Neil Howe: “Deep Demographic Problems Plaguing The U.S. Economy” (Hedgeye Investing Summit)

32:29
great irony is that the real ideological
edge of the whole Bitcoin movement was
was guys like you know James Dale
Davidson and REE smog and they there
were sovereign individual these are
boomers and all the Xers that followed
them these are all libertarians they
believe radically in the idea of no
government you know and we’re just you
know the with no need for trust I mean
talk about an ideal Society for most Gen
Xers no trust necessary so so anyway
we’re gonna do a world with that trust
and and that was really it was it was
actually I think an ideological edge to
a lot of people’s interest in Bitcoin it
was sort of the kind of world socially
politically that they really wanted
and unfortunately ideology as you know
and you’ve often spoken about that in
your programs ideology always warps your
market driven judgment right big time
you don’t want to start with ideology if
you’re marketing an ideology and you’re
good at it you might make a lot of money
in a short period of time but that
doesn’t mean that your views on it or
going to be non cyclical and or crashing
and that’s that’s that’s what you know
sadly is happening a lot of purveyors or
34:47
and speaking about money and again this
is sort of very deep sort of
intellectual history there kind of two
theories about the origin of money
one is the barter theory you know we
started out bothering Bob Barton just
treating goods for goods and then you
know then gold and other things and so
on so it’s basically that’s the kind of
the libertarian theory so the Canadian
guy from like the Hudson’s Bay Company
like yeah you know forever that piece of
paper but then there’s a whole nother
theory which also has a long kind of
intellectual pedigree which is more the
purview of sociologists and that is
government the money was really creation
of governments and there’s a lot to say
for that because in fact that’s how
money was
really introduce now it’s the government
people right that whole theory that
whole that whole intellectual pedigree
kind of feeds into modern monetary
theory and that is its government that
creates money I mean forget this whole
idea that it all comes from gold and
there’s some intrinsic value no god it’s
a system of Social Credit and Society it
makes a collective decision to create it
they can do it as they wish all
government all currency has always been
fiat currency and this whole idea that
only recently we’ve had fiat currency so
anyway that’s the idea behind monetary
theory you don’t have to worry about how
much you issue because you can issue any
amount you want so long as the economy
is it is running at full employment and
so long as you keep inflation to you
know down to a reasonable degree now I
always say that the argument from
monetary theory post GFC is a lot better
than it was right because no matter how
low we get interest rates we had trouble
getting to full employment and inflation
never seemed to show up on our radar
screen so I think this is the reason why
modern monetary theory is so big if the
reason it’s going to be practically
important is not now when we’re you know
unemployment is down at 3% and although
it’s gonna be a big issue come the next
recession right that’s when it’s gonna
hit right and we haven’t even talked
about that when is the nest recession is
that gonna be perfectly time for the
next election or not right that’s going
to be fascinating there are many more
Democrats believe in this mmt then
certainly like you said libertarians but
their but their chances of introducing
that are going to be hugely improved at
the right political juncture with the
economy on the right conditions yeah
wait until the economy is flat on its
back with our unemployment rate up at 10
37:19
percent and 11 percent whatever it is
37:21
suddenly the Fed is sitting there
37:24
flatlining at SERP right not knowing
37:26
what more they come on yeah hundred
37:29
mandatory thirty would be back plus huge
37:33
fiscal spending and you know the two
37:35
kind of merged together right modern
37:36
monetary theory and huge
37:38
of fiscal deficits you’ve been greater
37:40
than we have now so long as you got the
37:42
economy back working again
37:44
what’s the matter we did it with in
37:46
World War two we did it during the New
37:48
Deal mm-hmm the green New Deal
37:50
come on you got bad you got a New Deal
37:52
and the green New Deal
37:53
actually we’re getting some questions on
37:54
that why there’s actually question on
37:57
climate change if it figures into your
37:59
outlook does it you know on climate
38:02
change I’m more of a I have a matt the
38:06
ridley you know the guy the the british
38:10
intellectual who who wrote a a number of
38:13
great books on on genetics and and
38:16
evolution and so I’ve been equine
38:17
deterrent because he he actually covered
38:19
climate change for many many years but
38:21
he coined the term Luke warming he said
38:24
he’s a lukewarm ER which means that he
38:27
thinks it he thinks that rising carbon
38:29
dioxide levels are responsible for a
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little bit of warming but not not a lot
38:34
and not nearly the kind of alarmist
38:37
picture that people think I’m kind of
38:39
more of a lukewarm ER what interesting
38:42
thing warmer sounds like Luke Skywalker
38:43
it’s like an appeal to people because it
38:46
sounds like it makes some sense how’s it
38:49
look warmer yeah a little bit more of a
38:51
hot because you can’t you know we like
38:52
it you can’t be like a total like
38:54
Treehugger or you know you did you got a
38:57
it sounds like a little bit more neutral
38:59
yeah kind of sounds disgusting
39:02
anyway alright great thinking on the
39:05
economic Turan economic direction
39:08
long-term Neil Central Bank policy will
39:10
likely continue to counter the
39:12
demographic gravity and fall failure
39:14
will likely manifest in market and
39:16
monetary crises so slow with chaotic big
39:19
bumps ahead question mark sounds like
39:21
more of a comment but a lot of people
39:23
believe that I got into this with with
39:25
with Lakai a
39:27
lot of people believe that no worries
39:29
more cowbell markets could never go down
39:31
again no I clearly don’t believe that
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and and actually I think around October
39:36
to December you were brown right you’re
39:39
on this side of the you know this side
39:40
of the earth on the right side of the
39:42
grass yeah the markets went down yes
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this is memories are so short it’s
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almost like people watch the market day
39:52
they completely forget what happens you
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could have lot if you’re along the
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Russell 2000 which is a pretty broad
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index of US stocks and now 27 percent
39:59
from August the 30th to December the
40:01
24th what could go wrong that’s that’s
40:04
called a bear market yeah yeah I mean
40:06
it’s a rash so but I think what what
40:10
they’re referring to is the idea could
40:12
could the economy go down yeah and and
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and not only do I think it will i
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actually this is all a part with a lot
40:20
of people i think it’s a good thing I
40:21
actually do I think that is when we
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correct institutions and we rebuild
