Monopoly Politics vs. Democracy with Matt Stoller


Matt Stoller, Research Director at the American Economic Liberties Project and author of the book, Goliath: The Hundred Year War Between Monopoly Power and Democracy, talks with Rob about how the pandemic is affecting the power of monopolies in our politics and economics, and the paths forward as supply chain issues are laid bare.

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Transcript

Rob Johnson:

I’m here today with Matt Stoller, the Director of Research at the American Economic Liberties Project. He’s author also and founder of the newsletter BIG and he’s written a wonderful book called Goliath, and in Goliath, I remember reading the book when you first sent it to me. It’s about what I will call the tension between democracy and monopoly. Matt, thanks for joining me today. It’s nice to hear your voice.

Matt Stoller:

Thanks for having me.

Rob Johnson:

So we have all kinds of things, all kinds of elements in our structure of society, our politics and so forth, and you and I have been working together in a variety of ways since 2006. But this pandemic is like a lightning bolt. It’s like an alien invasion and it’s not just here but all over the world. But let’s focus on what you think this pandemic means, how it should be addressed in terms of mitigating the depth and duration of the crisis and also what you see not being done that should be done.

Matt Stoller:

Yeah. So thanks for, thanks for having me. The pandemic, it’s having so many important consequences on how we do everything. I mean obviously. So it’s hard for me to just give a broad brush answer. But I’ll talk about one of the things that I’ve focused on, which is the financial system and how we are structuring our political economy. So there’s basically two main forces that have been governing our culture. This is what I go into in my book, Goliath, they’ve been governing our culture since the 1980s and they’ve gotten progressively stronger. The first one are concentrated monopolies. So the big tech would be the pacesetters, but it’s not just big tech, it’s the corporations that are running our food systems, that are running our retail systems, the Walmarts and the Costcos and the Tysons and so on and so forth, and then they’ve also been running our medical system. So you’re seeing a lot of the supply chain breakdowns as a result of concentration in obscure companies you wouldn’t have heard of, like group purchasing organizations.

But what we see is this incredible consolidation and we’ve seen that since the 1980s and 90s and we’re seeing a lot of cracks and problems there, but we’re also seeing that these institutions are getting stronger politically. That’s one of the things that’s happening in this pandemic because they are effectively public infrastructure and so we have to rely on them, and our political leaders don’t understand this. So that’s what’s happening.

The second force is private equity and financial elites and this really comes out of… I have a chapter in my book because I go over the last hundred years, and so I start with J.P. Morgan and Andrew Mellon. And then the chapter in the 1980s is called the Mellons, the Morgans and the Milkens because it’s all about how Michael Milken replicated some of the ways that those older robber baron types operated and he basically created the industry that we know of as private equity. And private equity is a Ponzi scheme where these institutions, these funds, which are really just a small group of financiers that collude with each other, they use other people’s money, mostly pension funds, but there are other entities that finance them, and they use that to manipulate corporations and extract cash from them. And they keep this shell game going by rolling over debt and ultimately sticking the bad debt with the tax payers.

So in the 1980s, they stuck that bad debt with savings and loan banks, that was the savings and loan crisis. And then they got bailed out in 2008 and then since 2008 they’ve been rolling over this debt, getting more and more capital from pension funds to continue to invest and structure our corporations. Well now what’s happened is a giant crash in private equity that we haven’t yet noticed, but it’s just because everything in the economy has frozen up. There are no more customers for anyone except supermarkets and a couple of different areas. But most of the political economy is shut down and these guys have been living close to the edge because they load up their companies with debt and so they don’t have a lot of slack. They don’t have a lot of cushion, and so now a lot of private equity companies are not paying rent. They’re not paying bills and effectively a lot of them are insolvent. And now it’s time to pay the piper, right? And that’s what the political battle right now is.

Some of these funds are actually public companies like Apollo and KKR and TPG. And also, I follow those stocks and they’re basically responding to whatever programs the Federal Reserve and the treasury are putting out. So they’re responding to the question of whether they’ll get bailed out or not and so that’s what I’m interested in because there’s, there’s probably trillions of dollars of losses here that someone’s going to have to eat, and either it’s going to be the pension funds and these guys, these billionaires, or it’s going to be the taxpayer or it’s going to be some mix of the two. So that’s what I’m noticing on the financial side. The strengthening of monopolies, the open question of what’s going to happen with this private equity, the great private equity freeze I’ll call it.

