SIO125: Are We Headed for Another Depression? with Dr. Robert S. McElvaine

Transcript

This transcript was generated automatically and may contain errors — the audio is the record.

0:00:29 Thomas: Hello and welcome to Serious Inquiries Only. This is episode 125. I'm your host, Thomas Smith. Alright, today I've got a really fascinating interview for you with Robert S. McElvaine. He is a historian. He teaches at Millsaps College. He is the author of The Great Depression, America 1929-1941. He's got a number of other projects as well in the works. But I saw his article in the Washington Post about It's called I'm a Depression Historian, The GOP Tax Bill is Straight Out of 1929, Republicans Are Again Sprinting Toward an Economic Cliff. Sounds really ominous, sounds frankly quite believable to me, but we'll see what he has to say about that and some other related topics. Really fascinating stuff, let's get over to it.

0:01:24 Thomas: I'm joined by Dr. Robert S. McElvaine. Bob, how are you doing today?

0:01:27 Robert: Doing fine. How are you, Thomas?

0:01:29 Thomas: I'm doing great. I'm really looking forward to this. I really hope to learn a lot from you today because you are a depression historian, is that right? At least that's what the Washington Post article you wrote says.

0:01:42 Robert: Well, I've been accused of being a depressing historian.

0:01:46 Robert: For the first few decades of my professional life, I concentrated on the Great Depression, and I've done five books on the time, so I guess that makes me an expert. I've sort of moved on to other areas since then, but I still recall quite a bit about it, I think.

0:02:02 Thomas: Good to hear. I am sure that means you know something about it. I've got your article up here. I found it really fascinating, fascinating, um, for the Washington Post, uh, "The GOP Tax Bill Is Straight Out of 1929" is the rest of the title. I was wondering if you could take us back a little bit. History is not my strong suit, um, and and maybe we could start with, uh, a little more history on the Depression, what went into it and what caused it, and then we can go on to talk about a lot of what the article talks about in terms of where we might be headed there again and what the danger signs would be. I

0:02:06 Robert: Yes.

0:02:37 Robert: Okay. Well, the best thing to do before getting into the causes of depression is to to talk about one of them, which is basically, at least as I see it, the faith that conservatives and Republicans have for well over a century now put in the absolutely free market as a god. This means that if they let the market simply control everything, that everything will turn out fine. And this finally winds up creating a belief in trickle-down economics. And probably the best expression of the difference between that approach and the approach that the Democratic Party and progressives have generally used is what William Jennings Bryan said in his famous cross of gold speech at the Democratic Convention in 1896.

0:03:34 Robert: He said, there are two ideas of government. There are those who believe that if you only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The democratic idea, however, Bryan continued, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them. And so already in the late 19th century, the Gilded Age, as it was often called, or now many of us call it the First Gildered Age, because we seem to be in another one, was the idea that you just let as much money flow up to the top as possible, and that would eventually help everyone else. Now, you can criticize that morally, as I would, but this became more than a moral problem.

0:04:23 Robert: It became an economic problem around 1920 when we shifted into a really mass production economy, and mass production, of course, depends on mass consumption. If you're producing all this stuff, somebody has to buy it. The concentration of wealth at the very top, we don't really know because there's no way to measure it, but probably was even more in earlier centuries as people had, noblemen had their castles and so forth, and there were peasants. And that, again, you can criticize morally, but it probably didn't make much difference economically because they weren't producing a lot of things that had to be bought by people. But by the time you get to after World War I, the assembly line production that had begun to be perfected before the war by Henry Ford and others was turning out all sorts of stuff.

0:05:16 Robert: And in a situation like that, if most of the income is concentrated at the very top, it's simply not going to work in the long run because there aren't people with enough money to buy all the things that are being produced. Somebody who is making vast amounts of money might, for instance, be persuaded to collect cars and buy six or seven of them in a year. But if his share of the income in the nation is such that he would need to buy 500 cars a year to keep the automobile industry going, he's highly unlikely to do that. And so you have a situation in the 1920s where more and more things are being produced in terms of mass production, automobiles, radios, which were in those days, and wood cabinets, and expensive items, increasingly new household appliances.

0:06:09 Robert: And there simply wasn't enough money going to the masses of people to buy all this stuff. And this, at least in my analysis, is not the sole cause, but the most important cause of the Great Depression. As you go on through the 20s, well, I think it's important to point out that the concentration of income at the really very, very top, that is not the top 1% even, but the top one one-hundredth of a percent, peaked in 1928 with roughly 6% of all the income going to the top. One one-hundredth of a percent. It peaked again at almost exactly the same level, around six percent, in 2007.

0:06:57 Robert: And in both cases, it was followed a year later by an economic collapse. Now, that could just be coincidence, but given the need for the masses to have enough money to buy what is being produced to keep the economy going, I don't think so. So what happened in the later 20s was that people, in order to be able to buy these things, they had to be allowed to buy them without being able to come up with the money right away.

