A Turning Point in American Economics — Amity Shlaes
A Turning Point in American Economics — Amity Shlaes
It’s economic history like you’ve never read it … In her latest book, Great Society, bestselling author Amity Shlaes describes a turning point in American economics. In the 1960s, a war on poverty began with good intentions. But what was hoped to be a resounding success became a messy, ineffective failure. Shlaes discusses Great Society, government overreach and the New Deal with host Charles Mizrahi.
- An Introduction to Amity Shlaes (00:00:00)
- A Bipartisan Story (00:03:27)
- The New Deal (00:07:02)
- Johnson and the Great Society (00:18:38)
- A Housing Project Gone Wrong (00:21:02)
- Unintended Consequences (00:30:34)
- Great Society: A New History (00:39:13)
Amity Shlaes is a New York Times bestselling author, columnist and chair of the Calvin Coolidge Presidential Foundation. Shlaes’ exceptional works of nonfiction describe various historical figures and pivotal periods of American history. And you can find a list of these bestsellers below.
In addition, Shlaes is the recipient of numerous awards, such as the Hayek Prize and the Frederic Bastiat Prize. Most recently, she was the recipient of the 2021 Bradley Prize.
Before You Leave:
AMITY SHLAES: It’s true that mothers hid their dads in order to pretend that there were no dads and get money. They told their children to lie and say: “I don’t see my dad” — even if their dads were in the closet or under the bed. Can you imagine what that would do to a child? You’re forced to lie to an official when you’re eight years old.
CHARLES MIZRAHI: My guest today is Amity Shlaes. Amity is the author of four New York Times bestsellers; The Forgotten Man: A New History of the Great Depression; Coolidge; The Greedy Hand: How Taxes Drive Americans Crazy; and her latest book, Great Society: A New History. She also chairs the board of the Calvin Coolidge Presidential Foundation and the Manhattan Institute’s Hayek Book Prize. In addition, she serves as a scholar at The King’s College.
CHARLES MIZRAHI: I recently sat down with Amity, and we talked about how the history of good intentions, government overreach and terrible results offers lessons for both policymakers and voters today.
CHARLES MIZRAHI: Amity, thank you so much for appearing on the show. I greatly appreciate it.
AMITY SHLAES: Thank you.
CHARLES MIZRAHI: Before we even get into your latest book, I want to hold it up and show it. It’s called Great Society: A New History. I’m going to talk about why it’s really new. But then again, it’s not that new. As you put it in the beginning, nothing is really new here. We just keep forgetting what we did in the past. So, I want to get into the first thing. Why did you write this book? Why did you feel compelled to write a book about the Great Society?
AMITY SHLAES: Well, thank you, Charles. The logical answer is that I write about the progressive movement. And there are waves of progressivism in the history of the United States. The early wave was in 1910s. Another wave is the New Deal. And the next great wave was the Great Society, which built on the New Deal and the first progressive push — which was, for example, Theodore Roosevelt or William Howard Taft. So, each wave gets a snapshot. That’s my book.
AMITY SHLAES: But another reason I wrote this book — the Great Society is the logo or mantra of Lyndon Johnson in the 1960s — is because it’s the story of my parents. My parents were sentient, thoughtful people, business leaders and community leaders who didn’t just read about the Great Society, but they actually lived it in real time. Our family lived on the south side of Chicago — where there were plenty of Great Society impulses to help poor people and improve the world for all. I saw that as child. But I saw it and thought: “I’ll revisit this and figure out what happened.”
CHARLES MIZRAHI: I’ll cut to the chase. For those of you who are going to read the book, we know the ending. It doesn’t work. Why does a war on poverty — which sounds so great — and throwing zillions of dollars of government money at a problem and creating a bunch of entitlements for a bunch of people fail?
AMITY SHLAES: People have souls. Most decisions that people make are about themselves. And if a person wants to move up, economically, into the working or middle class, most of that impulse comes from him — even today. It doesn’t come from government. Certain moments may be helped by government.
AMITY SHLAES: For example, after World War World War II — or more recently — when a man left the army, he might get help with college. Even if he wasn’t an officer, the G.I. bill definitely helped. Or, a man or woman might get help with a mortgage — something related to being a veteran. Or, a woman might get help if she attended a community college where the cost was zero. And therefore, she’d learn a trade and be able to earn her own money.
