NewsBusters Interview: Donald Devine on the Path to Conservative Victory
Following major electoral defeats, it has become a bit of a tradition for people on the losing side to try and figure out what went wrong and how to return back to political favor. Oftentimes, these books tend to devolve into laundry lists of issues rather than explore some of the broader themes of politics itself.
Last week, I spoke to one author who avoids those problems, I’m pleased today to offer a conversation with another one, Donald Devine, a man who has spent decades in public service in academia, in government in the Reagan Administration, and outside as a conservative commentator.
Given his wide experience, it should come as no surprise that Devine’s book, America's Way Back: Reclaiming Freedom, Tradition, and Constitution is an exceptional work, packed with insights from a variety of fields including history, philosophy, public administration, and political science. America’s Way Back deserves a wide reading, not just for its contents but also because, as Brent Bozell noted last month, he was a key figure in the Reagan Administration who knew the founders of the conservative movement and thus understands that it is only by returning to our tremendously deep intellectual tradition that the Right can regain political success. Doing so, however, is much more complicated than taking some positions on the issues. Instead, it involves the arduous task of understanding deep philosophical problems and translating them into words that the average person can understand.
In the years since the 1980s, Devine argues, conservatives have lost sight of what propelled Ronald Reagan to victory: his ability to articulate general principles in a way that was easy enough for regular people to understand and to support with their votes.
“The problem is so few Republicans understand this,” Devine told me in our discussion. “They really think you have to go out and convince everybody of everything you believe in. That isn’t how it works. You’ve got to show them the broader theme and bring them the charisma, it’s almost a religious thing.”
That insight is particularly important in Devine’s work because, as he rightfully argues, the very idea of free markets, of separating the transcendent and the economic is completely foreign to the human experience. For the vast majority of our history, humans have held the exact opposite viewpoints: agreement on everything is desirable, only through total unity can anything meaningful be achieved. The conservative desire to withstand the innate utopian impulse is thus a tremendously difficult task, especially in a democratic society. But it can be done, even now. An abridged version of our in-depth conversation follows. It is lengthy but definitely worth your time.
MATTHEW SHEFFIELD: I have the pleasure today of speaking to Donald Devine the author of a new book out called America's Way Back. It is very different from your average political book in many good ways. You have obviously spent a lot of time on it. Tell me what your motivation for writing it was. This one came out nine years after your last one.
DONALD J. DEVINE: The main thing is that the one advantage of being old is that I was there at the beginning. The modern conservative movement started with a book by Friedrich Hayek and at the National Review offices of the people who had all read the book and they basically agreed with it. And they had radical libertarians and very traditional traditionalists and everybody in between. One of the guys was actually an anarchist. And they met in the National Review offices and they basically pounded out what modern conservatism was. And they basically came to the agreement around this principle of what later became termed fusionism. And fusionism was a terrible name but it stuck because the real word to describe the philosophy is tension and try to use the word “tensionist” if you think fusionist is bad.
So they came up with this way of looking at the problems of society which is simplified as using libertarian means in a conservative society for traditionalist ends. Freedom itself has no ends, it needs tradition to give it ends. You need both sides. This tension between freedom and tradition which [Devine’s mentor Frank] Meyer puts as the basis for all Western civilization is what revived the modern conservative movement. Now I see that the modern conservative movement is all over the place and I went back and put the story together to try and get us back on a track where we would recognize it again. I mean it’s insane, a libertarian can’t have markets without a moral structure under it. I mean Hayek didn’t even believe in God and he believed that. And traditionalists, even Russel Kirk wrote that you can’t just have tradition because there are some bad traditions. First of all, you’ve got to choose a tradition and then once you have one, you can’t go and apply it automatically. You have to reason your way through it. And our tradition very much includes freedom.
And even though Meyer and Kirk would argue with each other all the time, they were much closer than they were apart as I say in the book. And I knew both extremely well. Now I’m not saying that everybody agreed but basically, I don’t know how you talk about conserving America and the Western civilization that it’s built upon without recognizing this tension between tradition and freedom and that that is what gave this civilization its difference from every other one—and its success. And if we’re going to put it back together, we’ve got to find some way of looking at it to do it.
