1 00:00:15,058 --> 00:00:18,394 Banks got bailed out! We got sold out! 2 00:00:18,478 --> 00:00:22,231 Here's a question, do you trust the government? 3 00:00:22,732 --> 00:00:25,735 I don't always. I've seen them bail out Wall Street 4 00:00:25,818 --> 00:00:30,615 while the average American struggles. I've seen them attack peaceful protesters. 5 00:00:30,698 --> 00:00:33,076 And come on, I know what the TSA is really doing 6 00:00:33,159 --> 00:00:35,661 with all my confiscated weed gummies. 7 00:00:35,745 --> 00:00:39,165 Banks got bailed out! We got sold out! 8 00:00:39,248 --> 00:00:42,085 But you know what I realized, there is one way 9 00:00:42,168 --> 00:00:46,047 in which we all do implicitly trust the government every day. 10 00:00:46,130 --> 00:00:50,259 We use money, and money is nothing but trust. 11 00:00:50,343 --> 00:00:54,013 See the only reason this random piece of tree pulp is worth a buck, 12 00:00:54,096 --> 00:00:57,683 is because the government says it is and because we all believe them 13 00:00:57,767 --> 00:00:58,893 when they say it. 14 00:00:58,976 --> 00:00:59,977 You know, it's funny the… 15 00:01:00,061 --> 00:01:03,606 the bill says "In God we trust" on it, but I'm an atheist. 16 00:01:03,689 --> 00:01:06,317 I don't trust God, I curse God! 17 00:01:07,360 --> 00:01:11,739 Eh, it's probably a coincidence. No, we trust the government. 18 00:01:11,823 --> 00:01:14,742 That's why none of us would agree to get paid in IOU's 19 00:01:14,826 --> 00:01:17,411 or autographed headshots of celebrities. 20 00:01:17,495 --> 00:01:21,082 -Uh, do you accept Danny DeVito's? -Cash only, Bub. 21 00:01:21,165 --> 00:01:23,584 -What about Johnny Cash? -Who? 22 00:01:26,129 --> 00:01:29,090 But everyone accepts the good old American greenback. 23 00:01:29,173 --> 00:01:33,052 A dollar? What do you think this is, 1990? 24 00:01:33,135 --> 00:01:34,637 Five bucks a glass, grandpa. 25 00:01:34,720 --> 00:01:37,098 Okay, age comes for us all kid. 26 00:01:37,598 --> 00:01:39,934 You know, I used to think that the only time the government 27 00:01:40,017 --> 00:01:43,312 interacted with my money is when I paid my taxes 28 00:01:43,396 --> 00:01:45,106 or that one time I bribed a judge, 29 00:01:45,189 --> 00:01:48,693 but it turns out that the government and our trust in it 30 00:01:48,776 --> 00:01:52,238 actually impacts every moment of our financial lives. 31 00:01:52,321 --> 00:01:55,533 So what happens when that trust breaks down? 32 00:02:02,373 --> 00:02:05,418 You know, I take for granted that when I put my money in the bank, 33 00:02:05,501 --> 00:02:08,296 it'll stay there. But why? 34 00:02:08,379 --> 00:02:12,508 Why do I trust a faceless corporation with my life savings? 35 00:02:12,592 --> 00:02:15,636 I mean, they don't even trust me with their pens. 36 00:02:16,137 --> 00:02:19,932 Well, up until a century ago, most Americans didn't. 37 00:02:20,016 --> 00:02:23,811 See, back then, it was common for banks to uh, fail. 38 00:02:23,895 --> 00:02:26,898 And when that happened, your money would be gone. 39 00:02:27,732 --> 00:02:30,776 Howdy handsome, the cupboards are bare and the kids are crying. 40 00:02:30,860 --> 00:02:33,196 I need to dip into the kitty, or my goose is cooked. 41 00:02:33,279 --> 00:02:34,363 Sorry lady, 42 00:02:34,447 --> 00:02:37,408 this Depression's got our balance sheet redder than W.C. Field's nose. 43 00:02:37,491 --> 00:02:38,910 Your cash has flown the coop. 44 00:02:39,619 --> 00:02:42,830 Americans could become so afraid of losing their savings 45 00:02:42,914 --> 00:02:46,167 that any sign of instability would cause a panic. 46 00:02:46,667 --> 00:02:50,421 Hey gang! These phony four-flushers won't make good on our Mazuma! 47 00:02:54,175 --> 00:02:56,177 Depositors would bum rush the banks 48 00:02:56,260 --> 00:02:59,096 trying to withdraw all of their money simultaneously. 49 00:02:59,180 --> 00:03:00,932 This was called a bank run, 50 00:03:01,015 --> 00:03:03,643 and it could push even healthy banks into bankruptcy 51 00:03:03,726 --> 00:03:07,146 resulting in a calamitous cascade of closures. 52 00:03:09,273 --> 00:03:13,402 During the Great Depression, over 9000 banks failed. 53 00:03:13,486 --> 00:03:18,032 Americans lost billions in savings. The economy ground to a halt, 54 00:03:18,115 --> 00:03:22,703 and public outcry forced President Franklin Delano Roosevelt to act. 55 00:03:23,454 --> 00:03:25,247 One at a time, one at a time. 56 00:03:25,331 --> 00:03:26,707 I lost my life savings. 57 00:03:26,791 --> 00:03:29,126 I lost the proceeds for my moonshinery. 58 00:03:29,210 --> 00:03:33,255 I thought we were all wearing barrels to this, or did plans change? 59 00:03:33,339 --> 00:03:35,800 Alright, alright. How about this? 60 00:03:35,883 --> 00:03:38,344 To restore trust in the banking system, 61 00:03:38,427 --> 00:03:42,098 we will create the Federal Deposit Insurance Corporation. 62 00:03:42,181 --> 00:03:44,976 Your deposits henceforth will be guaranteed 63 00:03:45,559 --> 00:03:49,230 by the full faith and credit of the United States government. 64 00:03:49,313 --> 00:03:51,274 What if the bank burns down? 65 00:03:51,357 --> 00:03:52,566 You'll get your money back. 66 00:03:52,650 --> 00:03:55,945 What if Bonnie and Clyde get in there and mess up the joint? 