Capitalism in America: Alan Greenspan and Adrian Wooldridge in Conversation with Gillian Tett

it’s useful to understand how the system
works and the key turning point is a
very remarkable period it’s William
Jennings Bryan William Jennings Bryan in
1896 was a fairly young 36 year old
Nebraskan who got up in the middle of
that particular I guess you could say
Association of then the Democratic Party
and it was the one of those
extraordinary events which turns
politics around the Democratic Party was
a highly conservative party prior to
them and essentially it’s characterized
by presidents who thought that the least
government the best it was essentially
lazy fair he got up Bryan got up and
made this extraordinary speech which is
now historical and then cross of gold
speech about the American worker and the
American farmer of being crucified on a
cross of gold called being the gold
standard and that propelled him
strangely enough into the head of the
party he got nominated he never became
president because he kept losing
you think he went three times and failed
each time but left a very major
indelible stamp which led to Woodrow
Wilson and all the way through to
Franklin Roosevelt and I you know I
looked at Bryan as the root of Franklin
Roosevelt’s New Deal
that’s fascinating cause I think most
people that part of it’s often being
obscured in history it’s again one of
the reasons why this book is so
interesting is it throws up these
creating the existing tax pattern [M]y
view is that that’s the right thing to
do provided you funded the result of
that is a bit of variance is going to be
a very large federal budget deficit and
federal budget deficits invariably down
the road out qualification in gender
inflation at the moment we have the
tightest labor market I have ever seen
that is the number of job openings is
significantly greater than the number of
people looking for work and that must
inevitably begin to push on wages it
always has and always will but it’s
always delayed
and my told you that is something has
got to give and that’s I don’t know
where it all comes out well your blyat
comes out with inflation well the
problem basically is if we do nothing
we’re going to end up with probably
stagflation which is an inflation rate I
should say it’s partly stagnation which
as mentioned was very significantly
slowed output per our output per hour
now which used to be 3/4 percent per
back in the early post-world war ii
period it’s now well under 1% which
brings me very nicely on to the next
question from the audience which is
someone has asked for you to share your
thoughts about president Trump’s recent
criticism of Jay Powell and the Fed I
like him to answer that with all the
answers I think it’s very short-sighted
the issue of the Federal Reserve is
required by the Congress to maintain a
stable currency which means no inflation
no deflation and the policy they’re
embarked upon at the moment seems very
sense it will be caused as I mentioned
before the wage rates are beginning to
show signs of moving and you cannot have
real wages rising without it ultimately
think if they continue on the road would
that we will
going Pretlow I should say that the
president wants to go we’re gonna end up
with a very significant budget deficit
and very significant inflation
ultimately not not in the short term
that it takes a while
political system doesn’t care about
deficits what they do care about is
inflation when the inflation rate was 4%
in the 1970s
President Nixon imposed wage and price
controls were nowhere near there yet but
it’s wrong our way
if we are though heading towards a
potential rise in inflation rise in debt
at a time of growing populism do you
think there’s a chance that the Federal
Reserve will lose independence I’m
trying to follow you which I mean well
cheating is a chance at Congress or the
president will try to control the
Federal Reserve or take away some of its
independence I really don’t know one of
those forecasting aspects which is
difficult another question from the
audience as the Federal Reserve’s reach
grows do you think that leged of
oversight will become necessary again
that’s above my pay grade
or do you think that Congress should
exert more control or oversight of the
Fed I think the Federal Reserve is by
remember the Federal Reserve Act of 1913
which essentially did something very
unusual we had a long period we
discussed this in the book in which
financial crises kept surging up and
then collapsing which is a typical cycle
