Draft/Deliberative Podcast

On September 29, 2008, I sat stunned in front of the television. The House of Representatives had failed to pass a proposed $700 billion bank bailout plan. The Dow was dropping, second by second, finally landing nearly 778 points below where it had started that morning. Nearly 18 years later, that day — and everything that happened in response — still reverberates in our politics. In recent weeks, turmoil in the private credit markets has had echoes of 2008. To help us better understand what’s happening — and just how worried we should be — Cyrus and I invited Michael Hardaway, a former advisor to President Obama and House Minority Leader Hakeem Jeffries, to join the podcast. The private credit market emerged directly from the 2008 financial crisis — an unintended consequence of well-intentioned regulation. The Dodd-Frank Act required banks to hold more capital against risky loans, so banks stopped lending to risky borrowers. That’s where private credit — part of the “shadow banking” sector — stepped in. Private credit funds run by firms like Apollo, Blackstone, and Ares have grown roughly tenfold since 2009, now totaling nearly $3 trillion globally. Chasing higher yields, they’ve lent to borrowers that banks won't touch, with almost no public oversight. Now, AI is disrupting the software and tech companies these funds lent heavily to, triggering the market's first real liquidity crunch.As Michael notes in the podcast, this crunch is not likely to lead to a 2008 redux — at least not yet. Private credit makes up a comparatively small share of the overall market. But the challenges highlight bigger questions about how financial markets operate — and why state and local leaders should be paying attention. The public pension funds of teachers, firefighters, and state employees are sitting inside the private credit market — and other markets like venture capital that are arguably even less transparent. Furthermore, Trump signed an executive order in 2025 directing federal agencies to clear the path for 401(k) holders to invest in private credit and other alternative assets — potentially injecting up to $13 trillion into this market and exposing retail investors who lack the financial literacy to evaluate these risks. As someone who’s dived deeply into creative ways to fund regional economic development strategies, I understand the value of financial innovation — up to a point. I often wish that more of the brainpower used to find new ways to make already wealthy people more money was dedicated to other problems — like fixing healthcare or climate change. That’s a topic for another podcast (or three). But for now, it’s clear: When public money is on the line, “trust us” isn’t good enough.Spotify ┃Apple Podcasts┃Pocket CastsVideo editing: Olivia Bortner This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit joannamikulski.substack.com

Welcome to the official launch of the Draft/Deliberative podcast! We have a name (ok, the same one — but we’re sticking with it), three wide-ranging topics, and our first guest(!) coming later this week to discuss what’s happening in the private credit market and the implications. AI and the Labor Market: What States Can Do NowLast week brought another breaking development about the rapid progress of AI. Anthropic announced that its Mythos model is so powerful — and such a potential security threat — that the company is not releasing it to the public. Experts were quick to point out that it’s hard to parse the extent to which what we’re hearing about Mythos is real vs. a publicity stunt. But the news has heightened concerns about how quickly AI could transform the labor market. OpenAI entered the debate with its take on industrial policy in the AI age in a report that we found both interesting and frustrating. We wanted to spend some time breaking through the noise and focusing on what states can actually do right now to prepare for AI’s potential impacts. We may not be prepared to respond to a major labor market disruption driven by AI or otherwise, but states can take action by focusing on what we already know are best practices for strong workforce policies. We talked through where to focus: your education system (that’s where the money and leverage really are), labor market data quality, and work-based learning models like registered apprenticeships. We also got into why adaptability may be the most important skill of the moment — and why, counterintuitively, the liberal arts might be having a moment.Why We Tax Work More Than WealthIt’s tax season, which means it’s a good time to revisit a question that’s been on our minds: why does the U.S. tax income from work at a higher rate than income from investments? We take a look at the history, going back 100 years to Andrew Mellon — U.S. Treasury Secretary in the 1920s and one of the wealthiest men in America. Mellon is a hero of tax-cutting conservatives and libertarian, but his views were more complicated than often presented. He even argued in a 1924 book that wages should be taxed more lightly than investment income. But he oversaw the development of a system that does the opposite — particularly at the highest levels of income. We’re still living with those policy choices today. We talked through what that means — particularly as more workers shift to 1099 arrangements and building wealth through a paycheck becomes harder.Coming Up: Turmoil in the Private Credit MarketsWe’re bringing in our first guest for this one — Michael Hardaway, former aide to President Obama and House Democratic Leader Hakeem Jeffries. The topic: private credit markets and the “shadow banking” sector. While we may not be looking at a 2008-level crisis, the issue has lots of implications for retirement accounts and everyday investors. Later this week, we’ll get into what’s actually happening — and what can be done about it.Show Link: SpotifyMore soon! Joanna & CyrusAnd thanks to Olivia Bortner for video editing support This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit joannamikulski.substack.com

A few weeks ago, I previewed that my friend and colleague Cyrus Garrett and I are working on a podcast. The wait is over! This is a sneak peek for the (select and very special) Draft/Deliberative subscriber list. Cyrus and I met several years ago through the nonprofit America Achieves. It was the middle of the pandemic, and I was still living in London and getting ready to move with my family back to the U.S. Cyrus had just finished up work with the Biden campaign. We connected over a shared interest in understanding the history that got us to this present moment, how to make policy actually deliver for people — and how to communicate the nuts and bolts of what government does in ways that non-policy wonks (i.e., most people) can understand. We’ve been friends ever since, and we’re now turning our regular conversations about policy, politics, history, and the state of the world into a podcast. (Because what else does one do in 2026?)We’d love it if you’d check it out and give us feedback — but nice constructive feedback, please! This is still an experiment. We’re trying this out, and your thoughts will help us figure out where to take this endeavor in the future (if at all, lol). What should we talk about it? Feel free to pitch us on topics and guests (even yourself;-). Warmly,Joanna & Cyrus This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit joannamikulski.substack.com