40:26
institutions I think the idea that you
40:29
would have an economy just constantly
40:30
dribble along you know is actually not
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good for us
40:34
well there’s many periods of
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Reconstruction and and not only that but
40:38
the whole point about market crashes
40:41
depends which side you’re on if you’re
40:43
young and you’re being an invest you get
40:45
to buy into the American dream
40:47
at a discount there are always two sides
40:49
to a transaction and I do believe you
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know when I’ve I see the media following
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Wall Street all the time and every time
40:55
markets will go down a treeless type
40:56
price but whenever the prices go down
40:57
it’s like a terrible tragedy yeah for
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all the older people that owned
41:01
everything but the next generation is
41:04
coming on right it’s their opportunity
41:05
there are always two sides to a
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transaction and and for life to go on we
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have to think about what’s coming on
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after us well what you have seen is the
41:15
opposite like by virtue of not having a
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recession this is the longest u.s.
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economic expansion in US history
41:20
Republicans and Democrats when it comes
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to monetary policy have gravitated to
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the same thing there’s no difference you
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know there’s no difference between
41:28
Donald Trump wanting more cowbell and
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Barack Obama wanted more cowbell there’s
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no difference between this the federal
41:34
reserve members how they go about their
41:37
day job that it’s all one in the same
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thing totally but when the economy goes
41:45
down again and when we’re back at that
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you know that zero bound then all this
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other stuff comes back onto the table
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and and I don’t believe by the way that
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you know people talk about inflation the
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governments can very easily engineer
42:00
inflation if there were enough I believe
42:02
Japan was very near that point a couple
42:04
of years ago and and the way they would
42:06
have done it was simply to say any
42:08
worker or anyone with a payroll you put
42:12
your stuff in a bank and we just we’re
42:13
gonna index it out by a percent a month
42:15
or something like I mean thank you guys
42:17
but but no in other words you can
42:20
engineer it if you if you have the
42:23
incentive to do so a Jubilee what are
42:25
the advantages of that well suddenly now
42:27
your monetary policy has teeth once you
42:31
get inflation going again then holding
42:33
that interest rate low right actually
42:36
gives traction to your monetary policy
42:39
and and we are gonna see that if this
42:44
next time puts us in that same situation
42:46
we were gonna see a lot of the stuff
42:47
that was only discussed before yeah and
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and the inflation to be clear comes from
42:51
the deflation because the deflation is
42:53
what causes the inflation so I mean you
42:55
come from a very asymmetric point
42:56
there’s big opportunity politically in
42:58
that and you save the world according to
43:00
yourself let’s see here
43:05
there’s a lot of political questions and
43:07
I want to go there what what would be
43:11
here this is an interesting one given
43:13
you join the term Millennials what what
43:16
would be your biggest long-term bet as a
43:18
millennial investor given stagnation and
43:21
slowing growth if it comes to fruition
43:27
as a millennial so I assume they’re just
43:30
meaning if you’re Milan you’re looking
43:32
like what’s the best way to play your
43:33
outlook good answer I mean I you know
43:49
other than all the standard answers
43:51
about you know diversifying your assets
43:53
and being geographically diversified
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obviously at a time of crisis you
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certainly want to be geographically
43:59
diversified I mean I often get asked
44:01
which areas of the we you know you’re
44:03
the demographer which areas of the world
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I should be you know invested in from
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that point
44:07
view and you can see that I mean if you
44:09
just look at any of my you know 20
44:12
charts on the subject you can look at
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you can look at areas which are
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reasonably decent in terms of you know
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security legal structure corruption and
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all that and yet have high population
44:27
growth so if you’re really looking for
44:29
that wave you know you’re looking at the
44:31
at the Malaysia’s and Indonesia’s the
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Philippines and so on there there is
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there is again looking at quadrants
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there is an area there where you can
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find economies for the long run that are
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probably going to you know they still
44:44
have a lot of catch-up to do in terms of
44:46
productivity they’re still gonna have a
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proactivity you know dividend over the
44:50
so if you’re looking long term but be
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diversified because you know how any one
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of those countries is gonna go but there
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are ease of the world where you where
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you where you certainly particularly if
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you know if your millennial you probably
45:02
have a target date fund you know out
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there I don’t know
45:05
that’s tough hundred forty five or those
45:07
four old wall products like those are
45:09
like you can’t do it within that product
45:10
so I’m saying if you can take some money
45:12
out of that product yeah you you’d want
45:15
to diversify what is it one way to
45:17
things like Josephine’s for up Neil’s
45:19
four quadrant map with the countries
45:21
quickly if you can what I think you’re
45:23
saying – if I put it within the context
45:26
of my process is if we go to a slowdown
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like one that’s beyond stagnating to
45:31