SHEFFIELD: Speaking of conserving things, in the old days of media, there were a bunch of regional papers that were conservative, even in New York City. But over time, they either cashed out by selling or ran their own business into the ground. Starting in about the 1960s, there was sort of a departure from mainstream media ownership by conservatives. Have you looked at that at all?
DEVINE: That isn’t the way that I remember it. I would argue that progressivism as an ideal had totally captured the intellectual, moral, and political leadership of the country since the early twentieth century. The fact that Hayek was such a bombshell in 1944, proves this. I mean nobody liked it except Reader’s Digest which made it prominent because they had a conservative there. I don’t remember any conservatives—
SHEFFIELD: Well the Chicago Tribune for instance or the Los Angeles Times under the Chandler family.
DEVINE: Even that, I think they were more on the libertarian side. My point is that there really wasn’t any real intellectual tradition. There were a few individuals here and there but there weren’t many, much less many newspapers. I mean it was just a desert.
Woodrow Wilson was just so effective in turning around the way that people thought. He goes for his PhD in Prussia and he says, ‘Hey these people know what they’re doing and when the chancellor decides, they do it!’ So he comes back to America and decides ‘That’s what’s wrong with America! We divide power up and they concentrate it!’ So he starts the American Society for Public Administration, the American Political Science Association, the American Economics Association, he gets the whole intellectual climate of the United States changed. I mean look at the guy, he changes the academic structure, he becomes the president of Princeton University, the governor of New Jersey, the president of the United States. He changes everything aside from two ‘retrograde’ presidents in between him and Herbert Hoover [Warren G. Harding and Calvin Coolidge] who really was as much or more of a progressive than even FDR who ran to his Right in 1932. So I see nothing on the Right before 1944 and then the first real media we have is National Review in 1955.
SHEFFIELD: That’s probably true if we are speaking of intellectuals, however, if we speak of the regular paper that the average person read, that is my point.
DEVINE: The media back then weren’t far left but they were progressive. It was center-line progressivism. But on the other hand, even Obama, he isn’t a communist or something, he’s a progressive. He’s a left-leaning progressive but he’s still a progressive. I mean they all bought this idea that what you need to do to fix society and to make it work is to centralize power and hand over the running of things to the experts. That is progressivism at its core and it now dominates both parties to this very day. The last Republican president was a guilty of it as Obama is. The only ones who weren’t were Reagan, Harding, and Coolidge.
SHEFFIELD: Is there something endemic to cause that drift? I mean it seems in the last several decades, the Right just simply has not had much interest in media ownership in comparison to liberals.
DEVINE: While they are money-making operations, the operations themselves aren’t explicitly leftist. They’re just full of leftists. The people at the top of them are businessmen and they’re not leftist. They think because they’re non-verbal people that—you know Schumpeter and his Capitalism, Socialism and Democracy is the best thing written in the 20th century, it’s an empirical view of what really happens. His favorite expression was that a businessman won’t say ‘boo’ to a goose.
The businessmen just can’t deal with intellectuals. And the basic problem is that intellectuals have always been left of center. Just think of how few are on our side. Now part of this is that those who are just can’t fight their way through the system. But in any event, capitalism’s biggest problem is capitalists.
Now you and I are intellectuals and there is a Right intellectual class but they are not respected at all or listened to by the people who have the money on the Right. They think you’re kind of crazy.
SHEFFIELD: Do you have any examples of what you mean by that?
DEVINE: Well this isn’t quite apropos but I’ll give you an example of it. Many years ago when Trent Lott was the Majority Leader of the Senate, and he got Paul Weyrich and other conservative quote “leaders” together to talk about a particular issue and we were arguing back and forth and at the end of the discussion, Lott got mad and said “What do we need you people for anyway? You don’t have any big troops. I know you guys, I used to work with you years ago. I could write a book myself.”