AMITY SHLAES: But helping others become something all the way is what the Great Society did. It called itself “opportunistic,” but it was more like permanent help. It doesn’t work because if people want something, they usually want to do it themselves. If they don’t really want it, then a world of help doesn’t help them. And sometimes, it even makes them lose their own desires to advance.
AMITY SHLAES: Once, I was speaking to a bunch of high schoolers in Arizona. I was speaking about the expansion of food stamps during the Great Society in the 1960s. And under both President Johnson and President Nixon, the Great Society was a bipartisan story. It was not: “the Democrats did it.” Republicans did it even more in some ways — that is, the expansion and spending. I was saying something about food stamps, and a high schooler got up and said: “You’re shaming me. I’m on food stamps. How dare you shame someone who comes to want?”
AMITY SHLAES: Well, none of us want to shame anyone who comes to want. At all times, unexpectedly, people come to want. They do. And it’s not always their fault. But we can agree that it is a shame if one expects not only oneself but also one’s child and grandchild to be on food stamps. That’s a shame.
AMITY SHLAES: The most left-wing person in the world would think that’s a shame because the human ideal is to take care of your family and yourself — self-reliance. And that goes across parties. To be specific about the Great Society, before the 1960s, the government — whether state, local or federal — decided when someone deserved a federal benefit. There was a lot of discretion in that. And that discretion was ugly. Think of the social workers who liked one family and not another.
AMITY SHLAES: In the 1960s — and in this period, I cover going into the 70s — there was a Supreme Court case called Goldberg v. Kelly. It basically said: “Maybe welfare is like property. You’re entitled to it.” Hence, this big concept: “Entitlement — it’s your right.” That was a shift. When you make aid from whatever source — but particularly a government — a right, you change the human mindset.
CHARLES MIZRAHI: Let me jump in for a second. Before FDR and the New Deal, in your other book — The Forgotten Man — you show that FDR’s New Deal didn’t help the depression. In fact, it prolonged it.
CHARLES MIZRAHI: But before we talk about that, my grandparents — on my mother’s side — came to this country in 1922. And during the Depression, they were going to be kicked out of their apartment because my grandfather didn’t have enough money. He wasn’t working. My grandmother worked as a superintendent of the building. She scrubbed down the halls on her knees in order to pay the rent. She said: “At that time, there was no government aid at all. And thank God for FDR because he had all these great things that helped us get through.”
CHARLES MIZRAHI: Now, you have a different take on that. Maybe she didn’t remember much of what really happened. But how does one approach that say: “You need government to help people at certain times”?
AMITY SHLAES: Well, if the government help did help people at certain times, they would be all right. The New Deal programs that your grandfather might have been in — which were temporary work programs — were all right. Sometimes, we need them. Sometimes, they are life-savers. This winter, there will be wood for houses that burn wood. It’s wonderful when your house burns wood, and you need it.
AMITY SHLAES: But I don’t quite know why the godsend idea of FDR became an American bedrock memory. FDR was a pretty good war president. He was a fantastic Navy president. This is a man who knew every crack and cranny of the East Coast. He could sail the battleships himself, if necessary. His expertise was international, but he was a pretty poor economist. Why does that matter to our story? Because in the Great Depression — notwithstanding this New Deal for Americans — unemployment was 10% to 15% for a whole decade.
AMITY SHLAES: So, your grandmother enjoyed the magna minutiae of Franklin Roosevelt, but he did not help the worker enough. The New Deal failed to deliver what every other decade in American history has delivered: lower unemployment. So, what was it about the New Deal that made it fail? Was it that the Depression was so special and different — like something out of the Wizard of Oz? Not really. There was a remarkable deflation at the beginning of the decade that caused unemployment. We’d had shock unemployment like that before. But it’s pretty hard to find evidence for some remarkable circumstance.
AMITY SHLAES: They kept unemployment over 10% in 1935, 1936, 1937 and 1938. Why? GDP grew over a tiny base but did not return to the level of 1929 until the very end of the 1930s. Why? One answer I discovered in my research … I am very lucky. Economists often come to me about this because I put a narrative to their data points. There were troubling data points of the abiding unemployment of the 1930s. It was tragic that wages were too high. Why were wages high?
