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Peter Robinson: Welcome to Uncommon Knowledge, I'm Peter Robinson. A graduate of Yale, Amity Shlaes, is the author of four New York Times bestsellers including, "Coolidge," her splendid biography of the 30th president and, "The Forgotten Man: A New History "of The Great Depression." Her newest volume, "Great Society: A New History." Amity, welcome.
Amity Shlaes: Thank you Peter.
Peter Robinson: By the way, I should note that you are the author of four New York Times bestsellers and the mother of four children. At some point we may get around to asking how on earth you pull off that act. We're recording today on the campus of Stanford University. This June the class of 2020 will graduate more than 50 years after the enactment of The Great Society. More than half a century after the era of John F. Kennedy, Lyndon Baines Johnson, and Richard Milhous Nixon. Briefly right now, we'll devote the whole show to The Great Society, but briefly what do current college students need to grasp about the great society?
Amity Shlaes: The young people then were like you. They were idealistic. They saw a tremendous wealth in the United States and said, "Why can't we just do the little bit that's left? "Why can't we make the last tenth or 1/10 "of America happy?" "Why can't it all be fair?" It's an intensely idealistic period. The Great Society commenced in the early 60s and that we have as well. Secondly an interest in, a flirtation with, or affection for socialism.
Peter Robinson: All right. "Great Society." "There were not many self-described "socialists in the country in the early 1960s, "still many Americans ached to make American society over, "whether by tinkering or rebuilding, "in the name of improving life for all." You got to this a moment ago, but I wanna ask, frame it a little more tightly. Here you had, by the 1960s the United States, it had emerged from the Second World War as the most powerful nation on earth and the history of the country was pretty clear. It had absorbed wave after wave of immigrant and created one of the richest societies in the history of humankind. And yet they thought that it needed to be made over. Why?
Amity Shlaes: Some of this was the success of World War II. Imagine if you're a veteran and you saw what we did in Europe. Then well cleaning up a little poverty in the United States, Norman Podhoretz the great intellect said that, "Solving and curing poverty was just a mopping up action." So there was a real sense of confidence in the United States that we could do anything. Certainly deal with little domestic problems. That was a big part of it. Part of it was that the people who were born, the true early baby boomers, they hadn't been through the Great Depression. So they were more optimistic than their veteran parent or veteran big brother, just generally about what's possible in the United States and much more relaxed. If you haven't lived through a Great Depression, well so we can cure poverty now. America is rich. We had the standard of living comparable nowhere.
Peter Robinson: Right.
Amity Shlaes: Asia was not yet any kind of threat. Asia was place we had to rescue. Europe was a place we had to rescue. There was no notion that we could ever be competed with.
Peter Robinson: So one factor is this feeling they can do anything because some of them, some of the great societarians, or whatever the noun would be, hadn't lived through the Great Depression. They didn't know, in some sense, how bad things could be. And everybody had in the back of his or her mind, the Second World War, where we won. We just won. And we had rebuilt West Germany, rebuilt Japan. Okay, second factor that you stress is prosperity. "Great Society." "America was certainly prosperous enough "to afford a vast experiment such as socialism. "American unemployment was low and heading lower. "American business boomed. "As Stalin was said to have joked, "America was the only country in the world "that could afford communism." Close quote. So talk about that for just a moment. The sense of economic buoyancy.
Amity Shlaes: Well that too is like today. Americans today think the ever rising stock market is their birth rite. Well it's 28,000 or 27,000. Pretty soon it'll be 30. We just expect that. And by the time, when you ask students, "In 10 years, "when you have a real job, how much higher is it gonna be "or how much lower?" They always say 35 or 37. At that time, the stock market was rising and the number, the landmark everyone imagined we would pass shortly was 1,000.
Peter Robinson: Right.
Amity Shlaes: 1,000 that was coming Didn't seem, it was not hard to get a job. The kind of labor shortage we're enduring today, that was also in the mix. If you wanted a job, you got one.
Peter Robinson: Right.
Amity Shlaes: More or less. Even if you were not particularly skilled. They would train you. There was that much demand for labor in the early 60s.
Peter Robinson: So we've got the feeling that the country can do anything, that it has the resources to afford anything, and then one other factor here. Again I'm quoting from your book Amity. "In its Great Society endeavor, the country relegated "the private sector to the role of consultant, workhorse, "and milk cow." Close quote. Again, on the face of it this is puzzling. It's the private sector that produced all the material that enabled us to win the Second World War. It's the private sector where Detroit and Flint, Michigan are booming and able to pay high wages that attract people from all over the country. Why do they look at all of this and say, "Ah, we'll just milk the private sector, "we'll let the government will get the job done."
Amity Shlaes: Well in the idealism, we wanna have a great society. There are two ways to get a great society, private sector or public sector. As you mentioned Peter, we chose public sector. And the question is, why. And the answer is, I do think the military was part of that.
Peter Robinson: I see.