67 00:03:56,028 --> 00:03:57,613 You'll get your money back! 68 00:03:57,697 --> 00:03:58,948 What if you got a telegram 69 00:03:59,031 --> 00:04:01,826 saying everyone would be wearing barrels to the speech, but no one did it? 70 00:04:02,660 --> 00:04:04,203 It's guaranteed, okay! 71 00:04:07,081 --> 00:04:10,459 Can I withdraw one penny please? Thanks so much. 72 00:04:10,543 --> 00:04:14,714 At the time, this was considered an extraordinary measure, but it worked. 73 00:04:14,797 --> 00:04:18,718 The FDIC stabilized the banking system, restored trust, 74 00:04:18,801 --> 00:04:21,304 and made bank runs a thing of the past. 75 00:04:21,387 --> 00:04:24,515 Today, when you see that FDIC logo at your bank, 76 00:04:24,598 --> 00:04:28,936 it means that up to 250,000 dollars of your money per account 77 00:04:29,020 --> 00:04:31,605 is fully insured by the federal government. 78 00:04:31,689 --> 00:04:36,319 And since 1933, not one penny of insured deposits has been lost. 79 00:04:36,402 --> 00:04:40,614 And that is all the more impressive because bank failures still happen. 80 00:04:40,698 --> 00:04:43,993 It's just that nowadays, instead of causing a panic, 81 00:04:44,076 --> 00:04:49,332 the FDIC swoops in so seamlessly that almost no one even notices. 82 00:04:49,874 --> 00:04:50,916 How do they do that? 83 00:04:51,584 --> 00:04:55,546 Tell you what, heads we go find out, tails the show ends now. 84 00:04:56,505 --> 00:04:58,049 -Oh, man, what? 85 00:04:58,132 --> 00:04:59,258 Okay, this one doesn't count. 86 00:04:59,342 --> 00:05:00,593 -Let's go again. 87 00:05:02,303 --> 00:05:04,138 -Hey! 88 00:05:10,311 --> 00:05:14,190 -Hi there. -Hello, and welcome to the FDIC, Adam. 89 00:05:14,273 --> 00:05:16,567 This is like the bankiest place I've ever been. 90 00:05:16,650 --> 00:05:20,196 Come on, let's give a little tour. We're conducting a simulation today. 91 00:05:20,279 --> 00:05:21,906 -Oh, really? -So I've told them that I was 92 00:05:21,989 --> 00:05:24,200 gonna invite you to step in and observe the meeting. 93 00:05:24,283 --> 00:05:25,117 Would you like to do that? 94 00:05:25,201 --> 00:05:27,953 Oh, my God, that'd be incredible. We can see what happens when a bank fails. 95 00:05:28,037 --> 00:05:29,288 -Let's go on up. -Let's do it. 96 00:05:29,372 --> 00:05:32,041 -Adam, here they are. Good morning. -Oh, my gosh, hello everybody. 97 00:05:32,124 --> 00:05:34,960 Thank you for having us. This is very official, I'm a little nervous. 98 00:05:36,796 --> 00:05:39,507 Alright. So, welcome everybody to this executive briefing. 99 00:05:39,590 --> 00:05:44,386 We are here for ABC Banking Company. The code name is Kodiak. 100 00:05:44,470 --> 00:05:46,889 This bank was founded in 1948, 101 00:05:46,972 --> 00:05:49,683 and the bank has 23 retail branches across two states. 102 00:05:49,767 --> 00:05:52,269 The bank's been unprofitable for several quarters, 103 00:05:52,353 --> 00:05:55,314 and we've prepared a strategic plan for resolution. 104 00:05:55,397 --> 00:05:57,274 The on-site team will be working through the weekend 105 00:05:57,358 --> 00:06:00,611 so that insured depositors always have access to their funds. 106 00:06:00,694 --> 00:06:03,739 We wanna make sure the bank opens up Monday morning at 8:30, just like normal. 107 00:06:03,823 --> 00:06:05,574 So this is a bank that's failing, 108 00:06:05,658 --> 00:06:09,036 so there's 60,000 people who have accounts at this bank, 109 00:06:09,120 --> 00:06:12,414 the bank is going down, they don't know that you're here talking about… 110 00:06:12,498 --> 00:06:16,210 They do not. Yep, we try to do our best to fly under the radar and 111 00:06:16,293 --> 00:06:18,462 make sure that the financial system stays stable 112 00:06:18,546 --> 00:06:20,631 and that depositors don't have any disruption. 113 00:06:21,215 --> 00:06:24,009 So if a bank fails and you don't find the acquirer, 114 00:06:24,093 --> 00:06:27,471 what, FDIC just ends up owning everything the bank owns? 115 00:06:27,555 --> 00:06:28,722 That can happen, yes, 116 00:06:28,806 --> 00:06:31,100 but sometimes we also can own things 117 00:06:31,183 --> 00:06:33,269 that an acquiring bank doesn't want to own. 118 00:06:33,352 --> 00:06:34,562 Really, like, what? 119 00:06:34,645 --> 00:06:38,649 Well, back in the 80s, we had a minority share in the Dallas Cowboys, 120 00:06:38,732 --> 00:06:40,734 -for a very short period of time. -Wait, really? 121 00:06:40,818 --> 00:06:42,528 Did you get free tickets or what? 122 00:06:42,611 --> 00:06:44,905 -Unfortunately, no. -That's a bummer. 123 00:06:44,989 --> 00:06:48,409 Uh, we've had rights to a horror movie that starred, 124 00:06:48,492 --> 00:06:50,619 uh, George Clooney and Charlie Sheen. 125 00:06:50,703 --> 00:06:54,623 I think it was called Grizzlies II, and, uh, yeah. 126 00:06:54,707 --> 00:06:56,667 So, how often does this happen? 127 00:06:56,750 --> 00:06:59,962 Recently, it's been less and less because the economy has been doing very well, 128 00:07:00,045 --> 00:07:02,089 but we did have a significant period of time, 129 00:07:02,173 --> 00:07:05,009 -if anybody remembers back in 2008, where -Yeah. 130 00:07:05,092 --> 00:07:07,344 we had hundreds of bank closings. 131 00:07:07,428 --> 00:07:11,182 Wow! That must have been a very busy time for you in 2008. 