And so they started installment plans, usually in those days, weekly payments that people would make for automobiles. Maybe it would be monthly payments. But in any event, you could buy things without putting up the money right away, and that continued the prosperity of the 20s for a while because all the stuff that that was being manufactured could be sold, But it also made it worse when the collapse finally came because you reached a point where these people's credit would run out, and at that point they wouldn't be offered more credit to buy more things, but also they wouldn't even have their current income, which was not a big enough share of the total income. They wouldn't even have all that to spend on new purchases because a lot of it was going to pay off their past purchases. And so you reach a point before the stock market crash in 1929, by the late summer of 1929, when inventories are building up in warehouses, and each separate head of a company does the only sensible thing on the basis of the individual company.

0:08:31 Robert: If they're not selling all that they're producing, they cut back in production. And when they do that, of course, they lay people off. And so the total demand in the economy goes down. Fewer people are able to buy the stuff that is coming off the assembly lines. And so they cut more of the assembly line, more people are laid off, and it becomes this downward spiral, which was already well underway a few months before the stock market crashed in 1929.

0:08:58 Thomas: Wanted to ask a a clarifying question, but I really didn't want to interrupt, but, um, you know, I think of a couple of things I I would have thought of, it's really surprising to learn, I would've thought of trickle down as a relatively new thing, at least, you know, in within the last half a century. I had no idea that it was it went back that far. And then another thing that's interesting is I also my conception of the of political parties is that they really shifted in around the 60s, and the Southern their strategy and all that. But it's interesting to hear that it it sounds like a hundred years ago it was still, you know, Republicans were for trickle down and Democrats weren't. Um, that that's really interesting. Is there any more to that story, or yeah

0:09:36 Robert: Well, you're totally right about the shift in the 1960s in terms of some very important issues, particularly on race. You know, a lot of Republicans these days will say, well, the Democrats were the party of slavery and Jim Crow and all that. Well, that's true. But what happened in the 60s was that the parties switched, and you can just see that in terms terms of the solid South that used to be all Democratic. And by the time you get into the 70s and 80s, it's all Republican. In fact, I was noticing when Doug Jones won the Senate race in Alabama, it struck me to look at who were the senators and other former Confederate states. And if you exclude Florida, which is as much north as the South, every Confederate state states south of Virginia all the way out to Texas had two Republican senators, and now Alabama has the only Democratic senator in that whole area. So what was once

0:09:46 Thomas: Which took

0:10:35 Robert: The—it

0:10:35 Thomas: A miracle to for that to happen, it took a yeah took the worst possible candidate. Yeah.

0:10:37 Robert: Took a miracle—I don't know whether we want to call pedophilia a miracle, but yes. So you're absolutely right about the switch in the parties. Basically, the party of white supremacy during the 1960s changed its name from Democrat to Republican. But on these economic issues, that's not the case at all. It's been pretty steady. The Republicans, most progressives in the first two decades of the 20th century were Republicans, but also the party was solidly the party of big business. And you can see that again in what Brian was talking about as far back as 1896. I'm not sure the actual term trickle down may be more recent, but you just take Bryan's words and that translates to trickle down, saying that their prosperity would leak through on those below them.

0:10:41 Thomas: Yeah yeah Uh, another question I had, I think much answered it, but I think it's a pretty fundamental one, which is, I was going to ask you, uh, because in the article, and when we look at this tax bill, and we think, okay, yes, economic inequality is awful, and, I, I you know, I think that's a whole separate issue apart from an economic crash that is, as you have outlined, morally we should we should deal with. But, um, I don't know, would the Republican line of thinking be what is the is there a necessary connection between economic inequality and some sort of crash? Like, is it possible to have a stable economy with this much inequality?

0:12:07 Robert: Well, as I was alluding to before, if you want to go back into the Middle Ages or something, but in an economy that's dependent on mass consumption, I don't think there's any way it could work. It can work in the short run, particularly a massive tax cut. You know, Trump claims this was the biggest tax cut in history, and it was something like the eighth biggest tax cut in history.

0:12:10 Thomas: Yeah

0:12:29 Robert: But, yeah, that was wonderful. In fact, I was sure that the woman was being sarcastic, and I just read something this morning where she said she didn't— the whole article. It was sarcastic. You know, I'm getting $1.50 a week extra that I can pay for my Costco membership.

0:12:28 Thomas: I hear some secretaries are getting an extra dollar 50 a week, so it's it's pretty talk about right out of the Depression era, that that would have been pretty cool back in the 30s, extra dollar fifty a week

0:12:55 Robert: Yeah. So I mean, back to what you were just asking me about, I don't think that there's any way that that can for more than a period of a few years work. Work. The thing is, a big tax cut adds a lot of stimulus to the economy because, well, an example of this would be the Reagan tax cuts in the 1980s. They provided a great deal of stimulus, but it wasn't this magic of supply side economics. It was straightforward Keynesianism. That is, if you have big deficits, that's going to stimulate the economy. For a book I was writing at the time, I was interviewing a lot of political folks and I talked to Senator Lloyd Benson of Texas, later the Democratic vice presidential nominee, and he said, well, of course you've got the stimulus in the economy.

0:12:58 Thomas: Also

0:13:46 Robert: You can't write $200 billion of hot checks a year and not have stimulus. And what we're seeing now with this new tax cut is well over a trillion dollars a year of hot checks, almost all of which is going to the people at the very top. And in the short run, that is probably going to provide enough stimulus to keep things going. But if you look at history and not just the Depression, but every time there's been a real concentration at the top and trickle down economics and deregulation, it leads to collapse after a few years.