And then the third component is the politics. Our politics have, I don’t want to say changed, but they’ve really clarified. I mean they have changed a lot. I wrote a piece for WIRED in late February called this marks the end of affluence politics. So since the 1970s and 80s, we’ve been living in a world where it’s really just about fighting over consumer rights. We just assume that everything in stores just automatically comes. There’s never any shortages. Well now we’re living in a world of shortages. So we have to look behind the store shelf and think about the politics of production.

Anyway, what’s happened is the left and the Democrats have been revealed as completely superficial and irrelevant. And you saw this with what happened with Bernie and Warren where they both ran for president. Bernie to fix healthcare, Warren to address Wall Street. Both of them became popular after the bailouts. They both lost. Bernie was less powerful in 2020 than he was in 2016, so there was a loss of political power. But then also they both ended their campaigns and the final thing Bernie did was to whip and vote for Chuck Schumer and Mitch McConnell’s giant Wall Street bailout. So faced with the largest financial crisis since 2008 and the largest public health crisis in our lifetimes.

The guy who was trying to solve public health problems and the woman who started to crack down on Wall Street both ended by having zero policy influence at all in a giant multi-trillion dollar bailout of Wall Street. And to me, that says everything about our politics, the political impotence of the Democrats, the political impotence of the left, the total irrelevance of how we’ve been thinking about… I say this as someone of the left, so I’m sure there are people who are not of the left. But it reflects the complete breakdown of the way that we think about power.

Rob Johnson:

It almost feels a little bit like it resonates with Naomi Klein’s book The Shock Doctrine, that everything just got in the disorientation, fear and surprise the elites which, you might call, have a plan, understand the levers of power and just go for it. I don’t know necessarily what Elizabeth or Bernie could have done in the structural sense other than hold up the bill, protest, illuminate how off course it was or where its corruptions were centered. But if you had been their advisor, how would you have recommended they behave as this unfolded?

Matt Stoller:

Well, okay. So there are tactical and strategic questions about how they handled the bailout, which we can argue about. But I want to take a step back and give an alternative, which is Marco Rubio, okay? So Marco Rubio got destroyed in 2016 by Trump. He was thoroughly humiliated. He started out, he ran for president. He was essentially like the libertarian conservative movement candidate grown in a bottle, right? Grown from a fetus to become a conservative libertarian Republican president. And then he gets humiliated and destroyed in 2016 and what does he do? And it’s somewhat similar to how Bernie lost and somewhat similar to how the Democrats got humiliated. So he gets up and he says, “You know what? I’ve been thinking about the world all wrong,” and for about three years or so since Trump got elected, he and a couple of other Republicans like Josh Hawley, but also people like Tucker Carlson and Oren Cass and a whole series of thinkers on the right have been saying, J.D. Vance, “What did he get wrong? What happened?”

And they have undertaken a rethink of conservatism and they’ve started to say, “What do we do about China?” They’ve been looking at industrial policy. They’ve gone back to first principles and said, “What do we do about the social problems that we have? How do we construct a vision for what we want our economy to serve?” So Marco Rubio is the chair of the small business committee, which is an irrelevant backwater committee that no one cares about in the Senate. But because he had been doing this thinking and because there was this thought collective that acknowledged failure and then said, “Well, how are we going to rethink our priors, our assumptions?” When this bailout happens, Marco Rubio doesn’t get everything he wants. Josh Hawley doesn’t get everything he wants. These thinkers don’t get everything they want.

But Marco Rubio is ready with a tremendously ambitious lending program to small business, called the Paycheck Protection Program. So he gets a $349 billion small business lending program from a backwater committee that is irrelevant. He has a little bit of a brand. He has no power from a presidential race. He’s not popular. He can’t raise that much money. But because they’ve actually done the work to rethink their assumptions, he is the key organizer of a really important part of the bailout. It’s one of the few pieces that Congress is going to give a lot more money to. There are huge problems with it. But that’s what I mean by wielding power. Just coming out and saying, “Okay, let’s rethink what our vision is.”

