights on the fiscal reality as he sees it and how it ties into the micro-vision of the power generation industry.
He replied to Power Engineering queries about his childhood, what he learned from the Oval Office, why schools have failed many of our children and why the “scissors economy” has changed the way the grid used to be.
What sparked your wit early on and why does it serve so well now?
“I grew up watching and listening to talk shows. When my first book New Ideas from Dead Economists came out, William F. Buckley, Jr. asked me to appear on his show Firing Line. He was known as a brilliant wit and a profound thinker on policy. My mother has a great wit and growing up in her house was like living in an episode of I Love Lucy. Her malapropisms are priceless. She still refers to cayenne pepper as “canine pepper.” (We have to cover the dog’s ears when she’s around.).
“She recently told us about an alcoholic neighbor. But instead of telling us that he went into detox, she said that he had to go into “de-caf.” I’m not sure if he ended up at a facility or at Starbucks. Of course, these days it’s hard to joke about anything on stage without worrying about triggers and sensitivities.”
You went from financial hedge fund manager to the White House as director of economic policy for the first Bush Administration. So much went right during that presidency (fall of the Iron Curtain, victory in the first Persian Gulf War) but he supposedly lost because it was the “economy, stupid.” How would you classify your economic philosophy then and now?
“When I served in that White House I gave the inaugural lecture at the White House library. My speech was called “Clarity, Honesty, and Modesty in Economics.” Economists need to be modest about what they know. I believe that free markets promote prosperity, but I also understand that the free market is not a pain-free market. When new companies, new products, and new trading partners come around, some people do get hurt. In 2016, candidate Trump drew upon this discontent.”
One of your books is “The Price of Prosperity: Why Rich Nations Fell and How to Renew them.” Technologically speaking, is America in a time of renewal or desperately needing one?
“The problem is not our technology. The problem is our education system that does not equip enough of our kids to handle an advanced economy. That’s why I have jumped into math education for kids. My software company, Sproglit, released iPad apps that build number sense for children. University researchers show that the apps, Kyle Counts and Kira Counting, raise test scores. For the holiday season, the price on the AppStore is absolutely ZERO! Please tell parents and teachers to download the free apps and order the Math Arrow poster from Amazon. Their kids and country will thank them!”
All electric power, like politics, is local. Traditionally, most people don’t care how they get power in their home as long as it was reliable and cheap. So why is the grid changing so much?
“In a book I wrote in 1999 called Market Shock, I coined the term “scissors economy.” Middlemen (and middlewomen) have been snipped out of many transactions. We’ve seen thousands of travel agents and stock brokers close up shop, along with retailers like K-Mart and Sears. Along the grid, cities are buying power directly for their residents, companies like Alphabet (Google) are walking right past the utilities to buy their own electricity, and homeowners are laying solar panels to flood the grid. Not every middleman gets snipped out, of course. But in this hyper-competitive economy, the burden of proof is on the middleman to show that he or she deserves a piece of the action, a slice of the profits.”
Speaking of television sparring partners, who was your favorite?
“After debating in front of a huge audience in New Orleans, James Carville and I went together to a wonderful dinner in New Orleans. It was his home turf, and I enjoyed the shrimp etouffee, as well as his tales of Cajun lore and New Orleans history. Earlier that day Ben Stein and I visited the World War II museum, which was powerful. Afterwards, Ben insisted on taking me to Popeye’s Chicken, which wasn’t nearly as good as the meal James and I enjoyed in the French Quarter!”
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