132 00:07:11,265 --> 00:07:14,727 The important thing to know is the cost of bank resolution 133 00:07:14,810 --> 00:07:16,645 is not born by the taxpayer. 134 00:07:16,729 --> 00:07:20,107 We have a Deposit Insurance Fund, that's funded by banks 135 00:07:20,191 --> 00:07:22,443 who pay premiums based on their risk profile. 136 00:07:22,526 --> 00:07:24,153 I love it. Yeah, make the banks pay for it. 137 00:07:24,236 --> 00:07:27,531 It's the… if-- It was their fault. 138 00:07:27,615 --> 00:07:29,742 So we're going to go over to a bank branch 139 00:07:29,825 --> 00:07:31,869 and simulate the bank closing speech that 140 00:07:31,952 --> 00:07:33,954 we give on Friday night after the bank closes. 141 00:07:34,038 --> 00:07:35,164 Let's do that, please. 142 00:07:35,247 --> 00:07:38,751 Alright, first off, I've been given this honorary pin to uh… 143 00:07:38,834 --> 00:07:41,045 -to pin on you. -What? Wow. 144 00:07:41,921 --> 00:07:45,591 -I'm… I'm an FDIC official. Incredible. -You're ready to go. You look nice. 145 00:07:45,674 --> 00:07:47,301 Actually, you could do the part. 146 00:07:47,384 --> 00:07:48,844 You know what? I feel cool. 147 00:08:06,904 --> 00:08:09,073 Alright. Yeah, we are locked out. 148 00:08:09,615 --> 00:08:11,742 Classic. 149 00:08:11,825 --> 00:08:14,787 So I thought I would set the stage with you before we go in there. 150 00:08:14,870 --> 00:08:18,207 You know, as the FDIC we don't like it when banks fail, we just, we're there 151 00:08:18,290 --> 00:08:21,460 just in case it does happen. This is an emotional situation, 152 00:08:21,544 --> 00:08:22,962 it's something that we need to work through. 153 00:08:23,045 --> 00:08:26,257 I think about being professional. I think about being compassionate, 154 00:08:26,340 --> 00:08:27,925 -Yeah. -and I think about being respectful. 155 00:08:28,008 --> 00:08:29,885 Professional, compassionate, respectful. 156 00:08:29,969 --> 00:08:31,262 -Excellent. -Let's do it. 157 00:08:32,388 --> 00:08:34,473 Hello, can you please tell me where the bank president is? 158 00:08:34,557 --> 00:08:35,808 Yes. 159 00:08:36,767 --> 00:08:38,394 -Hello, are you Jerry? -I am. 160 00:08:38,477 --> 00:08:41,564 Hi, nice to meet you. My name is Tyler Caviness, I'm with the FDIC. 161 00:08:41,647 --> 00:08:44,066 Alright, so now is the moment where I would tell the bank president 162 00:08:44,149 --> 00:08:45,859 who we are and why we're here. 163 00:08:46,735 --> 00:08:48,404 -Oh, do I say that? -Go for it. Please do. 164 00:08:48,487 --> 00:08:51,699 Okay. Uh… Sir, I hate to tell you this, 165 00:08:51,782 --> 00:08:55,911 but we're here from the FDIC to… present a formal letter that the bank has failed. 166 00:08:55,995 --> 00:09:00,165 Um, once the last customer has left for the day, if you could lock the door, 167 00:09:00,249 --> 00:09:03,460 uh, and gather your employees so we can make the announcement. 168 00:09:03,544 --> 00:09:04,837 -Okay. -Did I do it right? 169 00:09:05,337 --> 00:09:06,505 -That was pretty good. Nor-- 170 00:09:06,589 --> 00:09:07,506 It's all right. 171 00:09:07,590 --> 00:09:09,717 Normally, we wouldn't say that the bank has failed. 172 00:09:09,800 --> 00:09:11,969 -Aah! -We don't want to bring that up until 173 00:09:12,052 --> 00:09:13,762 -right at the last minute. Once the state -I see. 174 00:09:13,846 --> 00:09:15,014 actually closes the the bank. 175 00:09:15,097 --> 00:09:17,850 Maybe he's thinking, "Maybe it's an announcement for my birthday." 176 00:09:17,933 --> 00:09:19,560 -Yeah. -Right? 177 00:09:19,643 --> 00:09:22,187 No, he's-- there's a pretty good chance he knows why we're here. 178 00:09:22,271 --> 00:09:26,525 Team, can we all gather up? We've got an announcement here this evening. 179 00:09:26,609 --> 00:09:28,611 Hello everyone, my name is Tyler Caviness, 180 00:09:28,694 --> 00:09:30,654 and I'm with the Federal Deposit Insurance Corporation. 181 00:09:30,738 --> 00:09:33,407 It's nice to meet all of you. As you've heard from the state, 182 00:09:33,490 --> 00:09:34,783 your bank has failed, 183 00:09:34,867 --> 00:09:37,286 and the FDIC has stepped in to help handle the resolution. 184 00:09:37,369 --> 00:09:39,913 The good news is the FDIC has entered into an agreement 185 00:09:39,997 --> 00:09:43,042 with an assuming institution to acquire all the deposits 186 00:09:43,125 --> 00:09:45,586 and virtually all of the assets of the institution. 187 00:09:45,669 --> 00:09:47,963 The bank will reopen Monday morning 188 00:09:48,047 --> 00:09:50,424 for business as usual, just under a new name. 189 00:09:50,507 --> 00:09:52,551 There will be a lot of work to accomplish together, 190 00:09:52,635 --> 00:09:54,762 and we are thankful for your cooperation. 191 00:09:54,845 --> 00:09:57,931 And now, I would like to introduce you to the acquirer, 192 00:09:58,015 --> 00:10:00,392 the acquiring bank. Thank you. 193 00:10:04,438 --> 00:10:05,439 -How'd I do? -That was a pretty good job. 194 00:10:05,522 --> 00:10:08,192 -Thank you. -Did it feel awkward or, uh, unusual? 195 00:10:08,275 --> 00:10:09,818 It did feel a little awkward 196 00:10:09,902 --> 00:10:11,987 cause normally when I'm speaking to a group of people, 197 00:10:12,071 --> 00:10:15,199 they laugh at the end of a sentence, but in this case, 198 00:10:15,282 --> 00:10:17,284 there are a lot of worried faces. 