Phone A Friend.
Nick Hanauer of Pitchfork Economics.
Summary: Max interviews Nick Hanauer, co-host of the Pitchfork Economics podcast and founder of Civic Ventures. They discuss Nick’s work at Civic Ventures to promote the $15 minimum wage among other initiatives, and have a wide ranging discussion about the power of neoliberal messaging, Bidenomics and the struggle to break through the “pack of lies” we’ve been sold by corporations to maintain the status quo.
Max: Over the past couple of years, we have sung the praises of the podcast Pitchfork Economics hosted by Nick Hanauer and David Goldstein. Pitchfork Economics is the audio platform of Civic Ventures, an organization founded by Hanauer dedicated to promoting policies and actions that catalyze social change. Nick is a business leader, venture capitalist, entrepreneur and public speaker who leverages his platform and status to agitate for structural changes in economic policy in order to reduce inequality. What makes Nick something of a curiosity is that he’s often speaking out against the very system that allowed him to amass a fortune. While Nick did so through investing and building successful businesses, he has used his wealth to lead the fight for a $15 minimum wage; to advocate for responsible gun ownership; and to engage voters in civic actions in his home state of Washington and throughout the United States.
He’s the author of best-selling books The True Patriot and The Gardens of Democracy: A New American Story of Citizenship, the Economy, and the Role of Government, as well as the forthcoming Corporate Bullsh*t: Exposing the Lies and Half-Truths that Protect Profit, Power and Wealth in America. Pitchfork Economics was one of the first shows ever to reach out to UNFTR for open collaboration and cross promotion so it’s truly a pleasure to introduce Nick Hanauer personally to the UNFTR audience. I hope you enjoy our discussion on this installment of Phone-a-Friend.
Max: Nick, first of all I just wanted to say thank you so much for coming on the show. Our fans already know a lot about Pitchfork Economics, so it’s a really, really great pleasure to meet you.
Nick: Thank you. So great to be here, thank you Max.
Max: So our podcast is actually originally bonded over our mutual antipathy toward Milton Friedman. So he’s sort of the nemesis of our show, and I think that’s how our producers actually found one another. And so if I could just start by talking about a podcast, because I think what you and Goldie do is really a great service because you surface economic issues that really aren’t spoken about in the mainstream and connect us with incredible people within your network. So I actually wanted to start by talking a little bit about the podcast, but in the context of your organization, Civic Ventures. So if you could just tell everybody just a little bit about Civic Ventures and why you started it and what it looks to accomplish. And then also just let us know if you’re kind of surprised by the feedback and the success of Pitchfork Economics as a standalone entity.
Nick: Yeah. Well, Max, thank you so much for having me on the show. I think what we’re both trying to accomplish here is very, very important, so it’s great to have a fellow traveler. So Civic Ventures, I’ll start with that, is the principle expression of philanthropy for my wife and I. And we do a lot of ordinary philanthropy. We’re signatories of the Giving Pledge, etcetera. But we’ve always believed that if you really want to make the world a better place you’ve got to focus on structural change; because philanthropy in many cases, and often best case, only takes kind of the hard edges off the worst problems. So, by way of example, there’s about a $50 billion philanthropic investment in the United States every year against issues surrounding poverty—but just changing the minimum wage to $15 an hour, just that one line of code in 2012 dollars would’ve delivered $450 billion more money to working families per year, 10x effectively as much as all of the philanthropy combined.
And it only took a few tens of millions or maybe a $100 million dollars to do that. And so it’s just such a better investment if you actually care about the problems. And so Civic Ventures is an organization of political professionals that operate at the intersection of policy and politics. So we change laws and we find a problem, we generate a policy solution, we build a narrative, we create a coalition, and then we run a campaign. And we have changed dozens of laws across a really broad range of sort of issue areas, and just feel really strongly that that’s the way that you must operate if you take seriously bending the arc of history towards justice. Now, the problem, of course, is that when you bend the arc of history towards justice, you are going to antagonize some people, mostly rich people and powerful people.
And so the kind of work that we do is most definitely not for the faint of heart. Because if you endow a building at the university, everybody in the whole wide world’s like, ‘Oh, yay, clap, clap. You’re a hero to humanity.’ But if you raise the minimum wage to $15 or $20 an hour, there’s a whole lot of folks, particularly peers of mine, that are not as amused by that. And so that’s just a thing that you have to be comfortable with and ready to deal with if you are in the business that I’m in. And Pitchfork Economics emerged effectively as a platform for Civic Ventures to kind of express what we did and why we did it, focused around the issues of political economy. Because at the end of the day economics in particular is mostly a story we tell ourselves about who gets what and why.
