The Ben Shapiro Show - Amity Shlaes | The Ben Shapiro Show Sunday Special Ep. 93

00:00:00.000 Guaranteed income tends to break up families.

00:00:02.000 It makes it easier to be a single, autonomous adult.

00:00:05.000 With a guaranteed income, you don't have to stay together.

00:00:07.000 Families need to depend on one another in order to be strong.

00:00:12.000 While Bernie Sanders might be out of the race, his socialist policies and ideas remain.

00:00:16.000 A Gallup poll shows that 43% of Americans believe some form of socialism would be a good thing, compared to only 25% in 1942.

00:00:24.000 Today, more Americans associate socialism with social equality than government control.

00:00:29.000 Back in 1964, in the middle of the Cold War, President Lyndon Baines Johnson, LBJ, created what's called the Great Society, and put into place many of the social welfare programs we have today, including Medicare, Medicaid, educational reform, sparking the beginning of the wave of social democracy we see today.

00:00:45.000 With the economy currently in the biggest collapse since the Great Depression, we should now be looking back at what worked, what didn't, and how we rebuild the economy.

00:00:53.000 Amity Shlaes is a renowned historian who has spent her career studying the effects of the Great Depression.

00:00:58.000 Over the years, she's written for Everyone, Wall Street Journal, Bloomberg, Forbes, National Review.

00:01:03.000 She serves as chair of the board of the Calvin Coolidge Presidential Foundation, and she's the author of four New York Times bestsellers.

00:01:09.000 Her latest, Great Society, A New History, is more relevant than ever.

00:01:13.000 She offers new insights into why the social programs of the 1960s did more harm than good, and what challenges await us if we continue down this path.

00:01:21.000 Today, we'll talk about how the best parts of the great society are the ones that cost the least amount of money, how the nation's economic success starts with what we do in our own families, and what to expect when the government plays God.

00:01:31.000 Hey, hey, and welcome to the show.

00:01:41.000 This is The Ben Shapiro Show, Sunday special.

00:01:43.000 This week, we're joined by Amity Shlave.

00:01:45.000 And just a reminder, we'll be doing some bonus questions with our guests.

00:01:48.000 The only way to get access to that part of the conversation is to become a subscriber.

00:01:51.000 So head on over to dailywire.com, become a subscriber.

00:01:54.000 You'll have access to all of the full conversations with every single one of our awesome guests.

00:01:58.000 Amity, thanks so much for stopping by.

00:02:00.000 Thank you for having me.

00:02:01.000 One of the things I've been talking about a lot on my show and in my writings is that there are sort of two versions of American history that have now come to be taught.

00:02:07.000 One is the more traditional version of American history, that America was founded on eternally good and true principles and the Declaration of Independence embodied in the Constitution of the United States.

00:02:15.000 Not perfected at the time, obviously we didn't live up to those principles.

00:02:18.000 The Civil War helps us draw a lot closer to those principles.

00:02:21.000 The Civil Rights Movement draws us even closer.

00:02:23.000 But that America was founded on good principles and we've been moving toward fulfillment of those principles.

00:02:27.000 And then there's an alternative history that's been put forth that suggests that America is eternally rotten, terrible, founded on racism, sexism, bigotry, homophobia, that the only good points in American history are essentially large government intrusions into the life of Americans, the 1930s and the 1960s specifically, areas that you've written a lot about.

00:02:43.000 So, which of these two versions of history, in your view, is more accurate?

00:02:47.000 And why do you think that there is this bifurcation?

00:02:50.000 The former is more accurate.

00:02:52.000 It's a better country than most other countries.

00:02:55.000 We should be proud of it and sustain it.

00:02:57.000 But part of it is the reason poor economics is used to assail the private sector, the companies, in the 1930s or the 1960s.

00:03:08.000 So the standard history of the Great Depression, for example, is that capitalism failed.

00:03:12.000 The evidence suggests it didn't.

00:03:14.000 The actual evidence suggests that the government As one economist of the period said, played God.

00:03:22.000 And when the government played God, the economy suffered by intervening too much, by, you know, sort of elephant in the room chasing you into the corner with his big trunk.

00:03:32.000 That's what the government was in the 1930s.

00:03:33.000 It's very clear.

00:03:35.000 There's also plenty of economic evidence, so I find it particularly puzzling that the left-leaning narrative would be so compelling to people.

00:03:45.000 For example, what's the kindest thing to sticking to the 1930s you can ever do for anyone?

00:03:50.000 That thing is to give him a job.

00:03:53.000 And in the 1930s, the government created jobs here and there through big programs, but the net was unemployment was over 10%, a level we can't even conceive of, the whole time.

00:04:03.000 Loving people tried to help people they loved and hurt them.

00:04:08.000 So I want to talk about sort of your history books, because you've written really three that I'm aware of that have made a big impact.

00:04:15.000 You wrote one on Calvin Coolidge, and then you wrote one on the Great Depression and FDR's policy.

00:04:19.000 And then you have your brand new book, Great Society, New History.

00:04:21.000 We'll go through each of those in turn, because I think it's important for people to know about these periods, which are so formative in how we think about history today and economics.

00:04:27.000 But first, I want to take a moment to give a shout out to all of our advertising partners who help make this show possible.

00:04:33.000 We are super grateful for their business, and we certainly appreciate it.

00:04:36.000 If our listeners can do what they can to keep our sponsors going, the advertisements keep our show going, and you, our listeners, patronizing our advertisers, that also keeps the show going.

00:04:44.000 We're all trying to get through this together.

00:04:46.000 You, me, the advertisers.

00:04:48.000 We're all going to get through it together, and we'll see you on the other side.

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00:05:52.000 All right, so let's talk about your first book on Calvin Coolidge.

00:05:56.000 So you write a book on Calvin Coolidge, who's apparently the most boring president of all time.

00:06:01.000 According to most people, he's rated always very low.

00:06:04.000 When you have historians rate American presidents, they always put him near the bottom.

00:06:08.000 Always FDR is very high, LBJ is very high. 0.85

00:06:11.000 Coolidge, they place very low.

00:06:12.000 Your history of Coolidge suggests that we should be viewing Coolidge precisely the opposite.

00:06:16.000 The reason this is important, obviously, is because Coolidge is president right before the Great Depression and is very hands-off in terms of his economic policies.

00:06:22.000 So what do people not understand about Coolidge?

00:06:25.000 Well, first of all, ranking presidents shouldn't be a zero-sum game.

00:06:29.000 And people like to rank in baseball.

00:06:31.000 If they have a high person, they want a low person because they want it to be zero-sum, right?

00:06:35.000 That's not useful for presidents, really, although it's fun.

00:06:39.000 So if you want FDR to be high, which is where the premise starts, I want Roosevelt, a loving intervener, to be high.

00:06:46.000 Coolidge was temperamentally, and in terms of policy, opposite to FDR, so ergo Coolidge has to be low, and they put him very, very low.

00:06:57.000 People tend to like a strong man or a great man, depending on the phrase.

00:07:00.000 You know the word great is always associated with the presidency.

00:07:03.000 Coolidge said it's not a good idea for the president to be a great man.

00:07:08.000 In fact, he said it was a comfort to the president and a safety for the people when the president is aware he's just a man.

00:07:17.000 Oh, that's very, very different.

00:07:18.000 And that model goes straight back to George Washington, who chose not to stay in office forever and wrote his famous farewell address about how the country needs to move on.

00:07:30.000 And that's very important to us.

00:07:32.000 Our government is important.

00:07:33.000 It's more important than any individual.

00:07:35.000 We don't want presidents to turn into dictators or have dictatorial power. 0.63

00:07:40.000 I thought this was fantastic.

00:07:41.000 The economic Record of Coolidge is similarly trashed because if you believe in intervention, FDR, then how can you like non-intervention?

00:07:54.000 But people get all tangled up because it's very hard to attack Coolidge.

00:07:58.000 For example, sometimes you'll hear attacks on Coolidge that his interest rates were too low and that caused a bubble.

00:08:03.000 What were his interest rates?

