60:42thank you what is the most persistent60:45zombie idea on the left and is there one60:47is there an idea to what you have60:50subscribed in the past which you now60:51kind of put into that category oh boy I60:55mean the trend the left is not nearly as60:58good at maintaining zombie ideas partly61:03because there there are in fact not that61:07many leftist billionaires and and61:09billionaires there are some but not very61:12leftist and so I mean well let me put61:20this way we were talking about climate61:22and environment and and climate change61:25and economic growth I’m running to a lot61:27of people still who are now this is61:30telling you that there I don’t think61:31there are a large part of the electorate61:33but there are61:34but the circles I move in I run into61:36people who are sure that to fight61:39climate change we have to stop living61:41the way we’re living and a much more61:43austere back-to-nature lifestyle is the61:47only way to deal with climate and that’s61:49an idea that it’s just clearly wrong if61:53we actually asked by we know enough61:55about the technological and economic61:57solution to climate change that ASUS a62:00green society that does not burden the62:02planet would almost certainly be a62:04society that looks a whole lot like what62:06we have now in people with the driving62:08cars they’d be using electricity but the62:10cars with the electric and the62:12electricity would be generated by solar62:13and wind and it but the actual rhythm of62:16daily life could look very much like62:18what we we have we don’t have to go back62:20to to an agrarian pastoral Eden to to to62:25deal with the issue but it’s it’s62:26something that sounds again it sounds62:29serious from a different point of view62:30it sounds like if you’re serious about62:31climate change you must be serious and62:34believing that we have to give up on62:35this consumer oriented society and and62:38all of these these comforts that we take62:40for granted but in fact it’s not true so62:43that would here that would be an example62:44of a kind of a left-wing zombie in other62:46countries in the belief that you can62:49just dictate all prices and you know you62:53can put price controls on everything and62:54not and never face shortages that’s not62:58something we see in the US but they62:59Venezuela clearly there’s some refusal63:02to face reality going on but that would63:05be these house but again zombies mostly63:08flourished because their big money63:10behind them not all of them but mostly63:12and and and the no.4 for every George63:17Soros there are 50 quiet billionaires63:21supporting extremely reactionary causes63:23and what about the question the question63:25of an idea you’ve changed your mind oh63:27so most of my changes have been in the63:33in the other direction look at minimum63:36wages no no a piece of economic research63:41has has shaken my views as much63:46actually I’m gonna give you two and and63:50me at this this is a great risk of63:52turning into a Monty Python routine63:54amongst the issues three okay so64:00actually so I’ll give you two one64:01minimum wages up until sometime in the64:05mid 1990s I believe that clearly64:09increases in minimum wages would cost64:11jobs they might be desirable otherwise64:13but econ 101 said that that’s what64:15happened and then we got this amazing64:17body of empirical research because we64:19get in the United States we get a lot of64:21natural experiments when one state64:22raises its minimum wage and the64:24neighboring state does not and the64:26overwhelming evidence says that minimum64:28wage increases at least within the range64:30we see in the US do not cost jobs and64:33that changed my view has said labor64:34markets are very different from where I64:35thought it actually moved me towards64:38emphasizing the role of power and in64:40labor relations and so on another one I64:43used to think that it was always64:44possible just by printing money to get64:47full employment and and the experience64:50of Japan in the late 1990s when despite64:54a very easy monetary policy they slid64:56into deflation changed my views totally65:00I there was a there was a group of us65:03actually of when I when I arrived at65:05Princeton in 2000 was a bunch of Japan65:07warriors who were really very shaken by65:10the Japanese experience because we we65:12looked at it said you know this could65:13happen to us so with me people you65:16wouldn’t have heard of but very65:17influential in the professional arts65:18Vince and Mike Woodford and the fourth65:21was Bernanke Ben Bernanke don’t know65:24what happened to him he disappeared I65:26think yeah so we so that but no the the65:31Japanese Japan’s Lost Decade65:33changed my view and basically made me65:36much more Keynesian much more believer65:38that there are times when you really65:40need to have the government do the65:41spending yes how do you successfully65:45regulate the financial markets while not65:50scaring the business community in sort65:53of trying to65:55in the middle of a class that any form65:58of common sense reform or tax is not66:01Marxist Leninist and it’s not going to66:03take away all their assets and money66:05okay you know we’ve done this before66:10right we imposed extensive bank66:14regulation in the 30s which didn’t66:17obviously cripple the economy we the66:19post-war generation was was the best66:22generation in in in certainly in US66:24economic history the the the only I66:29would say the problem is not scaring66:31people not looking Marxist the problem66:33with regulating financial markets is66:35first of all they’re the financiers have66:39a lot of clout but but beyond that it is66:45hard to keep up with financial66:49innovation which very often is not66:53innovating in the sense of you know66:55doing things better but as is innovating66:58a way of finding ways to set things up67:01that evade the regulations so you67:04regulate banks and then people create67:06something