It’s how human societies rationalize status, privileges and power. And the story we have told, as you well know that we now call neoliberalism or market fundamentalism is undergirded by an academic framework called, loosely, neoclassical economics that is basically a pack of lies. It’s a framework of thought, which it is mathematically elegant, it is internally consistent but it is completely untethered from what happens on planet Earth. And yet policymakers from both parties, Republicans and Democrats, have relied on that framework of thought, as you know for a generation to make policy, which is why the country is so fucked up, if I may say so.
Max: You may.
Nick: [Laughing] And the only way we’re going to materially improve it is if we tear that set of ideas down and build economics back up from basically, from the foundation.
Max: Are you surprised by how well it’s been received among the masses because economics isn’t the sexiest of disciplines? But you’ve reached actually a fairly wide audience and I imagine that you’re able to, I imagine that you get responses similar to what we do, which is this is just great information to know and in a different way it sort of empowers the masses to backstop what you’re working on at Civic Ventures.
Nick: No, for sure. And it’s been super gratifying and we do get an amazing response to the podcast. On the one hand, I am surprised because it’s so damn wonky that you just wonder sometimes if anybody has any interest in this whatsoever. But of course, there are a couple of factors: the first is that economics is the operating system of the world. And if you have the wrong operating system, you have the wrong world. And obviously thoughtful people do and should care about that a lot, and many do. And the other thing is that I think most Americans have a sneaking suspicion that what they’ve been told is a pack of lies. Like they’ve been told these stories that if you raise wages, it’ll kill jobs and if you give tax cuts to rich people, you get growth in any way in which we constrain big corporations will kill productivity and jobs and all this stuff.
And if there was a shred of truth to any of that, people would be living much better lives but they clearly aren’t. And so I think that while many people are not familiar with the technical details of what we talk about, it aligns with their intuitions about how the world works and doesn’t work. And so for the slice of people who are interested in this stuff, our stuff kind of sings to them in a way, which it aims to do. But again, I think we are a little bit surprised by how much people enjoy hearing about this and thinking about it.
Max: Does Goldie take most of the credit for that?
Nick: He does, and he deserves it [laughing.]
Max: You actually touched on a number of themes that we’re going to get to that I think are really important. But the first is just you as an individual in the world, having this success that you’ve achieved, as an entrepreneur and an investor, I imagine that—and you talked about ruffling some feathers among some of those colleagues and professionals that I imagine, similar to FDR, that you’re considered somewhat of a traitor to your class.
Max: But a lot of that is posturing. I’m curious as to what those conversations are like actually behind the scenes. So when you’re talking to people who have achieved great success and great wealth and corporate power players that really control the levers of our policies and our politics, is there a level of understanding and awareness there, or have they also kind of drank the kool-aid and they think that everything’s humming along just nicely, thank you very much?
Nick: Yeah. Well, I mean, of course, people are on a spectrum, right? And things have changed. So Max, when I first started talking to people about inequality, which is in about 2006, it made everyone I talked to about it get super angry and defensive, because people had not yet come to terms with the reality. I’m not sure if you know but I got banned from TED for making a talk about economic inequality in 2012. It was just not something you were supposed to talk about in polite company. Now, since then, they have reinstated me and I’ve done two more TED Talks—
Max: I would hope so.
Nick: —because Chris Anderson is a righteous dude, and he realized that had been a mistake and so on and so forth. But it is interesting that when you talked about inequality in 2000 or 2006 people didn’t grok it. And today almost everyone I talk to acknowledges that it is an issue, and they are with me, generally, right up until the point where I start talking about what it’s going to take to fix it.
Max: Right, right.
Nick: Which generally means paying working people more and my peers and I paying a slightly higher level of taxes.
And then you start hearing about how government is wasteful and the usual bullshit that rich people always say to try to make themselves feel better about the fact that they don’t want to pay taxes or don’t want to pay people more. And it is remarkably consistent how uncomfortable the idea, the simple idea that we can just make companies pay people more that makes my peers. They have been absolutely brainwashed or they brainwashed themselves into believing that people who make low wages deserve those low wages. And if we require big companies to pay people more, we will have violated some law of the universe, and the whole thing will collapse into a black hole or something like that. And economic inequality is an incredibly simple problem to address in a place like the United States.