slow down in the US and then you have
45:33
political change and you have MMT the
45:37
dollar is going to get castrated in that
45:39
environment and those countries that are
45:41
in quod one that you just showed are
45:44
gonna have in dollars don’t forget that
45:46
eeehm does very well when when when the
45:49
US government is burning its currency at
45:51
the stake so you know that is you know
45:53
that is the units the rebalancing of
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global power so rebalancing of
45:57
incentives it’s a rebalancing of growth
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expectations to where you actually have
46:01
the population growth going okay so
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that’s maybe another way to think about
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yeah I I agree with that and it it
46:09
really depends a little bit on the
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nature of the crisis I mean obviously at
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the at the worst of the crisis the
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dollar was strong because that was sort
46:17
of the the safe haven currency but as
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things begin to sort out
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the dollar may still be strong relative
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– you’re absolutely right with regard to
46:25
the EMS but we have I mean if if we
46:27
follow our sector we you know not only
46:29
do I do this kind of long term general
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stuff we actually have particular
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industries we like and I’ll just mention
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two of them here because we’ve written
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about them yeah very particular
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industries which we’re very bullish on
46:41
from from a demographic standpoint one
46:44
is pet care there are a lot of
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interesting ways you know everyone’s
46:49
owning pets and boomers and Xers have
46:51
completely reimagined how we treat our
46:53
animals right I mean you know everything
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about them is is you know the food and
46:57
you know it’s organic it’s every the
46:59
amount of money we spend on my father
47:02
treats my his two dogs better than I was
47:05
ever treated today they know if dogs
47:07
have now have parents and grandparents
47:09
and you know they weekend yeah but but
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another is a huge change there and in
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particularly assertive although I’m not
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big social media generally they’ve got
47:26
the kind of Google Facebook duopoly I’m
47:28
not very positive on I think that you
47:34
know online dating is an incredible
47:37
growth opportunity and we had a piece
47:38
recently on that because you know
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virtually everyone is waiting a lot
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longer to get married older people are
47:45
getting divorced and that’s an entire
47:48
area where there’s been very little
47:49
market penetration in your long the
47:51
screening process I mean that’s that’s
47:52
pretty much the other one is cannabis
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we’ve done a extensive amount of work
47:56
there you could see that the well we
47:58
have lifting we home security that does
48:01
that silly but but it’s it’s not
48:03
shocking to see Shane Laidlaw as hockey
48:07
sticking charts on cannabis consumption
48:09
relative to alcohol consumption yeah and
48:11
it is he calls it hit paper high or
48:14
whatever he calls it you know hit for I
48:16
yeah because it’s a lower it cost less
48:18
here’s a here’s another question this is
48:21
this is this is definitely this could
48:23
take you a whole day to answer this do
48:25
you need capitalism and favourable
48:26
demographics for GDP growth
48:32
well obviously not especially out the
48:34
GDP growth number you can have it all
48:36
the time
48:37
you need you need some form of
48:39
capitalism just to have any kind of
48:40
efficiency in your economy so that’s
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kind of a loaded question I think the
48:44
more interesting question is do you need
48:45
democracy and I think that’s becoming a
48:48
bigger issue I’ve written about that you
know our Millennials giving up on
democracy I think that’s actually an
interesting global question now we know
from a lot of surveys that Millennials
are less interested in democracy than
older generations and you look at not
only is it true and the UK and in the
United States but it’s true around the
world now if you look at particularly
East Asian countries you know with these
new charismatic leaders in a Narendra
Modi and India appealing to the the
Hindu mainstream you look at you know
Burma they’re the Buddhist mainstream
and you know uncle she is appealing in
China to the great Han you know to all
of these leaders in Shinzo Ivy appealing
traditional right you and then you go to
this this this madman is in charge of
the Philippines now you know Rodrigo
Duterte dirty-dirty duterte as they call
it but my point is is that you have
these charismatic authoritarian leaders
who are appealing to the mainstream of
their countries don’t give a damn about
who’s on the fringes right who is voting
most for them younger voters and that is
fascinating to me because earlier in the
post-war era the authoritarian leaders
mainly were voted for him only about the
older voters younger people didn’t want
them and that’s changing around and I
people often asked me this question when
do we know when the world is going from
host word of pre war you know when when
are we going from a post-war mood to a
pre well it’s kind of hard to tell until
you have the next big crisis right but
one key is is that in a in a post-war
era it’s the the generation that just
created the new era they were just went
through the crisis so they really
identify with the institution‘s they
build and generally younger people tend
to want more freedom they want less
order they want less rules that well
write less conformity and all that but
eventually as time goes by right
those younger leaders are in power and
generally have a pretty less a fair you
know libertarian world it’s younger
people who want more order more
certainty more route you soon I’m going
with this that is a sign you’re in a
pre-war little pre-crisis does that line
up with the fourth term absolutely yeah
that’s that’s well that you know I don’t
say pre-war because that kind of
predisposes about kind of crisis but I I
say pre-crisis pre-crisis yeah for those
of you that haven’t read the fourth
turning that I’m biased because I think
that’s your favorite book I think that’s
my favorite book I think that would
probably be a consensus though is it not
your favorite people’s favorite book
51:20
that you write it’s it’s either that or
51:22
the original one we did generations
51:24
generation shoes yeah that was kind of
51:27
the first big book I guess we’ve had
51:29
this question and maybe a good one to
51:31
wrap up on here because people are
51:33
constantly asking where do you think
51:35
Trump the Trump administration fits
51:37
within your framework of what is the