AMITY SHLAES: I’m not going to put a chart on your show. But when you look at a chart of the real wage in the 1930s, what you’ll see is that it’s above trend for the century. How can the wage be above-trend in a decade with over 10% unemployment? It was the centerpiece of the New Deal.
AMITY SHLAES: The New Deal law made it a rule that wages had to be high. You must pay more. That was called the Wagner Act. It was also other New Deal laws, such as the National Labor Relations Act or the Minimum Wage Act. There was an overtime act. The government ordered wages to be higher.
AMITY SHLAES: So, what do you do if you’re an employer, in a recession and don’t have a lot of revenue? Orders are still down, and you can’t pay a lot of people. The government said: “The Wagner Act says that you must pay high wages. You hire back more slowly.”
AMITY SHLAES: That was the tragedy of the New Deal. People were unemployed for five years.
CHARLES MIZRAHI: Or, you fired people. You have five people. You have to pay certain wages. Get rid of two or three.
AMITY SHLAES: They laid off and didn’t rehire. And why is that? Well, they wanted to follow the law. They didn’t want to get in trouble. The administration was for the Wagner Act. Congress was for the Wagner Act. Policemen were for the Wagner Act. Everybody was going to be hard on you if you didn’t pay high.
AMITY SHLAES: It was an economic falla. It’s a little unfair to use that analogy, but let’s say it was like using a drug in the COVID-19 period that everyone knows is or isn’t discredited. Everyone knew that a law that made wages high in an economically weak period when revenues were slow for employers was a bad idea. But nobody dared to say it.
CHARLES MIZRAHI: OK, stop for a second.
AMITY SHLAES: So, it was a bit like that. That was the period.
CHARLES MIZRAHI: OK, so you have intelligent people. They went to the right schools. Many of them grew up wealthy. Many of them ran businesses — and big businesses back in those days. Why do people, when they get into government, screw it up? They think they can save everybody by writing checks with 10 digits.
AMITY SHLAES: Well, in that period, it was more about forcing employers to write checks with 10 digits. So, employers refrained. The one example I’m giving is the real failure of the New Deal. It was for the working man. Remember, President Biden said: “Put people back to work.” That was the New Deal, too. And it didn’t help the working man. It created a forgotten man. Why is that?
AMITY SHLAES: I think it’s all vanity, Charles. We want to do good. We’re clever. Therefore, we want to scale our good. We don’t want to just go to church on Sunday and help three poor people by serving them soup or giving one small business loan around the corner. We want to help the whole country. And our IQs suggest that we might be qualified to do that.
AMITY SHLAES: Well, that’s the folly of knowledge, right? You can’t often know what people know better locally. In a town or community, people know what they need. A school might need a gym. If you send [aid] for Spanish teachers, and there’s not much interest in Spanish, it’s the wrong gift. The school might need Spanish teachers, and you send in the gym. It’s the wrong gift.
AMITY SHLAES: Who knows whether the school needs a gym, car park or Spanish teachers? Only the school knows. That’s another factor. The New Deal is very far away. And at that time, such national efforts from Washington were new things. Now, we’re accustomed to that. Washington guesses what some locality needs.
CHARLES MIZRAHI: I get it. And you’re right. I totally agree with you. On the local level, it was the synagogues, churches, Kiwanis Club and Rotary Club that used to help the local community. They knew who needed help, and they knew how to effectively help them without filling out, bureaucracies and the federal government. I’m totally with you.
AMITY SHLAES: You might want to stick to your grandmother for one side. Because I think Jews like Roosevelt.
CHARLES MIZRAHI: Liked? They thought he was Jewish.
AMITY SHLAES: So, why is that? The Republicans led — and Democrats joined — very restrictive immigration laws. It changed immigration from the 20s [on]. Right? So, your grandparents got in just in time. And immigration — particularly from eastern and southern Europe — became tougher. I don’t know about the Middle East, but I do know about eastern and southern Europe.
AMITY SHLAES: Well, the Republicans were blamed for that — and they probably should have been. Democrats joined them. And Roosevelt didn’t change that law. But when it came to World War II, he engaged. He sided against the Germans. The Germans were awful to Jews. I’m Jewish as well. My point is: Our look back is colored by our present-ism.
