Amity Shlaes is a renowned historian who has spent her career studying the effects of the Great Depression. She serves as chair of the Board of the Calvin Coolidge Presidential Foundation, and she is the author of four New York Times bestsellers. Her latest book, Great Society: A New History, is more relevant than ever. 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. This is a Sunday special, featuring an interview with Amity Shlave, where we 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. The only way to get access to that part of the conversation is to become a Dailywire subscriber. You ll have access to all of the full conversations with every single one of our awesome guests. Subscribe to Dailywire today! Become a subscriber today to receive access to the entire Dailywire channel and access to access all of our most popular conversations with all of your awesome guests! Subscribe today using our podcast s VIP memberships, unlimited access to our most listened-to episodes, unlimited ad-free episodes, and much more! Learn more about your ad choices. Use the promo code: PODCASTLEPRODUCER to receive 10% off your first month only when you become a DAILYWEEKS Member of DAILYwire. and receive 20% off the entire month of the DAILYWEBSITE when you sign up for DAILYWRINE. FREE PRICING! Use discount code: VIPREAL ESTATE when you shop at Dailywire.COM/PODCAST to receive a discount of $50 or more than $99.00 and get 10% OFF the offer of $99, and get 20% OFF your choice of a VIP membership when you enter the VIP discount when you buy a course starting in January 2020. Get exclusive VIP membership? Get the Dailywire membership offer when you use the VIP membership offer starts in the program? Use promo code CRITICAL? Subscribe HERE! Watch this episode of The Ben Shapiro's new book, Ben Shapiro s The Weekly Standard Subscribe here: The Best of the Weekly Standard Podcast and learn more about Ben Shapiro?
00:00:00.000Guaranteed income tends to break up families.
00:00:02.000It makes it easier to be a single, autonomous adult.
00:00:05.000With a guaranteed income, you don't have to stay together.
00:00:07.000Families need to depend on one another in order to be strong.
00:00:12.000While Bernie Sanders might be out of the race, his socialist policies and ideas remain.
00:00:16.000A Gallup poll shows that 43% of Americans believe some form of socialism would be a good thing, compared to only 25% in 1942.
00:00:24.000Today, more Americans associate socialism with social equality than government control.
00:00:29.000Back 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.
00:00:45.000With 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.
00:00:53.000Amity Shlaes is a renowned historian who has spent her career studying the effects of the Great Depression.
00:00:58.000Over the years, she's written for Everyone, Wall Street Journal, Bloomberg, Forbes, National Review.
00:01:03.000She serves as chair of the board of the Calvin Coolidge Presidential Foundation, and she's the author of four New York Times bestsellers.
00:01:09.000Her latest, Great Society, A New History, is more relevant than ever.
00:01:13.000She 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.
00:01:21.000Today, 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.
00:02:01.000One 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.
00:02:07.000One 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.
00:02:15.000Not perfected at the time, obviously we didn't live up to those principles.
00:02:18.000The Civil War helps us draw a lot closer to those principles.
00:02:21.000The Civil Rights Movement draws us even closer.
00:02:23.000But that America was founded on good principles and we've been moving toward fulfillment of those principles.
00:02:27.000And 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.
00:02:43.000So, which of these two versions of history, in your view, is more accurate?
00:02:47.000And why do you think that there is this bifurcation?
00:03:14.000The actual evidence suggests that the government As one economist of the period said, played God.
00:03:22.000And 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.
00:03:32.000That's what the government was in the 1930s.
00:03:35.000There's also plenty of economic evidence, so I find it particularly puzzling that the left-leaning narrative would be so compelling to people.
00:03:45.000For example, what's the kindest thing to sticking to the 1930s you can ever do for anyone?
00:03:53.000And 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.
00:04:03.000Loving people tried to help people they loved and hurt them.
00:04:08.000So 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.
00:04:15.000You wrote one on Calvin Coolidge, and then you wrote one on the Great Depression and FDR's policy.
00:04:19.000And then you have your brand new book, Great Society, New History.
00:04:21.000We'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.
00:04:27.000But first, I want to take a moment to give a shout out to all of our advertising partners who help make this show possible.
00:04:33.000We are super grateful for their business, and we certainly appreciate it.
00:04:36.000If 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.
00:04:44.000We're all trying to get through this together.
00:04:56.000I'm sure many of you are working from home these days.