51:39
fourth turning I you know Trump and I
51:43
thought that the two most interesting
51:46
fascinating and path breaking
developments in 2016 were Bernie Sanders
and Donald Trump because there’s a
recurring edge on both the left and the
right of this whole new kind of populism
and authoritarianism right the three
chairs on the left every bit as much of
possibilities of thorough tourism on the
right and you know Bernie Bernie Sanders
is a guy who believes in top-down
government just you know government and
baking big decisions creating winners
and losers and you always have to admire
the guy I mean when was the last time we
had leaders just say this is how it’s
gonna be
single-payer you know and and
Millennials actually gravitate toward
that yeah you know the paradox of choice
why have so many choices is something
small one choice but it works really
well right at least and you find this
now becoming a very dominant view on the
52:36
left so I think just like Jeremy Corbyn
52:39
now sort of the you know the elder sort
52:40
of great champion in the UK of the left
52:42
of the millennial left and you have
52:45
Bernie Sanders here but I think that
52:47
that
that Donald Trump is the kind of the
exponent of the leader the first one who
really galvanized this new populism but
if I had to bet I would say that when
those final populism finally takes shape
in America it’s gonna be a little
afternoon on the right so this is this
is why the you know 2020 election looms
really large and when you look at you
know futures markets and remember again
I come back to this the economy is now
53:19
at three point something percent
53:21
unemployment and already you have
53:23
futures markets predicting right that
53:26
that Democrats are going to come in and
53:28
sweep in 2020 wait and until the economy
53:32
is yeah a little more negative you take
53:34
that outlook and maybe last question on
53:36
this if you take that out looking again
53:37
we’re not I’m not trying to be political
53:39
I’m not a Republican or Democrat I’m
53:40
Canadian I’ve said that all the time
53:41
because it’s it’s it’s of course true
53:43
but if you look at them if you take that
53:46
let’s say the economy’s long we have
53:47
quad three four three quarters in a row
53:49
that’s my outlook and if that’s the path
53:51
and and what you just said is still the
53:53
truth you know what kind of a candidate
53:56
and what generation could or should they
53:58
be from within your lens would come out
54:01
of the Democratic Democratic Party as
54:03
the as the as a front-runner well this
54:06
is the big moment for Generation X right
54:09
you got a lot of candidates in yeah Gen
54:12
Xers you know you have you have you know
54:17
Camilla Harris and Bader O’Rourke and
54:19
you know you know what’s-his-name from
54:21
New Jersey you know they’re all my age
54:23
so you’ve Pro cannabis to New Jersey guy
54:27
yeah but interestingly enough you have a
54:33
millennial candidate running you know
54:35
this guy Pete Bennett reach out of South
54:37
Bend Indiana he’s 37 years old and just
54:42
to show you and I actually had a piece
54:44
on that recently I think he came out
54:46
yesterday but an amazing stat l just
54:48
leave people this one amazing statistic
54:51
and that is as as proof of how
54:54
absolutely disinterested Generation X
54:57
has been in politics you know they’re
54:59
way behind the age curve it actually
55:01
in Congress you know taking the house
55:02
taking the Senate taking us governor’s
55:04
at their current age you know boomers
55:07
had already we’re into the third
55:08
president and already at pluralities in
55:11
both the house in the Senate Gen Xers
55:13
have been so slow
55:14
you know Gen X is in both parties tend
55:16
toward the libertarian edge of their
55:18
party right
55:19
but as proof positive of how
55:21
disinterested Gen Xers are in politics
55:24
we look back and found we looked at all
55:26
of the contenders for the primaries in
55:28
the every presidential election since
55:33
1986
55:34
and for the past almost 30 years
55:37
the youngest contender in either party
55:41
was a Boomer all the way up through all
55:45
the way up through 2012 there were no
55:48
gen extra candidates actually contending
55:51
for the presidency obviously in 2016 you
55:54
had a lot of them the two younger ones
55:55
were Marco Rubio and that guy from
55:57
Louisiana you know the governor from
55:59
louisiana agenda button bobby Jindal
56:03
they were born in 1975 and interesting
56:07
Lena 2020 we have a millennial contender
56:10
so only one year only one president of
56:13
presidential election was a gen Xer the
56:16
youngest contender and it’s already
56:19
moving on to Millennials and this is
56:21
what anyone who’s read the fourth
56:22
turning or my books knows we bill and I
56:25
used to always make the point that
56:27
Millennials are destined to make an
56:29
early and strong entrance into politics
56:33
as a generation and basically filling
56:35
the vacuum that Gen Xers have left
56:38
behind even to some extent so they could
56:39
circumvent Gen X presidential candidates
56:42
altogether and you know most references
56:43
and most Gen Xers always knew it was
56:45
cutting in the cards you know by Stan
56:49
1975 yeah I have a genuine I do not hate
56:54
but I genuinely don’t like any
56:57
politician like that I don’t like their
56:59
parties I don’t like either party and
57:01
the ones that ran to your point
57:03
Gen X Rubio like those are like wet
57:07
Kleenex they feel like that’s not a
57:09
leader that’s not like you know you
57:11
don’t memorize your lines and
57:12
you know so I think that you’re right I
57:14
mean if you certainly if you take
57:15
somebody like me I’m just like disgusted
57:17
by politics and politicians so maybe
57:19
there is somebody there to inspire
57:21
somebody because I’d love to change my
57:22
mind we do we do talk in our ratings
57:24
about dominant and recessive generations
57:26
so between the GI generation which
57:30
fought in World War two you know the
57:31
so-called greatest generation right of
57:33
that was in the white house for a long
57:36
time from John Kennedy you know born in
57:38
the century all the way up through you
57:40
know George Bush Senior and then we had
57:43
a Boomer that completely bypassed the
57:46
Silent Generation yeah anyone who
57:48
remembers the Great Depression and World
57:50
War two as children but were you know
57:53
not old enough to serve that an entire
57:57
generation nearly twenty years was
57:59
completely bypassed for the White House
58:01
and look what’s coming up they say we we
58:04
do this we have dominant generations we
58:07
have recessive generations that’s uh I
58:10
don’t know if that’s a good or a bad way
58:12
to end today’s discussion but for us Gen
58:15
Xers we’re just going to go back into
58:16
our a political holes and we’re gonna
58:18
keep you data dependent as we tried to
58:20
keep you across by the way durations
58:22
today don’t forget we’re trying to talk
58:23
about a multi duration framework so
58:25
whether it’s short term intermediate
58:26
term or Neil House super long term there
58:29
are so many different things for us
58:30
human beings to attempt to contextualize
58:32
it at the end of the day we don’t know
58:34
what the real answers are gonna be but
58:36
we can probability wait how we go along
58:38
the way in terms of positioning
58:40
ourselves and being in better spots oops
58:42
would have been if we were ignorant of a
58:44
lot of these data’s and economic facts
58:50
[Music]
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[Music]