AMITY SHLAES: What do I mean by that? My grandmother is very wise person, but eventually she became old and said: “I really loved Roosevelt.” I asked: “Why do you love Roosevelt?” And she said: “He was so good on television!” She meant radio, but her memory had shifted a bit. So, I think the memory of the war — the justness of the cause of World War II — colored people’s analysis of the preceding Depression. That’s the point. Thank you for indulging me!
CHARLES MIZRAHI: I definitely got that. There’s such a bias because, in Roosevelt’s time, the New Deal wasn’t so great. He was a great commander in chief. But economically, he wasn’t that great. And it took 20 to 30 years for people to forget.
AMITY SHLAES: He was [the] “Admiral in Chief.” You have to forget. What President Biden seeks — I also want to talk about the Schechter case if you’ll permit me. But what President Biden seeks is to replicate something closer to the Great Society — or to extend it. But there’s enough memory of the Great Society and its failings. And it did fail. We spent a lot of money, and the poverty numbers didn’t really change. We went the wrong direction in terms of minorities — particularly African-Americans — and what we told them was important. We changed our culture.
AMITY SHLAES: A lot of people remember the failures of the Great Society. So, President Biden doesn’t always say: “I want to be just like Lyndon Johnson.” He says: “I want to be like Roosevelt.” Roosevelt is so far back. He looks all rosy. He’s a nostalgic figure. People do forget and remember selectively. That’s it.
CHARLES MIZRAHI: OK, I 100% agree with you. Let me just get back to the New Deal during this time period. And then, I’ll come to your book, Great Society. What I really liked about this book were the charts and graphs in the back. And I loved the way you had each chapter. You had guns and butter — entitlements and defense. And you could see that start to shift. But hold onto that for a second.
CHARLES MIZRAHI: During this New Deal, there’s this young, 6’3 congressman who [becomes] Roosevelt’s protege. He’s so popular in his district. Everyone loves this guy. If you want to get anything done, you go to this guy: Lyndon B. Johnson. And Johnson takes all the lessons from this. And when he becomes president, he has this way of: “I’m just continuing what FDR did.” Is that right?
AMITY SHLAES: Yeah. Or, [he was continuing] what Truman did. Truman faced resistance. After World War II, the president was Harry Truman. Truman faced resistance to big health care projects. There were versions of Medicare and Medicaid. He faced resistance on labor law when he defended Roosevelt’s labor law. The labor law to which I refer sustained and deepened unemployment in the 1930s.
AMITY SHLAES: So, Johnson wanted to finish what Roosevelt and Truman started. And he was a very young man. Roosevelt was nice to him. He worked in the New Deal. He caught the excitement, and he led with his heart. We were talking about this last night. How did we get the immigration law that we have? It leads with the heart, right? Families must be reunified because we love our families. Who can resist families?
AMITY SHLAES: Lyndon Baines Johnson was a political man. He was a Texas congressman who led with his heart. He thought a big heart at home could easily translate into a big heart in government. What works in the little house in Texas works in the big house in Washington, Congress, and the national government. He thought that worked great. And you could take what you did at home and translate it big. That was Johnson. And he was bitterly disappointed when it didn’t work. He went into a funk — a depression — when the strength of the absolute scale of his effort was not appreciated by the American people.
CHARLES MIZRAHI: OK, I want to talk about two things in the Great Society and Johnson. Both are things you described very well in your book. The first is housing. The federal government thinks it’s a much better idea to raze these poor neighborhoods — which had communities, churches and people living close together and taking care of each other. Raze them. And the best solution to this is building huge Soviet-style projects.
CHARLES MIZRAHI: That failed miserably. Why did they think they could solve these problems? I’m not getting it, Amity.
AMITY SHLAES: It’s the logical part of the brain working oddly. Because there’s a great attraction to the concept of economies of scale. If I can do 10, I’ve got to scale and do 1,000. Human nature isn’t that way. So, the most logical mind in the world is actually ignoring data sets when it tells itself: “I can go to 10,000 from 10.” Sometimes, you can’t. What makes 10 work and 10,000 not work? It’s a set of logical impulses that don’t necessarily add up to logic. Why?