And I responded to that and said that “What you don’t understand, Trent is that that we’re your intellectuals. We’re not very good and we don’t have a lot of sway but we’re all you got. And when you get in certain troubles that deal with the things intellectuals talk about—manipulating symbols—you could be in trouble.” And when he got in trouble giving that speech with Strom Thurmond, I passed him later and said, “See, that’s what I was telling you about. How many came out and helped you? None. If you had a whole bunch of people, you might have survived the thing.”
Now that’s not a good example of capitalists but the point is that even our politicians who are semi-intellectual don’t understand the value of symbol manipulation. They do in a narrow political sense but I think that your point is valid but I think there’s something fundamental that produces the problem.
SHEFFIELD: So how can conservatives displace the tyranny of experts or is that even possible now?
DEVINE: The first thing you have to do is to understand what the problem is. And I would say that 90 percent of conservatives don’t. I do radio interviews for this book now and all they ever want to talk about is how bad Obama is. Now that isn’t the problem. The problem is that we had a Republican in for two terms who thought exactly this way who passed the largest entitlement program since Lyndon Johnson’s Great Society. I mean he gave some lip service to fixing Social Security but then he comes up with a drug program that has an unfunded liability larger than Social Security! I mean the problem isn’t them, it’s us in my opinion.
SHEFFIELD: But does the public want to hear that message? I mean in your book, you go into great detail into what the message could be and should be and what it formerly was, but how can that be articulated to people who don’t understand the history or care?
DEVINE: First of all, people do understand this, they recognize that tradition alone doesn’t work, that freedom alone doesn’t work, that you need both sides. As I said, that, that’s the whole part of Western civilization and we’re still part of that—as tenuous as those links might be. The problem is that ordinary people cannot compete with people who are experts at manipulating symbols. I mean if Oprah tells them, well it’s got to be right. They can’t deal with this. I’m a political scientist and the first book I wrote was called The Attentive Public and it argued that only 25 percent of people really count in politics because they read the newspaper at least once a week. The main criticism that I got from my colleagues is that I overestimated that group. And they were right! It is too large. The only reason I used the 25 percent was that I did the first book that used all the polls that had been collected since 1930 and put them all together, well you can’t find 3 percent in a poll, the error margin is 3 percent. But my point is—and this is Joseph Schumpeter’s—people can’t manipulate things at that kind of level. People with charisma go out and sell an ideal or a general idea and the ones who are good at it are the ones who change society. And it doesn’t matter if it’s a monarchy or a democracy, so can you sell it? You sure can. The great thing about our wonderful Constitution is that not only does it put freedom in the whole government itself, every two years you can change it. You can change the whole thing in 2014 and you get another shot at the president two years later.
The problem is so few Republicans understand this. They really think you have to go out and convince everybody of everything you believe in. That isn’t how it works. You’ve got to show them the broader theme and bring them the charisma, it’s almost a religious thing. And that’s why [William F.] Buckley was so good at this, he got a lot of intellectuals to start thinking about this and Reagan was able to get it across to average people. You don’t need to change millions and millions of people, you’ve got to have a couple of people, I call them a happy band in my book, who understand what it’s about and do the same thing the Left does. I mean the Left has a vision, too even though many of them have lost belief in this idea that experts can fix everything now which is why we have a chance at all.
We on the Right don’t even understand what politics is about. We have to understand that democracy is not about having an academic seminar with everybody. Now you need these academic people who can think to help push things. But I still think that the public, deep down is with us anyway. Think of this last election. Clearly the conservative Right, their goal is the working-class white population. There’s no reason these people should be Democrats at all, the whole process of expertise in government is to put them out of work. A perfect example of this is West Virginia, it was the most Democratic state in America and they finally figured out ‘these environmentalists are out to put us out of work.’ Now they still have Democrats in the state but they’re pretty conservative. Anyway, those are the people we should be aiming for, but who do we put up for president in 2012? The guy who when he ran last time, someone said he looks like the guy who fired your brother-in-law. That’s who we put up? Well of course you’re going to lose.