The American Renaissance Is Already Happening

People who read this column know my political ideology: I’m a Whig. If progressives generally believe in expanding government to enhance equality, and libertarians try to reduce government to expand freedom, Whigs seek to use limited but energetic government to enhance social mobility.

Back in the 19th century, during their heyday, Whigs promoted infrastructure projects, public education, public-private investments and character-building programs to create dynamic, capitalist communities in which poor boys and girls could rise and succeed.

Whigs admired people and places that are enterprising, emotionally balanced and spiritually ardent. They had a great historic run — inspired by Alexander Hamilton, led by Henry Clay and Daniel Webster, embodied most brilliantly in the minds of Abraham Lincoln and the early Theodore Roosevelt.

Liberaltarians

The conservative movement—and, with it, the GOP—is in disarray. Specifically, the movement’s “fusionist” alliance between traditionalists and libertarians appears, at long last, to be falling apart.

.. Libertarian disaffection should come as no surprise. Despite the GOP’s rhetorical commitment to limited government, the actual record of unified Republican rule in Washington has been an unmitigated disaster from a libertarian perspective: runaway federal spending at a clip unmatched since Lyndon Johnson; the creation of a massive new prescription-drug entitlement with hardly any thought as to how to pay for it; expansion of federal control over education through the No Child Left Behind Act; a big run-up in farm subsidies; extremist assertions of executive power under cover of fighting terrorism; and, to top it all off, an atrociously bungled war in Iraq.