199 00:10:17,368 --> 00:10:18,994 -Yeah. -What is that like for you? 200 00:10:19,078 --> 00:10:20,537 You get used to knowing that we're there 201 00:10:20,621 --> 00:10:23,165 to make sure that they understand exactly what's happened 202 00:10:23,248 --> 00:10:24,958 and, um, to kind of walk them through it. 203 00:10:25,042 --> 00:10:27,753 We've taken care of all of this on the backend so 204 00:10:27,836 --> 00:10:29,088 that it's really a non-event. 205 00:10:29,171 --> 00:10:30,673 That's what we-- That's what we strive to do. 206 00:10:30,756 --> 00:10:33,384 A non-event. Like if I'm a customer of this bank, 207 00:10:33,467 --> 00:10:38,097 and on Friday, Saturday, Sunday, my debit card's still working. 208 00:10:38,180 --> 00:10:40,015 Sometime next week, I get an email or a letter saying, 209 00:10:40,099 --> 00:10:42,476 "Hey, your bank has a new name," and I'm like, "Ehh who cares, 210 00:10:42,559 --> 00:10:44,186 a form letter from my-- Whatever." 211 00:10:44,269 --> 00:10:45,854 And my life just goes on. 212 00:10:45,938 --> 00:10:48,399 I don't experience any disruption because you're there. 213 00:10:48,482 --> 00:10:50,317 -Yeah. -Yeah. Amazing. 214 00:10:50,401 --> 00:10:51,318 Thank you so much Tyler. 215 00:10:51,402 --> 00:10:53,445 -Alright, have a good day. -Thank you, you too. 216 00:10:55,906 --> 00:10:57,491 How incredible is this? 217 00:10:57,574 --> 00:10:58,742 Like, I don't know about you, 218 00:10:58,826 --> 00:11:02,955 I think this is one of the most effective government programs of all time. 219 00:11:03,038 --> 00:11:08,335 The people at the FDIC have neutralized the threat of bank failures so thoroughly, 220 00:11:08,419 --> 00:11:12,256 not only do they not hurt our money, we don't even hear about them anymore. 221 00:11:12,840 --> 00:11:14,425 And if they didn't create that level of trust, 222 00:11:14,508 --> 00:11:17,594 our economy would literally cease to function. 223 00:11:17,678 --> 00:11:18,971 But hold on, 224 00:11:19,054 --> 00:11:22,724 bank failures are just one bad thing that can happen to our money. 225 00:11:22,808 --> 00:11:24,351 What is the federal government doing 226 00:11:24,435 --> 00:11:28,772 to protect us from all the other financial disasters that threaten us? 227 00:11:29,731 --> 00:11:33,485 You know, this show was supposed to come out a year ago. 228 00:11:34,027 --> 00:11:37,406 But can you guess what world-altering event happened 229 00:11:37,489 --> 00:11:39,908 a week after we opened our writers room? 230 00:11:39,992 --> 00:11:43,412 No, I'm not talking about the release of Animal Crossing: New Horizons. 231 00:11:43,495 --> 00:11:46,457 Though that did also stop me from working for over a year. 232 00:11:46,540 --> 00:11:48,667 No, Covid-19 hit. 233 00:11:48,750 --> 00:11:51,670 And like so many businesses across the country, 234 00:11:51,753 --> 00:11:55,716 we were forced to shut down. It was a frightening time. 235 00:11:55,799 --> 00:12:00,053 Millions of Americans were out of work, the stock market had plummeted, 236 00:12:00,137 --> 00:12:02,764 and trillions of dollars disappeared from the economy 237 00:12:02,848 --> 00:12:05,476 faster than Quibi disappeared from our phones. 238 00:12:05,559 --> 00:12:09,229 Was a time when everyone from gig workers to CEO's 239 00:12:09,313 --> 00:12:11,315 were looking to the government for help. 240 00:12:11,398 --> 00:12:13,066 So what did they do? 241 00:12:18,030 --> 00:12:22,367 They made it rain. Trillions of dollars in unemployment, 242 00:12:22,451 --> 00:12:27,456 stimulus checks, small business loans, and corporate tax breaks. 243 00:12:28,373 --> 00:12:32,669 This emergency infusion of cash did stabilize the economy, 244 00:12:32,753 --> 00:12:36,048 but I found myself watching CNBC wondering, 245 00:12:36,131 --> 00:12:39,718 "First of all, when do my Shark Tank reruns start? This shit is boring." 246 00:12:39,801 --> 00:12:43,889 But more importantly, where is all this bailout money coming from, 247 00:12:44,598 --> 00:12:49,311 and who's really benefitting? We the people or the Mark Cubans of the world? 248 00:12:49,394 --> 00:12:53,106 Well, the answers to those questions may astonish you. 249 00:13:04,535 --> 00:13:07,538 Folks, my name is Penn Jillette, that's my partner Teller. 250 00:13:07,621 --> 00:13:12,125 And you may feel stunned, confused, even bamboozled by government bailouts. 251 00:13:12,209 --> 00:13:14,545 But they have not fooled us. 252 00:13:14,628 --> 00:13:17,172 We're here to show you how the magic works. 253 00:13:17,256 --> 00:13:20,342 Teller here will be playing the part of the government, 254 00:13:20,425 --> 00:13:23,637 and these stacks of good-old American greenbacks, 255 00:13:23,720 --> 00:13:26,181 they're the money flowing through the economy. 256 00:13:26,265 --> 00:13:29,309 Happy people buying groceries, taking out bank loans 257 00:13:29,393 --> 00:13:33,981 and betting it all on the ponies. But hold those horses. 258 00:13:34,064 --> 00:13:36,567 When there's an economic crash, people get scared. 259 00:13:37,150 --> 00:13:39,611 All that activity stops, 260 00:13:39,695 --> 00:13:44,533 and trillions of dollars literally disappear from circulation. 