Amity Shlaes: People build a military industrial complex. Only the government can make an internet. Only the government can launch a national poverty plan if we need a national poverty plan. Only the government can do that and Michael Harrington, the young socialist, not so young, but young socialist, who went to the White House at the beginning of the book to see if he could get a poverty plan. The JD Vance of the period because he was particularly interested in
Peter Robinson: Appalachia.
Amity Shlaes: Appalachia. He wrote the, "Hillbilly Elegy," of the era which was called, "The Other America," about poverty in Appalachia and elsewhere. He said, "Well only the government can do this." He said it right in his books. "I just don't think that towns could do this." And you see that today as well. You say, "What was there before social security?" Nothing. And in reality there are little institutions, sometimes community, sometimes church, that can do something and do do social good, but Mr. Harrington and the young socialists and social democrats and welfare, you know, idealists of that period thought only the federal government, otherwise nothing.
Peter Robinson: Okay, so those are the predicates. Now the Great Society comes into being. We often associate the Great Society with one president, Lyndon Johnson, but you stress that this was the project of three men. John Kennedy, Lyndon Johnson of course, but also Richard Nixon. So let's take each of these in turn. John Fitzgerald Kennedy, he's president for less than three years, before of course he's assassinated. But even at that, his administration expands unemployment benefits, social security benefits, enacts housing and transportation, but there's a puzzle here. At the same time JFK is responsible for deep income taxes. They're not enacted during his lifetime, but he proposes them and congress then enacts them after his death. So this is a strange picture. You've got a man willing to use government to expand, to begin the Great Society, but also seems to understand the importance of the private sector. Wants to cut taxes to promote economic growth. So what's the correct way to understand JFK's relationship to the Great Society.
Amity Shlaes: All presidents are just a collection of impulses. So you want to see a man, right?
Peter Robinson: Let's write that down.
Amity Shlaes: Now which impulse will prevail today, right? Especially in the pressure cooker that is the presidency, but in addition.
Peter Robinson: It's not just Donald Trump. They're all bundles of impulses.
Amity Shlaes: They're bundles of impulses and top of that John Kennedy. It was the Kennedy presidency even more than it was the John Kennedy presidency. So the impulses in Kennedy are his family's. So his brother Robert Kennedy was to his left and yet he felt he needed his brother Robert Kennedy, in the cabinet as attorney general. His father was kind of to his right, 'cause his father was an old Wall Streeter
Peter Robinson: A hard boiled businessman.
Amity Shlaes: and had been chair of the SEC and kind of tough and probably not that trustworthy. So which John are you speaking with is part of it. Kennedy respected capitalism, but he didn't particularly understand it. He kind of thought that the way that you got growth was important and got together in a room such as his father with important union leaders and important businessmen. And the businessmen weren't to be trusted. A wonderful Freudian could give us an analysis of that, but he did get in a fight with big steel and he said, "My father told me you couldn't trust "those bastards." That was big steel, but his own father was so tricky that it was said that when he became SEC chair, it was a fox guarding a henhouse. So there was this essential distrust of business and some idea that business is good and certainly a kind of keynesian understanding of growth. And keynesians and supply-siders are first cousins, right?
Peter Robinson: Really?
Amity Shlaes: They have a lot in common, so they thought well we'll stimulate the economy if we cut taxes and he had learned that from people like John Kenneth Galbraith and he thought, "That makes sense." And generally speaking, setting aside business which he artificially separated, John Kennedy was a man who respected the individual. "Ask not what your country can do, "ask what you can do for your country." And understood initiative and self discipline very well. So all these competing impulses were in him. The Bobby Kennedy side of him and the Eunice Kennedy side said, "Let's do little projects to help young people, "let's be friends with the Ford Foundation "and try out ideas there. "Let's have giant programs for delinquents." And that was the, I guess you'd say the embryo of the Great Society.
Peter Robinson: All right.
Amity Shlaes: But Kennedy never had the magnitude of vision that his predecessors did.
Peter Robinson: All right, which brings us to Lyndon Baines Johnson. Speaking of bundles of impulses. Two quotations here both from, "Great Society." Quotation number one, this is LBJ at the University of Michigan, he's speaking on May 22, 1964.
[Lyndon B. Johnson]: We are going to assemble the best thought from all over the world. On the cities, on natural beauty, on the quality of education, and on other emerging challenges. From these studies, we will begin to set our course toward the Great Society.
Peter Robinson: Hard to say quite what he's talking about, but it's big. Quotation two. This is you. "When Johnson's aides expressed trepidation, "he intoxicated them with his bold reply. "'Well,' Johnson said, "'what the hell's the presidency for?'" Close quote. Johnson enacts a cascade of legislation. Civil rights legislation, the War on Poverty, Medicare, Medicaid, Social Security Act of 1965 which greatly expands benefits and beneficiaries and all this while ramping up a war in Vietnam. What did he think he was doing?
Amity Shlaes: Ambition. I start with the ambition. The thought comes after the ambition, right? I want to...