00:08:05.000 His interest rates were hundreds of basis points higher than our interest rates.

00:08:09.000 So if he was loose, what are we now?

00:08:12.000 He and his Fed, right?

00:08:13.000 He was catastrophically loose.

00:08:15.000 Well, we're apocalyptically loose then, and we're going to have 100% inflation and hyperinflation by the same argument that usually progressives make against Coolidge, which is sort of the great Gatsby argument.

00:08:25.000 If you know from popular culture, well, it was all a lie in a champagne bubble, and the market went too high, and he goosed the market too high.

00:08:31.000 He didn't.

00:08:32.000 Actually, Coolidge didn't comment much on the market.

00:08:34.000 He was trained by Andrew Mellon, a very interesting Treasury Secretary, not to panic the market because uncertainty is bad in econ.

00:08:42.000 So you make yourself very still so you don't scare the elephant.

00:08:47.000 And that's just good sense.

00:08:48.000 So he didn't ever say, and the stock market is way too high and it's dangerous.

00:08:53.000 Because he felt that itself was dangerous.

00:08:55.000 But he also believed the White House should stay away from the stock market.

00:08:59.000 Remember, in the 20s, there was no Securities and Exchange Commission.

00:09:02.000 There was no serious national regulation, really, of the stock market.

00:09:07.000 It was, well, the New York had laws, right?

00:09:09.000 It's different if that's where the stock exchange was.

00:09:11.000 Or Massachusetts had laws, the Ponzi scheme.

00:09:14.000 Was prosecuted in Massachusetts, not by the federal government so much.

00:09:18.000 These are all relative, but anyway, Coolidge thought, well, if the market falls, it will happen as has had happened so many times in my lifetime.

00:09:27.000 It will fall and people will learn that maybe stocks sometimes go too high and they shouldn't have all their money in stocks.

00:09:32.000 That was the net of it.

00:09:33.000 That's what had happened before, and every time before, well, the recovery had come fairly fast.

00:09:40.000 There was a Great Depression in the early 20s that Jim Grant has written a remarkable book about called The Forgotten Depression.

00:09:46.000 It was really deep.

00:09:47.000 Unemployment in some places was 15%.

00:09:50.000 We would notice that.

00:09:51.000 But it was so short that we forgot it.

00:09:54.000 And that was what was the economic policy, the government response to this period.

00:10:01.000 Depression seems to be coming, or we have inflation.

00:10:03.000 Let's raise interest rates by hundreds of basis points.

00:10:06.000 Oh, that's counterintuitive.

00:10:08.000 And let's cut government, which is opposite to what we would do now.

00:10:12.000 Now we would spend a lot in government to fight off a recession.

00:10:17.000 The reaction was what technically is called pro-cyclical.

00:10:20.000 That is, we made it worse, sort of, but that also made it very short.

00:10:25.000 That was the standard response insofar as there was a response to downturns.

00:10:30.000 Then, when we get to the Great Depression, where Coolidge wasn't managing, rather Herbert Hoover and FDR were, they took the opposite position.

00:10:38.000 They said, let's wade in, let's reorganize the economy, let's berate business, a lot of things that had never happened before.

00:10:45.000 Let's insist that the labor price be high because that will stimulate demand. 0.99

00:10:50.000 Very new idea at the time.

00:10:52.000 And all these factors contributed to, along with monetary, to launching the Great Depression and then sustaining it.

00:11:00.000 So there's not a lot of, you know, I'll say one more thing, in the great Gatsby image, it was all fake, right?

00:11:08.000 It was just shiny dresses and champagne bubbles.

00:11:11.000 And there was no real growth.

00:11:13.000 But the reality of the 20s was there was incredibly solid growth.

00:11:16.000 Even at Harvard HBS now, at Harvard Business School, right this set, they are studying the patent rates of the 1920s because they were so astronomical.

00:11:25.000 A lot of ideas, including pre-television that we consider 30s or 40s ideas, were thought up in the happy 20s.

00:11:33.000 That's all suppressed, all that memory, because of the desire for a narrative that blames Coolidge, blames market, and elevates government.

00:11:42.000 What does that say about the study of history?

00:11:44.000 Because when you look at historians, very often what they do is they tend to take presidents toward whom they are favorable in terms of politics, and then contrast them with other presidents, very often dishonestly.

00:11:53.000 So instead of contrasting Coolidge with, say, Wilson, which would be more of a contemporaneous Comparison, given the fact that Wilson was, by the time he was out of office, deeply unpopular leading to Harding's election, given the fact that Wilson had presided over an unpopular war, that his economy had started to fall into complete tailspin by 1919-1920, that the reaction to that is the election of Republicans who then lead basically a decade of astronomical growth.

00:12:18.000 Instead of contrasting Coolidge with Wilson, instead what they do is they contrast Coolidge, who was not around during the Depression, didn't handle the Depression, Yeah, Hoover's a bit like Mitt Romney or his father, George Romney.

00:12:27.000 so that they can falsely contrast Hoover with FDR, when in reality, Hoover was actually implementing policies that looked almost precisely like what FDR did, except FDR just deepened it a little bit.

00:12:37.000 Yeah, Hoover's a bit like Mitt Romney or his father, George Romney.

00:12:40.000 He was a can-do man who liked to take charge, and he meant well, and he was a community man, but he was wrong.

00:12:46.000 I don't understand the whole thing.

00:12:49.000 I do understand that since you and I have grown up, the history of books have gotten worse, so it's very hard to find the correct history.

00:12:57.000 And I do understand the desire.

00:13:01.000 I mean, it's very, very important for young people to rebel against the mono line and check it out for themselves.

00:13:07.000 They don't have to believe you or me.

00:13:09.000 They can go look at the record.

00:13:11.000 If the 20s saw GDP grow fast, if one remarkable thing Coolidge did, for example, was he actually cut the budget.

00:13:20.000 When we talk about cutting the budget, we mean reducing the rate of growth of the budget.

00:13:24.000 That's part of our lying, right, to ourselves.

00:13:26.000 He actually literally cut it, nominal and real.

00:13:30.000 He actually, it was a lowered data point when he left after being in office 67 months.

00:13:35.000 That's very important for right now because sooner or later we're going to need a president who can cut the government and join Congress and that.

00:13:42.000 Here we have one in Coolidge.

00:13:44.000 And I think just precisely because he was so good, he is intentionally obscured.

00:13:49.000 I don't mean to be One should be paranoid, but one should be unrelenting in the pursuit of the reality of the event.

00:13:57.000 The real reality of the 1930s is the Great Depression was great because of that God playing. 0.88

00:14:03.000 I remember when I was writing Forgotten Man, which is the 30s book, I came across an economist.

00:14:08.000 He wasn't a weird Austrian unheard of economist.

00:14:12.000 He was the chief economist of Chase Bank.

00:14:15.000 And yes, he was actually kind of Austrian in modern language, but at the time that was mainstream.

00:14:21.000 By the way, the kind of economics you and I are now speaking was the economics of the United States up till about 1948.

00:14:28.000 So, and Benjamin Anderson of the Chase Bank wrote in the Chase newsletter, government shouldn't play God.

00:14:36.000 That causes economic uncertainty.

00:14:39.000 Market freezes when government is playing God with lots of random decisions.

00:14:43.000 So true, so predictable, so understandable.

00:14:46.000 We never learned this.

00:14:49.000 It's interesting too, Ben, I will say.

00:14:52.000 Once I had discovered Benjamin Anderson, the chief economist of Chase Bank, saying all the things I thought might be true.

00:14:58.000 I felt better with my book, but most Americans had not heard of Anderson.

00:15:02.000 Then one time I talked to a free market advisor of President Putin.

00:15:06.000 This is in the day when President Putin had those advisors.

00:15:10.000 It was Andrei Illarionov is his name.

00:15:12.000 He's now at Cato.

00:15:13.000 But anyway, at that time, his email was advisor at Kremlin.gov or something cool like that.

00:15:20.000 Advisor.

00:15:21.000 I was like, oh, wow.

