Roosevelt Institute – Podcast Bonus Episode: Senator Elizabeth Warren on Cryptos Cold, Dark Winter

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Michael Tomasky: I’m Michael Tomasky, editor of The New Republic.

Felicia Wong: I’m Felicia Wong, president and CEO of the Roosevelt Institute.

Michael Tomasky: And here’s How to Save a Country, our podcast about the ideas and people contributing to a new political vision and a new economic vision for the United States. We connect economy, democracy and freedom.

Felicia Wong: Because progressives need a common goal and a common strategy if we as Americans are all going to win. That’s what I think.

Michael Tomasky: I’m with you there. I’m into this.

Felicia Wong: So Michael,

Michael Tomasky: Yes.

Felicia Wong: You’ve probably, I know this is your favorite topic, Michael, but you’ve probably heard a lot of crypto news lately. And none of the news we’ve heard lately has been good. I think in crypto lingo like this, big crashes, lots of scandals, these are times we could call a crypto winter.

Michael Tomasky: And a very cold and icy one at that.

Felicia Wong: Yeah, the cryptocurrency bomb cyclone.

Michael Tomasky: Yes, there it is.

This is where we are right now. Anyway, we thought for today’s bonus episode we’d share a little bit of our conversation with Senator Elizabeth Warren.

Michael Tomasky: She’s been, as you’d expect, pretty hard on crypto from the start, hasn’t she?

Felicia Wong: Oh yes. I wouldn’t expect Elizabeth Warren to be a lover of some mysterious financial tool out there, in fact, she’s been pretty skeptical from the very beginning. And it will be interesting to see over the next couple of months if more people, if more members of Congress come around to his way of thinking.

Michael Tomasky: Let’s play the clip.

Felicia Wong [clip]: Ok, Senator, you have long been skeptical of cryptocurrency. You are one of the first people to be skeptical, partly because crypto is an unregulated market and you still believe that markets need regulation to protect consumers.

And you also worried about the climate harms of crypto. So now we see the implosion, the explosion, I don’t know, but this explosion of FTX. And so, with that making the news, do you think your view of crypto will be more widely shared in the future?

Senator Warren [clip]: I think more and more people understand that everything we’ve seen around crypto is just smoke and mirrors. And what always bothers me when something new like this happens, there’s no regulation, there’s no transparency. So it turns out people thought the trade worked one way, but the insider who understands how to pull the strings actually empties people’s accounts, uses the money for all sorts of outrageously evil purposes and leaves customers completely in the dark. and unprotected.

It’s pretty clear to me that we need a lot more transparency in this system, that we need a lot better consumer regulation, that we need enforcers, a cop on the spot who’s ready to go out and enforce some rules around crypto. And then I have to keep bringing this one up every time, all the others are about the economy, but we have to keep looking at the issue of crypto mining and the climate implications of that. Cryptocurrency mining sucks more energy than entire nations. And the consequence of that is that here we’re trying to push through, you know, climate bills in Washington that will reduce our carbon emissions. And just as we’re working to get everyone moving to clean cars, for example, electric cars, we have the crypto out there that’s turning on more old, outdated power plants because they’re sucking all that energy out. That does not make any sense. For no productive activity except for playing crypto game. So we have a lot of work to do in this area and I think the last crash shows us that we are running out of time to do it.

Felicia Wong [clip]: Yeah. Keep telling this story.

Michael Tomasky: So Felicia, first of all, is telling people how crypto mining uses more energy than entire nations. This kind of stuff is beyond me because they aren’t, it doesn’t actually involve the physical production of anything, and yet it uses all that energy. Explain?

Felicia Wong: Yes. Well, I’m really glad the senator brought that up because the climate implications are so often overlooked in our conversation about crypto and cryptocurrency. But it’s just remarkable, you know, last fall, August 2022, the White House estimated that total global energy consumption for all crypto assets was greater than many individual countries, senator was right. Big countries, countries like Argentina, countries like Australia. It’s just unbelievable that basically it’s sets of computers using so much power, trying to verify the ledgers that cryptocurrencies like bitcoin are based on, so that’s what it is. They are basically computers that suck and consume so much power.

And then as they heat up, as you know, very large computers, servers, etc., do you have to establish cooling systems for those computers. So yeah, Michael Bitcoin doesn’t really make a coin, but he certainly uses a lot of energy for, frankly, very little political or social purpose as far as I can see any good social purpose.