Peter Robinson: Be bigger than John Kennedy.
Amity Shlaes: Be bigger than John Kennedy. I want to, very complex man, not my topic in this book because the book is about the people who work for him. The domestic best and the brightest. The suffering fools. But he, the good Johnson wanted to do his duty and fulfill the platform promises of the democratic party in 1960 and honor John Kennedy. The less good and more human Johnson, just wanted to show them that he could do this better than Kennedy and he had that advantage because congress became more democratic. And so he had the votes for projects such as the tax cut which Kennedy would not have.
Peter Robinson: In 1964, of course John Kennedy has been killed, assassinated, Barry Goldwater, a man of the right, is the republican nominee, and Johnson sweeps to a landslide victory and brings in huge democratic majorities in both the house and the senate, making congress the most liberal congress since 1936. I think I've got that right. I think that's your point. So the politics of this are that the door is wide open and he gets whatever he wants.
Amity Shlaes: Johnson had a license Kennedy didn't have. In addition to that, he had master of the senate. You know, the ability...
Peter Robinson: He had been senate majority leader before becoming John Kennedy's vice president.
Amity Shlaes: As other good, wonderful books like Robert Caro have covered, but yeah you also play to your strength, right? You play the position in baseball that is your position so Johnson's position was to deliver laws. And Joe Califano is a very perceptive book about Johnson said...
Peter Robinson: Joe Califano was a senior aide to Johnson.
Amity Shlaes: Yes, I'm sorry a senior aide and later became a cabinet member under other presidents. He said Johnson, "made laws the way other men "eat chocolate chip cookies." He just, that's a law, that's a law, that's a law, that's a law, without much regard to the consequence of the law. I think he kind of thought he was honoring, in addition to JFK, Truman and FDR. His intellectual and political father because Johnson's whole youth as a politician was working in the New Deal. Great Society was gonna be even better than the New Deal and you know, guess what, it costs more now. I mean Johnson commitments cost more than FDR commitments, so.
Peter Robinson: Today.
Amity Shlaes: Today, yep.
Peter Robinson: All right, Richard Milhous Nixon. "Great Society." "Though the electorate expected "Richard Nixon to lead congress in curtailing "the Great Society," he's a republican after all. The Great Society is a democratic project. "The 37th president ended up expanding it."
Amity Shlaes: Yeah, you can almost feel Pat Buchanan, his speech writer, trembling with rage 'cause they ran for Nixon. Nixon ran a beautiful campaign in many ways. He spoke well.
Peter Robinson: '68 we're talking about.
Amity Shlaes: '68. He spoke well, he was intelligent, he was less of a thug than Johnson who just got his way through bluster and bullying often. Had clear arguments, he had compassion, but he was gonna cut government they thought. For example, observers thought that Nixon would get rid of the poverty office that Johnson had established and had gone badly wrong. He didn't. Why not? Well one answer is the Vietnam War. Both Johnson and Nixon had to keep the country calm, fewer riots, while they shipped off a lot of young men. Remember the numbers, you go from 50,000 young men to 500,000 young men in just a couple years. Also, he very important to Nixon he thought a lot about politics. He was good at figuring out politics. He wanted the democratic center to vote for him. So he threw the democrats a lot of bones. One was he permitted the vast expansion of food stamps. That's a good example, which sounds so un-Nixonian. So there it is and you know, also Nixon, who Nixon was, shifted. His favorite play friend was, in the early Nixon presidency, on the domestic side was Daniel Patrick Moynihan.
Peter Robinson: We'll come to him in just a minute.
Amity Shlaes: Yeah, but that shifted when Nixon got anxious as we know from the history of Watergate. The paranoid Nixon emerged and just almost a different impulse, a different man.
Peter Robinson: You describe events of August 1971. This is that there's a famous meeting at Camp David. Friday, August 13th, President Nixon meets at Camp David with a dozen of his advisors, including giants, men, they were all men, men we think of as giants of free market economics such as Arthur Burns, Paul Volcker, Herbert Stein, George Shultz. And then on Sunday evening they confer. On Sunday evening Nixon goes back to Washington and delivers and address from the Oval Office in which he closes the gold window. That is ends the convertibility of the dollar to gold, which makes it impossible for foreign governments to convert those holdings. Convert their dollar holdings. He imposes wage and price controls and he imposes a surcharge on imported goods. And you quote Pete Peterson, who was then a junior staffer. Went onto become commerce secretary and later still a major figure on Wall Street. Pete Peterson says, "It was about as non-market oriented, "non-republican an idea as I could imagine." Close quote. So it strikes me, you don't quite put it this way, so I wanna make sure that I've got it right. It strikes me that this is, this demonstrates at the intellectual level, although they're not taking the idea seriously enough, but it demonstrates how the Great Society carried everyone with it. There's no, none of these great figures says to Richard Nixon, you can't do that.