00:04:58.000Without your IT department to protect you from online threats, it's important you take action on your own to secure your devices, the devices you use for work.
00:05:05.000That's why I recommend using ExpressVPN for the best online protection possible.
00:05:09.000I've been talking about ExpressVPN on my show for so long, you already understand why encrypting your network data is so important, but some of you still have not acted.
00:05:16.000Well, you might be thinking security threats don't affect you personally, but Not using ExpressVPN, that's kind of like leaving your front door unlocked every time you go out.
00:05:23.000And just like there's been a jailbreak by mayors across the country, also, there are a lot of hackers who are now finding a lot of liberty online.
00:06:12.000Your history of Coolidge suggests that we should be viewing Coolidge precisely the opposite.
00:06:16.000The 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.
00:06:22.000So what do people not understand about Coolidge?
00:06:25.000Well, first of all, ranking presidents shouldn't be a zero-sum game.
00:07:18.000And 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.
00:08:15.000Well, 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.
00:08:25.000If 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.
00:08:48.000So he didn't ever say, and the stock market is way too high and it's dangerous.
00:08:53.000Because he felt that itself was dangerous.
00:08:55.000But he also believed the White House should stay away from the stock market.
00:08:59.000Remember, in the 20s, there was no Securities and Exchange Commission.
00:09:02.000There was no serious national regulation, really, of the stock market.
00:09:07.000It was, well, the New York had laws, right?
00:09:09.000It's different if that's where the stock exchange was.
00:09:11.000Or Massachusetts had laws, the Ponzi scheme.
00:09:14.000Was prosecuted in Massachusetts, not by the federal government so much.
00:09:18.000These 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.
00:09:27.000It will fall and people will learn that maybe stocks sometimes go too high and they shouldn't have all their money in stocks.
00:10:08.000And let's cut government, which is opposite to what we would do now.
00:10:12.000Now we would spend a lot in government to fight off a recession.
00:10:17.000The reaction was what technically is called pro-cyclical.
00:10:20.000That is, we made it worse, sort of, but that also made it very short.
00:10:25.000That was the standard response insofar as there was a response to downturns.
00:10:30.000Then, when we get to the Great Depression, where Coolidge wasn't managing, rather Herbert Hoover and FDR were, they took the opposite position.
00:10:38.000They said, let's wade in, let's reorganize the economy, let's berate business, a lot of things that had never happened before.
00:10:45.000Let's insist that the labor price be high because that will stimulate demand.
00:11:13.000But the reality of the 20s was there was incredibly solid growth.
00:11:16.000Even 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.
00:11:25.000A lot of ideas, including pre-television that we consider 30s or 40s ideas, were thought up in the happy 20s.
00:11:33.000That's all suppressed, all that memory, because of the desire for a narrative that blames Coolidge, blames market, and elevates government.
00:11:42.000What does that say about the study of history?
00:11:44.000Because 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.
00:11:53.000So 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.
00:12:18.000Instead 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.
00:12:27.000so 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.
00:12:37.000Yeah, Hoover's a bit like Mitt Romney or his father, George Romney.
00:12:40.000He was a can-do man who liked to take charge, and he meant well, and he was a community man, but he was wrong.
00:13:11.000If the 20s saw GDP grow fast, if one remarkable thing Coolidge did, for example, was he actually cut the budget.
00:13:20.000When we talk about cutting the budget, we mean reducing the rate of growth of the budget.
00:13:24.000That's part of our lying, right, to ourselves.
00:13:26.000He actually literally cut it, nominal and real.
00:13:30.000He actually, it was a lowered data point when he left after being in office 67 months.
00:13:35.000That'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.
00:15:27.000They 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.
00:15:46.000Let's move on to The Forgotten Man, because obviously we're talking about that period.
00:15:49.000It 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.
00:16:04.000And you really see the ugly results of that in FDR and his cabinet and his brain trust.
00:16:10.000Because, I mean, my goodness, when you talk at the beginning of the book, As I recall, about the manipulation of gold rates.
00:16:18.000I mean, it's astonishing stuff to realize that American national policy was being set based on FDR's lucky numbers.
00:16:25.000This is all about arbitrariness versus rule of law.
00:16:28.000So 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.
00:16:39.000Because we want markets, we don't want just tribal kingdom.