You simply have to require companies to pay people enough to live in dignity without food stamps. It’s that simple. It’s all you’ve got to do. And there is no earthly reason why you can’t do that. Now corporate profits may go down a little bit, executive bonuses may go down a little bit, but that’s it. But the proposition definitely makes people uncomfortable.
Max: So we talk a lot about this, and we talk a lot about how what we’re battling against—let’s just say, we’ll call it from the progressive side of the spectrum as we advocate for some of these fixes that you’re talking about—is that we’re also battling against a 50 year or maybe more onslaught of neoliberal thinking and policy that has taken shape in think tanks, in academia, certainly in economic circles, and then you see it reflected through campaign contributions and so on.
And it has been a very, very—I don’t think most people appreciate how coordinated those efforts have been, because you can usually draw some straight lines back to some very well-heeled funders that are putting a lot of time and effort into telling these type of stories that have completely mixed up the narrative.
Nick: It’s true.
Max: And so what I find personally is that when you talk to people one-on-one—and we’re going to get to the book in a minute, because you bring out a lot of individual issues and stances that are very hard to argue with when taken in isolation. But somehow when they’re taken as a whole, whether you want to call it the corporatocracy or the oligarchy, the power structure, however you want to phrase it, to hold that in your mind, they seem to be much better at telling simple stories that connect with people. Like what you talked about before.
We can’t raise incomes because that’ll lead to the wage price spiral, and here’s an economic theory that backs that up, whether or not it’s true or been tested over time. Or, these are the job creators you can’t deincentivize them from et cetera, et cetera. So we’re all familiar with these narratives and stories, and those are still the prevailing narratives.
Nick: They are.
Max: One of the things that you mentioned at the end of the book, though, is about telling better stories. And I think that’s so vital and so important. And I was really excited to actually get to the end to see you say that a lot of this does begin with storytelling. So in your estimation, how do we tell better stories that really connect and resonate with the masses, knowing that we’re going up against 50 years of anecdotes that have sunk in quite well?
Nick: I think it’s worth backing up a step and just acknowledging that we are 50 years behind, that the world was captured by this neoliberal, neoclassical framework. And that framework of thought, that worldview seeped into the heads of virtually every important policymaker and political leader in the western world. So it was more virulent in the United States and in Great Britain, but equally in Germany and some other places like that, although they’ve handled this much, much better, but certainly the United States. And so for 50 years neoliberals of all stripes, trickle downers, whatever you want to call them, had this very coherent theory of growth which was: if you give tax cuts to rich people, deregulate powerful people, express the wages for everybody else, you will get economic growth that will somehow benefit everyone.
Nick: And on the left, we said in one way, shape, or form, ‘Well, that’s not fair.’ And there are two things wrong with that. The first is that by a margin of almost two to one, citizens believe (I think quite rightly), that the point of economic policy is to expand the pie, not cut it up in a different way. So you lost that argument two to one, basically for 50 years. But worse, the true catastrophe, was that if you say growth, Max, and I say fairness, everyone with an earshot hears me effectively ratify your theory of growth. So we, progressives have been telling people for 50 years that the Republican party or whoever was advocating this trickle down economics, did understand how to grow the economy and we were just going to try and take the hard edges off it and distribute it in a slightly different way.
Max: A really great point.
Nick: And so we have dug ourselves a hole that is going to take more than 10 minutes to get out of. And so the truth is, the empirical truth is—and this is not just an alliteration or a story or poetry—the truth about economics is that prosperity in fact does not trickle down from the top. It is built from the bottom up and the middle out. A thriving middle class is not the consequence of economic growth. It is its cause. So we had economic cause and effect effectively backwards for 50 years and we embedded that ass backwards way of seeing it in the heads of virtually everyone.
And dude, like when I got to work on the $15 minimum wage, even the left-leaning economists who had worked on the minimum wage their whole careers thought we had lost our minds when we decided to do $15. But you realize that there are 9,000 professional economists in the United States of America, not one wrote in support of the $15 minimum wage. Not one. Think about that. It’s crazy.
Max: It’s staggering.
Nick: Why? Because all of them believed that the economy was this Pareto optimal equilibrium and if you raise the minimum wage, it would push the economy away from its Pareto optimality and decrease efficiency and reduce jobs. And by the way, it is not an equilibrium system. It’s just a dumb 19th Century way of understanding the economy. But those ideas are embedded deep in people’s heads, and we progressives did not help matters by effectively acknowledging or ratifying that stupid way of seeing economics rather than contesting it. That’s the bad news.