Amity Shlaes: Well man is fallible. Politics trump intellect and the men around Nixon wanted to be included. That's part of it and Herb Stein, who was certainly the most reflective of all of them writes beautifully.
Peter Robinson: You know economics inside out, but you're also so shrewd about human nature.
Amity Shlaes: Well what happens when you have the power of the sun so close to you and you're so warm. And Nixon was excellent at playing. They were always uncertain, playing people off one another. He tortured people, so what they convinced themselves, these great economists, was that this was necessary to have an economic anathema. And by the way redundant economic anathema. If you're gonna have tariffs, well maybe you don't need to release the currency from gold because the effect will be the same. Or you don't need, so it was just a bunch of stuff that they, every measure that Nixon and a democrat John Connally, the treasury secretary could think of, was in this agenda of what's called the Camp David Agenda. And it all contradicted itself and was anathema. Those two, and repeated itself, I'm sorry. It was redundant, it repeated itself, it sometimes contradicts itself, and it was definitely anathema and they all agreed to it. Why? 'Cause they thought well then Nixon might win again. Nixon is like Juan Peron here. I mean this is a very, very familiar pattern to non-US people and we are naive if we convince ourselves we don't do this. Nixon wanted to stimulate the economy to win the election. He wanted to rattle the chain of the Chinese. Does that sound familiar? He wanted to play Judo or karate with foreign leaders and scare, and surprise them, and shock and awe them. He wanted the public to have confidence if he came out like a strong man. He relished crisis as opportunity and he's written that. So all this was going on and all these guys signed off. I think it was an economy traded away for swag because imagine you're at Camp David and Herb Stein describes this beautifully. Navy officers wait on you. You have a tennis court, you get a little blazer that says Camp David meeting. Maybe it even says August 1971. Arthur Burns, the fed chairman also got some tumblers from Camp David and they said, "I'm in. "I am in the group. "I'm in the room where it happens."
Peter Robinson: It was the lure of the inner circle.
Amity Shlaes: In the room as in the, "Hamilton," song. "I wanna be in the room where it happens "so badly I can taste it. "Here I am. "I am loved by the king." Nixon flatters them and tell them how they're all great diplomats and they sign off on this thing. And it does goose the heck out of the economy for just long enough for Nixon to win reelection.
Peter Robinson: By the way.
Amity Shlaes: We should talk about Burns just briefly.
Peter Robinson: Go ahead.
Amity Shlaes: Arthur Burns, what's interesting about this is these characters.
Peter Robinson: Arthur Burns, what are his dates? I can't remember.
Amity Shlaes: He became fed chairman. So he was the fed chairman. Before that he advised Nixon as his senior counselor and he used to be head of the National Bureau of Economic Research. He was the mentor of Milton Friedman.
Peter Robinson: That's exactly right.
Amity Shlaes: He certainly stood for free markets even during the Nixon administration. Peter, relating to your work, he wrote a really prophetic paper saying, "As strong as the Soviet Union seems, "it's economy will bring its downfall."
Peter Robinson: Right.
Amity Shlaes: He was brilliant and he knew that there might be too much inflation and he probably should raise interest rates, but Nixon didn't want him to. And Nixon tortured Burns 'til Burns relented. How did he torture him? By playing on his weakness the way bullies do, which in Burns' case happened to be his Jewish background.
Peter Robinson: Uh.
Amity Shlaes: So just one story. When Nixon was president, he had a special event. He had church at the White House so you could go to the Sunday service at the White House. In Washington terms, what does that mean? It doesn't really mean piety, it means access. You're gonna be with the president in a wonderful informal situation. It's serious and righteous. Church. So of course Burns, whatever his current faith and I don't know what it was, wants to go. And on the night before church, on Sunday, Nixon when he wanted to torture Burns, would have Burns called and say, "Burns you're off the church list, you're not invited." Stuff like that.
Peter Robinson: Okay.
Amity Shlaes: And it goes on. So this is.
Peter Robinson: But he does inflate the economy. He hugely inflates the money supply which leads to inflation. Hugely inflates the money supply leading up to the reelection of Richard Nixon in 1972, right? Okay.
Amity Shlaes: And Milton Friedman, by the way his student Milton.
Peter Robinson: More than his student. Milton's father died. I know this because Milton Friedman's office was two doors down the hall from mine, so I got to know him pretty well in his final years. His father died when he, Milton, was a young boy. Arthur Burns was like a father to Milton Friedman and that's the way Milton put it himself. Not just an intellectual mentor, but a kind of personal mentor as well. So go ahead.
Amity Shlaes: Yes so, but Milton Friedman is a wonderful man and especially here at Hoover, we think of how kind he was to all his students, for whom he was a father. However he did something that Burns considered really unkind, which is he attacked Burns publicly on the money supply. You know Milton had a new franchise, the money supply. That was not something people talked about then. Instead of the interest rate. Whatever one's analysis of the particulars, one could see that Burns was too easy as a fed chair. And by the way, the too easy interest rate was much higher than our interest rates today.
Peter Robinson: Right, right.