AMITY SHLAES: In the book, I focus on one housing project to tell a story. It was called Pruitt-Igoe. It was in St. Louis. And St. Louis is a wonderful town with an enormously strong tradition — Tocqueville-wise — of town fathers. The federal government comes along and says: “We’ll subsidize you for urban renewal and razing ghettos” — the federal bulldozer. And St. Louis’ fathers say: “We like to control our town. But OK, we’ll take that money because we don’t have to raise levy taxes if we raze this street.” It’s supposed to be better, and no one knows.
AMITY SHLAES: So, much of St. Louis was razed because of perverse federal incentives. They built something new — an economy of scale. They built these giant housing projects. I can’t remember how many there were. But there were dozens at Pruitt-Igoe. There are pictures of them. And there was so much ambition about these housing projects. They were better for poor people than anything they might have had before. They had running water. They had no appliances. They had elevators. They had breezeways outside between the apartments so the mothers could take their strollers up and sit together on their floor. There were courtyards. The architect — whose name is Yamazaki — crafted this with all the love in the world.
AMITY SHLAES: The federal government comes in and says: “We’re funding this. You have to cut here and there. The result was a compromise. Some of these features didn’t all make sense. And the other premise was, if the federal government built it and gave it to the St. Louis Housing Authority, it would be profitable because St. Louis always grew, and workers would live there. St. Louis failed to grow. “Meet me in St. Louis” was over. The tremendous, amazing growth before World War II didn’t continue at the same pace after the war.
AMITY SHLAES: And so, if you premise a project on full capacity — everyone living in every apartment and no vacancies — maybe Pruitt-Igoe would have worked. One was named after a Black hero. And another was named after a congressman. It didn’t work. There was never a full capacity. And people couldn’t pay rent because the growth in St. Louis wasn’t there. The jobs weren’t there. So, a whole scheme to build a mini city went wrong. When you have vacancy…
CHARLES MIZRAHI: Before you even go into that, in the book, you touched on how you had this sense of community where people felt connected. The local churches were there. The people had their social clubs. Mothers could watch their kids play. Even though they were poor, there was a sense of community.
CHARLES MIZRAHI: In New York, Robert Moses did the same thing. He razed parts of New York to put the thru ways in the Bronx — the cross on the expressway. He razed areas and destroyed neighborhoods in the Bronx to build this for the greater good. When they start doing this and see that it doesn’t work, at what point do they say: “We’re wrong, let’s not replicate this”?
AMITY SHLAES: Almost never.
CHARLES MIZRAHI: Yeah. Why is that?
AMITY SHLAES: They say: “We’re wrong. Let’s edit this.” That’s what they say. First of all, it’s hard to get out of the —
AMITY SHLAES: In communism, we always used to say that it’s easy to make fish soup out of an aquarium, but it’s almost impossible to make an aquarium from fish soup. They cut up and destroyed these neighborhoods, so there was no going back. The people were going to go away. I think if you were waving a magic wand, what you would say is — and I actually believe this is true. If Missouri had remained competitive in terms of taxation and labor law…
AMITY SHLAES: Missouri was not a right-to-work state. It was a heavy labor state. More factories would have sprung up around Pruitt-Igoe. And the people in Pruitt-Igoe would have paid their rent and moved out — even African-Americans. Even groups that we thought would never come out of poverty would have. But the growth stayed away because Missouri was not friendly enough to heavy industry anymore.
AMITY SHLAES: That was a big factor. And the families never recovered from being rudely transplanted from subpar housing to “heavenly apartments,” which quickly became un-heavenly. They didn’t work out. Vacancy led to vandalism and crime. So, no matter how heavenly an apartment seems, if the hall outside of it is dangerous — you will be mugged and take your children the wrong way — you don’t want to live there. That’s what happened.
CHARLES MIZRAHI: To cut to the chase, what happens to this whole area? At the end of the day, they blow it up.
AMITY SHLAES: The first sentence of Great Society is: “Nothing is new. It is just forgotten.” And the last sentence — which is very sad — is: “And then, they blew it all to bits.” What happened to Pruitt-Igoe happened to many housing projects across the nation. The town fathers decided that the only thing they could do was take it down. It was a health danger.
