December 7, 2020 BARRON’S 29
MARC LASRY
Chairman and CEO, Avenue Capital Group
New York
Barron’s:How will the coronavirus pandemic
reshape the world—and the world of investing?
Marc Lasry:There have been some fundamental
changes in the retail sector and the use of technology.
There has been a hastening of the use of technology. We
would have gotten there in five or 10 years, but we are
there today. There is a much greater acceptance of tech-
nology now than six months ago. Partly, we had no
choice, and partly, it’s just a lot easier. In retailing, the use
of e-commerce has been accelerated. Everyone is more
comfortable using technology now. It is going to have
a huge impact on supermarkets and otherbricks-and-
mortar stores. Also, from a real estate perspective, we
have found that we are comfortable working from home.
Even when things return to normal, people might work
from home one or two days a week.
As for investing, we will still value companies based
on what they make [in profit]. That isn’t going to change.
What will be different is the speed with which trends
change. Disruption is going to happen a lot faster in the
future, so you’d better be current on trends.
How will the economic recovery unfold in the next
few years?
How quickly do people start going back to baseball
good idea to spend a lot on taking care of people.
A joke I’ve heard, which has a germ of truth, is that
we accidentally discovered how to eliminate reces-
sions with the Cares Act. Just give everyone enough
money, and surprisingly, things will be OK. Are we
going to learn from that experience how the govern-
ment should respond to economic downturns?
I’m trying to write a book about 2020, and that’s the basic
lesson. We have discovered some pretty fundamental things
about how to do macro policy. America stumbled into how
to avoid recessions—not just that, but how to avoid poverty,
if you want to! The question is what you want to do with
that knowledge. This is one of my big themes: the 50-year
journey of realizing the power of a fiat money system. Ini-
tially, the response to the 1970s led to the shift toward infla-
tion control, independent central banks, the push for aus-
terity, and so forth. 2020 is the next great chapter in what is
fundamentally a political question. It’s not a technical ques-
tion about how we do it, but whether we should and who
we should do it for. It’s a starkly political question, which
may not be easy for a democracy to deal with.
It’s as challenging for the center-left as for the center-
right. When Jerome Powell and AOC [Rep. Alexandria
Ocasio-Cortez, D., N.Y.] agree about the power of fiat
money creation and the irrelevancy of various constraints,
then the political choices become a lot more naked. Now, if
we allow Americans to be poor, it’s a choice. If we can con-
fer enough income on people that they can live through a
crisis like this, despite high unemployment, then it’s a
choice when we don’t do it. Money and finance aren’t the
constraining forces we had thought they were. Budgets,
per se, aren’t paramount. We should think of them as legal
conventions and distributions of power structures. None
of them are binding if you want to maximize employment.
What appears to be economic necessities are often just the
consequences of pre-existing institutional power struc-
tures. We may choose to forget that knowledge, as we did
after 2008 with the push to austerity, but it’s not neces-
sary. You will always come back to the political.
But let’s not be naive about what happens when we
strip away budgetary constraints. If politics is now about
whether we care whether other people live or die, politics
get much more toxic. Assuming you know what side you’re
on, do you know that you’ll win? Since that’s such a bitter
and explosive argument, you limit debate by saying you
only have so many pennies to spend. This was why the
post–World War II conservative liberals, people such as
Friedrich Hayek, wanted to limit what governments could
do by imposing essentially imaginary financial constraints.
They may have been critical of the British welfare state, but
what they were really afraid of was Hitler. 2020 has ex-
posed the complexities of that. America is not a society
organized to keep people alive efficiently, even if we can
make sure that nobody goes bankrupt.
Finally, where would you like to go once the
pandemic is over and it’s safe to travel again?
I crave Europe. I realized that my life in the U.S. is condi-
tional on my ability to go places. [Tooze is British and
grew up in West Germany.] I miss Europe. I miss all of it.
Thank you.
—Matthew C. Klein Illustration byALEXANDRA COMPAIN-TISSIER