0:14:23 Thomas: My reading of, the or I guess my my understanding of the crash that we just experienced, and you know, oh seven eight, nine, all that, is that it was maybe more particular to a failure of regulation in, you know, subprime mortgages and all that stuff. Is that something do you see it as as more particular to that set of circumstances, or or is it encompassed in your theory as more examples of so much inequality that the market can't sustain itself?

0:14:53 Robert: Well, both. I mean, the Republican idea of, again, worshipping the market like with a capital M as God, you simply can't interfere, includes deregulation as well as using tax policy and other policy to concentrate most of the income and wealth at the top. So both are part of this worship of the market. And that whole idea is so ridiculous that we should just have laissez-faire, we should leave hands off the market, let nature take its course, because we're talking about an economy and our whole way of life that is about as far removed from nature as you could get. And to say that human intervention is automatically a bad thing, you should just let the market do what it will and everything will be fine.

0:15:46 Robert: Well, we certainly don't do that in other areas. Like, I live in Mississippi, not all that far from New Orleans, and I think building levees around New Orleans is a good idea rather than letting nature take its course on something like that. And so, obviously, you can have too much regulation, you can have too much government interference, interference. But the idea that you don't need any just seems to me to be absurd.

And you let people, you say that people should be able to pull themselves up by their bootstraps. Well, that's a wonderful idea. You hear it all the time, and people have been saying it for over a century. The thing is, when you think about it, I actually, in one of my courses, when we get to talking about these sorts of things, try to find somebody who is wearing boots and have little, little straps on the side, and which would usually, usually be a female, and ask her to come up and pull herself up by her bootstraps. And, uh, you know, you can pull up one leg, but you can't pull yourself up by your bootstraps. And I just found it fascinating that the most common expression for what poor people should do is actually a physical impossibility.

0:16:54 Thomas: I thought that was the whole joke. Are there people who use it earnestly? Maybe I was reading in that wrong the whole time.

0:17:02 Robert: You know, no, I mean, it's not intended as a joke at all. When people say it, they say, oh, you know, you should be self-reliant, but the way they put it is pull yourself up with your bootstraps and it just can't be done.

0:17:11 Thomas: Oh my gosh. Well, my mind is blown. I thought there was a joke. Of course you can't pull yourself up by your bootstraps. Man.

0:17:18 Robert: I don't think most people even stop to think about that. No, they say it quite seriously.

0:17:20 Thomas: Wow. You know, I've been doing some research I've covered, at least on my best, not being an expert, but I was looking into economic inequality throughout the years, and one thing I stumbled across was just how high taxes were in the 50s, and I'm wondering if you could tell us any more about that. I mean, when people want to go back, you know, make America great again and all that, why don't we at least take one positive thing, which was the economy and inequality were much better by the measures I've seen, as in things were more equal, the economy was still good at a time of really high taxes. Can you talk about that?

0:18:00 Robert: Yes, well, when the Depression did hit and then finally when Franklin Roosevelt became president and he famously said when he was running for the presidency in 1932, take a method and try it. If it doesn't work, throw it out and try something else, but above all, try something. And so this pragmatic approach was what the New Deal was based on.

The Republican idea, which was Hoover's idea at the time and basically remains the Republican idea, is take the method because they think there is only one, this idea of deregulation and making the rich richer. If it does not work, try it again. If it do not work, try it again. If it don't work, try again, but above all keep trying the same thing.

So the New Deal, it's interesting, Mitch McConnell, after Obama became president in 2009 and was proposing a big stimulus to try to get out of the economic disaster he inherited, McConnell said, "History teaches us things, and one of the things it teaches us is that big deficits don't solve economic problems," because the Depression was still going on at the end of Roosevelt's second term. After the whole New Deal, this deficit spending hadn't ended the Depression. He said World War II ended the Depression.

Well, that was correct, except it totally undermined his whole argument, because the reason World War II ended the Depression is they stopped worrying about deficits and just spent massively, and in so doing, stimulated the economy, eliminated unemployment, and, uh, they they raised taxes during World War Iii up to, I think, 96 percent was the top marginal rate, and that wasn't reduced that much after the war. It was, as you were alluding to before, uh, during the 1950s in the Eisenhower years,

0:19:57 Robert: The top marginal rate was around 89 or 90 percent. And while I would not advocate a rate anywhere near that high, it does show that prosperity was not stopped by a tax rate that high. But the middle decades of the 20th century saw far more government regulation of the economy, the New Deal, World War II, and most of that regulation continued through the 50s and 60s and into the early 70s. And as a result of that, the economy was more under control and also the gap in income between those at the top and the rest of the people, while certainly there was still a significant gap, was much less than it was in the 1920s and started to become again from the late 70s down mostly to the present.

0:20:51 Robert: And with that spreading out of the money, Obama, when he was running for office, got into trouble with some people when he said we should spread the money around a little bit more. But that, again, is morally a good thing, but it's also necessary economically. And when it was spread around a little bit more equally, partly through high tax rates on the rich, the United States saw the rise of the strongest middle class in the history of the world. And it's been in the years since, it's concentrating more at the top, and there's been less regulation, that we've started going back in the other direction.