00:15:22.000 And he said, Amity, Benjamin Anderson, Anderson, Anderson, Anderson.

00:15:26.000 He's the greatest.

00:15:27.000 They knew all about Benjamin Anderson in the free market club of Moscow or Leningrad, but they didn't know Here, that's how much our education was obscured, that in a communist country, a high economist could know more about the breadth of our history and our economic analysis than we get at our institutions here.

00:15:46.000 Let's move on to The Forgotten Man, because obviously we're talking about that period.

00:15:49.000 It is a stunning book, particularly because it takes the Wilsonian conceit that you're going to have the best men at the top of government, the bureaucrats at the top of government, who know more than the rest of the market combined and can implement policies that will somehow even out the economy for everyone else.

00:16:04.000 And you really see the ugly results of that in FDR and his cabinet and his brain trust.

00:16:10.000 Because, I mean, my goodness, when you talk at the beginning of the book, As I recall, about the manipulation of gold rates.

00:16:18.000 I mean, it's astonishing stuff to realize that American national policy was being set based on FDR's lucky numbers.

00:16:24.000 Well, that's right.

00:16:25.000 This is all about arbitrariness versus rule of law.

00:16:28.000 So if you have a bunch of rules, even if they're imperfect, They might be better to follow than have one random leader, however charismatic.

00:16:39.000 Because we want markets, we don't want just tribal kingdom. 0.98

00:16:43.000 It's sort of a choice like that.

00:16:44.000 We want to be able to operate with relative confidence in markets.

00:16:48.000 The market doesn't have to be perfect, it just has to be not too bad.

00:16:52.000 As Adam Smith said, you need easy money, easy taxes, is what I meant.

00:16:56.000 Not too bad.

00:16:57.000 Not too bad situation, and then the economy will grow like crazy.

00:17:01.000 You don't need a perfect situation.

00:17:02.000 So that's what we needed and that's what they took away.

00:17:04.000 Roosevelt had no understanding of that.

00:17:06.000 He was an arbitrary guy.

00:17:08.000 He liked to be arbitrary.

00:17:09.000 He was very charming.

00:17:10.000 It goes with the territory.

00:17:12.000 And what happened specifically with gold, what you're referring to, is they couldn't figure out about where gold fit into the Great Depression.

00:17:20.000 We did have a contraction, a deflationary contraction.

00:17:25.000 Okay, that was a problem.

00:17:27.000 So we went off the gold standard, and he wanted to reflate.

00:17:32.000 So we started, let's see, to buy gold.

00:17:36.000 You know, he was just like you and me.

00:17:38.000 He was talking it through his head.

00:17:39.000 He said, well, I will set the price of gold and buy it here.

00:17:43.000 But he didn't understand that gold no longer mattered because he had gone off the gold standard.

00:17:49.000 It didn't have the magic it would have had, buying and selling gold before he went off the gold standard.

00:17:54.000 So he was very confused and very random. 0.95

00:17:56.000 And what's wonderful in that story is that Henry Morgenthau was his treasury secretary and was kind of the fool on the stage, as in Shakespeare, who is a fool but also speaks truth in spite of himself. 0.60

00:18:08.000 Henry Morgenthau, the future treasury secretary, went home and wrote in his diary, Roosevelt is picking the gold price because he has certain lucky numbers, and he's using those lucky numbers to pick the gold price. 0.68

00:18:21.000 Let it go up 21 cents.

00:18:23.000 Why, Mr. President?

00:18:24.000 Because 7 times 3 is 21, and 7 is a lucky number, or 3 is Morgan that went home and wrote in his diary.

00:18:32.000 If anyone knew how the United States set the gold price, they would be frightened.

00:18:37.000 And markets were frightened.

00:18:38.000 And that contributed to the duration of the Great Depression.

00:18:42.000 And that happened over and over again in many areas.

00:18:45.000 The government intruded, scared people like a dictator.

00:18:49.000 People froze.

00:18:50.000 We had what we call capital strike or business strike.

00:18:53.000 One of the most famous stories in the book.

00:18:55.000 There are two stories in the book that are worth recalling.

00:18:58.000 One was out here in the West.

00:19:01.000 We had a government farm called Casa Grande, Arizona, which is kind of outside Tucson now.

00:19:09.000 Actually, outside Phoenix, sorry.

00:19:10.000 Somewhere in between the two.

00:19:12.000 And Casa Grande was a real animal farm.

00:19:15.000 The government provided everything.

00:19:17.000 The people were supposed to work collectively and be happy, except it was humans.

00:19:22.000 They had to share the tractor, and in exchange they got really nice homes.

00:19:25.000 These were people who would have been in, you know, John Steinbeck otherwise, who didn't have enough food, who didn't have combs, who didn't have shoes necessarily, very hard times.

00:19:36.000 And what they discovered was that no matter how much they gave the people, including a really nice community house, a really nice chicken coop with a rare government chicken in it that would be more productive, more eggs, the people didn't like it.

00:19:50.000 They said, I want my own tractor.

00:19:53.000 I don't want to collectively farm for a wage, which is what Casa Grande was. 0.75

00:19:58.000 I want to own my farm and get profits.

00:20:00.000 And the people eventually went away.

00:20:03.000 That's because a big government program tends to go against human nature.

00:20:08.000 That's what the Casa Grande Animal Farm Farm experiment showed.

00:20:11.000 The other story in the book that people often refer to was a small chicken butcher in Brooklyn, and his case went to the Supreme Court.

00:20:20.000 That's A.L.A.

00:20:21.000 Schechter Poultry v. N.I.R.A.

00:20:24.000 And the-- or an IRA.

00:20:28.000 And the chicken people had a little kosher wholesale butcher outfit, right?

00:20:35.000 The slaughterhouse.

00:20:37.000 And the government came with the New Deal rules and told them what to do.

00:20:40.000 And the New Deal rules didn't make sense to the little chicken people and kind of went against their custom as well. 0.89

00:20:45.000 So, for example, under the New Deal rule, for reasons that are just absurd, people weren't allowed to pick their chicken any longer.

00:20:54.000 They had to take the chicken that came out of the coop when the butcher pulled it out.

00:21:01.000 Well, they want to pick their chicken.

00:21:02.000 This is in the era before antibiotics.

00:21:04.000 They want to know they have a healthy chicken.

00:21:06.000 That's all many, many ethnicities, like fresh poultry, and they're right.

00:21:11.000 They want to see the happy, healthy fowl before it's slaughtered, and they know their dinner will be great.

00:21:16.000 So this went to court.

00:21:18.000 The Schechter brothers were charged with many, many fines.

00:21:24.000 Then they could go to jail, felony basically.

00:21:26.000 And it went to the Supreme Court.

00:21:30.000 And the Supreme Court found for the chicken butchers and said, government can't reach this far.

00:21:34.000 This is too much.

00:21:36.000 It abuses delegation.

00:21:37.000 It abuses the Commerce Clause and so on.

00:21:39.000 And you know what?

00:21:40.000 The stock market went up after the Schechter case was resolved siding with the little chicken butchers, the Schechters. 1.00

00:21:49.000 And that, I think, was because the market saw that there was a limit to what even new dealers could do in the US economy.

00:21:56.000 So these are very interesting stories about arrogance of government.

00:22:01.000 Essentially, arrogance of government hurts jobs.

00:22:05.000 Arrogance of government leads to Outrageous mistakes.

00:22:10.000 The mistakes of the New Deal. 0.59

00:22:12.000 Arrogance of government can be avoided as well.

00:22:16.000 There was a study recently that came out from UCLA.

00:22:19.000 A couple of professors there found that FDR's policies had lengthened the Great Depression by at least eight years.

00:22:24.000 That the deep government interventionism had scared away capital.

00:22:29.000 That the attempts to prop up wage rates by lowering production in particular areas had prevented people from getting food.