261 00:13:44,616 --> 00:13:49,705 Oh, panic, calamity, the wheels of finance grind to a halt. 262 00:13:49,788 --> 00:13:51,957 No one's buying Frappuccinos 263 00:13:52,040 --> 00:13:55,586 and Ford F-150s anymore. 264 00:13:55,669 --> 00:13:59,298 To save capitalism, the government needs to inject cash 265 00:13:59,381 --> 00:14:02,426 into the system to get the economy flowing again. 266 00:14:02,509 --> 00:14:06,096 So we need a volunteer to fork some cash over. 267 00:14:06,179 --> 00:14:07,639 Don't be stingy. 268 00:14:07,723 --> 00:14:10,517 You can afford to see us so we know you're rolling in it. 269 00:14:10,601 --> 00:14:14,563 Oh! Oh! Me! Me! Ha-hah, me, me, take my money. 270 00:14:15,063 --> 00:14:17,149 Okay, Mr. Moneybags, since you're so loaded, 271 00:14:17,232 --> 00:14:19,735 why don't you be the bank? 272 00:14:19,818 --> 00:14:22,029 And Teller here, is the US Treasury. 273 00:14:22,112 --> 00:14:25,699 Now Uncle Sam needs 2.2 trillion dollars 274 00:14:25,782 --> 00:14:27,993 to stimulate the economy. 275 00:14:28,076 --> 00:14:31,455 So he does what he does anytime he needs to spend money. 276 00:14:31,538 --> 00:14:37,210 He borrows it, from investors, other countries, and from you, the bank. 277 00:14:37,294 --> 00:14:40,213 -Wow! That's quite a wad you got there. 278 00:14:40,297 --> 00:14:41,882 You overcompensating for something? 279 00:14:41,965 --> 00:14:43,884 No, don't answer that, don't answer that. 280 00:14:43,967 --> 00:14:49,139 The government takes that borrowed money and spends it on unemployment, 281 00:14:49,222 --> 00:14:54,519 bailouts and other stimulus to get the economy moving again. 282 00:14:54,603 --> 00:14:57,606 In return, the bank gets a treasury bond, 283 00:14:57,689 --> 00:15:02,152 which is just a fancy, bullshit way to say, "I owe you." 284 00:15:02,235 --> 00:15:06,365 It is the same thing with other banks and companies going deeper into debt 285 00:15:06,448 --> 00:15:08,075 than a college graduate. 286 00:15:08,158 --> 00:15:12,704 Who else wants to loan Uncle Sam a couple 100 billion? 287 00:15:12,788 --> 00:15:14,373 Why would everyone agree to this? 288 00:15:14,456 --> 00:15:16,667 Oh, they always do. 289 00:15:16,750 --> 00:15:19,252 Companies and other countries are eager to loan our government money 290 00:15:19,336 --> 00:15:21,713 because we're a super power. 291 00:15:21,797 --> 00:15:24,758 The biggest, baddest motherfucker in the world! 292 00:15:25,384 --> 00:15:27,302 And that makes us a uh… safe bet. 293 00:15:27,386 --> 00:15:30,097 The US government's kinda like the Lannisters, 294 00:15:30,180 --> 00:15:32,432 we always pay our debts, 295 00:15:32,516 --> 00:15:35,018 and start a lot of needless wars. 296 00:15:36,645 --> 00:15:39,690 Okay, look, I know the government borrows all the time, 297 00:15:39,773 --> 00:15:42,901 but in a crisis, we're borrowing so much all at once. 298 00:15:42,985 --> 00:15:47,072 I mean two trillion in debt on top of what we usually spend? 299 00:15:47,155 --> 00:15:48,115 Doesn't it seem crazy? 300 00:15:48,198 --> 00:15:51,535 That's why we have one more trick up our sleeve 301 00:15:51,618 --> 00:15:54,496 just in case the banks get nervous. 302 00:15:54,579 --> 00:15:59,042 It's called, "The Fed." Now, if you remember, we gave all of you banks 303 00:15:59,793 --> 00:16:02,671 a whole bunch of Treasury bonds as IOUs, right? 304 00:16:02,754 --> 00:16:04,881 Why don't you, uh, check those out now? 305 00:16:07,426 --> 00:16:08,510 What?! 306 00:16:08,593 --> 00:16:12,681 Yeah. The government has repaid all your IOUs. 307 00:16:12,764 --> 00:16:16,143 Now you can make home loans, invest in businesses 308 00:16:16,226 --> 00:16:19,187 and give your executives some big fat bonuses. 309 00:16:19,271 --> 00:16:21,857 But where did all this money come from? 310 00:16:21,940 --> 00:16:24,484 Ah-hah. Well, it wouldn't be a Penn and Teller show 311 00:16:24,568 --> 00:16:27,320 if we didn't reveal how the trick is done. 312 00:16:27,404 --> 00:16:29,406 The government's Federal Reserve Bank 313 00:16:29,489 --> 00:16:32,284 simply types a couple of numbers into a computer 314 00:16:32,367 --> 00:16:35,495 and adds some zeros to the bank's balance. 315 00:16:37,914 --> 00:16:40,542 What? So they create money out of nothing? 316 00:16:40,625 --> 00:16:43,670 That's right. The federal government literally 317 00:16:43,754 --> 00:16:47,758 controls how much money there is, which gives it alone, 318 00:16:47,841 --> 00:16:51,219 the power to bail the economy out in a crisis. 319 00:16:51,303 --> 00:16:53,930 And it only works because the banks trust the government 320 00:16:54,014 --> 00:16:55,932 to always pay back its debts. 321 00:16:56,016 --> 00:16:57,726 Okay, that's amazing. But I-- 322 00:16:57,809 --> 00:16:59,478 No, no, no. That's all. 323 00:16:59,561 --> 00:17:02,105 My name is Penn Jillette with partner, Teller, we're Penn & Teller. 324 00:17:02,189 --> 00:17:06,318 Whoever the hell you are, get off our stage. Get off our stage! 