0:21:31 Thomas: Yeah, and it does seem like there's a, an alternative history, well, I guess there always has to be, when you're talking about Republicans trying the same thing over and over, but there's sort of an alternative history, which is like, it was Reagan that, that built that middle class. But, uh, it sounds like, you know, what, what are the kinds of things that led to the downfall of that middle class, was it largely Reaganomics, was that what did it?

0:21:56 Robert: Well, Reaganomics certainly played a part. The whole idea of what was called supply-side economics, excuse me, was another name pretty much for the same idea. The idea of supply-side economics was if you create a supply of something, that automatically creates the demand for it, Say's Law, from the economist James Say, back in the 19th century, maybe it was in the 18th century, I don't remember, remember. And that really isn't true, because if the people don't have the money to buy the thing, it's not going to work. But that was the idea. You just concentrate on creating more stuff and people will be able to buy it and everything will be fine. But the first two years of Reagan's presidency saw the closest thing in terms of the level of unemployment to a new depression since the 1930s.

0:22:49 Robert: Unemployment peaked at, I think, around 11 or 12 percent by the second year of the Reagan administration. And it was at that point that the huge deficits that were created by his tax cuts started kicking in and helped bring things back somewhat. He had said during the 1980 campaign, that talking about how terrible everything was and we had to get away from the failed policies of the past. And then when he was running for reelection in 1984, one of his slogans was "America's Back." I remember writing in a couple of articles at the time pointing out that, yes, America's backed to where it was in 1980. It's just that it had gotten so much worse in between that it was now on the rise again and was only back to what he had denounced as the failed held policies in the past when he was first running.

0:23:40 Robert: That too resulted in not an economic collapse, but a very serious stock market crash in 1987. I think the main reason why that didn't go into a new depression, as it happened after 1929, at least as I see it, is that in the 20s people had been kind of persuaded to get get away from their traditional values of never going into debt if they could avoid it, and then only buying what they absolutely needed, and go into debt to buy a house but not anything else. And advertisers kept telling them, "Oh no, this is, uh, the, the, uh, age of eternal sunshine, you know, it'll never be another rainy day," uh, if you want to just go ahead and buy it if you can get credit it for it. So when that all collapsed, those traditional ideas weren't that far removed in people's minds, and they retrenched a great deal, uh, which certainly didn't help the economy, but it was a sensible thing for them to do as individuals.

Uh, however, uh, by the time of the 1987 economic collapse, we had been living with a sort of, uh, go ahead whenever you get the urge to buy something. And people were so accustomed to buying whatever they wanted that it was only a matter of weeks before purchasing was back pretty much the way it had been before the October '87 collapse. So that didn't result in the same thing.

0:25:14 Robert: But if you look at the rise in the concentration of wealth and income, again, finally getting up to the point in 2007 where it had had been in 1928, that comes, that starts directly at the time of Reagan, starting the year before, 1979. But in the 70s, just as an example of how things have changed so radically, the average CEO compensation was around 35 times that of the average worker. The statistic I saw the other day is it's about 250 times the average worker now, and there have been times in the last few years, and depends on what industry you look at, where it's over 300 or even 400 times that of the average work.

0:26:01 Robert: And again, I don't see how that can be justified morally, but also it doesn't work economically.

0:26:09 Thomas: What do you think we can do about that? I mean I mean, when I've debated Republicans on this, I remember specifically one argument I encounter is, because I would make a moral case for it, you know, this can't be what we want, right? We can't want this level of economic inequality. And the Republican line seems to be, well, it's inevitable. But, like, is it inevitable, and what could we be doing? I guess higher taxes is one thing we've already touched on. Is there anything else? Yeah.

0:26:36 Robert: Higher taxes for sure and more steeply graduated taxes. A good example of this, and it was not really graduated anywhere near enough, but Bill Clinton in his 1993 budget proposed a modest increase in the top marginal rate from 36 percent to 39 point, I think it was 6 percent. And every Republican in Congress voted against it. All of the free market economists, the trickle-down economists said it would lead to economic disaster. And instead, it was followed by one of the greatest periods of prosperity in American history. And ultimately, by the last two years of Clinton's administration, by eliminating the budget deficit entirely and having a surplus, plus, which when Clinton had come into office, it seemed like something that was totally impossible and never would be seen again.

0:27:31 Robert: And so that again showed that the opposite of what the Republicans believe in as a matter of faith is true. But then when the George W. Bush administration came in, they went right back, cut the top marginal rate again, also started doing a variety of other things and deregulation, some of which had actually passed at the end of the Clinton years, he doesn't escape some responsibility for that, and wound up turning things around very quickly. The deficits were rising again. An interesting fact that most people would not be aware of, because the Republicans are always seen as the champions, or at least they had been until recently, of fiscal responsibility.

The only times that there has been an increase in the national debt as a percentage of GDP under Democrats over the last 80 years was in response to three big national emergencies, the Great Depression, World War II, and the 2008 economic collapse. There was a big increase in debt as a percentage of GDP in the first couple of years of Obama to deal with that. Republicans, on the other hand, have very notably, twice in the past, and they seem to be doing it again, have greatly increased the ratio of debt to GDP, not when there was any huge, huge economic crisis, but under Reagan, under George W.

0:29:06 Robert: Bush, and now under Trump. And in each case, the purpose was not to deal with a national emergency, but just to give more money to the rich.