that is functionally a bank67:07but doesn’t technically meet the67:09definition of a bank and evades the67:11regulations it’s hard to keep up with67:13that and and if it’s not a well solved67:16problem in the we had a significant67:21financial reform in the US under Obama67:24not everything you I would have wanted67:26but it was significant but on many of67:29the issues it depends upon this67:31Financial Stability Council which has to67:34define systemic lis important67:37institutions that they’re mean and67:40there’s no clear definition it’s kind of67:43like pornography you know when you see67:44it which is not a stupid way to do it67:47but it depends upon having honest people67:51of goodwill in charge and now we have67:55the Trump administration so so the67:58dodd-frank is not a very effective tool68:00and it always depended upon upon good68:04leadership and68:06we have not found I haven’t come up with68:08a way to the thing about doing a regular68:10old-fashioned commercial banks is that68:15that system works the regulations work68:18the the guarantees work without68:21requiring that there be smart leadership68:23or good judgment calls at the top and68:25unfortunately everything we try to do to68:27deal with more modern financial68:29institutions is requires both goodwill68:34and sophistication which are both the68:36now and very short supply question from68:39the balcony please thanks very much so68:41we’ve mostly discussed zombi ideas in68:43the kind of domestic policy context i68:45wanted to ask about zombie ideas in the68:47international context in the sense of68:50the Washington Consensus and trade68:51liberalization and specifically I want68:54to ask what your thoughts are on the68:56extent to which countries can still68:58develop by exporting I has the impact of69:02technology and the scale of China made69:06it essentially impossible for a trade69:07liberalization to facilitate development69:10okay that’s a good question69:13I think empirically it’s just the69:16premise is wrong so we all know about69:19China and we know that China occupies69:21this huge space and China is a unique69:25success story nobody else has matched69:27their rates of growth but it’s not the69:31only success story so when I took I like69:34to talk about the the unfamiliar cases69:39Bangladesh Bangladesh is a desperately69:43poor country and and compared with69:46working conditions and in in the first69:49world it’s it’s is horrible and they69:51have factories that collapse and kill69:53hundreds of workers and all of that but69:56Bangladesh is actually they’ve they’ve69:59tripled their per capita income and70:03there there are very poor country but70:06they were a country that was right on70:07the edge of Malthusian starvation and70:11it’s all because of the ability to70:13export if the the ability basically70:17clothing labor-intensive70:19that they’ve been steadily gaining70:21market share at China’s expense because70:23China has been moving upscale and that’s70:26that’s showing that you can get yeah70:28that’s that’s major development that’s a70:29major change it’s it’s not it’s a long70:32way from from turning into into Western70:35Europe but it’s it’s it’s a very big70:37deal and it’s showing that the70:39globalization can still work for for70:41poor countries so I that’s that’s what70:45the line Bangladesh is not a it’s not a70:48banana republic it’s a pajama republic70:51but but that you know they can make fun70:54of it but in fact their use that’s a70:56very large number of people who are70:57lifted at least some ways above71:00starvation level by globalization and71:03another question from the balcony please71:06looking at it as a economist with a71:08mathematical mind what impact do you71:11think a shift a proportional71:12representation would have over time as71:15you compared to the electoral colleges71:18and first-past-the-post which we have in71:19the UK other British Commonwealth71:22countries which tend to over time have71:24led to two party states so what if we71:26shifted the proportional representation71:28okay I mean firstly the u.s. the the71:33u.s. electoral college system is71:35monstrosity that’s a that’s not about71:38first-past-the-post it’s about a system71:40that at the presidential level gives71:42disproportionate representation to to71:45some states with small populations and71:48at even more important we have the71:50Senate which where half the Senators are71:53elected by 16 percent of the population71:55so this is a that that’s crazy71:58that’s a deeply basically we’ve we’ve72:00evolved into a rotten borough system for72:03half of the US government and that’s72:05that’s a clear monstrosity as for the72:08rest I mean I don’t know I mean this is72:13not I’m not a political scientist I talk72:16to political scientists which by the way72:18is rare for economists we actually talk72:20I actually talk to these goods to other72:21social sciences and take them seriously72:24and but what I would say is that the the72:29there are places with proportional72:31representation72:32that also managed to be very72:34dysfunctional so you know Israel I72:38believe has proportional representation72:39and I would not say that Israeli72:44politics these past 15 years have been a72:47model of good ideas and wisdom72:50prevailing in fact they I mean every72:52system has its problems and one of the72:54problems with proportional72:55representation is it sometimes causes72:57small factional parties with with very73:01antisocial goals to to be kingmakers so73:06that’s not an easy solution either I73:08don’t really know what the answer is73:10except to say that that you know people73:13people are both generally clever and73:19often nasty and they can find a way to73:21screw up any system question trip down73:24here hi73:25you said earlier that the American73:26economy is in a pretty strong position73:28so I was wondering how much he thought73:30Trump could legitimately claim73:32responsibility for that