Bernie and Warren didn’t do that, right? They just came out and they said, “The problem that we have is my brand Medicare for All, or my brand got to fight for you on Wall Street. I’m just going to keep repeating that.” They never actually sat down and said, “Man, what did we get wrong? Let’s rethink our assumptions. Let’s figure out how Obama screwed up and why we all screwed up as a party. Let’s come up with a vision or a set of shared objectives for what our economy should serve.” They never did that and they never respected thinkers who do think about that enough to be part of an intellectual community that was actually trying to think that. And so there are a bunch of questions about how to do the tactics and the strategy and we put out an American Economic Liberties Project. We were the only progressive nonprofit to come out and say, “This is a disaster. What are we doing?” Two weeks before, as soon as it became obvious there was a bailout in the works. Two weeks before the bailout eventually passed.

We were just like, “This is a disaster. We need to make sure that we have these conditions on bailouts. We need to make sure that we’re… Here are the values that we need to embed in this. Here’s the shape of society we need to go to,” and all of that was marginal because the rest of the progressive world, the nonprofit progressive world and most of the Democrats, were just like, “Oh, well we need to get help out there. We need to have more unemployment insurance. We need to make sure that workers get funded.” Instead of actually putting out a vision of where they wanted society to go, thinking about power, they were just completely irrelevant. They didn’t even have enough understanding to see what was happening.

And so earlier this week, there is this Facebook billionaire named Chamath, I forgot what his last name is, but he was on CNBC and he was talking about what an embarrassment it was that big companies were going to get bailed out. He said, “Don’t bail out these billionaires,” and he’d been saying that for a month or so. Mark Cuban’s been saying that as well. And all of these progressives, because he said on CNBC, “This is ridiculous.” And all of these progressives, including Rashida Tlaib, were like, “This is totally right. I am totally with you on this,” and they didn’t even know that there was a bailout that they voted for until a Facebook billionaire on CNBC told them what they voted for. And all of these nonprofit groups are coming out with things like the People’s Bailout or the progressives are coming out with letters on how to structure the bailout, and it’s just like this massive gaslighting because it’s like, “Guys that was decided three weeks ago.”

It’s massive gas lighting because it’s like, “Guys, that was decided three weeks ago in a bill that you voted for and didn’t do anything about.” So it’s just this incredibly embarrassing, broken, lazy set of actors who are just completely divorced from reality. And that’s what I’ve learned has happened. And I don’t think that it was inevitable that it happened this way. But I do think that there’s a lot that Democrats and the left could learn from how Marco Rubio and Josh Hawley and Oren Cass, and a whole series, and Saagar Enjeti and Tucker Carlson, and a whole series of people on the right have approached what they recognized was a broken ideology of conservatism and have tried to repair it. And we have that same problem on the Democratic, on the left side, and we have not come to grips with the brokenness of our ideology.

Rob Johnson:

Is your sense that the Democrats are clinging to something, like what you might call small D democracy? That the point is voter registration and getting people up? Or do you think that the malady really is centered on, and the dysfunction is centered on, they’re not understanding the finance and what you might call the distribution of the burdens? How is it that people like Rubio are, how would I say, seeing the real challenge and acting on the real challenge that the Democrats could learn from?

Matt Stoller:

Well, look, I doubt that if you talk to most Democratic members of Congress or most Democratic voters, that they could tell you the difference between private equity and a mutual fund. They just wouldn’t know. I mean, Julian Castro was, he ran for president and he was also the Secretary of Housing and Urban Development, and when he was the secretary of HUD, he made the decision to sell billions and billions of dollars of mortgage backed securities and mortgages to private equity funds, right? Which made these bunch of private equity funds some of the largest land owners or landlords in the nation. And then somebody asked him during the presidential race, I got laid off from Toys R Us, which was destroyed by private equity. What’s your view of private equity? What should we do about it?

And he literally didn’t know what private equity was. He just didn’t know. And he just started talking about how Wall Street banks shouldn’t be too big to fail. And then this person came up to him afterwards, at a different place and said, “I really want to know what you think about private equity.” And it was just obvious he didn’t know what it was. And it was just, how can you not? I mean, how can the Democrats, and then Elizabeth Warren made him a key surrogate. And it’s just weird because, how can you have a political party or political movement that’s based on integrity and values when they literally won’t bother to learn the language of power, right? They literally won’t even bother to learn what powerful people are doing.