0:29:14 Thomas: Is it, well, it's, I, hard to know who's, what motivations everyone has, but there's got to be some element of, it's all bullshit, and obviously they know it's not going to do anything, it's just in their best interest to have taxes be lower. But also, is there, there are the people who want to take the, like, starve the beast mentality, and it's juste that they are, I guess, are never able to cut spending enough to compensate for these gigantic tax reductions, is, what do you make of that? I mean, I guess it wouldn't, would a Republican say, "Well, ideally, you know, I would want to lower taxes, but also just cut, you know, government spending so much that it wouldn't end up creating an increase in, in the deficit"?

0:29:54 Robert: Yes, that's what they say. And that was certainly the plan, not, I think, of Reagan himself, but of some of his advisors, was that they actually didn't believe in this voodoo economics, as George H.W. Bush had called it, or John Anderson in 1980 when Reagan was promising to start off with the big deficit he was inheriting, cut revenues drastically by reducing taxes, increased spending on the military enormously, and maintain the social safety net, and somehow this was supposed to produce a balanced budget. I wrote at the time that the only possible plan he could have was a constitutional amendment to repeal arithmetic.

0:30:42 Robert: But the idea, he thought this was going to work. But I don't think most of his advisors did. They thought it was going to do what it did, create a massive deficit. And then they would use that as an excuse to cut social programs, which is exactly what many of them want to do now. Paul Ryan has his dream since he was an adolescent of destroying the welfare state, and clearly sees the deficits that are coming with the current tax cut as an excuse to do that.

0:31:11 Thomas: Well, I, I, one note, I think Trump just used an executive order to, to destroy arithmetic, I don't think he bothered waiting for that. Was probably in one of them.

0:31:19 Robert: Yes. And then he would sign it and hold it up for everybody to say, like, it's kindergarten homework.

0:31:26 Thomas: If he remembered to sign it, but there's a couple that you Just forgot, um, yeah, no. So, um, but I guess back to the question, though, like, what are, what are some of the other things? I think we got a little sidetracked. But what could we be doing to reduce income inequality? Is how, how much of a social safety net? I mean, historically, I mean, is there any comparison, like, the best, are we, are we at an all-time low for that? Are we, had an all-time high? Are we somewhere in the middle? Yeah.

0:31:29 Robert: Right. Yeah.

0:31:54 Robert: Well, somewhere in between, but certainly nowhere near the all-time high. And again, what you mentioned earlier about going back to the 1950s, and they don't think at all about what the tax rates were in the 1950's, the idea of Make America Great Again clearly was to go back to 1950's. But that's to go back to a situation I'd like to point out, while the 1950s might look great on old black and white sitcoms that people see still in reruns, the 1950's were not so great if you happen to have a second X chromosome or more pigmentation in your skin than the average white person. But that is really the thing they are talking about in going back to the 1950's.

0:32:42 Robert: I think the Republican Party, since about 1968, has been basically running as the anti-60s party to repeal everything that happened in the 60s, including civil rights and advances for women, didn't so much start in the60s, but right after that, slow advances for gays, but also all the great society programs, get rid of all that and go back to the good old 1950s. But somebody like Ryan and many other Republicans now, in terms of repealing social legislation, they want to get rid of social security or almost get rid of it, repeal the New Deal as well, go back to the 1920s. Better yet, why don't we go back the days of William McKinley when there were no income taxes?

0:33:31 Robert: They call themselves conservatives, but they should be called regressives. They want to regress to these other periods. And as far as fighting against the extreme concentration of wealth and income at the top, there are clear things that can be done. And one of them is through tax policy. Another one as far is wealth rather than income very clearly is the inheritance tax, which they were trying in this latest tax bill to repeal entirely, which would have been an amazing giveaway to the super rich. They only succeeded in raising the limit at which the federal estate tax starts to $20 million, but that still means that the people who have huge, huge amounts of money are getting it cut back somewhat.

0:34:26 Robert: But if you eliminate it entirely, which is clearly what the Republicans want to do, you would basically be creating an hereditary aristocracy in the United States, going against one of the principles of the American Revolution. These people who would not have the money taxed are not contrary to the Republican tagline for it of the death tax. It's not the dead who are paying the taxes. The dead pay no taxes. It's their heirs who did nothing other than choose wealthy parents or wealthy people they inherit from to deserve it. And it totally goes against the whole argument for the free market, which is that it creates a meritocracy that people get what they deserve.

0:35:11 Robert: Well, somebody who picks up the fumble in the form of an inheritance at the opponent's team, one yard line, and can take it over has a bit of an advantage. I guess a better way to put it would be in a 100-meter dash. The person who starts at the 99-meter mark has quite an advantage over the one who starts in the beginning of the race. And so the only thing that makes any sense if you want to argue for meritocracy is basically to take away all of that. I mean, you'd have to just for practical political purposes allow inheritance, people who have a modest amount of money. But as far as the super rich, none of it should be passed along in inheritance if you really want to make an argument that it should be a totally free market and a meritocracy. See.

0:36:04 Thomas: That's a good point. I'm still kicking myself for the parents I chose, but, uh, but

0:36:09 Robert: Yeah, I chose really good parents, but not in terms of wealth.