which went on to a decade upon decade
and the populism that evolved as a
consequence of this looked at
ever-increasing lead to find a way to
solve the problem of why the crises
occur and the general solution was if
the economy is accelerating and it’s
running out of gold species and you’re
going to get into a situation in which
they are always going to be crises so
what the Federal Reserve Act actually
did was very very interesting it
substituted the sovereign credit of the
United States for gold and then if no we
stayed on the gold standard technically
that was a major change in American
financial history and debate the basic
consequence of that is that Federal
Reserve determines what in effect is a
sensible level of money supply expansion
and one of the reasons the Federal
Reserve Act was actually passed was to
prevent the political system when
becoming so very dominant in determining
monetary policy which is exactly what
you don’t want to happen and I mean I
was you know eighteen and a half years
as you mentioned getting letters from
everybody who won very little
congressmen or otherwise who wants it’s
a the issue of and don’t worry about the
issue of inflation
and nobody was well when I would be
getting people who say we want lower
interest rates I got tons of that mail I
never got a single letter saying please
raise them and it tells you that there
are some views which go against reality
and reality always wins but if you look
at that the history of populism some of
the worst populism you got was in the
1970s some of the work that the anger
that was generated by inflation in the
nineteen seventies were roiled right the
way through the political system
eventually leads to the rise of of
Ronald Reagan because and who comes in
and then you know crushes crushes
inflation so inflation is is not a
solution to populism it drivers it makes
people very angry do you think the
current populism is going to get worse
chairman Greenspan well let’s remember
where populism comes from it’s I don’t
know whether this is a general
proposition but I find it’s difficult to
get around the answer that when the
inflation rate or that must the
inflation ratings as much as the levels
of income slow down when you get
productivity for example which is that
the major determinant of income and you
get productivity slowing down you get a
much lower increase in JD GDP and gross
domestic income and wages and salaries
alike and there’s a great deal of unease
in the population which is saying things
are not good somebody come help us and
somebody necessarily on the white horse
because comes up and says I’ve got a way
to handle this and if you look at Latin
America the history of
goodly part of Latin America is a
remarkable amount of people like Peron
coming in and all the subsequent post
World War two governments in Latin
America and it’s really quite
unfortunate and surprising it’s not that
they try it and it fails which it does
always it always fails but it doesn’t
eliminate the desire to do it in other
words of Peru Brazil and like they’ve
all undergone very significant periods
of huge inflation and collapsing and
nobody wears a lesson
yeah well we’re almost out of time but
there’s one other question from the
audience which I think cuts to the heart
of a lot of what we’re talking about
right now which is this does the success
of capitalism come at the cost of
enormous wealth disparity is it possible
to have this vision of creative
destruction of capitalism of dynamism
without having massive income inequality
I doubt it and I doubt it for the reason
I said earlier namely that we’ve got the
problem that human beings don’t change
but technology as it advances and it’s
embodied in the growth of an economy is
always growing and when you have
something that’s growing and the other
thing that’s flat you get obviously
inequality and the political
consequences of that can I qualify that
just a little bit I mean there – there
are different sorts of inequality
there’s a there’s the inequality that
you get from suddenly like Bill Gates or
Steve Jobs producing a fantastic new
innovation and idea which means that
they reap a lot of reward
for that but which means that society as
a whole gets richer and better off and
there’s the inequality that comes from
crony capitalism from people using
political influence blocking innovation
and and sucking out and do rewards for
themselves so I think we need to be
absolutely very very sensitive to the
wrong source of inequality while