325 00:17:07,027 --> 00:17:10,155 Okay, hold up. Cool magic trick, but 326 00:17:10,238 --> 00:17:12,616 what happens if you're not a bank? 327 00:17:12,699 --> 00:17:14,910 Like yeah, the big billionaires on Wall Street 328 00:17:14,993 --> 00:17:17,496 trust that the government has their backs in a crisis, but 329 00:17:17,579 --> 00:17:21,208 can the average American trust the government to bail us out 330 00:17:21,291 --> 00:17:22,709 when the cash hits the fan? 331 00:17:22,793 --> 00:17:24,086 Hey, Adam. 332 00:17:24,169 --> 00:17:27,422 Hey Sandra. Hi Claudia. Thank you so much for this. 333 00:17:27,506 --> 00:17:29,091 -No problem. -This is so lovely back here. 334 00:17:29,174 --> 00:17:30,467 -Aww, thank you. -Thanks. 335 00:17:30,550 --> 00:17:31,676 So what is all this stuff? 336 00:17:31,760 --> 00:17:36,223 So we had a daycare that we had to close. This is 337 00:17:36,306 --> 00:17:40,102 the four of us. This is my dad is here and, obvi-- me, Claudia. 338 00:17:40,185 --> 00:17:42,771 And then this is our brother when we opened the school. 339 00:17:42,854 --> 00:17:44,773 -The grand opening. -Yeah. 340 00:17:44,856 --> 00:17:46,983 Kay, wait, I have a question though, cause I've always wondered this. 341 00:17:47,067 --> 00:17:49,736 For a grand opening, where do you get the big scissors? 342 00:17:50,737 --> 00:17:53,406 Obviously, every business had a lot of trouble during COVID. 343 00:17:53,490 --> 00:17:55,325 Tell me about what your story was. 344 00:17:55,408 --> 00:17:59,121 So we had a capacity of 55 children, ages 345 00:17:59,204 --> 00:18:00,580 six weeks to five years old. 346 00:18:00,664 --> 00:18:03,166 Most of our parents were ER doctors, 347 00:18:03,250 --> 00:18:06,044 or they work frontlines in the supermarket. 348 00:18:06,128 --> 00:18:08,547 You know, we had children of essential workers. 349 00:18:08,630 --> 00:18:10,465 You're like essential to the essential people. 350 00:18:10,549 --> 00:18:11,424 -Yeah, exactly. -Exactly. 351 00:18:11,508 --> 00:18:13,885 And so we were trying to figure out, 352 00:18:13,969 --> 00:18:17,180 can our employees come back? Is it safe for us to come back? 353 00:18:17,264 --> 00:18:19,224 And I had staff that didn't come back. I 354 00:18:19,307 --> 00:18:21,935 had maybe four or five children come back. 355 00:18:22,018 --> 00:18:23,103 -It was just messy. -Wow! 356 00:18:23,186 --> 00:18:26,982 So that sounds like that's a rough situation for you financially. 357 00:18:27,065 --> 00:18:30,527 We were trying to make a plan, to try and make it through, and… 358 00:18:30,610 --> 00:18:33,989 It was the anniversary of our mother's passing, 359 00:18:34,072 --> 00:18:36,199 -which, it's already a dark day. -Oh wow, yeah. 360 00:18:36,283 --> 00:18:39,494 And my sister called me, she's like, "Look, I reran the numbers 361 00:18:40,162 --> 00:18:41,913 and it-- We can't," 362 00:18:41,997 --> 00:18:44,416 you know, and we knew that it was affecting 363 00:18:44,499 --> 00:18:46,084 not just us or my chil-- 364 00:18:46,168 --> 00:18:47,961 -our children losing care. -Our friends, yeah. 365 00:18:48,044 --> 00:18:50,797 This is employees that are losing their income. 366 00:18:50,881 --> 00:18:53,800 But there were a bunch of big bills signed. 367 00:18:53,884 --> 00:18:54,968 -Right? -Right. 368 00:18:55,051 --> 00:18:57,846 And, like, a big part of that was the PPP loans 369 00:18:57,929 --> 00:19:00,682 that were the paytech... paycheck protection loans 370 00:19:00,765 --> 00:19:02,309 so that businesses like yourself, 371 00:19:02,392 --> 00:19:04,144 -would not have to lay off employees. -Right! 372 00:19:04,227 --> 00:19:06,730 -Were you able to get one of those loans? -We did, but it was 373 00:19:06,813 --> 00:19:07,898 six thousand dollars, 374 00:19:07,981 --> 00:19:10,358 -Okay. -and that is what we got. 375 00:19:10,442 --> 00:19:11,693 -Period, that's it? -Yeah. 376 00:19:11,776 --> 00:19:16,198 If you had six employees, that's not even a month of wages. 377 00:19:16,281 --> 00:19:19,576 No, but the second and third PPP loans, we were denied. 378 00:19:19,659 --> 00:19:21,953 -And that was-- I don't know. -Why were you denied? 379 00:19:22,037 --> 00:19:23,914 -They never said! Yeah. -Nope, they never said. 380 00:19:23,997 --> 00:19:24,831 Why do you think that is? 381 00:19:24,915 --> 00:19:29,085 Because we're just this teeny tiny little school run by two women, 382 00:19:29,169 --> 00:19:32,297 -like, we're not shouting loud enough, so. -Yeah. 383 00:19:32,380 --> 00:19:33,882 -That's really fucked up. -Yeah. 384 00:19:33,965 --> 00:19:36,593 -Yes! I agree. -I think so too! 385 00:19:36,676 --> 00:19:38,220 So is there any way we could go see it? 386 00:19:38,303 --> 00:19:39,304 -Yes, of course. -Yeah? 387 00:19:39,387 --> 00:19:43,141 I would love to stop by and see the little yellow house again. 388 00:19:43,225 --> 00:19:44,893 Alright, this is the first time I've been back. 389 00:19:44,976 --> 00:19:46,436 -Is it just over this wall? -I haven't been-- Yeah. 390 00:19:46,519 --> 00:19:47,812 I don't have access to it actually. 391 00:19:47,896 --> 00:19:51,233 You know, maybe production can help us out with a ladder or something? 392 00:19:51,316 --> 00:19:53,276 Awesome. Thank you, Kendall. 393 00:19:54,277 --> 00:19:56,780 -Oh my gosh, this is so cute. 394 00:19:56,863 --> 00:19:58,949 Aw, it looks so sad. 395 00:19:59,032 --> 00:20:02,953 Normally, my kids would be out here playing, making a ruckus. 