0:36:10 Thomas: Yeah. Smart. Um, I, I, I agree with you, and I, I see a strong case morally for why this, this should be so. But I think that one, one problem that we have in, in this argument is just this return to, like, fundamental principles, you know. And I think conservatives are good at painting it as, like, rights, you know, like, I, why, what gives the government the right to take way more from me or my estate than they would from someone with less money? How do you respond to that kind of thinking? One

0:36:42 Robert: Well, there was one of the wealthy business people who supported the New Deal. Many of them turned against it pretty quickly after the economy got off the absolute doormat when Roosevelt came in. At first, they kind of were willing to go along with it because they were so desperate, but then they started turning against it, but Edward Filene of Filene's Department Stores in Boston was a pro-New Deal businessman, and he said, well, why shouldn't the American people take some of my money from me? I took all of it from them, and I think that makes some sense. Plus, of course, the things that the money is going for to keep the country going well, to defend it and all that.

0:37:29 Robert: Those people have much more to be defended. But also, you know, not only do they make the argument, well, we should be able to keep this because we earned it. The word earned, when you're talking about people making hundreds of millions of dollars a year, just doesn't seem to me to be an accurate term. They get it somehow, but I don't think anybody But he earns that much money, particularly when you're not talking about somebody who came up with a new innovation, you know, a Bill Gates or somebody you could argue they deserve a good deal more. But the bulk of the people who make these huge amounts of money now don't do anything but, you Know, shuffle paper around and create exotic instruments of financial instruments, as they call them.

0:38:16 Robert: And, you know, like there's sort of people who cut up mortgages and re-bundled them and all that, creating some of the conditions for the 2008 collapse. You know, they don't do anything. The novel Bonfire of the Vanities by Tom Wolfe in 1987, there's a great thing in there where the broker who is the main character, his daughter says something about, Well, some of my friends' fathers do this and others do that. What do you do? And he couldn't really answer. And then his wife said, well, basically, other people bake cakes and people like your father pick up the golden crumbs. And I thought that hit it well. Well, the trouble is now, in more recent years, other People Bake the Cakes and these Wall Street types take most of the cake and leave the crumbs for the people who bake the cake.

0:39:10 Thomas: Thing I worry about so much now, well, there's two sides to this and I, I, I don't know if this will be something you have thoughts on, let me know if not, but I really know that everything is so framed toward the culture war that almost these pernicious Republican policies are kind of just getting by in disguise, you know, like Paul Ryan did not win the 2016 election, like his views were not even represented in the 2016 presidential election. But because somehow, you now, this con man convinced everybody he was going to to give everybody more doctors and health care than they knew what to do with at a lower cost, and all this crap that really is, it was good liberal, problem progressive promises really, if it was realistic, and then turned around and, and now it's, it's Paul Ryan's country essentially. It's, it's and Mitch McConnell, and they're able to enact this, this just the most Republican policy, uh, that That really wasn't represented in 2016 in any serious way.

0:40:08 Thomas: So is that, there's two sides to that. Like, I almost hope that, I think that if you market this the right way, do you think most people would agree with a lot of these things? They're just caught up in some other politics?

0:40:22 Robert: Well, I mean, not only did a majority of people vote against Trump in what they call the popular vote, also known as the vote. But if you looked at why a lot of people were voting for Trump, I think a lot was somewhat irrational hatred of Hillary Clinton and all sorts of other things. But, if they were actually actively voting for trump, especially the people People like in the upper Midwest states that put them over the top in the electoral college. These are people who are hard pressed by economic changes, and they were certainly not voting for what has been happening in the Trump administration.

0:40:29 Thomas: Right. Yeah.

0:41:02 Robert: The only people who would vote for what's happening inthe Trump administration were people like Trump's billionaire friends. And he said before the tax bill was passed, oh, this is going to be terrible. Well, all my rich friends are going to be against me, and believe me, I'm not going to make anything out of this. And then after it was passed, he went to Mar-a-Lago and told his rich friends, oh, I did so much for you. You're going to become so much richer than you were before. So, I mean, of course, he lies every time he opens his mouth, and the people that he misled don't want this sort of thing. It's obviously not goingto help them. They may get their $1.50 a week.

Some of them may get a little bit more than that for a while, but it's not going to help them. The coal industry isn't coming back. The jobs aren't coming back. And it was just all a pack of lies. And you kind of understand why some of them would fall for it, because they're desperate. But you'd think at some point they would wake up and realize they had been had.

0:41:16 Thomas: How worried are you right now about a serious depression style crash?

0:42:09 Robert: Well, I'm not losing any sleep over it in the near term. What I am much more worried about is the American Republic being destroyed by the would-be tyrant and the rule of law ending and going against all the constitutional checks and balances and the vast majority of Republicans, especially in the House, just going along in lockstep with him. I think while the economy is in danger probably some years down the line, I wouldn't venture to predict how many, the republic, the whole American system, I think is in dangerous in a shorter term. If Trump were to get away with either firing Mueller or somehow Mueller comes out with his report and the Republicans won't do anything about it, we would be in a lot more trouble than worrying about an economic collapse.

0:43:04 Thomas: Well, that's interesting. That's my prediction, by the way. My prediction is he does come out with a report and it doesn't directly have the phone call to Putin or anything like that, and it just implicates some people in his administration and Republicans do nothing about it. That's my money.