00:17:12.000And what happened specifically with gold, what you're referring to, is they couldn't figure out about where gold fit into the Great Depression.
00:17:20.000We did have a contraction, a deflationary contraction.
00:17:39.000He said, well, I will set the price of gold and buy it here.
00:17:43.000But he didn't understand that gold no longer mattered because he had gone off the gold standard.
00:17:49.000It didn't have the magic it would have had, buying and selling gold before he went off the gold standard.
00:17:54.000So he was very confused and very random.
00:17:56.000And 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.
00:18:08.000Henry 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.
00:19:17.000The people were supposed to work collectively and be happy, except it was humans.
00:19:22.000They had to share the tractor, and in exchange they got really nice homes.
00:19:25.000These 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.
00:19:36.000And 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.
00:22:12.000Arrogance of government can be avoided as well.
00:22:16.000There was a study recently that came out from UCLA.
00:22:19.000A couple of professors there found that FDR's policies had lengthened the Great Depression by at least eight years.
00:22:24.000That the deep government interventionism had scared away capital.
00:22:29.000That the attempts to prop up wage rates by lowering production in particular areas had prevented people from getting food.
00:22:35.000That 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
00:23:05.000associated with it, that America would have collapsed into complete dust and or tyranny.
00:23:36.000And the Dow of the 60s, just to get later, Everyone counted on it getting past $1,000.
00:23:42.000It didn't get past $1,000 until Ronald Reagan.
00:23:46.000Imagine if we had to wait a decade plus more to get to $30,000.
00:23:53.000Well, our children and friends would be mightily disappointed, including all the people who have pensions in the stock market, including teachers and TIAA-CREF.
00:24:32.000That'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.
00:24:46.000The second thing is teachers like government, especially when they're in unions.
00:24:55.000Third 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.
00:25:08.000But in America, the long march would be a long march through the institutions.
00:25:28.000I 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.
00:25:40.000There'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.
00:25:55.000And we're closer to East Europe than is comfortable for us.
00:26:00.000In fact, there's a diversity of evidence in all these areas, Ben, and the econ is pretty unmistakable.
00:26:06.000Freer is slightly better for the United States.
00:26:10.000Inflation is caused by government when it's too big.
00:26:13.000We haven't had inflation yet this time.
00:26:18.000Our freeways will be completely impaired should the interest rate go up.
00:26:21.000Well, one day the interest rate will go up.
00:26:23.000The 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.
00:26:46.000It turns out that gives you a hell of an advantage in terms of competitive Right, right.
00:27:36.000Another thing is like think about when you're in college and your junior year, your college wins the pennant.
00:27:41.000And how much you love the coach and the team.
00:27:44.000And if you're on the team, that stays with you forever, right?
00:27:48.000There 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.
00:28:48.000People look at what happens overseas and they say, well, I mean, sometimes it's very perverse.
00:28:54.000They say, well, if that big thing can happen here, we can do this here.
00:28:58.000They draw the wrong lessons sometimes.
00:29:01.000Let's talk about Great Society because now we've reached the 60s.
00:29:04.000And the fact is that the economy, as you talk about in the book, is booming by the early 60s during the JFK administration.
00:29:10.000We have very high rates of GDP growth.
00:29:13.000And there is this sort of belief that settles over America that finally we've reached the end point.
00:29:18.000That if we just engage in massive government redistributionist schemes and major government involvement, that we can cure poverty once and for all.
00:29:25.000And after all, we are in the midst of changing so many of our mores in other areas, some for good and some for ill.
00:29:30.000I mean, I'd argue for ill in the sexual revolution, but for great good, obviously, in the civil rights movement.
00:29:35.000You 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.
00:29:54.000Imagine if we could get up tomorrow and say there's no more American debt.
00:29:57.000We massively misspent when we spent on the Great Society.
00:30:01.000The 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.
00:30:15.000So people-- one in 10 black men in the South voted.
00:30:30.000They 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.
00:31:04.000from 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.
00:31:15.000That'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.
00:31:23.000We need to help people all along until they're really ready to compete with others.
00:31:27.000That idea went Just absolutely exploded into massive spending in all areas.
00:31:33.000It led to affirmative action that we have still with us today, but many other projects, too, that did the opposite of enfranchisement.
00:31:42.000They disenfranchised people by chaining them forever to welfare-like programs.