CHARLES MIZRAHI: That was in 1972, right?
AMITY SHLAES: I don’t want to say the wrong thing. That’s why I’m thinking. It was into the 1970s. There were several stages. Figures, we know. The father of Mitt Romney, George Romney, was the Secretary of Housing. And he thought: “How can we say this?” So again, the mind is always playing with this idea of improvement.
AMITY SHLAES: How can we say this? We’ve learned in the intervening period of the 1960s that super tall buildings don’t work. So, maybe we’ll knock off the top halves of these buildings. And then, they’ll be low-rise buildings. We’ve heard that low-rise buildings are much easier for people, and they prefer it. They congregate in low-rises. So, the most absurd ideas were considered. [George Romney] was confused. He wanted to look like a hero. But every idea that he tried didn’t work. In the end, the town fathers came along with the federal government and blew Pruitt-Igoe to rubble.
CHARLES MIZRAHI: So, in less than a decade, its history.
AMITY SHLAES: It’s more than a decade. I’m sorry. I don’t have the years right here.
CHARLES MIZRAHI: I’m looking through. I think it was 1972. The pilot demolition continued. You have 1972 in the book.
AMITY SHLAES: Right. It was first built in the 1950s. And people lived in Pruitt-Igoe in the 1950s. That’s getting to point that’s important to our listeners. The Great Society didn’t start all of it in the Great Society. Some of it started in the 1950s — particularly urban renewal. The more I know about it, the more I dislike the vanity of it.
CHARLES MIZRAHI: Before we go, I definitely want to touch on this: the law of unintended consequences. We had Colonel Allen West on the show. He said the biggest thing about the Great Society was the destruction of the African-American family. He said that, back then, 60% to 70% of families had a father and mother in the house. Today, it’s down to 25% or 27%. I don’t remember the exact number. He specifically talked about welfare and fathers hiding in closets when inspectors came to see if they were living at home. Could you touch on that — and the folly of government entitlement?
AMITY SHLAES: Absolutely that wasn’t just during the Great Society. In fact, the Great Society had to rectify that problem. For example, Missouri social workers at Pruitt-Igoe were making decisions. “We’re going to give money to families with no dads. We’re not going to give money to families where there is a dad because the dad won’t feel like he needs to go to work.” This was a time when dads worked — and less moms.
AMITY SHLAES: And so, in order to live in Pruitt-Igoe and get housing benefits or aid for dependent children, you had to prove that there wasn’t a dad. It is true. And I recommend a movie called: “The Pruitt-Igoe Myth.” It’s true that mothers hid their dads in order to pretend that there were no dads and get money. They told their children to lie and say: “I don’t see my dad” — even if their dads were in the closet or under the bed. Can you imagine what that would do to a child? You’re forced to lie to an official when you’re eight years old. That was our policy.
CHARLES MIZRAHI: And by the way, the unintended circumstance would be — they have to put that aside for a second. If they didn’t do that, they would be thrown out of their apartments. So, the incentive was to be deceitful, put dad in the closet and make sure he doesn’t come out until the social worker is gone.
AMITY SHLAES: Right. You have stories like that. And they were true because of state and town authorities. The federal government tried to change that. Daniel Patrick Moynihan is from New York and was involved in that. But basically, you can’t just tweak it. If you give a whole family that has the dad money — even though it has a dad, sometimes that dad or mom doesn’t want to go to work.
AMITY SHLAES: We see that right now with the confusion about returning to work subsequent to COVID-19. Essentially, welfare payments are COVID-19 payments. People evaluate the trade-offs. They say: “Well, I could stay home for three more months. I have reasons to do so anyway. I want to finish the basement. I want to raise my child.” Those are great projects, but work becomes relatively less attractive when there are payments or incentives for staying home.
AMITY SHLAES: So, all of that was going on as well. And I think Moynihan was very interesting because he was a tweaker. At every stage, he acknowledged the failures. For example, with the early welfare, he said: “We’re feeding the horses to feed the sparrows.” That meant a large share of the money was going to social workers — horses. And the actual people who needed the money — people of slender means or sparrows — were getting a small share of it. “We’re feeding the horses to feed the sparrows.” Yet, he was unable to come up with a program to fix it all.