And that, Rubio came out with reports over the course of several years and these were, these were not Catholic reports, these were not right wing reports. His people were reading left-wingers, his people were reading right wingers. And these reports were a discussion of how private equity and how finance worked and financialization of corporations and industrial policy. They really went into depth on how the practical, powerful institutions in our economy distribute resources. And there just wasn’t any of that on the Democratic side. There just isn’t. They just literally do not, I mean, some of the nonprofits like Eileen Appelbaum and some of, people know what private equity is and are putting forward bills to address it. But there’s no, there’s no actual rethinking going on. You can’t point to a single report from any Democrats saying, “Here’s what private equity is and here’s what it does and here’s how it fits into our set of philosophies. And here’s our philosophy of how to do this differently and better. Here are our goals.”

You can’t find anything like that on the Democratic side. And I really blame Warren for this. I think Warren has been a disgrace. She was, we put a lot of faith in her that she would, because she understands these things and she has done zero work to actually come up with vision or strategy or educate anyone on what this stuff actually means. And that, I mean it’s true with Bernie too, but it’s true entirely on the Democratic side. There is literally no interest in learning about the language of power to the point where they didn’t know what they voted for until three weeks after they voted for it. And I am just like, I’m just, after a billionaire told them that it was a disgraceful.

So why is that, what’s the problem there? I mean, the progressive movement is a very cloistered set of art critics who signal to each other about, what are the appropriate things to think. They don’t read books, they don’t think about ideas. They don’t respect people who read books or think about ideas. They don’t associate governance and power with what they do with elections. It’s just a movement of art critics and I don’t know how to fix it, but that’s my analysis and it’s pretty embarrassing. It also is embarrassing the way that they approach Trump, because Trump is putting forward real policy ideas, many of which are really bad policy ideas, but he’s really putting forward ideas about power and they don’t have any way to even understand what he’s saying.

Rob Johnson:

I think the things describing ring quite true to me because, and I think sometimes that the substitution within the Democratic coalition of identity politics for what you might call structural analysis of the economy and political economy comes to the fore. And I think as many people do, the issues of women and people of color and so forth are important but not important in lieu of an awareness of what’s happening. And I wonder about politicians who have to raise so much money if there, we might call blindness is willful or do you think it’s a failure of imagination? Do you feel that the people are captured and therefore muted? How do, how do you diagnose?

Matt Stoller:

Yeah, I don’t think that it’s a failure. I don’t think it’s a fundraising problem. I mean, fundraising is a problem, but Rubio managed to do it and it’s not like he doesn’t need money, right? And people on the right manage to do it and it’s not like they don’t need money. This was a failure of imagination. So I think the identity politics frame, I don’t love the word identity politics because it’s so freighted. My view of Democrats is they don’t actually care about racism. They don’t, they use it as a sort of shield for, like it’s a moral shield. But really what they’re doing is they’re actually just substituting moral vanity for thinking. And so it’s like, if you want to think about race and power, and you leave banks and corporations out of the calculus, then you’re not really thinking about race and power. You’re just using race as a symbol for your own goodness, your own, you’re just grandstanding.

And so, I think the right when they make fun of the Democrats in the left for their wokeness are really playing on the fact that the Democrats really don’t care about racism. They’re just moral grandstanders. And I find a lot of the woke language just deeply offensive because they’re turning everyone into an unperson and that’s just embarrassing. And I don’t believe that everyone is like, I don’t think that the only, woke politics is all about making people into victims and saying that only victims have legitimate political claims. And I just think that that’s an authoritarian way of seeing the world.

And it isn’t a way of seeing the world that actually puts forward the concerns of black people or Latinos or white people, or women or any other group. It’s a view of the world that’s just aristocratic. And they’re aristocrats, they just are like, “Oh, if you don’t learn this incredibly complicated language of wokeness that you have to spend years at a university to understand and then you step on a landmine somewhere, Oh, sorry, you’re canceled.” That’s not a legitimate way to do politics. It’s a way to exclude people that aren’t like you. And that’s what the Democrats are. That’s what the woke politics is. It’s just a way to exclude people that are not an educated, upper class group and they’re not all wealthy, but they’re all upper-class. It’s just a way to exclude, and I’m upper-class too. I’m not saying that it’s not every upper-class person that’s like this, but they’re just excluding people that aren’t like them. That don’t think like them, that don’t act like them. That’s what this is about.

