Episode 92 · 2021-07-30 · 48:55 · Original in Finnish
A Wild Year in the Business Desk | Alex af Heurlin | Negotiator 92
Originally published as “Taloustoimituksen hullu vuosi | Alex af Heurlin | Neuvottelija 92”
Alex af Heurlin, a journalist at Helsingin Sanomat's HS Visio, describes what it is like to write about investing in a year when SPACs, the IPO boom, modern monetary theory and the EU's pandemic stimulus were all in the headlines at once. The episode is a conversation between two market watchers in which the journalist criticises Finland's first SPAC bluntly — why would you want to buy a pig in a poke — and in which two readings of MMT are set against each other: for af Heurlin a creditable description of what is already happening, for the host an accurate description of the system but branded from the left, with the addition that MMT does not work in the euro area at all because its mechanisms require your own currency and your own taxation. The discussion turns to Finns' weak financial wealth, a tax rate near the OECD top, and the zero-sum culture described by Juha Hurme.
Core theses
- MMT's mechanisms require a sovereign currency and sovereign taxation, so the euro area argument about it is conducted on a premise that does not hold there.
- A SPAC asks investors to fund a purchase that has not been identified, and the blunt objection to it is the correct one.
- Finland's tax rate is near the OECD top while its household financial wealth is nearer Eastern Europe's — the pairing is the episode's most uncomfortable fact.
- Both participants agree technology has to be in a long-horizon portfolio and disagree about how to get it, which is the honest shape of that argument.
Watch and listen
Key moments
- 00:00 — The highlights of the episode
- 01:00 — The guest is Alex af Heurlin, a journalist at HS Visio
- 03:36 — HS Visio's salmon-pink model, the Financial Times
- 05:01 — The interesting content comes from outside the mainstream media
- 07:42 — The IPO boom, and Finland's first SPAC
- 09:53 — Hundreds of American SPACs, and the flood of private equity money
- 11:16 — Lauri Holappa and modern monetary theory
- 13:47 — Central bank socialism, and MMT's branding from the left
- 15:35 — MMT works only in your own currency, not in the euro
- 17:01 — The EU's pandemic recovery package as a federal precedent
- 19:13 — Can the ECB monetise 750 billion of joint debt
- 21:39 — Game theory: everyone borrows, and someone is left holding the card
- 23:03 — Why federal development is not debated
- 24:21 — Tax populism: the Finns Party as supporters of federalism
- 25:31 — Finland's tax rate near the OECD top, its wealth near Eastern Europe's
- 27:52 — Juha Hurme's Niemi, and the zero-sum culture
- 29:49 — Equity savings accounts, and social security in account form
- 32:46 — Roger Wessman's criticism: can everyone grow wealthy
- 35:45 — Ernst Grönblom, and the few winning stocks
- 37:52 — Index or stock picking, and Alex's own portfolio
- 39:18 — Technology as a compulsory part of a long-term portfolio
- 42:35 — The power of the tech giants: Apple in semiconductors
- 44:49 — Apple's car, or virtual glasses next
- 48:26 — Thanks and closing words
Summary
Alex af Heurlin, a journalist at Helsingin Sanomat’s HS Visio, describes what it is like to write about investing in a year when SPACs, the IPO boom, modern monetary theory and the EU’s pandemic stimulus were all in the headlines at once. The episode is a conversation between two market watchers in which the journalist criticises Finland’s first SPAC bluntly — why would you want to buy a pig in a poke — and in which two readings of MMT are set against each other: for af Heurlin a creditable description of what is already happening, for the host an accurate description of the system but branded from the left, with the addition that MMT does not work in the euro area at all because its mechanisms require your own currency and your own taxation. The discussion turns to Finns’ weak financial wealth, a tax rate near the OECD top, and the zero-sum culture described by Juha Hurme.
The premise that does not hold here
The most useful correction in the episode is narrow. Modern monetary theory’s mechanisms assume a state that issues its own currency and levies its own taxes. A euro area member has neither, so the Finnish argument about MMT is being conducted about a country that does not exist — whatever one thinks of the theory itself.
A pig in a poke
A SPAC raises money first and identifies the acquisition afterwards. The journalist’s blunt objection is not unsophisticated; it is the structure stated plainly, and the burden is on the sponsor to explain why that is a good trade for the investor.
Top of one table, bottom of another
Near the OECD top in tax rate and near Eastern Europe in household financial wealth. The two facts are not the same claim and putting them side by side is what makes the pairing awkward — the episode raises it and does not resolve it.
Watch
The recording lives on the Neuvottelija channel: Taloustoimituksen hullu vuosi | Alex af Heurlin | Neuvottelija 92. A Finnish edition of this episode is published at www.neuvottelija.fi.
In depth
The Neuvottelija AI editions carry a long-form write-up of this episode: English · suomeksi.
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People and topics
Guests: Alex af Heurlin