00:22:35.000 That the Tyranny from above of forcing businesses to adhere to laws with like literally they would they would tell people that they had to put symbols in their windows if they were adhering to government policy that none of this had had a particularly salutary effect on the American economy and yet the history that I was taught when I was in social studies in in middle school was that FDR had saved the country during the Great Depression that if it had not been for FDR and his interventionism if it had not been for the New Deal and and all various programs

00:23:05.000 associated with it, that America would have collapsed into complete dust and or tyranny. 0.57

00:23:11.000 Complete dust and or tyranny.

00:23:12.000 Well, one thing, you just look at the stock market today, people think a never rising Dow is their birthright.

00:23:17.000 Dow's going to go up because we're great, right?

00:23:20.000 Well, the Dow did not come back until the 50s from its pre-depression level.

00:23:27.000 And that was not because pre-depression was that much too high.

00:23:31.000 It was because people didn't believe in capitalism anymore.

00:23:34.000 Government had depressed them.

00:23:36.000 And the Dow of the 60s, just to get later, Everyone counted on it getting past $1,000.

00:23:42.000 It didn't get past $1,000 until Ronald Reagan.

00:23:46.000 Imagine if we had to wait a decade plus more to get to $30,000.

00:23:53.000 Well, our children and friends would be mightily disappointed, including all the people who have pensions in the stock market, including teachers and TIAA-CREF.

00:24:01.000 Right.

00:24:02.000 So the evidence is definitely there.

00:24:03.000 You're so right.

00:24:04.000 I think one reason with Roosevelt is he was on the right side of World War Two.

00:24:09.000 War trumps econ. 0.76

00:24:10.000 It's a sad little story for economists and for the economy, but war trumps econ.

00:24:15.000 He led us in rescuing Europe.

00:24:17.000 So people are simple minded.

00:24:19.000 They don't want to hurt Roosevelt for his little domestic errors.

00:24:23.000 Say my mother, who's now gone.

00:24:25.000 Unfortunately, she loved Roosevelt because of what he did in the war.

00:24:29.000 So she was willing to forgive that other stuff.

00:24:31.000 It was too complicated.

00:24:32.000 That's not useful for us if we're operating in the real economy or if we're setting policy now, to out of sentimental affection for a war leader, ignore economic evidence that hurt our grandparents or great-grandparents or parents.

00:24:46.000 The second thing is teachers like government, especially when they're in unions.

00:24:50.000 I like government too.

00:24:51.000 I admire it, but it's so often wrong.

00:24:55.000 Third is, you know, it was said in the 60s, there was an Italian writer Gramsci, the philosopher, and also in Germany, that when the left didn't win, In the great 60s upheaval, they would copy Mao and do a long march.

00:25:08.000 But in America, the long march would be a long march through the institutions.

00:25:11.000 They would get tenure.

00:25:13.000 They would become judges.

00:25:15.000 And that long march did happen.

00:25:17.000 So now if you go to school and you find teachers, almost all of them are going to be more progressive.

00:25:23.000 They hang together.

00:25:24.000 They're progressive.

00:25:25.000 And they reinforce each other.

00:25:26.000 And they write the books.

00:25:28.000 I also would say, I don't hate it, but I think it's wrong for the College Board to have such a monopoly on all the economic testing culture, that then a new testing culture needs to be created.

00:25:40.000 There's a test for classical education now I'm very interested in, because if to get a five on the AP to get in college, you need to believe that Franklin Roosevelt Saved America in the Great Depression, you're going to believe that.

00:25:55.000 And we're closer to East Europe than is comfortable for us.

00:26:00.000 In fact, there's a diversity of evidence in all these areas, Ben, and the econ is pretty unmistakable.

00:26:06.000 Freer is slightly better for the United States.

00:26:10.000 Inflation is caused by government when it's too big.

00:26:13.000 We haven't had inflation yet this time.

00:26:15.000 That doesn't mean we never will.

00:26:18.000 Our freeways will be completely impaired should the interest rate go up.

00:26:21.000 Well, one day the interest rate will go up.

00:26:23.000 The other factor I think that has an impact is the revisionism that takes place between World War II and the 60s, which is this idea that FDR has put the American economy on new footing, and then after World War II things explode forth because of the new footing of the American economy, when in reality it's pretty fairly evident that the reason that the United States economy leaps forward is because we are literally the only country on earth that has a major industrial power that has not been completely wrecked all the way to the ground.

00:26:46.000 It turns out that gives you a hell of an advantage in terms of competitive Right, right.

00:26:51.000 That's very important.

00:26:52.000 There's a joke about the 50s.

00:26:53.000 They say Democrats go back to the 1950s in their minds because they want to work there.

00:27:00.000 Very well-paid decade for also unskilled workers.

00:27:04.000 Republicans go back to the 50s because they want to live there.

00:27:07.000 Because this war conservative is very interesting.

00:27:09.000 But the absolute truth is we could raise wages as much as we liked in the 50s because Asia was not a threat.

00:27:16.000 Europe was.

00:27:17.000 What do we consider Europe?

00:27:18.000 A potential customer for our product.

00:27:20.000 That is what the Marshall Plan was for.

00:27:22.000 Not so they could start their own factories.

00:27:25.000 And in the explanation often it was so Europe would have enough money to buy our stuff.

00:27:30.000 That's how it was sold sort of as a Commerce Department venture.

00:27:33.000 In the United States.

00:27:35.000 So that's one thing.

00:27:36.000 Another thing is like think about when you're in college and your junior year, your college wins the pennant.

00:27:41.000 And how much you love the coach and the team.

00:27:44.000 And if you're on the team, that stays with you forever, right?

00:27:48.000 There are studies that suggest that if your college won junior year, you are going to be a better donor than anyone else at your college, all things being able.

00:27:57.000 Forever.

00:27:58.000 Because the high of it can never be replaced forever.

00:28:00.000 Well, the war, World War II, was an even greater high.

00:28:04.000 Those people, those soldiers, those vets returning home, associated Roosevelt with the high of their life.

00:28:11.000 We saved Europe.

00:28:13.000 How can they stop and quibble about economic policy?

00:28:16.000 Again, but it's associated with a major high for the U.S.

00:28:19.000 Norman Podaritz, a great intellectual, said regarding the 60s when he heard about curing poverty that, sure, we could do that.

00:28:27.000 We won in Europe.

00:28:28.000 I mean, compared to winning in Europe, isn't curing poverty in the United States a small thing?

00:28:33.000 And Podaritz said, well, we regarded curing poverty in the United States as a kind of mopping up action.

00:28:40.000 Not too hard, relative to the other things we do.

00:28:43.000 If communism can go away in Europe, then we can have socialism here.

00:28:46.000 Same thing.

00:28:48.000 People look at what happens overseas and they say, well, I mean, sometimes it's very perverse.

00:28:54.000 They say, well, if that big thing can happen here, we can do this here.

00:28:58.000 They draw the wrong lessons sometimes.

00:29:01.000 Let's talk about Great Society because now we've reached the 60s.

00:29:04.000 And the fact is that the economy, as you talk about in the book, is booming by the early 60s during the JFK administration.

00:29:10.000 We have very high rates of GDP growth.

00:29:13.000 And there is this sort of belief that settles over America that finally we've reached the end point.

00:29:18.000 That if we just engage in massive government redistributionist schemes and major government involvement, that we can cure poverty once and for all.

00:29:25.000 And after all, we are in the midst of changing so many of our mores in other areas, some for good and some for ill.

00:29:30.000 I mean, I'd argue for ill in the sexual revolution, but for great good, obviously, in the civil rights movement.

00:29:35.000 You talk in Great Society about this notion being pushed by members of government, by union leaders, that we are right on the verge of finally, basically... Yeah, exactly.

00:29:46.000 Right.

00:29:46.000 The Great Society is important.

00:29:48.000 Why?

00:29:48.000 We spent tens of trillions.

00:29:50.000 What would happen if we had those tens of trillions?

00:29:53.000 We could erase the debt.

00:29:54.000 Imagine if we could get up tomorrow and say there's no more American debt.

00:29:57.000 We massively misspent when we spent on the Great Society.

00:30:01.000 The good parts of the Great Society, in my view, weren't the ones that cost so much money, such as the civil rights Act, which came at-- and the Voting Rights Act, which came after it, which basically established or affirmed the most basic rights.