Here’s the good news: for the first time in 70 years, we have an administration that has broken with that orthodoxy. The Biden administration has given neoliberalism and neoclassical economics and trickle-down economics the heave hoe, and they have deliberately, methodically, and expertly prosecuted a completely different narrative and economic agenda. So there is a reason that the Biden administration has accomplished more economic policy in two and a half years than the prior eight presidents combined or whatever it is. And that’s not because they somehow were magically better at legislation. It’s because they actually tried to do it. Barack Obama could have passed all of the legislation that Biden passed. He just was surrounded by economists who told them that you shouldn’t do those things. But thank god for Jared Bernstein, and thank god for Brian Deese, and thank god for Heather Boushey, and thank god for Lael Brainard and all the other parts of the team who have embraced this middle out framework.
Max: What I find so interesting Nick about what you just did though, is you just rattled off a litany of important administrative economists and policy crafters that are inside the organization. But it still goes back to the fact that we—and this is not something that you’re going to find the man on the street is going to be able to answer this question—but we still look at the Alan Greenspans and the Larry Summers as the titans of economics in the modern era, and we don’t talk about the policy wonks that you just mentioned and illuminated.
And part of that to me goes back to this idea of story. And we’ve sung a lot of the same hymns that you’re singing right now, but also have been, I think rightly critical that the Biden administration isn’t also the best at messaging and hasn’t done anything to kind of recapture that flavor. And so a lot of these policies are helping people, but they’re being talked about in a vacuum where people aren’t connecting the two. And so I still feel like we have a narrative problem that we haven’t been able to coalesce and overcome.
Nick: So the most important thing I’ve learned about how ordinary people think about economics over the last 10 years is this, that for 95% of Americans—and that probably includes zero of the people who listen to your podcast and listen to my podcast—but for the vast majority of citizens, the economy does not exist as an abstraction. It exists as my job and the expenses, and that’s it. And so the only time that ordinary folks who are hanging on by their fingernails begin to think differently about the economy is when something different happens to them. When they actually get paid more, or their costs come down, or they get childcare or whatever it is. And so, as much as the Biden administration has accomplished, a lot of that stuff has not seeped into the public consciousness yet. Now, of course, the [American Rescue Plan] ARP was a miracle of legislation, and it prevented I think probably the Great Depression, but it’s hard to prove a negative. Like it’s hard, people can’t compare.
Nick: They don’t know that they could have been in a depression. They just know that things are hard and have been getting shittier every year for about the last 50 years. And so again, the great shame, and it’s not fair, but we have a huge hole to dig out of. People have lost faith that government can make their lives better. Not just because Republicans have been telling them for 50 years that it can’t, but also as a practical matter, because it hasn’t. It’s just true that economic inequality went up during the Obama administration not down.
We just have to face the fact that we fucked up. We have a lot of work here to get out from under it. This is not to say that you’re wrong, that we need a better story and better messaging. You’re right, we have to do better, there have to be ways to break through, but we should not collectively be surprised and amazed that the world has not snapped to attention and said, ‘Oh, okay, you guys are right? All that stuff I’ve been taught for the last 50 years was wrong, and I’m onto the new thing.’ It just will take time.
Max: So let’s stay on Bidenomics first, because I want to return to something that you actually covered in two recent podcasts, specifically. And they were actually some of my favorite shows and they just happened to be collected over the last couple of months. You and Goldie spoke with Bharat Ramamurti from the National Economic Council about Bidenomics, and Ronnie Chatterji, which was, to me it was a fantastic interview. He was a key advisor to Biden in crafting the CHIPS Act.
Max: And you made the point personally, specifically in both episodes, that when we think about the unprecedented, truly—
Nick: Yes, unprecedented.
Max: —unprecedented amount of money [that’s] yet to course through this system, hasn’t even been spent yet from the CHIPS Act, The Infrastructure Bill, The Omnibus bills, The Inflation Reduction Act, as you mentioned. When we think about that and the potential surge in economic activity, I was just wondering if you could speak to that specifically because it’s something that you keyed in on that we haven’t even begun to feel the effects of what has been designed and crafted.
Max: What do you see, what do you think is possible in these out years as a result of these acts?
Nick: I mean, if there is anything to be optimistic about in the world right now, it is the effect that these investments are going to have, not just on the economy of the United States and the wellbeing of Americans, but the way in which that bow wave may drag the world forward too. The trillions of dollars of investment that are going to go into our country over the next few years is going to remake America in a way that we’ve almost never seen.
And there’s a reason the economy keeps churning out these ridiculous job numbers, like every month, it’s like ‘How did that happen?’ It is the beginnings of these investments. You just read about it every day, another factory opening, another factory opening, another factory opening. The infrastructure money is starting to move, people starting to fix things.