Amity Shlaes: So think about that. And that was because Burns was afraid of Nixon. George Shultz.
Peter Robinson: And Milton Friedman and Arthur Burns didn't speak for years.
Amity Shlaes: I bet.
Peter Robinson: Men who had been that close didn't speak for years because Milton Friedman took, he placed the intellectual, he placed the argument above the personal relationship. I almost thought that was admirable myself.
Amity Shlaes: Well sort of.
Peter Robinson: Sort of.
Amity Shlaes: You're hurting dad, right? In public. Sort of, but it happened Milton was correct and Arthur was just being cowardly. And recently George Shultz discovered a document in the Hoover archives, which is interesting. They all believed Milton was a free marketeer and he was, and they all believed Arthur Burns was a free marketeer and it turned out he was a free marketeer on some days.
Peter Robinson: Right.
Amity Shlaes: Because what they uncovered was a letter from Burns to Nixon saying wage and price controls are okay.
Peter Robinson: Right.
Amity Shlaes: And so why is that? Why would Arthur Burns, who was worried about Soviet communism say that? Because if congress put on wage and price controls, inflation would be damped for awhile and he wouldn't have to raise interest rates.
Peter Robinson: Oh I see.
Amity Shlaes: And he would stay in Nixon's favor. So it's just a bunch of trade offs which is the least unattractive.
Peter Robinson: I see.
Amity Shlaes: But this letter is evidence of Burns, frankly his hypocrisy or directionlessness.
Peter Robinson: Right, all right. This is, I appreciate that little portrait of Arthur Burns, a man who would otherwise be forgotten. We talked about the three presidents, but this book is wonderful in the portraiture of the people just at the next level down, so to speak. Let's take a moment or two to discuss a few others. Sargent Shriver, 1915 to 2011, decorated veteran of the Second World War, graduate of Yale, brother-in-law of President Kennedy. He marries Eunice Shriver and he creates the Peace Corps during the Kennedy administration, and is the principal architect of the War on Poverty during the Johnson administration. "Great Society." "It was Shriver who most pointedly drew "the connection between Christian service in charity "and deepening the service of the US government." Close quote. Explain that.
Amity Shlaes: Well this is a story of lovable people trying to help people they love, and hurting them. And Sargent Shriver is loving and lovable, and yet he hurt people. That's because he really believed that what you do in a local church, Tocqueville wise, is the same as a federal program. And there are plenty of people who believe that today. So he is a man of service. A man, you know a boy of service, a man of service, a decorated veteran and founder of the Peace Corps and he thought well, "We're gonna make cities better "because we love them and have more money to spend on them." And he became the poverty czar, which is, that is to say he ran the Office of Economic Opportunity, which was the poverty office. And in the name of doing good things, he sent young people, Peace Corps wise, into towns.
Peter Robinson: Right.
Amity Shlaes: And he sent money to poverty programs he liked. And then it all blew up.
Peter Robinson: All right. We will return to the blowing up in a moment. Walter, how is that pronounced?
Amity Shlaes: Reuther.
Peter Robinson: Reuther, Walter Reuther, 1907, 1970, built the United Automobile Workers union. Makes it a central component of the democratic coalition. He plays a central role during the Kennedy administration in creating the Peace Corps. And during the Johnson administration, he is such an important figure, this union leader, that he gets together with President Johnson once a week. He's involved, he brings the union behind the Civil Rights Act of '64, Voting Rights Act of '65, Medicare, Medicaid, and all of it. "Great Society." "Reuther was the star and visionary "among union men, dazzling in debate. "Yet it is no exaggeration to say that Reuther committed "the economic murder of the automobile manufacturing centers "of Flint and Detroit." A dazzler, who messes things up. Explain.
Amity Shlaes: A dazzler who, well if we were interviewing him here, he'd lead the room. He was a lovely guy. He was not particularly corrupt. He did not have money in shoe boxes. He loved the union.
Peter Robinson: He wasn't Jimmy Hoffa is what you're saying.
Amity Shlaes: He wasn't, well he wasn't any, yeah, any number of figures who were on the take.
Peter Robinson: He was a clean union man.
Amity Shlaes: He lived modestly. He had been in Russia, but he was not a bad traitor communist. He's a very interesting man, extremely lovable himself, and he had this idea that America could afford social democracy, first within the union. And today, you know we have trouble remembering how to say Reuther's name, all of us, but in the day every night on TV.
Peter Robinson: Major figure.