Rob Johnson:

Yeah. I know Michael Sandel at Harvard, the political philosopher who I’ve done a lot of work with, and we made a course together called What Money Can’t Buy: morals in markets. Excuse me. And Michael’s newest project, it’s a book in the works right now. It’s called The Tyranny of Meritocracy. And I have talked a little bit about where he’s going with it, but it’s as if, which you might call the notion of a public servant being deserving of having power based on learning and skills and what I’ll call lateral pattern recognition, being multidisciplinary. It’s been replaced by a contest mentality where people are entitled, because they have a degree and they won the contest and therefore rule.

But as this other professor at Yale, and I don’t recall his name right now, wrote a book called Elegant Sheep is the indoctrination of elite students in the self satisfaction feeds the kind of language and self-righteousness that you’re describing. And I’m very concerned about what you might say, how we breathe humanity back in to expertise and we’re just way off course right now. And I think you’re touching on a lot.

Matt Stoller:

Well, let me give you a message of hope. So one of the nice things about the total collapse of, I am particularly close to the, I’m coming out of the progressive side of the world. So it’s like, that’s what I’m mad at. But the nice thing about the total collapse of the progressive world and the socialists and all that, that whole worldview in the Democratic party is that it does allow us to look at a bracing truth. It does allow us to hit rock bottom and to rebuild a genuine thought collective that has a vision, right? I mean, if you don’t believe in anything, if you believe in nothing, you’ll fall for anything, right? And I think that what’s neat is that I think there’s a lot of people on the right and the left, I mean, it’s funny, my book Goliath, it’s the hundred year war between monopoly power and democracy.

I wrote it because I worked with you and many others during the financial crisis and it was like, “Oh, it turns out progressives don’t know anything about corporate power.” And it’s this whole part of politics that they don’t know anything about. It’s this hugely important history here. It’s fun. It’s super interesting. So I’ll write a book and I’ll explain it. That’s what I do in my newsletters, what I do on Twitter. It’s what I do with this book. I’ll try to explain stuff so that people can understand their traditions and their history. Well it turns out that it’s not actually the left that actually cares about any of this stuff. The people that have read the work that I do and that actually like to use it are this weird group. There’s some democratic members you can’t really predict where they are.

Like David Cicilline, he really likes this stuff. And then weirdly Jim Himes is into some of it, there’s just a strange motley group. But the group on the right and in the national security world is totally fascinated with the problem of monopoly and totally fascinated with the problem of finance. And I talk to them a lot and I used to have to hide that a couple months ago, year ago, I used to have to hide that I was talking to conservatives. But since the Bernie collapse in the pandemic, also I used to talk a lot about how China is a fascist state and is really dangerous and everyone on the left would be like, you’re just a racist. And now that’s over, because that, it’s obviously silly to make that claim towards me.

And I feel like there’s a really great opportunity and opening to actually have honest conversations about really where we are as a society. And I, and I think that to me is very helpful. I mean, I see a lot of people in the national security world that are really interested in national mobilization to address this pandemic. But I think going forward to address broader social needs, whether that’s climate change, whether that’s the challenge of China.

Broader social needs, whether that’s climate change, whether that’s the challenge of China, whether it’s a whole series of other potential problems, AI. I think that there really is a rethinking of national security and collective action everywhere in our society. And that’s really cool. It’s a really great time to rethink first principles. And I don’t know where the political coalitions are going to shake out. That’s a little bit foggy to me right now because of the collapse of my whole tradition. But I think that there is a possibility, both within the business world, within parts of labor, within the artistic world, within the national security and military worlds. I think there are a lot of people that see that we’ve mismanaged things and that the ideas underpinning our society are destructive and reckless.

And that’s exciting to me. I think this is sort of a moment to rethink first principles. It’s also an incredibly scary moment because you could see deep authoritarianism taking over. But that’s always been the battle. That’s what America’s always been about. It’s always been this battle between whether we can be free, whether we can find the ideas that prioritize liberty and community and democracy or whether we’re going to hand over our liberty to people who are aristocrats, whether those aristocrats or bankers or openly aristocrats, or as you study a lot, corrupted experts.