Well, those jobs create other jobs, and the jobs that were created create jobs. So I predict, I may have egg on my face, but I truly believe that barring asteroid impact out three, four, five years, you’re going to see GDP growth rates in the United States go back up to the historic sort of 1960s levels where the country was growing the fastest. I mean, we could screw it up, but that kind of outcome is ours to lose at this point. We have set ourselves up for an astonishing amount of success going forward as a country, if we can just kind of keep the thing on track.
And I think it’s something that we should be excited about, and I just want to make clear that I’m not just talking about the dollars and cents of it. So most people think that economic inequality is merely sort of—inequality is like this economic inconvenience for people. Like, it sucks not to have enough money, but that’s the smallest part of it. The problem with rising and radical inequality is that it shreds the reciprocity norms that make social cohesion and democracy possible.
Max: Great point.
Nick: And the only way to fix our democracy is to fix our economy and make it clear to most people, the vast majority, that they’re in this too. That as the country does better, they do better. You can’t expect people’s political interests to converge if their economic interests are diverging, which is where we have been for the last 50 years.
Max: So if you think about the wave and the rush of investments yet to come, that are just beginning to show in the economy now—I think Ronnie, actually, there are two things that concern me, and I think Ronnie hit on the first one, which is it can all be interrupted if the Democrats lose Congress and the White House because these policies can also be legislatively undone if we don’t have some level of continuity.
Nick: It can.
Max: And so I think that’s obviously a concern.
Nick: It’s a risk.
Max: And a risk without a doubt. Where I am maybe a little more skeptical, just because I don’t yet understand how it filters down: in the middle out, bottom up strategy that the Biden administration is putting forward, I’ve been a little bit cynical with respect to the bottom up portion. I get how these investments can filter through the wider economy. But when we look at the nature and the quality of the investments that are coming in, when we’re talking about factories and superconductors, renewable energy, hardcore infrastructure, digital infrastructure, a lot of these are in sort of these Schumpeter’s creative destruction type of industries of where it’s going to be a renewal; and we are still going to have a segment of our economy and the people in our economy that won’t necessarily be able to participate if we don’t also pass a number of reform measures that reimplement smart measures like that, the direct child tax payments.
Nick: Yeah, of course. You have to remember that the Bidenomics economic agenda is to a great degree, simply a reflection of what has been possible, right?
Nick: Like, you can’t fault Joe Biden that we haven’t passed a $20 minimum wage, which is bottom up, right? Or a suite of other things: the elimination of student debt, bottom up. There’s a list of 20 things that team would love to do if they had different senators and a Democratic Congress. So what they have done up to now has been enormously impactful and on the right path, there’s a job yet left to do that we need to reelect those people, ideally with good majority so they can get done.
But I just do want to point out that the least well understood and maybe the most impactful stuff that they have accomplished are the executive orders, which are sort of under the hood. The anti-monopoly executive order is not legislation, but it can have an enormous impact on the lives of people of the middle and the bottom of the economic spectrum. So by way of, one simple example is the elimination of non-competes, which is something that’s going through, one tiny example of the hundred things they’re trying to get done.
Max: The rule change at the [National Labor Relations Board] NRLB is another example. Just giving the people more opportunities to participate for sure.
Nick: Absolutely. But one in five Americans have been forced to sign a non-compete. The calculations are that by eliminating those, you put $300 billion a year more in people’s pockets. And those are not just software executives. My hairdresser had to sign a non-compete. It’s nuts. People working in sandwich shops were signing non-competes, so they couldn’t go across the street and make burgers because Jimmy John’s made them sign an non-compete, like it’s so nuts. So is Bidenomics today enough to live up to the promise of what it should be? Absolutely not. Joe Biden would be the first to admit that. But my god, we’ve gotten a good start. And with a majority, they could do a lot more. So in defense of it, I know people are frustrated and feel like we should have gotten farther. If Kyrsten Sinema hadn’t been such an asshole maybe we would’ve.
Max: And I think there are people out there that understand the policy implications, or at least what the executive branch is capable of doing with policies like student debt relief; that there could have been another avenue that they pursued that they were told from the beginning that they actually could have wiped out a shit ton more debt than they actually, doing things like that. And it’s one of these things where we’ve been talking about the benefits of—Biden is the most progressive president to date. And I’m careful to explain at least or to have the conversation with our audience, that the benchmark there is pretty low. So yes, we should be extremely enthusiastic, but when we look at, what it’s up against over the last 50 years, again, this is a demonstrably different approach to governing from an economic standpoint than we have seen. And we can also hold two thoughts at once that it is, yes, also not enough legislatively. And we’re going to have to continue to battle for these things.