This woeful record cannot simply be blamed on politicians failing to live up to their conservative principles. Conservatism itself has changed markedly in recent years, forsaking the old fusionist synthesis in favor of a new and altogether unattractive species of populism.

.. The old formulation defined conservatism as the desire to protect traditional values from the intrusion of big government; the new one seeks to promote traditional values through the intrusion of big government.

.. Just look at the causes that have been generating the real energy in the conservative movement of late: building walls to keep out immigrants, amending the Constitution to keep gays from marrying, and imposing sectarian beliefs on medical researchers and families struggling with end-of-life decisions.

.. the conservative embrace of a right-wing Leviathan has left libertarian-minded intellectuals feeling left out in the cold.

.. New York Post columnist Ryan Sager bemoaned the rise of big-government conservatism and warned that excessive pandering to evangelicals would rupture the movement.

.. Andrew Sullivan denounced the right’s fundamentalist turn in The Conservative Soul: How We Lost It, How to Get It Back.

.. 13 percent of the population, or 28 million voting-age Americans, can be fairly classified as libertarian-leaning.

.. Back in 2000, this group voted overwhelmingly for Bush, supporting him over Al Gore by a 72-20 margin.

.. Markos Moulitsas of Daily Kos fame caused something of a stir by proposing the term “Libertarian Democrat” to describe his favored breed of progressive.

.. Governor Brian Schweitzer of Montana, fellow Montanan Tester, and Virginia Senator-elect Jim Webb—have sounded some libertarian themes by being simultaneously pro-choice and pro-gun rights.

.. if Democrats hope to continue appealing to libertarian-leaning voters, they are going to have to up their game. They need to ask themselves: Are we content with being a brief rebound fling for jilted libertarians, or do we want to form a lasting relationship? Let me make a case for the second option.

.. the prevailing ideological categories are intellectually exhausted. Conservatism has risen to power only to become squalid and corrupt, a Nixonian mélange of pandering to populist prejudices and distributing patronage to well-off cronies and Red Team constituencies.

.. Liberalism, meanwhile, has never recovered from its fall from grace in the mid-’60s.

.. Conservative fusionism, the defining ideology of the American right for a half-century, was premised on the idea that libertarian policies and traditional values are complementary goods.

.. But an honest survey of the past half-century shows a much better match between libertarian means and progressive ends.

.. many of the great libertarian breakthroughs of the era—the fall of Jim Crow, the end of censorship, the legalization of abortion, the liberalization of divorce laws, the increased protection of the rights of the accused, the reopening of immigration—were championed by the political left.

.. capitalism’s relentless dynamism and wealth-creation—the institutional safeguarding of which lies at the heart of libertarian concerns—have been pushing U.S. society in a decidedly progressive direction.

.. The civil rights movement was made possible by the mechanization of agriculture, which pushed blacks off the farm and out of the South

.. Likewise, feminism was encouraged by the mechanization of housework.

Greater sexual openness, as well as heightened interest in the natural environment, are among the luxury goods that mass affluence has purchased.

.. secularization and the general decline in reverence for authority, as rising education levels (prompted by the economy’s growing demand for knowledge workers) have promoted increasing independence of mind.

.. Yet progressives remain stubbornly resistant to embracing capitalism, their great natural ally.

.. Knee-jerk antipathy to markets and the creative destruction they bring continues to be widespread, and bitter denunciations of the unfairness of the system, mixed with nostalgia for the good old days of the Big Government/Big Labor/Big Business triumvirate, too often substitute for clear thinking about realistic policy options.

.. the rival ideologies of left and right are both pining for the ’50s. The only difference is that

  • liberals want to work there, while
  • conservatives want to go home there.

.. Both generally support a more open immigration policy. Both reject the religious right’s homophobia and blastocystophilia. Both are open to rethinking the country’s draconian drug policies. Both seek to protect the United States from terrorism without gratuitous encroachments on civil liberties or extensions of executive power. And underlying all these policy positions is a shared philosophical commitment to individual autonomy as a core political value.

.. their conceptions differ as to the chief threats to that autonomy.

  • Libertarians worry primarily about constraints imposed by government, while
  • liberals worry most about constraints imposed by birth and the play of economic forces.

.. At the same time, some of the resulting wealth-creation would be used to improve safety-net policies that help those at the bottom and ameliorate the hardships inflicted by economic change.

.. Progressive organizations like Oxfam and the Environmental Working Group have already joined with free-market groups in pushing for ag-policy reform.

.. the current subsidy programs act as a regressive tax on low-income families here at home while depressing prices for exporters in poor countries abroad—and, to top it off, the lion’s share of the loot goes to big agribusiness, not family farmers.

.. the president of Cato and the executive director of the Sierra Club have come out together in favor of a zero-subsidy energy policy.

.. cut taxes on savings and investment, cut payroll taxes on labor, and make up the shortfall with increased taxation of consumption. Go ahead, tax the rich, but don’t do it when they’re being productive. Tax them instead when they’re splurging—by capping the deductibility of home-mortgage interest and tax incentives for purchasing health insurance. And tax everybody’s energy consumption.