and then73:33alongside that what are the strong II73:35cannot strongest economic arguments to73:37voters for voting against him okay the73:41reason that we’re in a relatively strong73:43economic position is that it’s basically73:47deficit spending after years and years73:49of saying no debt this is an existential73:52threat then we must have austerity which73:54really hobbled the US recovery under73:58Obama as soon as Trump was in office for74:00Republicans said oh we don’t care about74:02that I mean the last two State of the74:04Union speeches have not so much as74:06mentioned the deficit and that even74:09though it’s badly done it does give a74:13boost to demand so I guess you could say74:16the Trump has gets some credit in the74:19sense that by getting elected he caused74:22congressional Republicans to stop74:24sabotaging the economy that’s not a you74:27know vote Republican and and and and the74:29and the economy won’t be undermined by74:31by our sabotage efforts so that’s not a74:34great electoral slogan but it might win74:36in the election I have to say and I lost74:40the room what the rest of that was but74:42the74:44was one of the strong strongest economic74:46arguments to voters to vote against him74:48oh the thing about Trump is that he’s74:50managed to preside over a economy that74:55by sort of aggregate measures74:58unemployment rate is low GDP growth has75:02been pretty good not spectacular but75:04pretty good but which is is showing75:08increased hardship for many people75:11despite that I mean we were making huge75:13progress in reducing the number of75:15people without health insurance that has75:17now gone into reverse the number of75:19people who say that their that they are75:23that they are postponing or not75:27undertaking necessary medical treatment75:29because of expense has skyrocketed75:32and the America like the UK there’s75:38tremendous regional divergence we have a75:43large part of the large parts of the the75:47heartland which are in severe economic75:50decline as social collapse and that has75:53just accelerated you know despite the75:55low overall unemployment rate the state75:58of affairs in Eastern Kentucky is76:01terrible and life expectancy I guess it76:06rose slightly this past year but you76:07know mortality rates are rising and it’s76:11as in case an Angus Deaton say deaths of76:14despair people dying from from opioids76:19alcohol and suicide have been rising76:22despite the strong economy so this is76:25actually that earlier question about GDP76:27you know the GDP growth not saying that76:31the that it’s false but under under the76:34surface of that good GDP growth is76:36actually a substantial increase in76:38misery just a one final question from76:43thanks bull great to see you here my76:48question is about the u.s. minimum wage76:50obviously it’s very very low compared76:53it should be you know from visiting the76:55US for last 25 years it seems P and76:57getting no three jobs to make ends meet77:00what do you think the minimum wage77:02should be and one of the reasons other77:05than you know losing jobs that perhaps77:07people have been keeping it down the77:09minimum wage suppressed oh so I asked77:12that in Reverse I mean the reason the77:14minimum wage has been held down is77:15because employers want chief labor and77:20they have a lot of clout the question of77:24how high to go is an interesting one77:26and it’s the so even the the big move in77:34the u.s. is for $15 and that’s a I’d say77:39even $15 an hour even Alan Krueger who77:43was one of the key researchers on that77:45revelatory work was a little nervous77:48about 15 and that the problem is77:52regional the the state of New York the77:55state of California no problem you have77:58a $15 minimum wage and and there’s78:00absolutely no reason to think that78:02that’s economic difficulty we’re talking78:05about Mississippi or Alabama places with78:08much lower productivity you might start78:10to have some job loss at that level I78:12think that the preponderance of the78:14evidence says that $15 is okay that78:18there might be some minor job loss in78:21some of the least productive parts of78:22the US but but overall not a big deal I78:26think 20 I would start to make me really78:28nervous78:29that then you start to really be a78:30problem in in potentially problematic78:33territory but it’s it’s why they see78:36actually in this case I think a federal78:38minimum wage of 15 and then higher wages78:40and in in in appropriate States it makes78:44sense this is one of these cases where78:45federalism works to our advantage and78:47and it’s interesting by the way Alan78:49Krueger did do at one point he he went78:52to to Puerto Rico which part of the u.s.78:55is subject to the u.s. minimum wage and78:57much lower productivity and said there78:59we should be able to see clear evidence79:01that the minimum wage cost jobs and he79:03couldn’t find it he said I don’t really79:05believe this by79:06I can’t find the evidence so so for the79:09moment I say let’s let’s go for 15 and79:11see what happens and then maybe maybe79:15look for the high productivity states to79:20to go beyond that great I’m so sorry to79:24have to draw it to a conclusion but you79:27will have the opportunity to meet ball79:29and and get the book signed for now79:32please join me in thanking him for79:34really fascinating today all right
Trevor Noren, managing director at 13D Global Research and Strategy, discusses how the concentration of wealth and corporate power is shaping his macro perspective. He sees the past three decades of industry consolidation as root causes of the problems that the American economy currently faces: stagnant growth, increasing wealth inequality, and a QEdependent stock market. Noren predicts that this trend of consolidation will reverse, and he sees significant investment potential in gold, small cap stocks, and companies leading the decentralization movement. Filmed September 26, 2019 in New York.