0:43:19 Robert: Well, I think he'll come out with more than that, whether there's the direct phone calls or not. He has access to all these financial records, and there's absolutely no question that Trump has been deeply involved with the Russians in that. And so that will at least come out.

0:43:29 Thomas: Oh, yeah. Yeah, yeah, yeah... This might border on financial advice, like fiduciary advice, but does history teach us anything about what can all us little people out here who don't have control over any of this... is there anything we can do to protect ourselves, is there anything we should be doing?

0:43:51 Robert: Well, as you say, that is a form of advice that if I could tell you what the stock market was going to do, I wouldn't be in my current economic situation. But

0:43:56 Thomas: Of Course, yeah. Yeah, I don't mean that, but I mean, is there a type of person who did better than not in these past crashes? I mean, should we be careful not to have too much debt? Should we, you know, is there a general thing like that?

0:44:04 Robert: No.

0:44:15 Robert: Oh, absolutely. I mean, not that many of us who preach not having too much debt actually practice what what we preach. But obviously, too much debt is a really bad thing. Thing is that you need government policies that will deal with this. One way I have been putting it for a number of years, and I've written a few articles about this, is that the one that I did was called just a spoonful of, quote unquote, socialism helps the capitalism go up. And the basic idea is that That Winston Churchill, quoting someone else, I believe, said in 1946 that democracy is the worst of all possible political systems, except for every other political system anybody has ever thought of.

0:44:22 Thomas: Right. Right. Yeah. Yeah. Right. Yeah.

0:45:02 Robert: And I think the American founders understood something like that without putting in those words and set up a system. They were very leery of democracy. They knew it had these tendencies that we've just been seeing for some sort of a demagogue to take over and things to get out of hand, but they believed that every other type of system was worse, and so they set up a system that was based on democracy but tried to create these checks and balances to ward off the real dangers inherent in democracy. And I think the proper economic policy would be based on a similar idea, that is capitalism is the worst of all possible economic systems. I always hope

0:45:02 Thomas: All

0:45:48 Robert: Somebody doesn't cut off the recorder right there, except for every other economic system anybody's ever thought of. And so we need a basically capitalist system. However, we need to recognize that And just like democracy has inherited all sorts of dangers of going off the deep end, that there are very clear inherent dangers in unregulated capitalism. And so we need the equivalent of the checks and balances of the founders put in the Constitution, regulations that will keep some of those excesses from getting out of hand. Of course, when it comes to regulation, you can certainly have too much regulation and people can differ over how much. But the idea that we don't need significant regulation, that we can just let the economy go wild, is not going to be in the best interest of the majority of people.

0:45:51 Thomas: Right, we're out of time, gotta get... no, I'm just kidding. Yeah.

0:46:43 Thomas: Yeah, it seems to me, I mean, my opinion is that I, you know, I, I still would say I believe in capitalism, I think it's, it seems easy to say markets can do incredible things without having to say, okay, therefore we need to worship the totally unregulated extreme of a market, you know, I, where do you stand on, I mean, do you, do you think of yourself as any sort of socialist or democratic socialist, or you know, Bernie Sanders type? What do you think? Yeah.

0:47:06 Robert: Well, yeah, I would consider myself a democratic socialist, depending on how you define it. I mean, basically sort of the Scandinavian approach that when it comes to things like health care, that that ought to be a human right, not something that goes to those who have enough money to pay for it, regulating the price of prescription medicines and all that sort of thing. But continuing as the Scandinavian countries do to have private enterprise, higher taxes, maybe some of them have taxes that are too high. But if you look at all the surveys that are done year after year of which countries in the world the people are happiest, you find Denmark and Norway in these countries there.

0:47:56 Robert: People aren't happy because the sun shines that much, but they are happy because they don't have to worry about the sorts of things that we have to worry about here. And that doesn't mean at all that the government owns everything or even very much. It just means that the excesses that are are inherent in capitalism, which you're still keeping as the basic system, need to be kept under control by carefully thought out government actions.

0:48:28 Thomas: Yeah, man, well, I, short of, uh, of an election, a sweeping takeover of Congress in 2018, which isn't really possible in the Senate, um, I'm not sure what else we can do. It sounds like individually there's not much we can, and we need to rely on, on better policy.

0:48:47 Robert: Well, the thing that, the thing we can do is what the resistance is trying to do, and get people to actually come out and vote. And I'm not so sure, I'm sort of a congenital optimist, all the evidence to the contrary notwithstanding.

But I think if you look at what's been happening in these elections along the way in recent months, just this one in Missouri, in a state legislature district that had gone, I don't know, something like Trump won by 26 percent, and the Democrat won the other day by 4 percent or something. These huge swings, and a lot of this is simply due to people who normally don't vote in these kinds of elections coming out.

And so if, – and particularly women coming out, and that's one of the very hopeful signs that what Trump has done by being such an extreme misogynist, and the total outrage of somebody like that being elected, and then the policies have mobilized women as we've never seen before. And this was clear in Virginia and Alabama, and the number of women who were running, there's 350, give or take, women running for seats in Congress, and they're voting in much larger percentages. So I think that a lot more of these, even Senate seats, may be within reach, particularly if more of the evidence of just how deeply Trump has been involved in financial corruption and dealing with the Russians comes out. Now, of course, the 33 percent or whatever of his base who get their information from Pravda, that is Fox News, will never even know about it.