Nick: 100%, yes, yes, yes.
Max: There’s something that you said in the book that I love. You had a phrase that you called compassion fatigue. And I really keyed in on that because I think it is something that helps me kind of explain, when we do go back into history, the acceptance of Reagan’s shining example, the city on a hill, and Reaganomics writ large; this idea that progressives got it wrong, and we’re always talking about fairness and equality as opposed to talking about a different vision moving forward. And I loved how you phrased that, but there’s something that mystifies me that I was wondering in your conversations, in your travels, if you could kind of unpack for me And that is the idea that even with compassion fatigue, this war on entitlements is going after sacred cows like Social Security and Medicare, and still resonating somewhat even with a population that is in receipt of these entitlements and on the conservative side of the spectrum. How can we explain that level of brainwashing?
Now, there are people that would just fall out of their chairs and never vote Republicans again if they dismantle Social Security and Medicare and privatize the entire thing. I think that people are that connected to those programs, and yet the conservative side of the party and Republican Party from a platform perspective continues to push these narratives hoping that will resonate with the dying gasps of their older voters. What is it that they see is a benefit to attacking these incredibly important and successful programs that benefit almost exclusively their constituency? What are they seeing? What’s the margin in that?
Nick: Well, wow, I mean there’s a political calculus there that I don’t understand, but I do understand a little bit of the psychology of it. And what we progressives always have to remember is that humans are not all the same. And our way of thinking about justice is different than some other people’s way of thinking about justice. And we tend to be more concerned with outcomes. And other folks, more conservative folks tend to care more about process. And for a lot of people, some of these programs seem to reward (to them) people who have not worked hard or undeserving, and it drives them crazy. They’re just wired in that way. And if you let these things be a contest over these two versions of fairness, you cannot win, because people just don’t rearrange their DNA.
Nick: See, the thing is, what modern economics teaches is that justice causes economic growth, that we don’t have to dispense with compassion. We have to simply remind people that when you pay people more, it’s good for everybody.
Nick: We didn’t win the $15 minimum wage by saying, we feel really sorry for these people, we should pay them more. We won the $15 minimum wage by saying when workers have more money, businesses have more customers and hire more workers. We have to remind people that progressive economic policies are actually the policies that grow the economy for everyone. So you may not like those people who are getting paid more, but they make really good customers for you now. And you don’t have to send them food stamps. And so if you couple compassion with practical arguments about how the economy actually grows, you get a lot of those people to be like, ‘Okay, I’m with you.’
And that’s where the mistake has been made, is we let this contest be over different versions of fairness, when really it’s a contest over how you best grow the economy for everyone. So growth is effectively in our language code for: there’s something in it for everybody. That’s why we want to raise the minimum wage, not because we feel sorry for people, although we may, we want to raise the minimum wage because the more money those folks make, the better customers they are for everyone. The better citizens they are for everyone. Everything gets better. The better taxpayers they are for everyone! The less they need government assistance! Like, why would you not want to do that? But that’s the frame. And you know what, we’re being compassionate too.
Max: I think that’s actually a good bridge for us to talk about the book.
Nick: Yup, okay.
Max: Of everything that I loved about the book, because it puts in one place the things, those anecdotes that you’re always searching for to be like, ‘yeah but I mean, they did.’ And I have it written so everybody knows. It’s called, it’s an elegant title, much like Unf*cking the Republic, so I appreciate that, titled Corporate Bullsh*t, Exposing the Lies and Half-Truths That Protect Profit, Power and Wealth in America. Before we dig into some of the details of the book, because I do want to get to that because I could blather on all day with you, there’s one small piece that I wouldn’t be me if I didn’t push back on a framing of something in the book, because it’s something that I’ve keyed in on.
Max: Particularly with the series that we did on the Clinton years. So I have trouble with the whole ‘Clinton economy was great narrative.’ And that’s not the design of the book, but the way you approach it is to actually demonstrate that when Clinton pushed through a slight increase to statutory tax rate, that things were still fine in corporate America and the world didn’t collapse. My problem with that, I guess, is that the effective rate didn’t really change much. But in addition to that, that administration specifically under the ideology of the New Democrats—which I think you can find is the core of neoliberalism, but with better packaging—made a series of economic moves that actually led to statistically the greatest expansion of inequality that capped corporate pay, which led to the era of performance pay. They loosened credit standards while lending rates were decreasing. They ushered in the era of cheap and dangerous money, and then passed ruthless welfare and criminal justice reforms that crowded out tens of millions of people from actually participating in what I admit are very real gains. So it’s less of a question.