00:30:15.000 So people-- one in 10 black men in the South voted.

00:30:20.000 That's wrong.

00:30:21.000 State of Mississippi, it has to be fixed.

00:30:23.000 Voting Rights Act.

00:30:24.000 People couldn't sit down at a lunch counter, that needs to be fixed.

00:30:28.000 It was fixed.

00:30:28.000 So those things were not expensive.

00:30:30.000 They were emotionally expensive and politically charged, but they were not expensive because they were rights of freedom, what's sometimes known as negative rights, which is to say rights about your individual, not that to which you're entitled, which is a positive right.

00:30:43.000 So those were great.

00:30:44.000 But then Johnson, who was the president, kind of switched over.

00:30:48.000 He said, I'm going to build a great society in the classroom, the countryside, the city.

00:30:53.000 And first he said that was all about opportunity, less expensive.

00:30:57.000 Then he said it was about what one is owed, very expensive.

00:31:01.000 And you can mark the shift.

00:31:04.000 from freedom to entitlement in a speech he gave at Howard University where he said basically it's not enough to free people and give them the opportunities other people have.

00:31:15.000 That's like putting a lame person at the start line of a race and then of course he's not going to win and you go haha you lost.

00:31:22.000 That's cruel.

00:31:23.000 We need to help people all along until they're really ready to compete with others.

00:31:27.000 That idea went Just absolutely exploded into massive spending in all areas.

00:31:33.000 It led to affirmative action that we have still with us today, but many other projects, too, that did the opposite of enfranchisement.

00:31:42.000 They disenfranchised people by chaining them forever to welfare-like programs.

00:31:49.000 I mentioned food stamps and sometimes people attack that.

00:31:52.000 There's nothing wrong with a poor family sometimes receiving food stamps.

00:31:57.000 There's something sick about, for the family mostly, of the family expecting it will always be on food stamps, and its children will, and its grandchildren will, and that's sort of what we've created.

00:32:08.000 The Great Society basically just Increased and increased commitments for spending made some very interesting legal shifts.

00:32:15.000 One legal shift was at the beginning of the decade, spending on benefits was more like charity from the federal government.

00:32:25.000 The law changed through the Yale law professor Charles Reich, through the Supreme Court in a case called Goldberg v. Kelly, where essentially benefits became property, where we got the word entitlement.

00:32:37.000 You're entitled to it as a patent owner.

00:32:40.000 is entitled to the rents from his patent, the property from his patent.

00:32:46.000 That's a weird idea.

00:32:48.000 Why should people be entitled to payments that cost someone else?

00:32:52.000 Because when you spend for one person to get entitlement, property, a benefit, you're taking away someone else's property, his money.

00:33:00.000 He must pay the taxes for this project.

00:33:03.000 So our property rights hurt or helped.

00:33:05.000 Charles Reich is very interesting because he also wrote the Greening of America, sort of crazy left-wing manifesto, mixed-up youth manifesto.

00:33:13.000 But I think his property rights analysis, that welfare is property, was incredibly damaging to our society.

00:33:21.000 I mean, there's so much in the book that I didn't know, even as somebody who's studied the period, and that's absolutely shocking.

00:33:26.000 The federal government openly sponsoring people to agitate against the government in order to stump for benefits was one thing that I found absolutely shocking.

00:33:34.000 Yes, Mayor Yorty of Los Angeles and Mayor Daley of Chicago are both in the book, and I want to let you know, because of my own progressive education and perhaps yours, I never thought Mayor Richard J. Daley, the boss, was such a hero.

00:33:48.000 I grew up around independent Democrats who really hated him because he ran a machine and it wasn't nice.

00:33:53.000 My parents grew up in Chicago.

00:33:57.000 Sort of like Mussolini.

00:33:58.000 I mean, you know, the snowplows came.

00:34:02.000 When it snowed, but he wasn't nice and they weren't particularly part of it either because he had, Daly was an Irish machine. 1.00

00:34:10.000 But I grew to like Daly in this book and even Yorty of L.A.

00:34:14.000 because the mayors had ideas for poverty.

00:34:18.000 This is the Tocqueville Society of the United States of America where community comes up with ideas and understands very well what's needed in their community, mayors do.

00:34:27.000 Even when their community is people of a different race. 0.96

00:34:30.000 That can happen, right?

00:34:31.000 So Mayor Daley had all his poverty ideas in a box and he supported the Democrats.

00:34:38.000 Kennedy, Johnson, and 64.

00:34:40.000 And so when Johnson gets up and announces big poverty program, Mayor Dilley says, great, Lyndon, puts all his ideas in the box.

00:34:48.000 I mean, ties it with a bow, big box, and sends them to Washington.

00:34:52.000 Here's what you're going to give me money for, programs I've started with my employees.

00:34:56.000 That is not what the Great Society did.

00:34:58.000 Instead, Johnson's people, led by Sergeant Shriver, also of Chicago, was they created their own federal poverty office in Chicago.

00:35:07.000 They tapped their own friends.

00:35:09.000 And those friends who were picked by the poverty office in our War on Poverty in Chicago were really left wing.

00:35:16.000 They even gave money to the Blackstone Rangers through the Woodlawn Organization.

00:35:21.000 So they kind of supported a vigilante protection the way the U.S. government.

00:35:25.000 government has occasionally done in Medellin, in Colombia, in drug places.

00:35:31.000 You give guerrillas money so they won't shoot so many people and will become something tamer like a police force, but it's a creepy thing to do.

00:35:39.000 That's essentially what we did, and Daley could not believe it.

00:35:43.000 The federal government was giving money to people who wanted him out of office and who were going to cause riots in his city, and sometimes they still could.

00:35:51.000 And he called up the White House and he said, does President Johnson know he's giving M-O-N-E-Y to subversive people?

00:35:59.000 So I began in reading the humiliation and frustration of these mayors and reading of that to understand how undermined our towns were to an extent that we still suffer from today.

00:36:13.000 The mayors just became mendicants who needed money from Washington and Washington always set the terms.

00:36:18.000 That was a surprise to me.

00:36:20.000 It's amazing how none of the ideas from the Great Society have ever truly died, like, even gone away.

00:36:25.000 I mean, what we're watching right now in the 2020 presidential race is the reflection of a great many of those ideas, be it Bernie Sanders or Elizabeth Warren, in even more extreme forms.

00:36:34.000 I mean, literally, while we were filming this, Bernie Sanders was tweeting out that we ought to have national rent control.

00:36:40.000 He tweeted that out today.

00:36:41.000 And the first thing that I flashed to was the Pruitt- IGO.

00:36:46.000 The IGO Government buildings in your book because I actually tweet out a picture of it for those who missed it because the fact is that the policies that were being pushed by the Johnson administration were these policies of right to housing and therefore we're going to literally knock down entire suburbs and just put up government housing.

00:37:05.000 It was such a terrible idea that as you talk about in the book, they had to basically knock down all the government buildings because it was such a terrible idea.

00:37:12.000 And yet that is coming back, and it's coming back stronger than it was maybe in the 60s.

00:37:16.000 Well, you know, one thing about the old New Republic writers and the progressives of that period is they were quite honest.

00:37:22.000 And one of them I'm thinking of is Nicholas Van Hoffman.

00:37:25.000 And he has a story about leading a rent strike.

00:37:30.000 That is exactly what is under discussion now.

00:37:33.000 Make the bad landlord, who's a rat-fink profiteer, Be nice and bring down the rent or do something else for us, repair this or that. 1.00

00:37:45.000 And Niklas von Hofmann, this writer, was then a young activist, maybe working for Saul Alinsky.

00:37:53.000 And he went and there was a meeting with the evil landlord.

00:37:56.000 And the landlord came and he had a piece of paper.

00:37:58.000 And he said to his lawyer who was with him, tell them.