.. Gore has proposed a straight-up swap of payroll taxes for carbon taxes

.. Greg Mankiw has been pushing for an increase in the gasoline tax.

.. libertarians’ core commitments to personal responsibility and economy in government run headlong into progressives’ core commitments to social insurance and an adequate safety net.

.. Spending on Medicare, Medicaid, and Social Security is now projected to increase from about 9 percent of GDP today to approximately 15 percent by 2030.

.. We can fund the Earned Income Tax Credit and other programs for the poor; we can fund unemployment insurance and other programs for people dislocated by capitalism’s creative destruction; we can fund public pensions for the indigent elderly; we can fund public health care for the poor and those faced with catastrophic expenses. What we cannot do is continue to fund universal entitlement programs that slosh money from one section of the middle class (people of working age) to another (the elderly)—not when most Americans are fully capable of saving for their own retirement needs.

.. Instead, we need to move from the current pay-as-you-go approach to a system in which private savings would provide primary funding for the costs of old age.

What Has Mitt Romney Learned?

Romney’s rhetoric on China and immigration was a more restrained version of Trump’s nationalist pitch, and here and there he tried to imitate Franklin Roosevelt’s promise, updated crudely by Trump, to be a traitor to his successful class.

.. the defining pitch of the Romney campaign was the tone-deaf “you built that,” which valorized entrepreneurs and ignored ordinary workers; the defining policy blueprint was a tax reform proposal that offered little or nothing to the middle class; and the defining gaffe was the famous “47 percent” line, in which Romney succumbed, before an audience of Richie Riches, to the Ayn Randian temptation to write off struggling Americans as losers.

.. that failure lay the opportunity that Trump intuited — for a Republican candidate who would rhetorically reject and even run against the kind of corporation-first conservatism that Romney seemed to embody and embrace.

.. Trump has mostly turned his back on his own economic populism

The best of the current Republicans (the Paul Ryans, the Ben Sasses, the Mitt Romneys) have certain common features that should be appealing to the electorate. They seem to have the home life of the family man. They have the discipline and diligence of the organization kid. They have the looks of the pretty boy. Yet the public still rejects them, because the voters find their ideas even more unpleasant than Donald Trump’s odious personality.

.. But he could also perform a service by showing that he has learned something from watching Trumpism succeed where his own campaign failed — which would mean steering a different and more populist course than those NeverTrump Republicans who pine for a party of the purest libertarianism, and those OkayFineTrump Republicans who are happy now that Trump has given them their corporate tax cut.

.. Right now there is a small caucus in the Republican Party for a different way, for a conservatism that seeks to cure itself of Romney Disease by becoming genuinely pro-worker rather than waiting for a worse demagogue than Trump to come along.

 

Maybe Trump knows his base better than we do

In the United States, Trump is leading something that is best described as plutocratic populism, a mixture of traditional populist causes with extreme libertarian ones.

.. The puzzle, Wolf says, is why this is a politically successful strategy.

.. Pierson argues that Trump entered the White House with a set of inchoate ideas and no real organization. Thus, his administration was ripe for takeover by the most ardent, organized and well-funded elements of the Republican Party — its libertarian wing.

.. “We are not auditioning for fearless leader. We don’t need a president to tell us in what direction to go. We know what direction to go. . . . We just need a president to sign this stuff.”

.. But what if people are not being fooled at all? What if people are actually motivated far more deeply by issues surrounding religion, race and culture than they are by economics? There is increasing evidence that Trump’s base supports him because they feel a deep emotional, cultural and class affinity for him.

.. And while the tax bill is analyzed by economists, Trump picks fights with black athletes, retweets misleading anti-Muslim videos and promises not to yield on immigration. Perhaps he knows his base better than we do.

.. Polling from Europe suggests that the core issues motivating people to support Brexit or the far-right parties in France and Germany, and even the populist parties of Eastern Europe, are cultural and social.

The President’s Self-Destructive Disruption

his repeated use of the word “fake” to describe news coverage when he actually means “unpleasant” and his style of rhetoric in front of the United Nations, where he called terrorists “losers” and applied a childish epithet to the head of a nation in whose shadow tens of thousands of American troops serve and with whom nuclear war is a live possibility, are all cases in point. There is no way to formalize conventions of maturity and dignity for presidents. Custom fills that void.

.. When he violates such customs, Mr. Trump is at his most impulsive and self-destructive. It may sound ridiculous to invoke James Madison or Edmund Burke when we talk about this president, but that is part of the problem. Mr. Trump could profit from the wisdom of his predecessor Madison, for whom the very essence of constitutionalism lay not in what he derided as “parchment barriers” — mere written commands there was no will to follow — but rather “that veneration which time bestows on every thing.” The Constitution, in other words, would be only as strong as the tradition of respecting it.