CHARLES MIZRAHI: Come to today with President Biden. Why does he think that he can fix all these problems? All you have to do is read what happened in history and avoid it.
AMITY SHLAES: What you do is start in politics. He is not the only one who does this. All politicians do it. “How do I win the election?” You win elections by giving new benefits — incremental increases. You can’t just give what is already there. You have to incrementally increase. So, it builds like a coastal shelf. It builds and builds.
AMITY SHLAES: Every politician has to give more than their predecessors in order to win the next election. Is it logical? No. Is it good? Why will it stop? It will stop because the U.S. will have an economic problem and suddenly have high interest and inflation rates. And in order to reduce those, the government will have to spend less. People will say: “Wait a minute. The inflation and interest rates have killed my job. I want my job.” Therefore, the government must spend less. But that experience hasn’t happened yet.
CHARLES MIZRAHI: I think a simple solution is that a president has to live anonymously, on a regular street and in a middle-class house for a month to get the feel of what’s really going on in the country. Because in their Oval Office, they kind of detach from the American population. A lot of these people are smart — many of whom are good and mean well. But it just doesn’t end well.
AMITY SHLAES: No, it doesn’t. How do we figure out how to change it? Well, one thing is we won’t have to. There’ll be some exogenous event that comes upon us, and we’ll need to save money — including the government. But another is: We educate our kids. That is the main thing I do with the Coolidge Foundation, where I’m chairman. We try to be sure young people know there is another way — principally, through the life of Calvin Coolidge. He’s in the library and an image behind me. Coolidge always saved money for the government because he wanted Americans to pay less taxes.
CHARLES MIZRAHI: How do you go about doing that with kids? What do you do? Do you go into schools?
AMITY SHLAES: We have a merit scholarship, which is very popular. It’s a full ride to any college. So, it’s an expensive endeavor. It honors academic merit. And this year, we had 4,700 candidates for five scholarships. What do those candidates do? Well, they write essays about Calvin Coolidge. That’s the competition. So, they have to familiarize themselves with Coolidge in order to be in the running for a scholarship.
AMITY SHLAES: And then, we have programs for the top 100. And hopefully, one day, it’ll be for the top 500. They learn about economics with us. I believe young people are very skeptical. They know they’re being fed a monoline in school, and they resent it. Mutiny is the de facto mode for high schoolers — particularly boys. Their mutiny is that they don’t like receiving only one line about how the world works. We want to be sure they hear something else. And then, they can make up their own minds as young adults.
CHARLES MIZRAHI: Wow. Outstanding. And also, congratulations. The other day, you won the Bradley Prize. Tell me about that in a few simple lines. It’s a pretty important prize.
AMITY SHLAES: It’s a big honor. It’s from the Bradley Foundation, which is based off Allen Bradley. It comes accompanied. It comes out of the world of business and the Midwest. The Bradley Prize is for contributions to concepts like markets and economic freedom. And because of these books, I had the honor of being a winner. That’s rare because frankly, there aren’t a lot of ways to honor conservatives. So, I was especially grateful. I’m grateful to the Bradley Foundation for understanding.
AMITY SHLAES: The Bradley Foundation isn’t particularly a spin foundation. It’s a very slow-moving foundation and looks at projects that take years or even decades. And there are very few institutions that honor at that end. So, thank you, Bradley Foundation, for being so appreciative of the value hunt rather than the growth front.
CHARLES MIZRAHI: Beautiful. Folks, the name of the book is Great Society: A New History. It’s a really good book. I like the graphs in the back.
AMITY SHLAES: Do you like the cover?
CHARLES MIZRAHI: First of all, what are they looking at? I looked all over for where this cover was.
AMITY SHLAES: Where is that cover? In the back, there are beautiful graphs…
CHARLES MIZRAHI: Hang on a second. I want to describe it for 99% of our podcasts listeners who listen and don’t watch on YouTube. We put it on YouTube so people can see that we have a studio. Other than that, there’s no other reason. All podcasts are listened to on audio. The book shows a picture from 1960 — or a picture of a whole bunch of people standing on a corner or something. It looks like something’s happening down the block. So, what is this picture, and why did you select it for the front of your book?