00:38:02.000 It's like science and the lawyer says the landlord is willing to give you angry tenants the property for $1 because he can't afford to maintain it even at the rents you think are too high or whatever he can't hit the business does not make sense to him there's no way even if he wanted to help you he could he's losing money so would you like the property for $1 and if

00:38:25.000 Nick van Hoffman went home and had a stomachache because his whole premise of left-wing activism over rent control or bad landlords who don't replace light bulbs or get heat was blown away.

00:38:36.000 The poor little landlord gave up.

00:38:38.000 He said, you can have the property here.

00:38:40.000 I'm scared.

00:38:41.000 You're bothering me.

00:38:42.000 You're making me feel like a bad man.

00:38:44.000 Most landlords aren't bad men or good men.

00:38:46.000 They're somewhere in between, like all humans. 0.56

00:38:49.000 And just the mere economics of it didn't work out.

00:38:51.000 In the case of Pruitt-Igoe, which was this massive housing project, perhaps the biggest in the United States, tower after tower, the premise was economic growth.

00:39:03.000 It didn't happen.

00:39:03.000 They never filled the public housing.

00:39:06.000 That is, the St.

00:39:07.000 Louis Housing Authority never got the revenue it thought it would, based on the economy of scale of these towers and massive growth.

00:39:13.000 It just had too little revenue to pay.

00:39:17.000 for fixing up these towers.

00:39:19.000 The tenants were very unhappy.

00:39:22.000 There were rules for the tenants that basically drove out the fathers because if you weren't dadless, you didn't get a good apartment.

00:39:28.000 The sons went wild and broke all the windows and made terror cells of the elevators.

00:39:35.000 And this dreamy utopian public project with rent control became a dystopia.

00:39:42.000 Hell, so sad.

00:39:45.000 In fact, one of the interesting things about Pruitt-Igoe, they did eventually blow it up.

00:39:50.000 It was a shame, a blight of St.

00:39:51.000 Louis, not a pride, was that there was a Catholic priest named Father Shockley who worked there a long time.

00:39:58.000 I want to work in public housing.

00:39:59.000 I want to help poor people.

00:40:00.000 I'm a progressive.

00:40:01.000 And he eventually concluded that the best thing he could do for the people at Houdaigo was to move them out into houses of their own and help them buy them.

00:40:09.000 So this little project, buying little houses, and the people really liked to have their own house.

00:40:13.000 And they actually knew how to paint their house.

00:40:15.000 And the dad got to stay.

00:40:17.000 And it was a miniature but valuable success story.

00:40:20.000 So to see people replicating this today.

00:40:23.000 There's also a story about guaranteed income, which is in the news.

00:40:26.000 Guaranteed income tends to break up families.

00:40:30.000 The Great Society people, who again were sometimes more honest than we are now, commissioned some studies.

00:40:35.000 And some of those studies were actually funded by the Great Society to see what happens when you give families guaranteed income.

00:40:40.000 And one thing it does, obviously, It makes it easier to be a single autonomous adult.

00:40:46.000 With a guaranteed income, you don't have to stay together, dad or mom.

00:40:50.000 Families need to depend on one another in order to be strong sometimes.

00:40:56.000 The dad needs to be the breadwinner, sometimes.

00:40:59.000 The mom needs to be the breadwinner, but anyway, they need to be together.

00:41:02.000 And a paid income tends to divide people.

00:41:07.000 I have money now, I don't need you.

00:41:09.000 Okay, so let's talk for a second about union strength.

00:41:11.000 So one of the big things that the Democrats have been pushing, the left has been pushing recently, is the idea that America's economy has not been growing equally because of the decline of American unions.

00:41:22.000 That if unions were stronger, then they could be pushing in the private sector for more wage gain in the private sector.

00:41:28.000 The idea is particularly that manufacturing and industry, that those industries have fallen behind, that the lack of union strength has led to all of this.

00:41:37.000 You talk at length in Great Society about the union contribution to the Great Society, union involvement with the Great Society, and then you also talk about the fact that union states just basically stopped growing and very often fell behind economically.

00:41:49.000 So what happened with America's unions?

00:41:51.000 Were they good for America's economy?

00:41:53.000 Were they bad?

00:41:53.000 Where do they stand?

00:41:55.000 They made labor too expensive, and that didn't matter when we had no competition.

00:42:01.000 When we began to have competition, the unions were indeed very powerful.

00:42:04.000 They did indeed push up wages, and they made our automobiles uncompetitive. 0.51

00:42:10.000 Just to give an example, let's stick with the United Auto Workers, because I focus a lot on Walter Ruther, the UAW leader, the Detroit auto union leader.

00:42:19.000 He got so involved in politics and pushing up wages to help his workers that he failed to notice something on the landscape.

00:42:25.000 That was the freight ship bringing over Toyotas.

00:42:28.000 The Toyotas docked.

00:42:30.000 The little Corollas rolled out. 0.99

00:42:32.000 They were ridiculous. 0.98

00:42:33.000 They were small. 1.00

00:42:34.000 They ate our lunch.

00:42:36.000 Eventually.

00:42:36.000 You could contract the story.

00:42:39.000 You know, telescoping.

00:42:40.000 They ate our lunch.

00:42:41.000 We didn't notice.

00:42:42.000 Oh, Americans like Toyotas. 0.96

00:42:44.000 Oh, by the way, they're better made.

00:42:45.000 Why is that?

00:42:46.000 They're better made in part Because, and this was new to me really, Ben, when I studied it.

00:42:52.000 Some people have studied in business school, Japanese assembly line projects, how a Japanese assembly line might differ from an American one.

00:43:02.000 We were in this Dance.

00:43:05.000 Worker v. employer.

00:43:07.000 And it was pretty rough on the American assembly line.

00:43:10.000 It was not pretty.

00:43:12.000 When a worker was unhappy with the way something was going, he couldn't stop the assembly line.

00:43:18.000 It was modern times.

00:43:20.000 And the unions kind of liked that because they liked to sustain the hostility between the worker and the employer.

00:43:26.000 That led to angry assembly lines and junkie cars.

00:43:30.000 In Japan, which we think of as such a rigid society, a worker could push a button and the assembly line would stop if he had an idea that might make the assembly line work better.

00:43:40.000 And they listened to one another more, which we, you know, in our stereotype, don't think is Japanese, such a hierarchical culture and so on.

00:43:49.000 The unions there were weak.

00:43:50.000 So their cars were better than our cars.

00:43:53.000 And they made more cars per hour Their productivity began to strip us in the 60s as they recovered from World War II.

00:44:01.000 All of a sudden, Japan had cheaper, better cars, or Germany had cheaper, better cars.

00:44:06.000 So the idea that a union is great, you can have that illusion if you have no competition.

00:44:12.000 If you want to go the Donald Trump way, and even farther, and have giant protectionism, which the Democratic Party has to consider as well, then you might, for a time, be able to shut out competition.

00:44:26.000 But not for long, because people really like those Toyotas.

00:44:29.000 Yeah, we're seeing this now in negotiations over the USMCA, where the unions really got into the process and now have demanded that a certain number of man-hours going into the making of cars be produced at a certain wage, and that is supposed to hold true in Mexico as well as in the United States.

00:44:43.000 It seems like a great way of pushing up the cost of vehicles past what Americans are going to be willing to buy in five or ten years.

00:44:49.000 Right.

00:44:49.000 I mean, there are two Americans.

00:44:50.000 One is buying and the one is working.

00:44:52.000 And, you know, the alternate is education.

00:44:55.000 All Americans are capable of improving their education or that of their kids.

00:44:59.000 What if we hadn't done the Great Society, the spending part?

00:45:03.000 What if we had spent that all on making sure every kid knew algebra and trig?

00:45:08.000 Imagine what a culture we would have.

00:45:10.000 One of my favorite characters in the book is one of the civil rights leaders.

00:45:14.000 His name was Robert Paris Moses.

00:45:17.000 Robert Paris Moses.

00:45:18.000 He's not the Robert Moses who built the houses in New York and built the bridges and tunnels.

00:45:23.000 He was a Stuyvesant alum from the math high school in New York who became a math teacher and then decided he was going to be a civil rights activist, went to the South, grew disillusioned with the Johnson administration, wanted to help black young people, and started, eventually, something called the Algebra Project, which won a MacArthur grant, a genius grant, to teach all poor young people, especially his community, blacks, algebra.