00:31:49.000I mentioned food stamps and sometimes people attack that.
00:31:52.000There's nothing wrong with a poor family sometimes receiving food stamps.
00:31:57.000There'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.
00:32:08.000The Great Society basically just Increased and increased commitments for spending made some very interesting legal shifts.
00:32:15.000One legal shift was at the beginning of the decade, spending on benefits was more like charity from the federal government.
00:32:25.000The 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.
00:32:37.000You're entitled to it as a patent owner.
00:32:40.000is entitled to the rents from his patent, the property from his patent.
00:32:48.000Why should people be entitled to payments that cost someone else?
00:32:52.000Because when you spend for one person to get entitlement, property, a benefit, you're taking away someone else's property, his money.
00:33:00.000He must pay the taxes for this project.
00:33:03.000So our property rights hurt or helped.
00:33:05.000Charles Reich is very interesting because he also wrote the Greening of America, sort of crazy left-wing manifesto, mixed-up youth manifesto.
00:33:13.000But I think his property rights analysis, that welfare is property, was incredibly damaging to our society.
00:33:21.000I 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.
00:33:26.000The federal government openly sponsoring people to agitate against the government in order to stump for benefits was one thing that I found absolutely shocking.
00:33:34.000Yes, 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.
00:33:48.000I grew up around independent Democrats who really hated him because he ran a machine and it wasn't nice.
00:34:02.000When it snowed, but he wasn't nice and they weren't particularly part of it either because he had, Daly was an Irish machine.
00:34:10.000But I grew to like Daly in this book and even Yorty of L.A.
00:34:14.000because the mayors had ideas for poverty.
00:34:18.000This 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.
00:34:27.000Even when their community is people of a different race.
00:35:09.000And those friends who were picked by the poverty office in our War on Poverty in Chicago were really left wing.
00:35:16.000They even gave money to the Blackstone Rangers through the Woodlawn Organization.
00:35:21.000So they kind of supported a vigilante protection the way the U.S. government.
00:35:25.000government has occasionally done in Medellin, in Colombia, in drug places.
00:35:31.000You 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.
00:35:39.000That's essentially what we did, and Daley could not believe it.
00:35:43.000The 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.
00:35:51.000And he called up the White House and he said, does President Johnson know he's giving M-O-N-E-Y to subversive people?
00:35:59.000So 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.
00:36:13.000The mayors just became mendicants who needed money from Washington and Washington always set the terms.
00:36:20.000It's amazing how none of the ideas from the Great Society have ever truly died, like, even gone away.
00:36:25.000I 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.
00:36:34.000I mean, literally, while we were filming this, Bernie Sanders was tweeting out that we ought to have national rent control.
00:36:41.000And the first thing that I flashed to was the Pruitt- IGO.
00:36:46.000The 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.
00:37:05.000It 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.
00:37:12.000And yet that is coming back, and it's coming back stronger than it was maybe in the 60s.
00:37:16.000Well, you know, one thing about the old New Republic writers and the progressives of that period is they were quite honest.
00:37:22.000And one of them I'm thinking of is Nicholas Van Hoffman.
00:37:25.000And he has a story about leading a rent strike.
00:37:30.000That is exactly what is under discussion now.
00:37:33.000Make 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.
00:37:45.000And Niklas von Hofmann, this writer, was then a young activist, maybe working for Saul Alinsky.
00:37:53.000And he went and there was a meeting with the evil landlord.
00:37:56.000And the landlord came and he had a piece of paper.
00:37:58.000And he said to his lawyer who was with him, tell them.
00:38:02.000It'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
00:38:25.000Nick 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.
00:38:44.000Most landlords aren't bad men or good men.
00:38:46.000They're somewhere in between, like all humans.
00:38:49.000And just the mere economics of it didn't work out.
00:38:51.000In 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.
00:40:01.000And 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.
00:40:09.000So this little project, buying little houses, and the people really liked to have their own house.
00:40:13.000And they actually knew how to paint their house.
00:41:09.000Okay, so let's talk for a second about union strength.
00:41:11.000So 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.
00:41:22.000That if unions were stronger, then they could be pushing in the private sector for more wage gain in the private sector.
00:41:28.000The 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.
00:41:37.000You 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.
00:41:49.000So what happened with America's unions?