396 00:20:03,036 --> 00:20:08,375 Just had to take everything or whatever I could take and go. 397 00:20:08,458 --> 00:20:10,502 The community really needs a place like this 398 00:20:10,585 --> 00:20:14,172 with someone who takes care of it as much and loves it as much as we do. 399 00:20:14,256 --> 00:20:17,717 Yeah. You're providing so much support to the community, 400 00:20:17,801 --> 00:20:19,719 but then when the crisis comes, 401 00:20:19,803 --> 00:20:22,389 and the government's putting up this big safety net for everybody, 402 00:20:22,472 --> 00:20:25,642 it's like the holes are too big and you guys are too small, 403 00:20:25,725 --> 00:20:27,602 -and you fall through. -Fell right through. 404 00:20:27,686 --> 00:20:28,812 If you could build a system 405 00:20:28,895 --> 00:20:31,147 that would have supported you the way you needed, 406 00:20:31,231 --> 00:20:32,732 what would it have looked like? 407 00:20:32,816 --> 00:20:35,735 To me, it would just be somehow having a voice. 408 00:20:35,819 --> 00:20:37,696 Or hav… having someone you can call. 409 00:20:37,779 --> 00:20:40,198 -Having a teeny business administration -Yes, definitely. 410 00:20:40,282 --> 00:20:41,866 -that is there to serve you. -Right. 411 00:20:41,950 --> 00:20:43,576 A teeny business, I would say that! 412 00:20:43,660 --> 00:20:47,580 Sandra, thank you so much for telling me your story. I can't thank you enough. 413 00:20:47,664 --> 00:20:51,084 Thank you for having me and letting me share my teeny tiny business. 414 00:20:51,167 --> 00:20:52,210 Yeah. Can I give you a hug? 415 00:20:52,294 --> 00:20:54,296 -Of course! Thank you. -Thank you so much. 416 00:20:54,379 --> 00:20:56,006 -Alright. -Alright. Bye. 417 00:21:03,847 --> 00:21:08,560 Sandra's story makes me so angry, and she's not alone. 418 00:21:08,643 --> 00:21:10,478 How many of you know a Sandra? 419 00:21:10,562 --> 00:21:13,023 Hell, how many of you were a Sandra? 420 00:21:13,106 --> 00:21:16,401 Waiting for a lifeline that just never came? 421 00:21:17,110 --> 00:21:22,490 How is it possible that our government can make money rain down from the heavens, 422 00:21:22,574 --> 00:21:25,994 yet if it fails time and again to make sure any ends up 423 00:21:26,077 --> 00:21:29,122 in the hands of the people who need it the most. 424 00:21:30,332 --> 00:21:35,670 Well, we looked into it and the answer isn't going to make you less angry. 425 00:21:35,754 --> 00:21:39,674 See, in this country, we have two radically different systems 426 00:21:39,758 --> 00:21:41,968 for distributing federal bailout money, 427 00:21:42,052 --> 00:21:45,013 one for the rich, and one for everybody else. 428 00:21:45,096 --> 00:21:49,434 Banks and large corporations have a direct, efficient line to government cash. 429 00:21:49,517 --> 00:21:52,812 For them, it's kind of like flying first class. 430 00:21:52,896 --> 00:21:55,106 Ugh, this recession is such a downer, 431 00:21:55,190 --> 00:21:57,233 I need a ticket to Money Town right away. 432 00:21:57,317 --> 00:21:59,194 Of course, how will you be paying? 433 00:21:59,277 --> 00:22:00,987 I just issued these bonds. 434 00:22:02,530 --> 00:22:06,159 Which as you know, is a fancy, bullshit way to say, "I owe you." 435 00:22:08,244 --> 00:22:09,996 Very good, sir. 436 00:22:10,080 --> 00:22:13,333 We at the Federal Reserve would love to buy these from you. 437 00:22:13,416 --> 00:22:15,377 One ticket to Money Town. 438 00:22:15,460 --> 00:22:19,005 And please enjoy our complimentary low-interest rosé. 439 00:22:19,089 --> 00:22:21,174 We hope to bail you out again soon. 440 00:22:21,257 --> 00:22:22,175 Ta. 441 00:22:22,258 --> 00:22:24,469 But the rest of us can't issue bonds, 442 00:22:24,552 --> 00:22:27,263 so we don't have access to that kind of help. 443 00:22:27,347 --> 00:22:30,141 Instead, we're stuck in economy. 444 00:22:30,225 --> 00:22:33,728 My restaurant has been really struggling since the shutdown. 445 00:22:33,812 --> 00:22:35,772 Can I please have a ticket to Money Town? 446 00:22:35,855 --> 00:22:38,149 I don't know, can you issue any bonds? 447 00:22:38,233 --> 00:22:40,693 No, I…I… What is that? 448 00:22:40,777 --> 00:22:42,237 I'm afraid you'll have to wait over there. 449 00:22:42,320 --> 00:22:47,200 Actually, economy's too nice. It's more like flying standby on Christmas Eve. 450 00:22:48,660 --> 00:22:52,789 The federal agency that distributed COVID-19 relief funds to small businesses 451 00:22:52,872 --> 00:22:55,125 is called the Small Business Administration. 452 00:22:55,208 --> 00:22:57,460 But they themselves are so small, 453 00:22:57,544 --> 00:23:00,672 they had to outsource their job to the banks. 454 00:23:02,549 --> 00:23:03,508 Next! 455 00:23:03,591 --> 00:23:06,886 Please, I need to get to Money Town. I have a family and ten employees. 456 00:23:06,970 --> 00:23:10,390 Oh, certainly, certainly. Just get in line, I'll be happy to help. 457 00:23:10,473 --> 00:23:12,016 Just as soon as I get my cut. 458 00:23:12,517 --> 00:23:16,396 That's real. During the SBA's COVID-19 loan program, 459 00:23:16,479 --> 00:23:20,358 banks were actually allowed to make a percentage off of each loan, 460 00:23:20,441 --> 00:23:23,194 and a loophole in the bill allowed even big businesses 461 00:23:23,278 --> 00:23:25,530 like restaurant chains, to qualify. 