00:45:50.000 I'm for that.

00:45:51.000 That's where the energy should have gone.

00:45:54.000 And by focusing on identity and groups, whether it's labor, race, we misled our own country.

00:46:01.000 One of the things that happens in the aftermath of the Great Society programs, we have complete economic stagnance, basically from the late 60s all the way through the very early 1980s.

00:46:10.000 And then there's this sort of pushback, not against the spending programs, but at least against the taxation and the regulation via Ronald Reagan.

00:46:18.000 You have Bill Clinton basically acquiescing in the idea that the era of big government is over.

00:46:23.000 And then in the aftermath of 2007-2008, obviously that all goes away.

00:46:26.000 Obviously the American mentality has shifted.

00:46:29.000 We are back into big government big time, if we ever left it.

00:46:32.000 But the truth is, that story, which is told so often by Republicans, is not fully true.

00:46:36.000 I mean, the fact is that these entitlement programs never really went away.

00:46:39.000 The Reagan administration spent an enormous amount of money, as did the Bush administration.

00:46:43.000 So here's the question.

00:46:45.000 Are we ever going to get past the Great Society or are we doomed to basically ride this train until it runs directly off the rails and we'll be forced into austerity because economics is reality?

00:46:54.000 Unfortunately, I think we'll be forced into austerity.

00:46:56.000 There's some new books about austerity.

00:46:58.000 It's not always that bad.

00:47:00.000 But of course, it's not great to have it.

00:47:02.000 It will be hard.

00:47:03.000 What it is is we're a casualty of our own success.

00:47:06.000 Nothing is new is the motto of this book.

00:47:09.000 It's just forgotten.

00:47:10.000 Nothing is new.

00:47:11.000 And when you're doing so well, you just assume growth.

00:47:14.000 Assume the economy.

00:47:16.000 For a long period, we were able to tell ourselves we could outgrow our problems.

00:47:21.000 But the way the entitlements are now rigged, they grow with the economy.

00:47:25.000 And that's technical.

00:47:26.000 These are formulae.

00:47:27.000 For example, Social Security.

00:47:29.000 The richer we are, the better Social Security benefits are going to be.

00:47:33.000 It's not that I'm two years older than you, you get the same pension as I do from Social Security adjusted for inflation.

00:47:41.000 That would be fine.

00:47:42.000 You get more than that.

00:47:44.000 You get something that rides with the average real wage.

00:47:48.000 So my younger brother actually gets a better pension than I did, forgetting about inflation.

00:47:54.000 I think most people just think if we adjust for inflation, that's it.

00:47:57.000 That would be fine.

00:47:58.000 But because social security formula have to do with the quality of life, you can never outgrow social security.

00:48:05.000 It's hard to outgrow Medicare as well.

00:48:08.000 So this idea, the old idea, let's outgrow it, is a little bit passe.

00:48:12.000 I had the honor to work with President Bush on an economic growth project.

00:48:17.000 My main job was to get up self-assigned and say, well, I'm not sure we can outgrow this.

00:48:21.000 We have to reform it this time, guys.

00:48:24.000 So yeah, that's the problem.

00:48:27.000 One of the things about Reagan was he could never bring himself to undo many programs, but we kind of have to forgive him because he was in a rather serious war, which was the Cold War.

00:48:40.000 Remember, Star Wars was not just a fun idea.

00:48:43.000 It was created out of desperation, this idea of a shield in space to end the arms race.

00:48:48.000 And nowadays, when people talk about military spending, if you look at a graph of military spending, it's way down from the past.

00:48:56.000 One of the ways we mislead people on television is to say, as a share of discretionary spending, defense spending is huge.

00:49:03.000 Yes, but discretionary spending is a smaller and smaller part of the budget.

00:49:07.000 So when they start to talk to you about as the share of discretionary, they are misleading you.

00:49:12.000 Look at the whole budget because all the entitlements are in mandatory and they're bigger and bigger.

00:49:17.000 They've been bigger for a long time now than defense.

00:49:21.000 Don't let anyone tell you it's all our troubles are because of defense spending.

00:49:25.000 Okay, so there's an argument that's been kind of interesting on the right between, I'd say, you know, I'm on one side, I'm much more libertarian when it comes to economics, and there are folks who are sort of in the first things category.

00:49:36.000 There's a magazine called First Things where they write very often about sort of economics and society, and their argument goes something like this.

00:49:43.000 In the 1960s, the Democrats came along and wrecked the family structure through government interventionism and social engineering.

00:49:50.000 And now those institutions have basically been destroyed.

00:49:53.000 The destruction of those institutions means that there is no way for communities to recover.

00:49:58.000 And thus we should use the means of government in order to pour money back into communities that have been broken, thanks to government policy in the first place.

00:50:05.000 There's a call for government interventionism that is designed toward helping dying towns, helping rust belt towns. 0.96

00:50:13.000 You see Tucker Carlson talk about this on his show a lot.

00:50:16.000 Is that destined to work or is that destined to fail in the same way that all social engineering projects seem to fail?

00:50:21.000 Evidence suggests that will fail.

00:50:25.000 In the 1960s already they knew that it was bad to separate families.

00:50:31.000 Lyndon Johnson knew it and said it.

00:50:33.000 JFK knew it and said it, so it's already myth that they didn't know that, and yet they managed through their guaranteed income, for example, to disserve the family.

00:50:42.000 The family is so important in the United States.

00:50:45.000 Who can fix the family?

00:50:47.000 Only the family.

00:50:48.000 Only the community, locally.

00:50:50.000 And this idea of Tocqueville from above, which is basically, oh, Tocqueville, he understood the American community, let's help the American community from above, usually doesn't work.

00:51:00.000 Tocqueville has to come from the local town.

00:51:04.000 And what do you need to give a community so that it can form itself and help itself?

00:51:10.000 You need to give it space and breathing room.

00:51:11.000 You need to take the elephant out of the room. 0.99

00:51:14.000 I think that electability is also part of this drive.

00:51:19.000 It sounds nice, every family gets paid X, another child credit, another Longer paternity leave, whatever that is.

00:51:27.000 Government can't afford it and it doesn't usually work.

00:51:27.000 Sounds nice.

00:51:31.000 It just sounds nice.

00:51:32.000 So I'm sad to see this direction.

00:51:37.000 Let's just play mind game and say, oh, let's cut the capital gains rate in the United States to 5% benefit plutocrats.

00:51:44.000 Or let's triple the child credit.

00:51:45.000 Which will be better for the family?

00:51:47.000 Absolutely.

00:51:48.000 Cutting the capital gains tax.

00:51:50.000 Because then every dad who had a business would make more money.

00:51:54.000 Every dad who traded stocks would make more money.

00:51:56.000 Every mom who traded stocks would make more money. 1.00

00:51:58.000 Every mom who had a business would make more money. 1.00

00:52:00.000 And guess what?

00:52:01.000 They'd be able to pay for their families and their community.

00:52:06.000 Let's halt the reduction in the value of the charitable deduction, because there are many ways in which charitable deductions, as wonderful as they are, are limited by the tax code.

00:52:16.000 Let's halt that and make it even, so a charitable deduction is really valuable, so that when you give charity money, you won't be taxed on that money.

00:52:24.000 That would be great.

00:52:25.000 That kind of thing.

00:52:26.000 So you can make low cap gains.

00:52:30.000 Not even enhanced, just neutral charity, that it returned to neutrality.

00:52:38.000 More school choice, not through the federal government, but locally.

00:52:42.000 You begin to see all the things you want.

00:52:45.000 Sometimes, you know, communities think it's easier to assign one person, that would be the president, to fixing the family.

00:52:52.000 It's not like that.

00:52:53.000 The family has to fix itself, and it can.

00:52:59.000 We have to acknowledge that.

00:53:00.000 How do we fix the teaching of history?