.. Burke is generally seen as the progenitor of modern conservatism, but Mr. Trump, who came late to the conservative cause, is said to be so hostile to custom that his staff knows the best way to get him to do something is to tell him it violates tradition.
.. demagogic campaign rallies masked as presidential addresses
.. because many elements of his base associate these customs with failed politics, every violation reinforces the sense that he sides with them over a corrupt establishment.
.. Historically, conservatism has tended to value light governance, for which custom is even more essential. Aristotle writes that “when men are friends they have no need of justice.” In other words, rules enter where informal mechanisms of society have collapsed. The philosopher and statesman Charles Frankel summed it up powerfully: “Politics is a substitute for custom. It becomes conspicuous whenever and wherever custom recedes or breaks down.”
.. Since Woodrow Wilson’s critique of the framers’ work, progressive legal theory has generally denied that the meaning of the original Constitution, as endorsed by generational assent, wields authority because it is customary. Much of libertarian theory elevates contemporary reason — the rationality of the immediate — above all else.

.. The president’s daily, even hourly, abuse of language is also deeply problematic for a republic that conducts its business with words and cannot do so if their meanings are matters of sheer convenience. The unique arrogance of Mr. Trump’s rejection of the authority of custom is more dangerous than we realize because without custom, there is no law.

The Bannon Revolution

Bannon’s grand ambitions should inspire the same soul-deadening déjà vu, the existential exhaustion, with which Bill Murray’s weatherman greeted every morning in Punxsutawney, Penn. They should bring to mind both Friedrich Nietzsche’s idea of eternal recurrence and his warning that if you stare deep into the abyss, it stares into you.

.. What Bannon is promising is what the Tea Party actually delivered, in a past recent enough to still feel like the present: a dramatic ideological shake-up, an end to D.C. business-as-usual, and the elevation of new leaders with a sweeping vision for a new G.O.P.

.. The ideological shake-up took the form of paper promises, not successful legislation. The end to D.C. business-as-usual just created a new normal of brinkmanship and gridlock. And when the Tea Party’s leaders — Ted Cruz and Rand Paul, above all — reached out to claim their party’s presidential nomination, they found themselves steamrolled by a candidate who scorned all their limited-government ideas and offered, well, Trumpism instead.

.. when it comes to governance, Trumpism turns to have two fatal weaknesses:

  1. the dearth of Trumpists among elected Republicans, and
  2. the total policy incapacity of Trump himself.

So having failed in his appointed role as Trump whisperer and White House brain, Bannon has decided to do the Tea Party insurgency thing all over again, except this time with his

  • nationalist-populist cocktail instead of the
  • last round’s notional libertarianism.

.. Maybe the Tea Party was a dead end, but some Trumpist primary candidates will finally produce a Republican Party capable of doing something with its power.

.. His professed nationalism, with its promise of infrastructure projects and antitrust actions and maybe even tax hikes on the rich, is potentially more popular than the Tea Party vision ..

.. But this imaginative exercise collapses when you look at Bannon’s own record and the candidates he’s recruiting.

.. At the White House, Bannon did not manage to inject much heterodoxy into any part of the same old, same old Republican agenda. But he did encourage the president to pick racialized fights at every chance.
.. his new grass-roots populism promises to be more of the same:
  • a notional commitment to some nebulous new agenda,
  • with white-identity politics and the
  • fear of liberalism supplying the real cultural-political cement.
.. Especially because the would-be senators he’s recruiting are a mix of cynics and fanatics who seem to share no coherent vision, just a common mix of ambition and resentment.
.. if you believe figures like Roy Moore and Erik Prince are going to succeed where Trump is obviously failing, I have some affidavits attesting to Harvey Weinstein’s innocence to sell you.
.. He and his allies are the latest group to recognize the void at the heart of the contemporary Republican Party, the vacuum that somebody, somehow needs to fill.
  • .. The activists and enforcers of the Tea Party era tried with a libertarian style of populism.
  • Paul Ryan tried with his warmed-over Jack Kempism.
  • My friends the “reform conservatives” tried with blueprints for tax credits and wage subsidies.

.. now they, too, need to reckon with a reality that has confounded every kind of Republican reformer since Barack Obama was elected: Our politics are probably too polarized, our legislative branch too gridlocked, and the conservative movement too dysfunctional and self-destructive to build a new agenda from the backbenches of Congress up, or even from the House speaker or Senate majority leader’s office.

.. Our system isn’t really all that republican anymore; it’s imperial, and even an incompetent emperor like Trump is unlikely to restore the legislative branch to its former influence. So if you want to remake the Republican Party as something other than a shambolic repository for anti-liberalism, the only way it’s likely to happen is from the top down —

  1. with the election of an effective, policy-oriented conservative president (which Donald Trump is not),
  2. surrounded by people who understand the ways of power (which Bannon, for all his bluster, didn’t) and
  3. prepared to both negotiate with Democrats and bend his own party to his will.

.. I would not be wasting my time trying to elect a few cranks and gadflies who will make Mitch McConnell’s life more difficult.

Instead I would be looking for the thing that too many people deceived themselves into believing Trump might be, and that Bannonite populism for all its potential strength now lacks: a leader.