AMITY SHLAES: One reason is that the picture has all kinds of Americans. There are ladies with babies, clergymen…
CHARLES MIZRAHI: Oh, true. I’m looking here. I’m looking at ladies with hats. I’m looking at African-Americans. We get a priest. I’m looking at a mother holding a baby. It looks like a long line. It looks like they’re on some type of line.
AMITY SHLAES: It’s a long line, and they’re very inquisitive. Everyone dressed pretty well in those days. So, that’s interesting, too. That picture is not a welfare line — though it could be. They look a little worried and very interested. You think they’re looking at a train schedule in the station. They’re trying to figure out which train is theirs — or what gate is theirs.
CHARLES MIZRAHI: It looks like the train is late. It looks like they’re anxiety-ridden here.
AMITY SHLAES: There’s a bit of anxiety and so much seriousness. That photo is from when the Mona Lisa painting came to America. They went to the art museum to look at the Mona Lisa — which isn’t quite what you’d expect. They’re not relaxed. Everyone wanted to see the Mona Lisa. So, it was packed, and they were probably hurried along.
AMITY SHLAES: But they are looking with a concern that is very serious. That’s what it is. It was by a French photographer. When I saw the picture, the publisher — HarperCollins — said: “This is the Mona Lisa shoot. I liked the look of concern mixed with interest in the people’s faces. I said: “This is perfect for Great Society.” They’re watching the Great Society. They’re not sure about it, but they’re intensely interested.
CHARLES MIZRAHI: Nice. Do you have that anywhere here? Because I was looking.
AMITY SHLAES: I’m not sure.
CHARLES MIZRAHI: I looked for it. I tried. I was trying to see what these people were doing.
AMITY SHLAES: That’s 1963, and Jackie Kennedy was involved. But the data points you like — I want to give some credit to Fed Chairman Alan Greenspan — who’s retired. He helped me put that data together. His office looked at it, which is important to me. Nowadays, we say that defense spending costs so much. But it’s really entitlements that cost so much. And when did entitlements come to cost more than defense? When did butter come to cost more than guns? it was in the period of this book — which is why I use that data set.
CHARLES MIZRAHI: Nice. It was a really great book. For those of you who like history, it’s phenomenal. Those of you like economics — even better. Amity puts it all together, and that’s why I really enjoyed The Forgotten Man. I have not read Coolidge yet, but I will. That’s definitely on my reading list. It’s a nice big book. And it has a great picture of him on the cover. He looks so happy. Amity, thank you so much. This has been really great. And by the way, where can people find out about the Coolidge foundation?
AMITY SHLAES: Coolidgefoundation.org. We also have debate programs. And we have declamation programs. Kids give Coolidge speeches, and they can win prizes for that — which I like very much. So, if you have a kid who has a big mouth and doesn’t do too well in school — but you think he’s kind of neat — this is a way for them to shine. And we all have one of those. School is not for everyone. And I really like to see those declaimers channel Calvin Coolidge.
AMITY SHLAES: He was a good speaker — notwithstanding his reputation as “Silent Cal.” And Coolidge had beautiful arguments. By the way, Coolidge was a beautiful writer. It’s a shocker. If you hadn’t met him, he gave a great sermon in short sentences. He was homiletic even though he wasn’t a clergyman. I came to love the way he wrote. He wrote with an acute consciousness of the English language. So, if you’re an English teacher, you will like Coolidge.
CHARLES MIZRAHI: All right. That book is 500 pages of your writing, right?
AMITY SHLAES: That’s all right. He’s a president. Unfortunately, when you’re writing a presidential biography, you have to do that because when the president costs, it goes in there. But I think there are some important themes. Thank you, Charles, for this opportunity.
CHARLES MIZRAHI: Oh, great. Lots of luck to you. And I wish you continued success. Thank you so much, Amity.
AMITY SHLAES: OK, take care.
CHARLES MIZRAHI: Thanks for listening to this episode of The Charles Mizrahi Show. If you’re a new listener, welcome! If you’ve been listening for a while, we’re glad to have you back. Either way, we’d love to know what you think of the show. Please leave a review if you listen on Apple Podcasts. Reviews make it easier for others to find the show. You can also see the video of the interview on The Charles Mizrahi Show channel on YouTube.
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