celebrating the right sort of inequality
and also had that Joseph Schumpeter that

great man once said that the the nature
of capitalist progress doesn’t consist
of Queens having a million or two
million pairs of silk stockings it
consists of what used to be the
prerogative of a queen being spread
throughout the whole of society silk
stockings you know that become something
that go from being very rare and only
worn by Queens to being worn by all
sorts of people all over the place so
it’s the nature of capitalism is to
create new innovations which are at

first rare but spread throughout the
whole of society and everybody uses so
if you think think of the the iPhone or
something like that some that was
something that was incredibly rare and a
few people had those sort of
communications vais now everybody
carries them around all the time and the
great capitalists the Bill Gates the

Steve Jobs don’t get rich by selling one
really really good iPhone to one purpose
and they get into selling their products
to all sorts of people so there’s a
sense in which there is no real
trade-off between very rich people
getting very rich and the rest of
society getting getting better off you
know they only get rich because they
create things which everybody most
people want to have and buy you know
it’s it’s it’s it’s the Silk Stocking
question really I you know I accept that
qualifications let me just say one thing

you going back to his mentioning here
Walter Isaacson’s book on innovation he
wrote that book and I remember reading
it and my final conclusion was and I
asked him why is it that most innovation
is in the United States
it’s American and he said you know I’ve
never thought of that I don’t think he
was aware of the fact that he here and
all these innovation
to developers and they all turned out to
be American which leads me to conclude
that there’s something fundamental in
the psyche of American history in the
American public which creates it it’s
not an accident which is why I won in it
who too often so which is what you of
course you sought to explain the book so
if you had a chance to take this book
into the Oval Office today or into the

Treasury and give it to the President
and say this is a history of America
here are the key lessons what is a top
bit of advice that you would give to the
administration today to keep capitalism

growing in America well you know we do
have we haven’t mentioned that there’s
an underlying financial problem which we
haven’t addressed in the best way to
discuss it as when I first became aware
of it
I would haven’t been looking at data and
accidentally created a chart which
showed the relationship between
entitlements spending which is social
benefits in the rest of the world and
gross domestic savings and I’m from 1965

to the current period the ratio of
entitlements to the sum of those two is
flat as a percent of gross domestic
product which means or at least implies
that one is crowding out the other and
when you look at the individuals they
are actually looking different and
enable one goes up the other goes down
and so forth and I think that’s
suggestively the fact that there is
something in the sense of when we say
that entitlements by which a rising and
the baby boom generation is essentially
crowding out gross domestic savings
which in turn coupled with
the borrowing from abroad is how we
finance our gross domestic investment
which is the key factor in productivity
right so entitlement reform well I look
forward to a tweet about entitlement
reform I look forward to this very
important book being part of the
discussion about how to keep America
America’s economy great and growing but
in the meantime thank you both very much
indeed for sharing your thoughts it is
indeed a fascinating book and quite an

achievement and best of luck in getting
this very important message out so thank
you both very much indeed

What The Ebbs And Flows Of The KKK Can Tell Us About White Supremacy Today

As long as the United States has existed, there’s been some version of white supremacy. But over the centuries, the way white supremacy manifests has changed with the times. This includes multiple iterations of the infamous Ku Klux Klan.

According to the sociologist Kathleen Blee, the Klan first surfaced in large numbers in the 1860s in the aftermath of the Civil War, then again in the 1920s, and yet again during the civil rights era.

Blee is a professor and dean at the University of Pittsburgh, and the author of Inside Organized Racism: Women in the Hate Movement, as well as Understanding Racist Activism: Theory, Methods and Research. She says the anonymity allowed by the internet makes it difficult to track just how much white supremacist activity we’re seeing today.

But despite this difficulty, she and other experts say there’s been an indisputable uptick in hate crimes — and an overall rise in white supremacist violence: Earlier this fall, a gunman shot and killed 11 worshipers at a Pittsburgh synagogue. In 2017, a clash with protesters at the Unite The Right rally in Charlottesville, Va., left one woman dead. In 2015, the shooting at the Mother Emanuel AME church in Charleston, S.C., killed nine black churchgoers. And in 2012, a rampage at the Sikh Temple of Wisconsin in Oak Creek, Wisc., killed six people.

As we consider this spate of racist attacks, we thought it’d be helpful to talk to Blee about the ebbs and flows of white supremacy in the United States — and what, exactly, those past waves say about today’s political climate.

Our conversation has been condensed and edited for clarity.

First, can we talk about the various phases of white supremacy in the U.S. throughout history — and what caused those ebbs and flows?

The 20th to 21st century Klan actually formed after the Civil War, during the Reconstruction period. Then it was entirely contained within the South, mostly in the rural South. It [was] all men. There were violent attacks on people who were engaged, or [wanted] to be engaged, in the Reconstruction state, [including] freed blacks, southern reconstructionists, politicians and northerners who move to the South. That collapses for a variety of reasons in the 1870s.