Amity Shlaes: Every single night, "UAW, United Auto Workers leader "Walter Reuther said. "President Johnson said." Like that. He was so important and he was very much inspired by the civil rights movement. He thought the job of the union was to take social democracy and equal society from union land into all America. It was Walter Reuther who sent bail money down to get Martin Luther King out of Birmingham Jail, if you can believe it. And he meant well. He taught Martin Luther King. He took him to the White House when, you know at a big important march. But what Reuther didn't understand is the US autos have to be competitive. And the US can't necessarily afford to be a near socialist social democracy. So you watch him struggle and it becomes Reuther Agonistes. The whole thing. One of the stories in the book is, the story of the arrival of Toyota. 'Cause Reuther didn't have time to notice that as head of the UAW. He was too busy in negotiations that would give business to the result of which would give business to Toyota because the negotiations would yield contracts that were just too expensive. And therefore the US cars would be too expensive. And therefore this tiny weird Japanese company, with these little cars, had a shot. I don't know if some of the viewers will have seen, "Ford Ferrari."
Peter Robinson: Yes, yes.
Amity Shlaes: In that film you get a look at the stupefying bureaucracy of Ford. Toyota was like Ferrari a bit.
Peter Robinson: At the bottom of the market though.
Amity Shlaes: Right. Like the race car driver
Peter Robinson: Purely opportunistic.
Amity Shlaes: who wants to win, but Ford won't let it.
Peter Robinson: Daniel Patrick Moynihan, 1927, 2003, serves in the Navy, earns a doctorate at Tufts. He would go on to represent New York in the senate for almost a quarter of a century, but first he serves in the Kennedy and Johnson administrations at the Department of Labor. And in the Nixon administration he serves as counselor to the president for domestic policy. We should note that he grew up truly poor. He grew up in the Hell's Kitchen neighborhood of Manhattan when it still lived up to its name. And his father, an alcoholic, walked out on the family when Daniel Patrick Moynihan was a kid. "Great Society." "Daniel Patrick Moynihan, both witness to "and conspirator in 1960s policy." Explain that.
Amity Shlaes: Daniel Patrick Moynihan is like one of those characters in the Shakespeare play who gets a great soliloquy, but right before they chop off his head, you know? He was a wonderful man. He had good ideas. He saw through so much of what was going on and yet he also conspired. So an example, Kennedy administration, two sins in my book. One was the executive order making it easier for there to be public sector unions in the United States.
Peter Robinson: Right.
Amity Shlaes: He was very proud of that executive order because it made...
Peter Robinson: Moynihan was.
Amity Shlaes: Moynihan was. This was at a time when congress wouldn't pass that, right? So it was an executive order, because it didn't really allow public sector workers to strike. So Moynihan and the labor secretary, I think was Arthur Goldberg, maybe Willard Wirtz said, "Okay we got a victory. "It's a non agreement." But actually once the public sector knew it could have unions, it demanded very high wages. High enough to hurt the federal budget. Unintended consequence of Moynihan's work. Another unintended consequence, Moynihan wrote a little guide paper for federal architecture that essentially said it must be modern and not just old, old lady, 19th century Victorian architecture. And that gave license to, for example brutalist architecture. Big concrete slabs, like the HUD building, or the FBI, which we know today 'cause those are modern, right? And he, through that document, guidelines on architecture, he changed federal architecture. Why was that a sin? Because the new buildings that were built with this license did not match the environment they were in and our community as a whole. So when a new house comes, it should be respectful of the other houses. It doesn't have to be identical, but should be respectful of the community space. That architecture didn't. Those are two little errors from that administration. A bigger, I would say it's a truth not an error, but what you're getting at Peter, is that he wrote a monograph about the black family where he said, "It's not clear that a lot "of government money will help this. "What's more important is that the black family "be encouraged or at least not discouraged from, "encouraged to stay together and not discouraged "from separating." 'Cause federal and state policy has separated black families so often before. And he was the first canceled person.
Peter Robinson: Right.
Amity Shlaes: He was the first canceled person, 'cause what he wrote was true. He knew all about poverty and no dad 'cause as you mentioned, he had no dad. He knew all about pathology. He had experienced it and he was just heartbroken when white and black progressives turned against him and said,
Peter Robinson: Accused him of racism.
Amity Shlaes: "You're a racist 'cause "you said there is a problem with the black family."
Peter Robinson: Right, so one of the many things that's so impressive about this book is the generosity with which you write this. These were admirable people. You say so, you show why they were admirable and it comes through that you feel for them. And yet they were all involved in a project that failed. "Great Society." "The Government lost the War on Poverty. "In fact what the War on Poverty and the new flood "of benefits did do was the opposite of prevent poverty. "They established a new kind of poverty, "a permanent sense of downtroddenness. "The gap between black and white unemployment widened. "Welfare programs funded by Johnson "and Nixon expanded rolls to an appalling extent. "Appalling because welfare fostered a new sense "of hopelessness and disenfranchisement "among those who received it." Close quote. When did we realize it had all gone wrong?
Amity Shlaes: Pretty soon in the 70s. Well the economy was really terrible in the 70s and we try to convey now and tell ourselves why do I say it was terrible in the 70s? Well that stock market never went up. It didn't go up.
Peter Robinson: You say they were expecting it to reach a thousand and it stalled out at about 800 for...
Amity Shlaes: It stalled out behind a thousand. So it wasn't until well into Reagan that it established itself past a thousand. That's a long time.
