Ep 11. Adam Ruins The Economy

Adam Ruins Everything is a television show that follows comedian Adam Conover as he delves into commonly held beliefs and misconceptions about various topics, exposing the truth behind them. In season 3 episode 11, titled Adam Ruins The Economy, Adam takes a deep dive into the world of finance, economics, and the American economy, to uncover the truth about some widely-held beliefs about money and investment.

Throughout the episode, Adam challenges common stereotypes and financial myths that many people have about the stock market and economy. He goes on to explain why concepts like trickle-down economics, the gold standard, and the idea that all stocks will eventually go up are flawed and often lead people astray when making decisions about their finances.

One of the first things Adam tackles in the episode is the idea that there is always a buyer for a seller, and vice versa. When it comes to the stock market, there isn't always a willing buyer or seller for every trade. This can lead to market crashes or bubbles, as people start panic-selling or buying into hype that doesn't reflect actual value. Adam explains how this happened during the Dotcom bubble at the turn of the 21st century, and how it could happen again if people don't pay attention to market signals.

Another topic addressed in the episode is the stock market's "invisible hand" - the idea that all investors acting to maximize their own profits will, in aggregate, create a healthy and efficient market. Adam points out that this hasn't always been the case - before the Securities and Exchange Commission (SEC) was established in 1934, insider trading was rampant and caused major market crashes. In fact, Adam explains, insider trading is still a concern today, with corporate executives and lawmakers often benefitting from insider knowledge.

Adam also tackles the belief in the gold standard, and how it doesn't really hold up under scrutiny. He explains how the value of gold is largely arbitrary, and how economies can easily become locked into deflationary spirals if they are tied too closely to the precious metal. He also debunks the idea that printing more money will always lead to inflation, pointing out that there are many factors that impact inflation rates, and that most modern economies have mechanisms in place to control inflation.

One of the central themes of the episode is the role of banks in the economy, and the idea that they don't always act in customers' best interests. Adam explains how banks make money off of fees and interest, and how they often incentivize certain behaviors, like overspending or taking out loans with high interest rates, in order to turn a profit. He also talks about how central banks, like the Federal Reserve in the US, manipulate interest rates to try and stabilize the economy, and how this can have far-reaching effects on people's lives.

Towards the end of the episode, Adam explores the concept of "systemic risk" - the idea that certain events in the economy can have ripple effects that impact everyone. He gives the example of the 2008 financial crisis, which started with risky lending practices by banks and mortgage lenders, and spread throughout the global economy, causing widespread job loss and economic instability. Adam argues that it's important to regulate the financial sector, so that it doesn't put everyone's finances at risk through irresponsible practices.

Overall, Adam Ruins The Economy is a fascinating and eye-opening look at the world of finance and economics. With engaging animations, expert interviews, and Adam's signature wit and humor, this episode is sure to leave viewers with a new perspective on money, investing, and the role of banks and governments in the economy.