Then, the Klan is reborn in the teens, but becomes really big in the early 1920s. And that is the second Klan. That is probably the biggest organized outburst of white supremacy in American history, encompassing millions of members or more. … And that’s not in the South, [it’s] primarily in the North. It’s not marginal. It runs people for office. It has a middle class base. They have an electoral campaign. They are very active in the communities. And they have women’s Klans, who are very active and very effective in some of the communities. That dissolves into mostly scandals around the late ’20s.

Then there’s some fascist activity around the wars — pro-German, some Nazi activity in the United States — not sizable, but obviously extremely troubling.

The Klan and white supremacy reemerge in a bigger and more organized way around the desegregation and civil rights movement — again, mostly in the South, and back to that Southern model: vicious, violent, defensive, Jim Crow and white rights in the South.

And then it kind of ebbs. After a while, it kind of comes back again in the late ’80s and the early 21st Century as another era. And then there’s kind of a network of white supremacism that encompasses the Klan, which is more peripheral by this time. Also Neo-Nazi influence is coming as white power skinheads, racist music, and also neo-Nazi groups. The Klans tend to be super nationalist, but these neo-Nazi groups have a big international agenda.

Then the last wave is where we are now, which is the Internet appears. The movement has been in every other era as movement of people in physical space like in meetings, rallies, protests and demonstrations and so forth. It becomes primarily a virtual world, and as you can see, has its own consequences — many consequences. It’s much harder to track. And then there are these blurred lines between all these various groups that get jumbled together as the alt-right and people who come from the more traditional neo-Nazi world. We’re in a very different world now.

That’s a long history. You mentioned that, for a variety of reasons, the Klan in the Reconstruction era collapsed. What are some of the factors that contributed to that?

I would say two things that mostly contributed to that ebb over time.

One is the white supremacist world, writ large, is very prone to very serious infighting. Internal schisms are quite profound in collapsing white supremacists, even as an entire movement, over time.

What’s that infighting look like? How racist to be?

No, no. It’s almost always power and money. So, for example, the ’20s Klan — I say “Klan” but in every era there were multiple Klans, they all have different names, they all have different leaders — they are trying to extract money from their groups, and they are all fighting about money …. and then over power, and who controls the power, because white supremacy groups don’t elect their leaders right away. To be a leader just means to grab power and control. So there’s a lot of contention in these groups of control.

It’s not ideas. Ideas aren’t that central. They have these certain key ideas that they promulgated — race and anti-Semitic ideas — but the fine points of ideological discussion don’t really occur that much in white supremacist groups, nor do they get people that agitated. It’s not like in other kinds of groups, where people might have various versions of ideas, versions of ideologies. [The Klan] just have kind of core beliefs. But they do tend to fight over ideas for money, power and access to the media.

So that’s the fighting. The other thing is, in different waves of history, there are prosecutions, either by the police or civil prosecutions that collapse groups and movements. Sometimes, there’s kind of a blind eye to white supremacist organizing, but at other times there is really successful either civil or state prosecutions of these groups that do debilitate them.

How does the longevity of white supremacy or these [hate] groups coincide with who has political power?

It’s very hard to create a generalization here. Certain groups, like the Klan, tend to rise and fall based on the threats to who is in power. The 1870s Klan [was] based on the Southern racial state formed during slavery being threatened by Reconstruction. In the 1920s, the idea was that political power [was] being threatened by this wave of immigrants. The 1920s Klan [was] very anti-Catholic, as well as racist and anti-Semitic. Part of this anti-Catholicism [was] based on the idea that Catholics were going to start controlling politics as well as the police.

There’s some really good analysis by some sociologists that showed that the Klan appeared in counties where there was the least racist enforcement of the law. Because in counties where the sheriff and the county government was enforcing racist laws, there was no need for the Klan.

How does this apply to this more recent wave of white supremacy?

Right now, we have an extremely heterogeneous group that we might call white supremacists. So some of them, probably the smallest group, are nationalistic. And probably the larger group are not particularly nationalistic. This is why it’s hard to make generalizations. It’s not the case that nationalist fervor just finds itself in the white supremacist movement. The person accused of the shooting in Pittsburgh is an example. If you look at [his] writings, they’re not nationalistic, they’re in fact anti-nationalistic. And that’s pretty common with white supremacy today — some of them have this sense that their mission is this pan-Aryan mission. They’re fighting global threats to whites and creating a white international defense. So that’s not a nationalist project, that’s an internationalist project.


