Arthur, I heard you're retiring from AEI after a spectacular run. Congratulations and best wishes in your future endeavors. However, in reading an "exit interview" with you, by Tim Alberta of Politico, I stumbled across what I believe to be a very important and dangerous blind spot in your thinking.
With some trepidation, because the interview with Mr. Alberta was relatively short, I would like to summarize your arguments. The title of the piece was "Americans are Being Held Hostage and Terrorized by the Fringes."
- You call competition a "moral good" and bemoan a "culture that's not trying to win [political] competition vigorously and civilly and respectfully, but rather trying to shut down competition...". I happen to agree with you on this. Discourse has become uncivil.
- You call this "stupid." I agree, again, and you add, "It leads to a flaccid set of political parties...you don't solve problems...you simply build up power structures. So all politics becomes a rent-seeking mechanism: my tribe, your tribe."
- You blame this on the financial crisis of 2008 and cite Reinhart and Rogoff's book, This Time Is Different, and three German economists who, in early 2017, published a piece in The European Economic Review. Reinhart and Rogoff argue that economic recoveries in the decade after financial crises are slow. The German economists argue that these slow or lumpy recoveries have knock-on political effects.
- You say, "...in the decade after a financial crisis, the knock-on effect over 10 years is not low growth, it's uneven growth. The big thing that happens for 10 years is that you have asymmetric economic growth where 80 percent of the income distribution gets none of the rewards of the growth after the recession." This creates populism – where people blame "immigrants," "trading partners," or "bankers."
- You then blame the rise of Trump, on an "unwillingness or inability of mainstream Republicanism to deal with a lot of misery that was going on. To talk openly about the despair...there's been a 323 percent increase in drug overdose deaths for men my age..."
- You say Congress isn't detached, but, "they don't know what to do, so they didn't do anything." You then say, "nobody has ever figured out this first decade problem. Ever... Politicians say, 'We can solve this; vote for me and I'll solve it.' [But] They can't solve it...they get blamed." "Nobody knows what to do except wait it out." You claim even Milton Friedman in the White House couldn't have made a V-shaped recovery.
- You complain of a deficit of happiness, "When people feel like 'Sh*t, I can't get ahead,' that's when people feel a lot less happy." "The best single way to get rid of all this unpleasantness right now is economic growth that's evenly spread throughout the population."