Michael Tomasky: It’s, yeah, it’s, it’s mind-blowing. It’s just wild stuff. I’m not going to sit here and pretend I’m an expert on this. But obviously he really, really wants regulation. Senator Warren said it, Senator Sherrod Brown said it too. I don’t know, obviously with the Republicans running the House, nothing like this is going to happen in the near future. But I, you know, this is one of those cases where even with the Democrats running the place, and let’s assume for the moment that they do, in January 2025, it seems to me there’s still a lot of Democrats who would like to disagree with Elizabeth Warren and Sherrod Brown on something like this. It’s like the Democrats as a whole aren’t really there, is it?

Felicia Wong: There is this very big debate. Should we regulate crypto more? Should the government try to regulate crypto more? Is it really a currency? In many countries it is not actually legal tender, so is it really a currency? Or is it more of a stock, something you can invest in? Is it really just an investment mechanism? If so, then you know, many, many, many different government agencies, including the SEC and the FTC, could get into regulation. That’s what Senator Brown is asking for with this kind of whole-of-government approach to regulating crypto. That’s what he asked the Biden administration to do late last year.

But some people, mostly Republicans, but also Democrats, are actually saying, no, it’s crypto, it’s just a commodity. It’s as if corn or wheat don’t really need to be regulated. And because it’s so hard to understand what crypto is, I think that’s why we’re in this kind of debate about it.

And it also allows exchanges, quote exchanges, like FTX, to do all kinds of nefarious things and basically run what end up being complete scams.

Michael Tomasky: I think politics should be very simple for people, you know? He seeks ordinary people against big interests. It’s like regulating Facebook that way. You know, I haven’t looked at crypto polls specifically, but I have looked at a number of polls when people are asked, should Facebook be broken up or regulated? It’s like 72%, 74% say yes. You know, it’s not a closed question.

Felicia Wong: And that changed over time, though. This evolved over time to 2017-2018. So that has changed too. So maybe people’s views on crypto can and will change too after the whole Sam Bankman-Freid FTX debacle. But I hear what you’re saying, Michael, about the politics of this, which is very Warren politics, very progressive politics.

The government’s perspective here should be to watch out for the average consumer, the average American, the average voter, and not do things to support big interests. Even if these interests are not as shady as some cryptos seem to be. We really shouldn’t be doing things for the few at the expense of the many.

That’s what I hear you say, Michael.

Michael Tomasky: That’s what I’m saying. And Biden, you know, Biden is pretty good at a lot of things. I mean, you know, his antitrust efforts have been pretty strong. But, you know, the party as a whole just isn’t there yet, in terms of establishing its identity as being, you know, fighters for the working class.

Felicia Wong: Yeah, well, you know, on this issue of crypto scam fighters, this is one place where I really think we should ask our listeners what they think. I guess they know at least as much as we do about all of this. What was their experience with the market? Was it exciting for them? Did they lose a lot of money? So I think they should tweet us.

Michael Tomasky: My name is @mtomasky. This is MTOMASKY.

Felicia Wong: I’m @FeliciaWongRI. I want to know what you think of crypto

Michael Tomasky: Hey Felicia, what’s our next bonus episode?

Felicia Wong: Our next minisode, actually Michael is you. It’s you and Brad DeLong. How about that? You and Brad DeLonge discuss neoliberalism and the Cold War.

Michael Tomasky: Oh yes, I remember that.

Felicia Wong: I can’t wait to be there.

Felicia Wong: How to Save A Country is produced by PRX in partnership with the Roosevelt Institute and The New Republic.

Michael Tomasky: Our coordinating producer is Cara Shillenn. Our lead producer is Alli Rodgers. Our executive producer is Jocelyn Gonzalez. Our mixing engineer is Pedro Rafael Rosado.

Felicia Wong: Our theme music is courtesy of Codey Randall and Epidemic Sound. Other music provided by APM. How to Save a Country is made possible thanks to the support of Omidyar Network, a social change company that is reinventing the way capitalism works. Learn more about their efforts to refocus our economy around individual, community and societal well-being at omidayar.com.

Michael Tomasky: Support also comes from the Hewlett Foundations Economy and Society Initiative, which works to foster the development of a new common sense about how the economy works and what purposes it should serve. Learn more at hewlett.org.

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