0:50:33 Robert: But if the two thirds who do know about what's going on actually get motivated enough and go out and vote, I think the Democrats taking over the House in November is a fairly likely thing. And I wouldn't rule out the Senate. Of course, that's not going to give you two-thirds of the Senate to actually remove him from office in an impeachment. But if things are shown to be bad enough, enough Republicans might come around to do that.

0:51:04 Thomas: That's the hope, that's the best case scenario, but in some ways it's sad that it takes this level of corrupt, uh, uh, ineptitude and, and just all, all the things Trump is, uh, to, to motivate us this much, because really, as, as we were talking about earlier, it's not even, of course, Trump is awful, and he's doing a great amount of harm, but the Republican status quo under a, um, I guess like normal, non-ridiculous, uh, con man president, is still awful. And it's still something that we, we need to, to move against and resist, but it almost seems like it, we had to be shocked into it.

0:51:41 Robert: Yeah, we did. And to me, maybe the most incomprehensible thing of all is how so many Republicans are just willing to go along with him. And by the account of all sorts of news people who talk to senators and members of the House, Republicans off the record say that so many of them say that, you know, he's an absolute evil idiot, and they can't stand him. But in public, they continue to support him. And the reason is that they're afraid that there's enough people in their districts who are blind followers of Trump, that if they oppose him, they would lose their party's nomination. And they apparently are more concerned about keeping their office than they are being patriotic and saving America.

0:52:26 Thomas: But I also think it's that they're getting everything they want though, I mean, they he decided he was going to be a pen, that he's just a pen for, for, uh, McConnell and Ryan, I mean, he's just going to sign whatever the, the most Republican possible policy that they want. I really think that turned it around for some of the Republicans that seem to maybe be, be standing up to him, yeah.

0:52:48 Robert: Yeah, I think that's right. Although a lot of people thought that the main thing that they wanted was this tax bill, and that once they got that, they'd be less supportive. But that doesn't seem to have happened. I'm not sure what other things they want to do to—right, there's still that. That. While he's saying that, I think he said in the State of the Union something about he wanted to bring the price of prescription drugs under control. Yes. Reporters who covered Lyndon Johnson used to say you can tell a lot about him from his mannerisms, that if he pulls on his earlobe, he's telling the truth. If he smooths down the hair on the back of his head, he's talking the truth. He puts his finger beside his nose. He's telling him the truth, but if he moves his lips, he's lying. And that was largely true of Johnson. It's totally true of Trump.

0:52:59 Thomas: That's true. Oh, they still gotta take away all our health care, they're still, that too, yeah. Yeah.

0:53:41 Thomas: It's pretty easy, he's, he's lying all the time, and when he says "believe me," that's, that's a good sign. Too. Somehow I'm not convinced. Yeah, yeah.

0:53:46 Robert: Oh yeah, believe me. I know words, I know lots of words. Well, the only words that he uses that are really correct, uses regularly, are he's always saying unbelievable and incredible, and literally everything he says is unbelievable and incredibly.

0:54:04 Thomas: Well, That's, uh, about a good time. Is there anything that we didn't get to that you wanted to be sure to, to mention, to, to make sure we all have the, the right historical framework to think about this kind of stuff?

0:54:14 Robert: Well I don't think so on these things. I can and go on for hours and hours, but I think we hit most of the main points.

0:54:17 Thomas: Excellent. Well, Dr. Robert McElvaine, thanks so much for coming on the show and putting some of this stuff in historical context for us. I'm worried, but I hope maybe, uh, I, some of your, maybe I can borrow some of your optimism to get through the day. Is There any way you want to put, people to find you or your work online or anything, books you want to plug?

0:54:34 Robert: It helps. But anyway, yeah, you can just use my name and find all sorts of things on the Internet, including articles and books and so that should do it

0:54:49 Thomas: Thank you very much for your time. Okay.

0:54:52 Robert: Talking with you

0:55:18 Thomas: Another big thanks to Dr. Robert S. McElvaine. That was very interesting. We've got a lot of work to do, even if we can take power. Of course, by we, I mean Democrats. I know, I guess everybody, not everybody listening is Democrat, but speaking as someone who thinks the country is indeed headed in a horrible direction, the only answer is to vote. Vote. Get out there. It's always going to be a theme forever until we fix this. Vote, vote, vote. And indeed, after we fix this. Vote, vote, vote. Keep voting. It's the only way to make it happen. If we can keep this energy up through the 2018 midterms and through the 2020 election at a minimum, we can do our best to turn it around. That is pretty vital, though.

0:56:03 Thomas: Youth movement we've seen with the shooting and all that, I think that has been encouraging to see those voices, and I think there's a tremendous amount of energy there, but we have to keep it up. It's up to all of us. All right, that's my show. Hey, make sure to check out Philosophers in Space if you haven't already. There's going to be a new episode out for non-patrons very soon. For patrons, they have all kinds of episodes out. They're ahead. So check that out. It's a really good show. If you want a place where you don't have to talk about politics and Trump and all that stuff, if you want to just talk about some really cool sci-fi and some philosophy, check out Philosophers in Space. It's really fun. Search for it on iTunes or whatever. But with that said, thanks for listening and I'll see you guys on Thursday.