I don’t buy any of this stuff that people have bought into the Left or anything like that. Now they like Barack Obama and they feel guilty about how we’ve treated blacks in America and it makes them feel like it was a good thing to have him in the presidency but we would’ve beat Obama if we had been able to get someone who could walk and chew gum at the same time.
SHEFFIELD: And who would that have been?
DEVINE: I think almost anyone. I think we could’ve gotten Rick Perry the governor of Texas elected even though he’s not much of an intellectual. But in 2016, I think it’s looking like we’ve got a lot of people who can walk and chew gum at the same time.
SHEFFIELD: You mention the white working-class voter. I think while that while that’s true that the Right can reach that group, it’s also true that black Americans have been harmed so much by the failures of the Left that there is also potential there.
DEVINE: There’s no question that intellectually that is true but you cannot make that case because you are threatening their way of living, their income. They’re too dependent upon the state.
SHEFFIELD: Isn’t that our fault to some degree? I think it is.
DEVINE: Sure it is. But you can’t do the impossible. If you want to do the impossible, don’t go into politics. Yes we should though. One of the greatest speeches I ever gave in my life, I was quite young at the time, and there was a black Republican organization that needed someone to speak on a campus. So I gave the damnedest speech saying how I empathize with blacks in America because I’m an Irishman and if my relatives had come over here today, they would still be on welfare. And it’s true, we would be, or we would be working for the state. We did every other kind of municipal job but listen, this work ethic idea, it did not exist in Ireland. Michael Barone did an interesting book later comparing different ethnic groups together and who did he compare the Irish to? The blacks. We would never work if we did not have to. But the fact is that if you came over and you didn’t work, you’d die, all right? And the crowd went crazy, they loved it. They had never heard anything like that before. And it was in Maryland so it wasn’t an overwhelmingly conservative crowd though they were conservative in the right way.
And you’re right intellectually but it can’t be done. I’m sorry but that’s not where you’re going to be able to look to change things. I’d like to find a way but I just don’t think it can be done. It’s just a practical question. Like I said, I know that’s the message to give, the one I gave that crowd. I mean you can get a decent percentage of them.
SHEFFIELD: That’s all I’m saying. And I’ll give you a framework to put that idea in: electoral politics comes after acculturation. That old saying of Keynes that we’re all the slaves of some dead economist, I would say that we’re all the slaves of some dead theologian no matter secular one might be.
DEVINE: Well there are a lot of things that are considered secular which are really much more in common with religions.
SHEFFIELD: Absolutely. And I would say that the entire foundation of progressivism was based on certain interpretations of the Bible. I mean if you look at Woodrow Wilson, William Jennings Bryan and others like the prohibitionists, that was a progressive idea. And they were all extremely religious people. My point though is that people think what they do because they absorbed it from the environment in which they’ve lived. And I think the problem for conservatives is that ever since Ronald Reagan won, we thought we could take the shortcut to propagating and protecting our ideals through just elections only. What we haven’t understood is you don’t need these great speakers and orators if you have enough influence within the cultural framework. The politicians who are out there are simply restating the ideas of other people.
DEVINE: Well I may question one of your assumptions there. You know what Reagan was known for in the media when he ran in 1976? They called him the Gaffer. He couldn’t say anything straight. Now he was better than they thought but he was not a perfect communicator. And it was the fact that he radiated that he believed in it and that he was deep in it that persuaded people ultimately. I think the reason that conservatism ultimately fell apart was that Reagan’s vice president when he accepted the GOP presidential nomination in 1988 said that we were going to have a kinder and gentler country. I mean he broke with Reagan right there at the Republican National Convention. And I didn’t even really get it at the time, the only one who did was Nancy Reagan who supposedly said “Kinder and gentler than whom?”
But that doesn’t really get to your fundamental point. Basically Reagan wasn’t able to win over his own party or even his own movement. And certainly the belief that you needed both freedom and tradition, I don’t think there were even 10,000 people who believed that in 1964 when we took over the Republican Party. In 1980 when Reagan got elected, there probably weren’t even 30,000. Politics is only secondarily a mathematical institution even in a democracy. Elites drive the process and they attract or don’t attract masses to them, not primarily on intellectual arguments either. Most people cannot understand high-level abstractions.
