Tyler Cowen

speaker

2,016 appearances 10 recordings 1 series first heard Apr 2025 last heard 20 Jul

Tyler Cowen’s voice in public audio — every appearance, attributed to the second.

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recordings per month · last 12 months

Recordings per month over the last 12 months — 8 in all, peaking in Jan 2026 with 3.

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Like say I start a company, raise money, and then just pay myself a huge dividend for all the money.

Well that's typically against the law because there's a covenant.

in the contract saying I can't do that.

So we need new covenants to cover these cases, those will be harder to write, but the market will respond.

In the meantime, it's a problem.

It depends how you're doing the financing, but very often in other settings it's done by the bondholders.

The bondholders want a covenant that you can't just drain all the resources out of the firm.

The more the firm is based on human capital, the easier it becomes to do that.

Because human capital leaving is not monetrable in the same way that a big cash dividend is monitorable.

Uh but we'll figure out ways of doing it.

Maybe it will require arbitration, but this absolutely needs addressing.

Otherwise you just keep on starting up companies, ship the talent out somewhere else and SM sell it twice.

Bunch of different people are screwed over.

For the next person who tries it with no intent of doing that, the cost of capital is too high, and that's the the longer run problem.

But again, markets are very good at solving problems like that with covenants.

I would not involve the FTC.

I don't like them.

I don't trust them.

Their previous boss, their current boss, they're both bad news.

Neither knows any economics.

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