He is not a liberal, he’s the end of liberalism.
A few months ago, I wrote a column saying I would vote for Elizabeth Warren over Donald Trump. I may not agree with some of her policies, but culture is more important than politics. She does not spread moral rot the way Trump does.
Now I have to decide if I’d support Bernie Sanders over Trump.
We all start from personal experience. I covered the Soviet Union in its final decrepit years. The Soviet and allied regimes had already slaughtered 20 million people through things like mass executions and intentional famines. Those regimes were slave states. They enslaved whole peoples and took away the right to say what they wanted, live where they wanted and harvest the fruits of their labor.
And yet every day we find more old quotes from Sanders apologizing for this sort of slave regime, whether in the Soviet Union, Cuba or Nicaragua. He excused the Nicaraguan communists when they took away the civil liberties of their citizens. He’s still making excuses for Castro.
To sympathize with these revolutions in the 1920s was acceptable, given their original high ideals. To do so after the Hitler-Stalin pact, or in the 1950s, is appalling. To do so in the 1980s is morally unfathomable.
I say all this not to cancel Sanders for past misjudgments. I say all this because the intellectual suppositions that led him to embrace these views still guide his thinking today. I’ve just watched populism destroy traditional conservatism in the G.O.P. I’m here to tell you that Bernie Sanders is not a liberal Democrat. He’s what replaces liberal Democrats.
Traditional liberalism traces its intellectual roots to
- John Stuart Mill,
- John Locke,
- the Social Gospel movement and
- the New Deal.
This liberalism believes in gaining power the traditional way: building coalitions, working within the constitutional system and crafting the sort of compromises you need in a complex, pluralistic society.
This is why liberals like Hubert Humphrey, Ted Kennedy and Elizabeth Warren were and are such effective senators. They worked within the system, negotiated and practiced the art of politics.
Populists like Sanders speak as if the whole system is irredeemably corrupt. Sanders was a useless House member and has been a marginal senator because he doesn’t operate within this system or believe in this theory of change.
He believes in revolutionary mass mobilization and, once an election has been won, rule by majoritarian domination. This is how populists of left and right are ruling all over the world, and it is exactly what our founders feared most and tried hard to prevent.
Liberalism celebrates certain values:
- intellectual humility and
Liberalism is horrified by cruelty. Sanders’s leadership style embodies the populist values, which are different:
- bitter and relentless polarization, a
- demand for ideological purity among your friends and
- incessant hatred for your supposed foes.
A liberal leader confronts new facts and changes his or her mind. A populist leader cannot because the omniscience of the charismatic headman can never be doubted. A liberal sees shades of gray. For a populist reality is white or black, friend or enemy. Facts that don’t fit the dogma are ignored.
A liberal sees inequality and tries to reduce it. A populist sees remorseless class war and believes in concentrated power to crush the enemy. Sanders is running on a $60 trillion spending agenda that would double the size of the federal government. It would represent the greatest concentration of power in the Washington elite in American history.
These days, Sanders masquerades as something less revolutionary than he really is. He claims to be nothing more than the continuation of Franklin Roosevelt and the New Deal. He is 5 percent right and 95 percent wrong.
There was a period around 1936 or 1937 when Roosevelt was trying to pack the Supreme Court and turning into the sort of arrogant majoritarian strongman the founders feared. But this is not how F.D.R. won the presidency, passed the New Deal, beat back the socialists of his time or led the nation during World War II. F.D.R. did not think America was a force for ill in world affairs.
Sanders also claims he’s just trying to import the Scandinavian model, which is believable if you know nothing about Scandinavia or what Sanders is proposing. Those countries do have generous welfare states, but they can afford them because they understand how free market capitalism works, with fewer regulations on business creation and free trade.
There is a specter haunting the world — corrosive populisms of right and left. These populisms grow out of real problems but are the wrong answers to them. For the past century, liberal Democrats from F.D.R. to Barack Obama knew how to beat back threats from the populist left. They knew how to defend the legitimacy of our system, even while reforming it.
Judging by the last few debates, none of the current candidates remember those arguments or know how to rebut a populist to their left.
I’ll cast my lot with democratic liberalism. The system needs reform. But I just can’t pull the lever for either of the two populisms threatening to tear it down.
Some of its employees tried to stop their company from doing work they saw as unethical. It blew up in their faces.