00:41:55.000They made labor too expensive, and that didn't matter when we had no competition.
00:42:01.000When we began to have competition, the unions were indeed very powerful.
00:42:04.000They did indeed push up wages, and they made our automobiles uncompetitive.
00:42:10.000Just 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.
00:42:19.000He got so involved in politics and pushing up wages to help his workers that he failed to notice something on the landscape.
00:42:25.000That was the freight ship bringing over Toyotas.
00:42:46.000They're better made in part Because, and this was new to me really, Ben, when I studied it.
00:42:52.000Some people have studied in business school, Japanese assembly line projects, how a Japanese assembly line might differ from an American one.
00:43:20.000And the unions kind of liked that because they liked to sustain the hostility between the worker and the employer.
00:43:26.000That led to angry assembly lines and junkie cars.
00:43:30.000In 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.
00:43:40.000And 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.
00:43:50.000So their cars were better than our cars.
00:43:53.000And they made more cars per hour Their productivity began to strip us in the 60s as they recovered from World War II.
00:44:01.000All of a sudden, Japan had cheaper, better cars, or Germany had cheaper, better cars.
00:44:06.000So the idea that a union is great, you can have that illusion if you have no competition.
00:44:12.000If 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.
00:44:26.000But not for long, because people really like those Toyotas.
00:44:29.000Yeah, 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.
00:44:43.000It 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.
00:45:18.000He's not the Robert Moses who built the houses in New York and built the bridges and tunnels.
00:45:23.000He 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.
00:45:51.000That's where the energy should have gone.
00:45:54.000And by focusing on identity and groups, whether it's labor, race, we misled our own country.
00:46:01.000One 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.
00:46:10.000And then there's this sort of pushback, not against the spending programs, but at least against the taxation and the regulation via Ronald Reagan.
00:46:18.000You have Bill Clinton basically acquiescing in the idea that the era of big government is over.
00:46:23.000And then in the aftermath of 2007-2008, obviously that all goes away.
00:46:26.000Obviously the American mentality has shifted.
00:46:29.000We are back into big government big time, if we ever left it.
00:46:32.000But the truth is, that story, which is told so often by Republicans, is not fully true.
00:46:36.000I mean, the fact is that these entitlement programs never really went away.
00:46:39.000The Reagan administration spent an enormous amount of money, as did the Bush administration.
00:46:45.000Are 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?
00:46:54.000Unfortunately, I think we'll be forced into austerity.
00:46:56.000There's some new books about austerity.
00:48:27.000One 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.
00:48:40.000Remember, Star Wars was not just a fun idea.
00:48:43.000It was created out of desperation, this idea of a shield in space to end the arms race.
00:48:48.000And nowadays, when people talk about military spending, if you look at a graph of military spending, it's way down from the past.
00:48:56.000One of the ways we mislead people on television is to say, as a share of discretionary spending, defense spending is huge.
00:49:03.000Yes, but discretionary spending is a smaller and smaller part of the budget.
00:49:07.000So when they start to talk to you about as the share of discretionary, they are misleading you.
00:49:12.000Look at the whole budget because all the entitlements are in mandatory and they're bigger and bigger.
00:49:17.000They've been bigger for a long time now than defense.
00:49:21.000Don't let anyone tell you it's all our troubles are because of defense spending.
00:49:25.000Okay, 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.
00:49:36.000There's a magazine called First Things where they write very often about sort of economics and society, and their argument goes something like this.
00:49:43.000In the 1960s, the Democrats came along and wrecked the family structure through government interventionism and social engineering.
00:49:50.000And now those institutions have basically been destroyed.
00:49:53.000The destruction of those institutions means that there is no way for communities to recover.
00:49:58.000And 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.
00:50:05.000There's a call for government interventionism that is designed toward helping dying towns, helping rust belt towns.
00:50:13.000You see Tucker Carlson talk about this on his show a lot.
00:50:16.000Is that destined to work or is that destined to fail in the same way that all social engineering projects seem to fail?
00:50:33.000JFK 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.
00:50:42.000The family is so important in the United States.
00:50:50.000And 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.
00:51:00.000Tocqueville has to come from the local town.
00:51:04.000And what do you need to give a community so that it can form itself and help itself?
00:51:10.000You need to give it space and breathing room.
00:51:11.000You need to take the elephant out of the room.
00:51:14.000I think that electability is also part of this drive.