SHEFFIELD: And that’s because they don’t need to. That is the entire basis of the invisible hand theory of Adam Smith and it’s also in Joseph Schupeter that the idea of rational ignorance is a good idea, for the most part. That is what specialization is. But it is dangerous when it comes to politics. That is the unfortunate reality of things in a republican system.
DEVINE: Well to me, that’s just how it is. I mean it’s not too bad, that’s how it is. You’ve got to deal with human nature as it is. And therefore, the first fact that you have to understand about politics is that and you have to be able to deal with that reality. You need a certain group of people who do understand things, I’m not sure how large it has to be but it doesn’t have to be tens of millions.
SHEFFIELD: But you do need channels though, otherwise, the message can’t be delivered to the voting public at large. Kind of like how Google’s Android operating system was the only new smartphone operating system that was able to displace both Blackberry and the iPhone thanks to greater retail sales channel support. In politics, the media are the sales channel. They sell the ideas of ideologies to the public.
DEVINE: We don’t have them, we don’t. The miracle is that we are even on the playing field. And it was more true when we did it the last time than it is today. We had three networks then, that was everything. And most of radio was network. And there weren’t really many regional papers that were conservative. And most of the ones that were, the ownership turned over the running of it because this was the proper WASP thing to do which was to turn things over to the people who were the experts, all right? And the experts were the liberal intellectuals. We had no media then except National Review, Human Events and five other newspapers here and there. Oh and Reader’s Digest. Even the Tribune when I was your age, the conservatives didn’t control the news content. They did 20 years before that.
That is the miracle of the 20th century that we were even on the playing field. The only conclusion that you can possibly make is that the population is basically more on our side than on theirs.
SHEFFIELD: At least back in the 1980s. What about now?
DEVINE: Even now. We would’ve won the last election if we didn’t have Romney. I’m convinced of it. That and a miracle storm of Hurricane Sandy and [New Jersey Republican governor] Chris Christie doing kiss-up with Obama. I think that was the thing. It was still an enormously close election. People say: ‘Hey, you know, that’s what we really want. We want Republicans and Democrats to get along with each other.’ I think that truly was enormously important in deciding that election. That was their picture that they’d been told repeatedly as what we need to do. We just need to get along. In my book, this idea that we should all agree together is enormously powerful. I think that changed the whole election.
It is those kinds of things that get through to people. And it wasn’t even concocted in any broad sense. I mean Christie saw it as a tremendous opportunity to have him be governor of New Jersey forever. And it worked great for him. And it worked great for Obama. It was an enormously lucky thing for Obama.
SHEFFIELD: Let’s go back to the media. You were there when it all got started so my next question is this: Why have conservative philanthropists been so willing to spend basically billions of dollars on campaign ads and think tanks but almost no money on actual media platforms?
DEVINE: I think conservatives have spent their money almost all on advertising.
SHEFFIELD: Why not stop buying the ads and buy the stations themselves?
DEVINE: Because in a political campaign, you have only one goal. Winning that campaign. You don’t care about the next one. It would be crazy to invest in CBS to win an election that is a couple of months long. The basic problem is that there is no such thing as a political party any more. The progressives have ruined the political party with the direct primary so no one has a long-term interest in politics in America. It is all short-term influence to win the next election.
And the rest of it, you look at all the money that is spent on the Right for politics like for the Media Research Center or the Heritage and the campaign, it’s a pittance. Maybe one or two groups on the Left get more money from the government than all the money that is raised by conservative groups. It’s a pittance. It’s a nothing. In terms of money, our whole ideology works against us. I mean what we should do if we wanted to really compete with the left in terms of money would be to get money from the government. But we’re not supposed to do that. The fact that we ever win anything is a miracle. I mean all of the institutional power is on the Left. They don’t have to worry about buying a network, the government gives them one! You’ve got National Public Radio and Public Broadcasting. Why do you have to buy anything? The government will give it to you!
SHEFFIELD: One of the things you talk about in your book is that the Right needs to make a renewed push for federalism, it’s a concept you argue has been kind of lost as politics has become more nationalized. Can you expand on that?