00:53:02.000 So since the beginning of the 20th century with sort of the rise of folks like Charles Beard and then later in that line, you know, 50 years, 60 years down the line, the Howard Zins of the world, there's this rewriting of American history that happens apace in which instead of looking back at history and reading history through its own lens, there's an attempt to read history through the modern lens.

00:53:20.000 So stuff that we like right now, we look back in history, we identify the seed of that, and that seed becomes good because it has produced this thing that we like.

00:53:27.000 Right now.

00:53:28.000 And if we want to change, effectuate it.

00:53:30.000 Then we look at history through the prism of what change we'd like to see effectuated.

00:53:33.000 And this is very openly talked about in the 1920s, 1930s by the new historians and the idea of rewriting history with an eye on what sort of social change we'd like to see.

00:53:44.000 What sort of perspective should historians take when it comes to looking at facts?

00:53:48.000 Because obviously we all have our own prism when it comes to looking at facts.

00:53:51.000 You look at the basic evidence.

00:53:52.000 In our case, we've been talking about the Dow Jones Industrial Average and employment, particularly employment of the poor in the later history.

00:53:59.000 Well, the evidence is pretty strong.

00:54:01.000 You're fixing history right here by offering a different point of view or a different set of data.

00:54:09.000 I have great trust in people to make their own evaluation.

00:54:14.000 I'm concerned about the way history is taught in schools.

00:54:17.000 One, it's taught more left than it should be, but two, it's not taught enough.

00:54:22.000 The predominance of the social sciences, which presume that we can solve things, means the eclipsing of history, which is, as the historian said, chancy.

00:54:31.000 It doesn't always come out the way the theory would suggest, and there's a wonderful, unterrible, terrifying serendipity in that.

00:54:40.000 Oh my gosh, something ended up the way it shouldn't.

00:54:43.000 It almost happened, for example, relating to labor.

00:54:46.000 Right now we have right-to-work states and non-right-to-work states and non-right-to-work states.

00:54:50.000 You kind of have to be in the union and there's only one union and the employer kind of has to accept that union and the jobs leave there.

00:54:57.000 That natural experiment is a very important thing for the United States.

00:55:00.000 That's how we learned that unions could be counterproductive.

00:55:04.000 What if we hadn't been allowed to have so-called right-to-work stakes?

00:55:07.000 Well, that almost happened.

00:55:10.000 It was on the Democratic Party agenda to end the right-to-work exemption, which was part of Taft-Hartley law.

00:55:17.000 It just happened that Lyndon Johnson got a little...

00:55:20.000 tired after the Tet Offensive and so on, that he didn't have time or energy after all the civil rights legislation and Medicare and Medicaid to put through an end to right to work.

00:55:31.000 So this loophole stayed, so all these states grew and showed us that perhaps unionization is an impediment to growth and employment.

00:55:42.000 Never would have happened had we just made the whole country non-right to work, which is indeed what some of the candidates are proposing now. - Is there a way to put the genie back in the bottle here?

00:55:52.000 So the constitutional bargain has been rewritten, broken.

00:55:56.000 One of the problems with government is obviously that you have discrete beneficiaries and diffuse victims.

00:56:02.000 With every government policy, it's easy to see the person who gets the check.

00:56:05.000 It's very difficult to see the millions of people from whom the check came.

00:56:08.000 Is there any way for Americans to reestablish that constitutional bargain and move back toward a system of negative rights versus positive rights?

00:56:16.000 Because that's really what both The Forgotten Man and The Great Society are about, is this transition from the actual rights of the American Revolution to this kind of second bill of rights that includes all of these entitlements.

00:56:25.000 Yes, I do think.

00:56:27.000 Reagan came up with his name for California when he ran for governor the first time in the 60s, Ronald Reagan.

00:56:33.000 And remember, he wasn't so known then.

00:56:35.000 I mean, known in California, known as an actor, but wasn't all going to be automatic to the presidency the way we think of it now.

00:56:42.000 He said, we have a creative society, not a great society, a creative society.

00:56:47.000 And if you permit creativity, then you will see recognition.

00:56:53.000 Through doing a business comes understanding of the importance of markets.

00:56:57.000 And he really believed that and it was true.

00:56:59.000 So I believe we live in a super creative society now.

00:57:03.000 People are doing things they never imagined they could and change is happening at a faster rate than it's ever happened before.

00:57:08.000 So I do believe through alternate paths of education, whether it's new forms of video, streaming, YouTube, a lot of things you're doing, or through contests, people are managing to educate themselves.

00:57:25.000 One of the things we do at the Coolidge Foundation, where I am, is provide the education about Calvin Coolidge to high schoolers through economic debate.

00:57:33.000 If they have to debate the economy, they see that Coolidge had some merit.

00:57:38.000 So they can make up their own mind.

00:57:40.000 They argue both sides.

00:57:41.000 But I really do believe in workarounds and education as important for the future of America.

00:57:45.000 That sounds tame education.

00:57:47.000 I really believe in it.

00:57:48.000 Well, why do you think it is that so many of the sort of economic elites in our society have bought into the nostrums of the great society?

00:57:56.000 Because you would think that those would be the people who lead the fight against it.

00:57:59.000 And indeed, throughout your books, you talk about certain entrepreneurs who were leading the fight against this sort of government interventionism and saying, this is not the way I run my business.

00:58:05.000 This is not the way a business ought to be run.

00:58:07.000 And yet now, increasingly, what we see is sort of our great business leaders who are speaking out on behalf of government interventionism Who are openly stumping in favor of government interventionism.

00:58:18.000 Is that just because they're looking for a specific benefit from government or is it because they've been cowed into submission by a politics that declares them malefactors of great wealth if they refuse to if they refuse to kowtow?

00:58:30.000 Well, there are two questions.

00:58:31.000 One is economists.

00:58:33.000 Economists, their problem is they're in a guild.

00:58:37.000 As opposed to entrepreneurs at the beginning, right?

00:58:40.000 They're in a guild, they have to please one another.

00:58:42.000 They prefer to be powerful to being accurate sometimes, right?

00:58:48.000 So the guild believes, you want the favor of the guild.

00:58:50.000 In this book, in Great Society, I have the story of Arthur Burns, a really great economist who completely caved, broke his own oaths.

00:58:59.000 You know, and gave us inflation, even though he was a great scholar of inflation, out of vanity and political politics, because he wanted to be loved by the president.

00:59:10.000 Businesses, it's a different matter.

00:59:11.000 When they're publicly traded, they're almost part of government already.

00:59:15.000 Warning, do not go public with your business, because then you are heavily regulated.

00:59:20.000 You can't do what you want.

00:59:21.000 It can't be a family business.

00:59:23.000 And you can't, you know, all the sets of rules for shareholders now are are so onerous that CEOs are basically hired to pander to the business press and the world, which includes a whole lot of social justice talk that probably isn't good for the employees of the company or the shareholders.

00:59:42.000 So in just one second, I'm going to ask you one final question, but if you want to hear Amity Schlaes' answer, you have to be a Daily Wire subscriber to To subscribe, head on over to dailywire.com, click subscribe, and you can hear the end of our conversation there.

00:59:54.000 Amity Shlaes, the book is Great Society, New History.

00:59:56.000 Go check it out today.

00:59:57.000 Thanks so much for stopping by.

00:59:58.000 I really appreciate it.

00:59:59.000 Thank you.

01:00:08.000 Mike Joyner and produced by Mathis Glover.

01:00:10.000 Executive producer, Jeremy Boring.

01:00:12.000 Associate producer, Katie Swinnerton.

01:00:14.000 Our guests are booked by Caitlin Maynard.

01:00:16.000 Post-production is supervised by Alex Zingaro.

01:00:18.000 Editing is by Jim Nickel.

01:00:20.000 Audio is mixed by Mike Carmina.

01:00:22.000 Hair and makeup is by Nika Geneva.

01:00:23.000 Title graphics are by Cynthia Angulo.

01:00:25.000 The Ben Shapiro Show Sunday Special is a Daily Wire production.

The Ben Shapiro Show - May 03, 2020

Amity Shlaes | The Ben Shapiro Show Sunday Special Ep. 93

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