00:51:19.000It sounds nice, every family gets paid X, another child credit, another Longer paternity leave, whatever that is.
00:51:27.000Government can't afford it and it doesn't usually work.
00:52:01.000They'd be able to pay for their families and their community.
00:52:06.000Let'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.
00:52:16.000Let'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.
00:53:00.000How do we fix the teaching of history?
00:53:02.000So 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.
00:53:20.000So 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.
00:53:28.000And if we want to change, effectuate it.
00:53:30.000Then we look at history through the prism of what change we'd like to see effectuated.
00:53:33.000And 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.
00:53:44.000What sort of perspective should historians take when it comes to looking at facts?
00:53:48.000Because obviously we all have our own prism when it comes to looking at facts.
00:53:52.000In our case, we've been talking about the Dow Jones Industrial Average and employment, particularly employment of the poor in the later history.
00:54:01.000You're fixing history right here by offering a different point of view or a different set of data.
00:54:09.000I have great trust in people to make their own evaluation.
00:54:14.000I'm concerned about the way history is taught in schools.
00:54:17.000One, it's taught more left than it should be, but two, it's not taught enough.
00:54:22.000The predominance of the social sciences, which presume that we can solve things, means the eclipsing of history, which is, as the historian said, chancy.
00:54:31.000It doesn't always come out the way the theory would suggest, and there's a wonderful, unterrible, terrifying serendipity in that.
00:54:40.000Oh my gosh, something ended up the way it shouldn't.
00:54:43.000It almost happened, for example, relating to labor.
00:54:46.000Right now we have right-to-work states and non-right-to-work states and non-right-to-work states.
00:54:50.000You 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.
00:54:57.000That natural experiment is a very important thing for the United States.
00:55:00.000That's how we learned that unions could be counterproductive.
00:55:04.000What if we hadn't been allowed to have so-called right-to-work stakes?
00:55:10.000It was on the Democratic Party agenda to end the right-to-work exemption, which was part of Taft-Hartley law.
00:55:17.000It just happened that Lyndon Johnson got a little...
00:55:20.000tired 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.
00:55:31.000So this loophole stayed, so all these states grew and showed us that perhaps unionization is an impediment to growth and employment.
00:55:42.000Never 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?
00:55:52.000So the constitutional bargain has been rewritten, broken.
00:55:56.000One of the problems with government is obviously that you have discrete beneficiaries and diffuse victims.
00:56:02.000With every government policy, it's easy to see the person who gets the check.
00:56:05.000It's very difficult to see the millions of people from whom the check came.
00:56:08.000Is there any way for Americans to reestablish that constitutional bargain and move back toward a system of negative rights versus positive rights?
00:56:16.000Because 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.
00:56:27.000Reagan came up with his name for California when he ran for governor the first time in the 60s, Ronald Reagan.
00:56:33.000And remember, he wasn't so known then.
00:56:35.000I 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.
00:56:42.000He said, we have a creative society, not a great society, a creative society.
00:56:47.000And if you permit creativity, then you will see recognition.
00:56:53.000Through doing a business comes understanding of the importance of markets.
00:56:57.000And he really believed that and it was true.
00:56:59.000So I believe we live in a super creative society now.
00:57:03.000People are doing things they never imagined they could and change is happening at a faster rate than it's ever happened before.
00:57:08.000So 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.
00:57:25.000One 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.
00:57:33.000If they have to debate the economy, they see that Coolidge had some merit.
00:57:48.000Well, 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?
00:57:56.000Because you would think that those would be the people who lead the fight against it.
00:57:59.000And 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.
00:58:05.000This is not the way a business ought to be run.
00:58:07.000And 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.
00:58:18.000Is 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?
00:58:33.000Economists, their problem is they're in a guild.
00:58:37.000As opposed to entrepreneurs at the beginning, right?
00:58:40.000They're in a guild, they have to please one another.
00:58:42.000They prefer to be powerful to being accurate sometimes, right?
00:58:48.000So the guild believes, you want the favor of the guild.
00:58:50.000In this book, in Great Society, I have the story of Arthur Burns, a really great economist who completely caved, broke his own oaths.
00:58:59.000You 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.
00:59:23.000And 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.
00:59:42.000So 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.
00:59:54.000Amity Shlaes, the book is Great Society, New History.