DEVINE: The thing that made America successful was that it had a great constitution. And the Constitution was based on the idea of separation of powers which the progressives tried to change. What isn’t given explicitly to the feds is given to the states and to the people. Ronald Reagan in one of his major speeches said that my goal is not to save money. My goal by saving money is to give power back to the states and the people. The basic reason that government doesn’t work is that under progressivism, we’ve given all the responsibility to the federal government and it has ossified. I quote Professor Light there [in the book] that the government can no longer faithfully execute its laws. We are trying to do the impossible. We give this thing on top everything to do and of course it messes up. The only possible thing to do is to either give it back to the people in the private sector through the market and associations that we all do out there or to give it to the state and local government. We put everything up here in DC, the solution to me is pretty simple: you’ve got to get it back down there. The feds are overwhelmed. Public administration is the study of government and they admit it themselves that it can’t work. Why can’t we learn?
The only thing that stops it is that so much money is given to so many special interests and to try to buy the votes of the middle class. That is where we spend most of our money on things like Medicare and Social Security. It seems to me that we know what the problem is. We’ve got an ossified central government that is overwhelmed and it can’t do anything. If we’re going to actually solve anything, we’ve got to get it out. And that is the way the founders set it up. You can’t run anything the way we’ve been doing it. You’ve got the legislative, judicial, and executive countering each other with the states thrown in the mix. You cannot make things run like a clock in our system. It is made to be decentralized. It cannot run the way progressives want it to.
SHEFFIELD: One quote that you have in the book is from Friedrich Hayek on the impossibility of administration that I thought was good was the number of atoms in the solar system. There are 1056 atoms in the solar system—
DEVINE: And there are more intracortical connections in one person’s mind in one minute than that. And then imagine how much more difficult it is to manage the interactions between hundreds of millions of individuals with all of those connections. I mean the complexity in just one cell is overhwhelming and to think that we’re going to take that complexity of trying to predict one cell’s behavior and extrapolate that to millions of people’s behavior is just ridiculous. I mean Hayek’s estimate of societal complexity was made in the 1930s. Since that time, we’ve discovered that individual human biology is far more complex than he had any idea.
I mean when people go back and look at the 20th century, and we’re still living under the rules of the last century. When people in the future look back at these times, they will regard it as a superstitious belief that we had this notion that human behavior could be easily and immutably changed. I mean witchcraft is going to look rational by comparison compared to thinking that a couple of people sitting in Washington could handle the complexity that is out there.
SHEFFIELD: And that was the entire premise of Michael Oakeshott’s wonderful book Rationalism in Politics. But when you try to take them out and discuss them to the so-called expert class, the intelligentsia, it seems offensive to them that you would even say that. Basically, it seems to them that you are calling them stupid and that you are therefore anti-intellectual and anti-reason for stating these points. I’m sure you’ve encountered that type of rhetoric before. What is your response to that?
DEVINE: I’m not quite sure what you mean by that.
SHEFFIELD: The idea that there is no so-called master science of public administration. That almost no significant societal problems like poverty can be solved by a few people in the federal government. That is anti-intellectual in their viewpoint. What is your response to that charge?
DEVINE: It is very simple. You go back to the earliest thing that you know about humanity. Go back to the caves. 30,000 years ago, we had the idea that we all have to work together at a common plan with a common way of thinking, how we dress, how we hunt, how we do everything. For 30,000 years until Julius Caesar, that was how everybody thought. There was one way that we should do things and we’ve got to figure it out, it’s the herd mentality. It isn’t until the beginning of what is now called the Common Era that somebody said something different, that it isn’t just Caesar, there’s an entire other part of life. So we started a civilization that you divide and not bring together. And that society by the year 1000 had passed the rest of the world economically and another few hundred years, it wasn’t even in the same realm. We changed the whole world with the idea of dividing power.