Nick: You forgot NAFTA [laughing].
Max: And of course, NAFTA [laughing]. Exactly. So I guess it’s less of a question and more of a framing that I’m cautious with that I always kind of bristle when I see anything positive about the Clinton economic policies, because that’s where, to me, progressives lost the plot in applauding what was happening.
Nick: Yeah. Well, I mean, you’re reading our book carefully and we were oversimplifying there a little bit and trying to make a point about the idea that we’re narrowing our focus, this simple proposition that if you raise taxes on rich people, the whole world will come apart and growth will slow and stuff like that. And the truth is, that there is absolutely no evidence for that whatsoever. Every time you raise taxes on the rich, the economy does better, not worse. And that was the narrow point that you’re making. And of course, I substantially agree with everything you said about the Clinton years, NAFTA being probably the most negatively impactful piece of legislation.
Max: So again it was more of a framing issue and I wanted to make sure that we aligned because it would be, it wouldn’t be us.
Nick: Totally aligned.
Max: We didn’t push on that.
Nick: Exactly. And like I said at the beginning of this interview, Democrats have been as bad or worse than Republicans have been over the decades on all of these economic issues, because Clinton, like everybody else, was a neoliberal. He was surrounded by neoliberals.
Max: So when you look at all the corporate bullshit that is out there which you exhaustively and exhaustingly put together, because if you’re not tired by the end of this and really, really angry and frustrated.
Nick: And hopefully amused.
Nick: It’s amusing, it’s super funny when you read it, if it wasn’t so sad, it would be extremely funny.
Max: That’s right. I mean some of this has to be delivered tongue in cheek and be a little sardonic.
Nick: You can’t believe that people say this stuff.
Max: It’s amazing. And a lot of it looks bad in hindsight. So in retrospect, all of these things look even worse than they are. So actually, what I was wondering is, what lies are being told today that you think in 10, 15 years, if we all do our jobs right we’re going to look back and be like, ‘I can’t even believe they got the words out of their mouths.’ What lies are you keying in on these days?
Nick: So let me answer that question in the abstract first. So when we were thinking about this book—so why did this book come about? It came about because a couple of things converged. The first is that I had been working through these issues for a super long time if you’re doing things like trying to raise the minimum wage or whatever it is, you’re getting this pushback. The canonical thing being, if you raise wages, it will kill jobs. It’ll harm the very people it’s intended to help. And what I knew is that there was no actual empirical evidence for that, And yet people kept saying it and saying it and saying it. And we present more evidence and they just keep saying it. And this light bulb went on in my head, it should have gone on 100 years before that. But they weren’t saying this stuff because it was true. They were saying it because it was effective, right?
Nick: It sounds like economics, like you’re making a claim on economic cause and effect. It’s a bullying strategy. It’s an intimidation tactic. You ask for a job: I threaten to fire you. This is the most effective thing capitalism has been doing since the invention of capitalism. Saying that raising wages kills jobs, just saves guys like me from one-on-one conversations with working people. It’s a way of threatening the livelihood of millions of people in fragile economic circumstances in one go.
And I had this friend, an amazingly brilliant neuroscientist named Molly Crockett, who is at Princeton now, I believe. And I called her about this. I was like what is this, what is up with this? And she told me this really important thing, which is that the most important thing about human moral reasoning is intention. Like that is the core of how we reason about morality.
This is why if you deliberately kill somebody, you go to jail forever, versus somebody jumped in front of your car and you accidentally hit them and kill them. The two people are equally dead. But in one case, you’re in very big trouble. And in the other case, they may say, ‘Well, this is really a terrible thing, but just drive more carefully,’ or some version of that. And so I realized that all of this bullshit is fundamentally the same thing. Dressing up anti-social ends in pro-social language. Nobody says, ‘Screw you, we make a lot of money on this chemical. It may kill you, but we’re shipping it out because my god, it’s profitable.’ No one ever says that. Corporations never say, ‘The reason we don’t want to pay you more is we love us, our executive bonuses and our big fat profits. We don’t give a rip about you and your family, and we’re just going to squeeze the hell out of you for as long as we can.’
Max: I love that you went all the way back to Upton Sinclair and brought it through the OSHA standards.