Peter Robinson: 1983 I believe.
Amity Shlaes: If you would tell a young person now, let's see 68, 78, it will be 15 years until the stock market goes past 29,000. That young person wouldn't even believe it.
Peter Robinson: Right.
Amity Shlaes: So there was that, but what made the 70s so awful and we do remember that. Well the inflation allowed by Arthur Burns meant that our parents or grandparents got two fewer bedrooms in their house than otherwise they would buy. Because the interest rate was so high. My father was working in real estate development at the time and he thought all American houses might get smaller because this was a time when right here at Stanford, there was so much pessimism in the 70s, 'cause of unemployment and inflation, that a professor from this university proposed a diaper tax and giant changes to the tax code to discourage reproduction because America couldn't afford its people. So it's a profound pessimism took over the land as a result of the Great Society.
Peter Robinson: You draw, I can't remember the numbers now. I'm hoping you do, or at least close to them. When Nixon holds that meeting at Camp David, in August 1971, the crisis is that unemployment, as I recall was just under 6% and inflation was running just over 6%. And by 1978, 1979 both of those numbers, unemployment and inflation were in double digits. That's correct-ish?
Amity Shlaes: Well, unemployment did go into the tens, and I'm trying to think it would be in the 80s actually.
Peter Robinson: 80s
Amity Shlaes: Reagan. But the interest rate is, it was generally higher. We sum those two up and we call them the misery index.
Peter Robinson: Yes, yes, yes.
Amity Shlaes: Which is a good thing to learn inflation plus unemployment and it was high. That's another way to put that is to call it stagflation. Because economists were astounded. You're not supposed to have unemployment and inflation at the same time, in their book. You're supposed to have one or the other and we just had awful both in the 70s. You want to imagine interest rates over 15%. That's why Chairman Volcker, the fed chairman was so much vilified in his time because he put those interest rates up to squish, to quash inflation expectation.
Peter Robinson: Right. Again, "Great Society." "The damage of the 1960s showed up in a subtler area: "political trust. "The overpromising in social programs disillusioned voters, "black and white." Close quote. So all these charts we're constantly being presented with, as if Donald Trump is to blame, that show a decline in trust in the federal government from the immediate postwar period. This all starts with the Great Society. The government says, "We'll eliminate poverty," and then fails. Right?
Amity Shlaes: Just think of it in terms of an airline. If an airline says you're in seat one B and you get, and they give you seat 38B, and they say, "This is your ticket, sorry. "We switched your place." How angry you are. Governments should only give, only promise what it can give. And more or less, most of the time deliver that thing. So it's an example of the damage of ambition.
Peter Robinson: You write in the, "Great Society," about the way the FBI put tails on certain leftists which you, of course you say is perfectly stupid. And you write this, "The trouble with the 1960s leftists "was not that they were traitors. "The trouble was that they were wrong." So where did they go wrong? We begin with these predicates at the beginning of this conversation, that it looks in the 1960s as though the federal government can do anything. It beat Hitler and it looks as though the United States can afford anything. It has the most buoyant economy after the war that human kind has ever experienced. They weren't wrong about that were they? What went wrong?
Amity Shlaes: There was a point where they went wrong. In offering equal opportunity, they were correct. If only one in 10 black men in Mississippi can vote, that needs fixed.
Peter Robinson: Right.
Amity Shlaes: So the civil rights, the Voting Rights Act and the Civil Rights Act before it, those were not bad laws in terms of our country and our future. The big turn was when we began to talk about affirmative action, entitlements, what you are owed beyond opportunity. You are owed money of some kind, or some good. You are owed a special place. That was problematic and that's where the wrong turn came. You can actually trace it to a speech by LBJ at Howard University which James Nabrit, the president of the university, you can see him, if you watch the video kind of going, "Well that's a little farther than I would go." Where Johnson declared the era of affirmative action open because he said you can't just take someone who's been disadvantaged and put 'em at the start line and say, "Now you can race." You have to help 'em. Very loving thing to say.
Peter Robinson: Right.
Amity Shlaes: But he said, basically what he was saying is we will always help until it's all better. When is it ever gonna be all better? So that was the shift in the Great Society culture. There were good laws out of this period, but the ultimate damage was that we taught people that entitlements were their property, a new idea, and that they were always owed. And this is not just poor people, not just minorities, right? But through expansions of social security and Medicare.
Peter Robinson: So we, you established that the Great Society program, we can't afford it. The entitlement programs, the Great Society now costs more than the commitments of the New Deal in the federal budget. And we just can't afford it. We just can't afford it. The federal deficit is rising, and rising, and rising. But sorting out the wheat from the chaff here is tricky. Civil right legislation, the Voting Rights act, for sure we want to keep that, right? But here Henry Olsen, I'm sure you know Henry Olsen's book, "The Working Class Republican, Ronald Reagan "and the Return of the Blue Collar Conservatism." And Henry Olsen says that even Ronald Reagan, basically bought into the New Deal. I'm quoting Olsen, "The cardinal principle, "Reagan himself championed the cardinal principle "enshrined in the New Deal, "that government had a limited role, "a limited but strong role to play "in helping the average person achieve his or her dreams." So I hand you the scalpel and say what do we need to cut back on? How do you carve it out?