462 00:23:25,613 --> 00:23:29,409 Here's a loan for you, Mr. PF Chang, and one for you, Ruth's, 463 00:23:29,492 --> 00:23:31,411 and for your friend, Chris. 464 00:23:31,494 --> 00:23:33,872 Hope your little steakhouse empire survives. 465 00:23:36,040 --> 00:23:37,709 What the hell?! 466 00:23:37,792 --> 00:23:39,544 Oh, we just realized we could make more money 467 00:23:39,627 --> 00:23:41,838 by giving a few big loans to big businesses 468 00:23:41,921 --> 00:23:44,591 as opposed to many small loans to smaller businesses. 469 00:23:44,674 --> 00:23:47,051 So that's what we're going with. Next! 470 00:23:47,135 --> 00:23:51,097 And that might explain why in most large cities, 471 00:23:51,181 --> 00:23:53,183 businesses in predominantly white areas 472 00:23:53,266 --> 00:23:57,353 received loans at far higher rates than those in communities of color. 473 00:23:58,229 --> 00:24:02,483 But you know, for all the attention that small businesses got during the pandemic, 474 00:24:03,067 --> 00:24:06,487 you know who really got screwed? Individual workers. 475 00:24:06,571 --> 00:24:09,991 Because their aid was doled out through the unemployment system, 476 00:24:10,074 --> 00:24:14,287 and that's more like… the worst bus trip you've ever been on. 477 00:24:18,625 --> 00:24:21,044 If you've ever been on Unemployment in America, 478 00:24:21,127 --> 00:24:24,130 you don't need me to tell you it is fucked up. 479 00:24:24,214 --> 00:24:28,635 It's a rickety, patchwork program that every state manages differently. 480 00:24:28,718 --> 00:24:32,764 And many of them have underfunded their unemployment systems for years. 481 00:24:32,847 --> 00:24:34,307 Okay dearies, 482 00:24:34,390 --> 00:24:36,559 I don't have a ton of help back here today, 483 00:24:36,643 --> 00:24:40,313 so it's just gonna be slow, I'm gonna have to get to you one at a time. 484 00:24:40,396 --> 00:24:43,274 -Now, who was here first? 485 00:24:43,358 --> 00:24:47,403 So when an unprecedented wave of joblessness hit in 2020, 486 00:24:47,487 --> 00:24:49,989 the system didn't have nearly enough capacity 487 00:24:50,073 --> 00:24:52,492 to process the tsunami of claims. 488 00:24:52,575 --> 00:24:55,703 Oh, dagnabit! 489 00:24:55,787 --> 00:24:58,998 They don't give me a pencil sharpener, so I've got to just whittle by hand. 490 00:24:59,082 --> 00:25:02,460 That's why just filing for unemployment during the pandemic 491 00:25:02,543 --> 00:25:04,879 was a bureaucratic nightmare. 492 00:25:04,963 --> 00:25:08,216 Americans in need were kept on hold for hours 493 00:25:08,299 --> 00:25:11,052 and forced to wait months before relief came. 494 00:25:11,886 --> 00:25:16,182 While the biggest businesses in America were relaxing in first-class. 495 00:25:16,266 --> 00:25:20,561 I can't believe I'm tired, I slept so much on the plane. 496 00:25:26,150 --> 00:25:28,611 You know, when COVID-19 shut us down, 497 00:25:28,695 --> 00:25:32,198 my production company got a PPP loan just like Sandra, 498 00:25:32,282 --> 00:25:36,953 but even though our work is definitely not as essential, Sandra takes care of kids. 499 00:25:37,036 --> 00:25:39,122 I'm up here doing pen jokes. 500 00:25:39,205 --> 00:25:42,250 We got more help more quickly than she did 501 00:25:42,333 --> 00:25:45,878 just because we have a fancier accountant at a bigger bank. 502 00:25:45,962 --> 00:25:48,840 I had more, so I got more. 503 00:25:49,549 --> 00:25:52,051 That is facedown-ass-up-backwards. 504 00:25:52,135 --> 00:25:54,971 But our entire system is rigged that way. 505 00:25:55,054 --> 00:25:58,891 Is it any wonder that so many Americans have stopped trusting it? 506 00:25:59,726 --> 00:26:02,729 Oh, uh, Lemonade Kid, what happened? 507 00:26:02,812 --> 00:26:06,566 I'm getting out of the game old-timer. Never got my PPP loan 508 00:26:06,649 --> 00:26:09,485 and, nobody wants to spend their stimulus on lemonade. 509 00:26:09,569 --> 00:26:13,239 Guess I'll work for Amazon and get paid in gift cards. 510 00:26:14,407 --> 00:26:16,701 Lemonade Kid, no. 511 00:26:18,161 --> 00:26:22,957 Our financial system and our government depend on our trust. 512 00:26:23,041 --> 00:26:25,793 If we don't trust that our money is safe in the bank, 513 00:26:25,877 --> 00:26:30,131 if we don't trust that the government will have our backs in a crisis, 514 00:26:30,214 --> 00:26:34,927 if we don't trust that this piece of ink and paper is actually worth a dollar, 515 00:26:35,511 --> 00:26:36,721 it collapses. 516 00:26:37,221 --> 00:26:38,639 And that's what we risk 517 00:26:38,723 --> 00:26:42,185 when our government fails to live up to its promises. 518 00:26:42,268 --> 00:26:46,189 It turns out that our economy and our government 519 00:26:46,272 --> 00:26:47,815 is a lot like Tinkerbell. 520 00:26:48,566 --> 00:26:51,611 If we don't believe in it, it drops dead. 521 00:26:56,032 --> 00:26:58,618 But it doesn't have to. 522 00:26:58,701 --> 00:27:01,037 A better system is possible, 523 00:27:01,120 --> 00:27:04,290 and our government can create one if it tries. 524 00:27:04,374 --> 00:27:07,919 I mean, these are the same people who founded the FDIC, 525 00:27:08,002 --> 00:27:10,505 who predict the paths of hurricanes… 526 00:27:11,506 --> 00:27:14,634 …who sent a man to the Moon. 527 00:27:16,511 --> 00:27:18,346 You know speaking of which…