Max: Because you can walk into any factory and look at the OSHA standards and hear management grumbling about OSHA, but then when you put it out there and actually do the math of how many people were absolutely saved in working environments over the years by these regulations, it really makes it—and then put that against all of the other corporate lies and bullshit that you illuminate through the book. I think it’s pretty powerful.
Nick: And so I had this colleague, Don Cohen, who had been through the same ringer and had devoted half a year or something to collecting this bullshit at the Library of Congress, and he had this database and he didn’t really know what to do with it. He gifted it Civic Ventures, and we didn’t really know what to do with it. And then we had this idea, well we should make a coffee table book, and here’s why: because all these new lies—whenever you hear a new one, it’s plausible. You’re like, ‘Oh, well that could be true.’ Until you realize that they’ve said the same thing for 100 years and was always bullshit before.
And so creating context for people, showing people how this works and how long it’s been going on, effectively inoculates people against the future lies. So when you hear them, you’re like, ‘Oh my god, that’s bullshit. Of course they’re going to say that. That’s what they said about seat belts.’ These are the same people who told us that cigarettes were good for you and seat belts were unnecessary and Thalidomide was yummy and women shouldn’t have the right to vote, and the slaves were better off as slaves. And it just goes on and on and on and on.
Max: And for the seat belts and safety, we can come all the way back to our buddy Milton Friedman, who was responding to the rise of people like Ralph Nader. I’m always amused by how often I keep tripping over the same names over the past few decades of the people that are really, really good at selling this, or have produced research that other people are relying on to codify the same lies over and over and over again.
Nick: That’s right and Milton Friedman was one of the best, wasn’t he? Yeah, he was, he was a very slick salesperson. And so anyway, that’s the point of the book. So to your question: what lies are we going to hear in the future? I mean, I think that any place where entrenched power will be challenged, you will hear these lies.
Nick: You hear these lies today from the social media companies. You hear these lies from the big media companies. You hear these lies from big pharma. You hear these lies, of course from the fossil fuel industry. You find me entrenched power, I will show you people spewing these lies. There is almost never an example where they don’t. And the thing that’s so amazing is there is almost no bottom to how little regard for humans sometimes there is. It just astonishes you when you go back and look at this stuff. So anyway.
Max: What I love about it, Nick, is that I’ve long felt that—I came up in independent alternative media and journalism—I’ve long felt that the unceremonious decline and death of independent media and independent newsrooms is that corporate America would get a pass, because I felt like the national mainstream news had already been long co-opted by the conglomerates, but it was at that local level where if there was wrongdoing with a corporation, whether it was a branch of it, a franchise, or that was the hometown employer, independent on the ground, local media would be the one to unearth it. And the decline of that has allowed corporations to pretty much have their way with all of us as they please. And that’s why I like that you took this tack and you went toward the corporation specifically, because people talk about getting money out of politics, and they talk about corrupt politicians and systems and economics and all that, but there’s always money behind it.
Nick: Tiny problem.
Max: Always money. And you have to cut that source out and the only way to do that is to kind of re-shift the focus, much like you say in the conclusion: we have to tell different, better stories. We have to change the focus here. They can’t have a pass anymore, not on our watch.
Nick: No, absolutely not.
Max: And so that’s why the arc of Pitchfork Economics, certainly what you’ve been doing with Civic Ventures and the fact that you’d never had to is one of the things that I admire, because you are the rarest breeds of people that have been as successful as you in investing.
Nick: Thank you.
Max: But the fact that you’re pulling it all together and threading the needle with this idea that it’s no more bullshit out of you guys. I see you. I see you for what you are, I think is really powerful. So I hope you find great success with it. I hope I walk into a house one day that has it sitting on a coffee table because that would be super cool.
Nick: It makes an excellent stocking stuffer, or whatever.
Max: No doubt. No doubt.
Nick: Every progressive—actually, that’s bullshit. Every citizen, whether you’re conservative or liberal will benefit from that knowledge. Because by the way, companies don’t care whether you’re red or blue or Black or white, it’s all about the money, baby.
Max: That’s right. Well, I wish you great success with this book obviously and continued success with the podcast because even though—
Nick: Thank you so much.
Max: It sounds like you guys are having a whole bunch of fun on there. And it is providing a valuable service because you’re giving people an insight into a world that they normally don’t get a look at. And so I’m a great fan of it and I just wanted to thank you again for coming on the show today.
Nick: So kind of you. I really, really appreciate it. And it was great to be here. It was a really interesting conversation.
Max: Good stuff. Thank you so much, Nick.