Amity Shlaes: I'm for education and opportunity. I'm for federal money for school choice. So for schools, but not to one establishment for choice. I do think that most Americans, even today, like opportunity better than a commitment to receive things. They want that for their children, even if they think, "I want food stamps "because I need them." And they may need them. They're not excited about the idea of their grandchildren receiving food stamps. They want their grandchildren to move ahead so that's how I would divide it. And I would not underrate, Peter, the private sector. The milk cow did pretty well for a long time, the private sector in this story. And it created what is the kindest thing you can ever give to someone? It's a job. It created the jobs all the way through. I was very interested to see the rise of Intel, Fairchild, which became Intel. In the story Fairchild opened a factory where Native Americans worked and became the single greatest employer of Native Americans in the private sector. Oh we want to employ Native Americans, here it is. Maybe that's better than a casino.
Peter Robinson: Right.
Amity Shlaes: Right? So we just have paid insufficient attention to the capacities of the private sector.
Peter Robinson: All right, I've got two last questions for you Amity. "Great Society." "For a time, under presidents Reagan, George H.W. Bush, "Bill Clinton, and George W. Bush, "it seemed that America had finally managed "to outgrow Great Society collectivism. "This was due to a policy, commenced with Reagan, "of staking national hope for greatness "on the private sector once more." You just explained that. And as we sit here, a man who calls himself a socialist without apology, is widely tipped to win the Iowa democratic caucus in just a couple of weeks. We seem to have outgrown Great Society collectivism and now socialism, it's as if Walter Reuther had never died and Milton Friedman had never been born. How did this happen?
Amity Shlaes: It's idealism. It sounds better to ears that have not heard much history and this is partly our fault, let's face it. We've failed to teach history in our schools well enough. So young people don't really know what happened in the Cold War, or they think that's old and fusty and they're not interested. Or they don't really know what's happening in Venezuela right now in real time. The same tragedy being replayed. So, but also there's a portrait of Tom Hayden, the student activist in the book. And I conclude that his analysis of socialism was this, he wasn't perhaps a socialist himself. I don't know if he had a strong ideological, but he knew he wanted political power and that was the beauty of socialism. It's never done. They always say socialism is a process, so you could never condemn it because you've never seen the finished product. And while it's still in process, it sounds good. It sounds warm. It sounds fuzzy. So there's a chapter on him in Hanoi admiring what was a repressive regime in his own naivete, thinking it's, I don't know, warm, fuzzy, socialism like a kibbutz or something.
Peter Robinson: So can I just, this is sort of a big, big question, but in a certain sense it's on every page of, "Great Society." Can we learn from history? Can we really and truly learn from things that happened before we were born? Or are today's college kids only going to understand what socialism can do to them if Bernie Sanders is elected and we get four or eight years of hugely expanded government, rising taxes, and a tanking economy. Can we only learn from experience?
Amity Shlaes: I do believe we can learn from history. Think of medicine, where every doctor has within him all the failed experiments in surgical procedures of 1950 when they pull the gall bladder out wrong, or whatever. It's just we've chosen not to learn and this is partly the predominance of the social sciences over history in our education culture. But I don't believe it's that hard. It's our job to make it come alive again though and that is hard work.
Peter Robinson: All right, so here we go last question. President Trump. You knew I had to come to this. President Trump, a republican he may be, but so far he has displayed zero interest in reforming the Great Society entitlement programs. How do you read this, two questions, so these really are the last questions. How do you read this man? Is he saving the work of reform for a second term? Or do we have in Donald Trump, some strange reemergence of the altruistic impulse of Sargent Shriver and Daniel Patrick Moynhihan? Is Donald Trump a true believer in the Great Society? And the second question is, if you could give him two sentences of advice, what would you say to him? So read Donald Trump for us.
Amity Shlaes: Well, I am a foundation person, not a journalist anymore, but I would say what Trump has in common with President Johnson and President Nixon is great ambition and desire to be loved. So that populist edge.
Peter Robinson: Right.
Amity Shlaes: Which is short term and if I would give him two, but he's also, we see in this administration, some work to for example, restrain the judiciary through the appointment of judges. That restrains, well the wildest of Great Society type activity. Those judges would. And if one were, not necessarily me, to give advice to President Trump, one would respond as Calvin Coolidge and say, "Perhaps restrain yourself."
Peter Robinson: Restrain yourself, all right.
Peter Robinson: Amity Shlaes, author of "Great Society: A New History," thank you, what a pleasure.
Amity Shlaes: Thank you Peter.
Peter Robinson: For Uncommon Knowledge, the Hoover Institution, and Fox Nation, I'm Peter Robinson.