And the other reason is there’s this idea among white supremacists in the United States that the national government is ZOG — Zionist Occupation Government — and that’s a shorthand way of saying that the national government is secretly controlled by an invisible Jewish cabal. So some of them will be amenable to very local government … they’ll embrace, and work with, and even try to seize control of the government at the county level. But generally, national politics are quite anametha for those two general reasons.

In the 1920s, synagogues were targeted by the KKK. Can you run through other examples of violence like this?

People will say the ’20s Klan was not as violent as other Klans. But that’s really because its violence took a different form. So there, the threat that the Klan manufactured was the threat of being swapped — all the positions of society being taken by the others — so immigrants, Catholics, Jews and so forth. So the violence was things like, for example, I studied deeply the state of Indiana where the Klan was very strong — pushing Catholics school teachers out of their jobs in public schools and getting them fired, running Jewish merchants out of town, creating boycott campaigns, whispering campaigns about somebody’s business that would cause it to collapse. So it’s a different kind of violence but it’s really targeted as expelling from the communities those who are different than the white, native-born Protestants who were the members of the Klan. So it takes different forms in different times. It’s not always the violence that we think about now, like shootings.

When did we start seeing the violence that we see today?

Well, the violence that we see today is not that dissimilar from the violence of the Klan in the ’50s and ’60s, where there was, kind of, the violence of terrorism. So there’s two kinds of violence in white supremacy.

  1. There’s the “go out and beat up people on the street” violence — that’s kind of the skinhead violence. And then there’s the sort of
  2. strategic violence. You know, the violence that’s really meant to send a message to a big audience, so that the message is dispersed and the victims are way beyond the people who are actually injured.

You see that in the ’50s, ’60s in the South, and you see it now.

I was wondering if we could kind of talk a little bit about the language we use when we talk about mass killings that are related to race, religion or ethnicity — especially about the second type of violence, “strategic violence,” that you describe. I’ve seen people use the phrase “domestic terrorism.” What do you make of that phrase?

Terrorism means violence that’s committed to further a political or ideological or social goal. By that definition, almost all white supremacist violence is domestic terrorism, because it’s trying to send a message, right? Then there’s that political issue about what should be legally considered domestic terrorism, and what should be considered terrorism. And that’s just an argument of politics, that’s not really an argument about definitions right now.

How these things get coded by states and federal governments is quite variable depending on who’s defining categories. But from the researcher point of view, these are terrorist acts because they are meant to send a message. That is the definition of terrorism. So it’s not just, you don’t bomb a synagogue or shoot people in a black church just because you’re trying to send a message to those victims or even to those victims and their immediate family. It’s meant to be a much broader message, and really that’s the definition of terrorism.

I think what we don’t want is for all acts of white supremacist violence to be thought of as just the product of somebody who has a troubled psyche. Because that just leaves out the whole picture of why they focus on certain social groups for one thing. [And] why they take this kind of mass horrific feature … so I think to really understand the tie between white supremacism and the acts of violence that come out of white supremacism, it’s important to think about that bigger message that was intended to be sent.

What are the most effective strategies to combat these ideas of white supremacy, or this violence?

I’d say the most effective strategy is to educate people about it, because it really thrives on being hidden and appearing to be something other than it is. I mean, millions of white supremacist groups have often targeted young people, and they do so often in a way that’s not clear to the young person that these are white supremacists, they appear to be just your friends and your new social life, like people on the edges who seem exciting. … And so helping people understand how white supremacists operate in high schools, and the military, and all kinds of sectors of society gives people the resources the understanding to not be pulled into those kinds of worlds.

Twenty years, or even 10 years ago, I would have said it’s really effective to sue these groups and bring them down financially, which was what the Southern Poverty Law Center was doing.

[Now,] they don’t have property; they operate in a virtual space. So the strategies of combating racial extremism have to change with the changing nature of it.