After a little while the Black Death broke that idea and inspired the divine right of kings, but while that was happening in Europe, the people who came over here, the yokels in America were still believing the old ideas of separation. They didn’t know that modernity had changed so when George III came over and tried to impose divine right of kings, we said ‘no.’ And so what did we do? We set up a constitution that is based on the Magna Carta but of course, now that we have it, people have been trying to change it so right from the beginning, people were trying to centralize it. And thank God De Tocqueville caught a picture of it before we started messing it up. And of course Woodrow Wilson and the progressives were finally triumphant and took it over.
So sure, I understand why so-called intellectuals and scientists would think that way. There are about 30,000 years where humanity thought exactly that. This is a new idea that is very hard to understand that dividing power can be more powerful than putting it together. It is a very difficult concept and our whole emotional structure is against that. That is how we learned, it is very hard to get away from it.
SHEFFIELD: What it could be argued is that the quintessential challenge that proponents of limited government face is how do you say no to people who want something that another person falsely claims they can give them for free? How do you say no to that?
DEVINE: It is very hard. I mean Aristotle told us right from the beginning that in politics, once people find out that they can get something at someone else’s expense, that is why democracies don’t last. That is the essential problem of democratic politics, why all of them have broken down so far and why we’re breaking down now. And probably we are going to break down. Because once you’ve given people something, it’s just about impossible to stop. It is very, very hard to say no. If things go badly enough, though, they might be willing to listen to reason. And that is where we are now. The total income of the U.S. Is $13 trillion and the debt is $16 trillion. And that is what is on the actual books but there is another $3 trillion at the Federal Reserve and another $8 trillion in Social Security unfunded liabilities and $38 trillion in Medicare unfunded liabilities including George W. Bush’s gift to us with the prescription drug funding.
SHEFFIELD: And then you have the trillions of Fannie Mae, Freedie Mac, and Sallie Mae on top of that.
DEVINE: So you’ve got like 500 percent of income in debt. I mean this is serious. And you can play around with a lot of stuff and of course, our financial regulatory stuff is so bounded up that everyone is afraid to do anything. The most recent stock rise is so funny. The earnings reports in most sectors like manufacturing or whatever is very mixed. The financial people people are coming in great but if you look closely, what are they investing in? Stocks. But they’re only going up because they previously went up. That is called a bubble. This is going to break.
SHEFFIELD: Or the currency itself will break.
DEVINE: That has always been what is the real thing that will bring down the West. We have the results of almost a century of progressive thinking. It is right there before us now.
SHEFFIELD: So we have to wait it out until the system collapses, is that what you are saying?
DEVINE: Well, I don’t know. You might have to. But maybe things are bad enough that people might recognize that you might have to take some big steps but I don’t know. I think it is a very iffy thing. I think we have to be prepared and enough people have some idea of what we need to do to get us out if we get the opportunity.
I mention toward the end of the book that Ludwig Erhard is one of my heroes. He was a German finance minister and chancellor after World War II. He had survived Nazi Germany by keeping his head low and he had also read Hayek and, I believe actually went to classes with him before the war. And he became the economics minister of Germany during the occupation and saw these price controls that the Weimar Republic and Hitler had put in and he said what we need to do is to get rid of these wage and price controls. And all of the American economists, good progressives, said no, this is how you run a society, you keep control of prices and it will all work. And of course, the head of the American occupation is a general, what does he know about economics so he listens to all the experts tell him and Erhard said no, I’m going to do it.
And one day, the American general gets on a plane back to the states and Erhard goes and does it right while he’s on the airplane. And in two months, all the shortages are ended and in five years or so, Germany passes the victors in the war France and England! Germany is prospering while those countries are still struggling under wage and price controls.
My goal in this book in going around giving book parties and giving lectures is to hope that there is one Erhard who listens to something that I said that is out there who will be in the right position right before we’re collapsing to do the right thing. I don’t think it takes a lot for people to change the world. Lenin had a dozen or so, Jesus had a dozen. You don’t need a lot to change. And Marx started out with Engels.
SHEFFIELD: Those are some encouraging words. Don Devine, thank you for speaking with me today. Your book, America’s Way Back is really a great one. I encourage people to check it out. I appreciate the conversation.