Rob Johnson:

Well, you talk about, how would I say, a hopeful note. And I see that we really are at a fork … When your name is Robert Johnson, you always talk about the crossroads, the old blues soul. But I think we’re at a place right now where they always say, “Well, it’s darkest before dawn.” And the impetus, the direction from these pressures can lead to that repair. And I know like Rebecca Solnit wrote a wonderful book called A Paradise Built In Hell, How The Extraordinary Communities Arise In The Face Of Danger. I see that the other, which many dread is that it’s going to get even darker through authoritarian oligarchic type control in many places around the world. How do you see it? I mean, if you were the odds maker, which direction would you see as most likely at this juncture?

Matt Stoller:

Yeah. I mean, it’s hard for me to say that I am hope … I’m not super hopeful that we can ward off authoritarianism. I don’t know. I mean, it’s like every newspaper is kind of going to be gone pretty soon. Big tech is going to be more powerful than ever. I was afraid. It’s foggy to me right now. So I was afraid that China would come out of this much more powerful than they were because they have the manufacturing capacity to deliver protective equipment and medical equipment to people around the world. And that that would revamp our global order to China’s benefit. I’m not trying to create a competitive framework with China, but I actually just think that China is exporting fascism. So I don’t want them to do that.

But actually, it’s neat to see people all over the world rejecting the sort of Chinese overtures and saying, “You guys caused this problem. We don’t like what you’ve done.” There’s a tremendous amount of anger. And that’s not because they … They don’t have an America to turn to right now. America’s kind of lobotomized. So that’s I think a very hopeful sign. It’s not something that I expected. And I think that that’s quite possible to happen here. There’s going to be an enormous amount of anger in three to six months by the “essential workers” that are low-paid that risked their lives so that so many upper-class people can sit in their apartments or houses and just do whatever.

There’s a lot of kindling. And I mean, the demographic trends in America are not good for authoritarians. The young, larger generations don’t like authoritarian politics. So the institutions are really bad and the ones that are democratic are dwindling and that to me is what I look at. So it seems really scary, but there are other trends here that I think paint a much more hopeful picture. It’s just hard emotionally to be an optimist when your whole political tradition or your whole political world has just collapsed in every way possible.

Rob Johnson:

Let’s talk a little bit about the question of climate change. People were talking about climate change increasingly and the various climate strikes of young people, including my seven and 10 year old daughters in New York took a day off and went and protested and you could feel the energy building. Then the pandemic comes in. It disrupts employment. It burdens our fiscal capacities. And the question I have is, will people now say, because of the pandemic, “This has unmasked the failure in social design and organization. We’ve got to turn the corner and we’ve got to embrace that.” Or will they say, “We’re exhausted. We can’t afford it. I’ve experienced too much turmoil and waste precious time before approaching the challenge of climate”?

Matt Stoller:

I think they’re going to do the former. And it’s not just because I get former and latter confused. I believe that this … We’ve been living in that world of affluence politics since the 70s. And affluence doesn’t mean wealth. It means not paying attention to what creates wealth in the first place. It means assuming automatically that stuff just shows up in stores and that we can just fight over distributional questions as consumers. And addressing the problem of climate change means getting out of that and actually thinking about production. And for better or worse, what we’re now seeing is a lot of reporters are starting to write about supply chains. A lot of people are thinking about production and they’re rethinking what’s necessary in society in terms of travel and things like that.

And let’s also not forget that as the pandemic is pretty awful, but carbon emissions have dropped pretty dramatically and we’ve shut down air travel. So what we’ve shown is that it’s possible to do that, right? And so I’m not somebody who thinks that we can’t do anything, like that this is necessarily the worst thing that could ever happen to us. It could be really bad. It could move us towards global fascism or authoritarianism in a whole bunch of different countries. But I think it more likely that this is sort of a way to show us that we can do things differently, that we are doing things differently. And there’s no reason to assume that the choice to govern … We’re living in a planned economy where Donald Trump and Jared Kushner are doing the planning. Libertarianism has collapsed. It’s like a joke.

So we’re now in just a different … There’s just different ideas that are organizing our society. We are now in an age of collective action. It’s just that the collective action we’re doing right now is often organized by corrupt, dumb people who don’t understand what they’re doing. But we’re in an age of collective action. And by the way, let’s just be clear. Authoritarianism is a form of collective action and so is a kind of democracy that actually addresses our challenges in a more dignified and an honorable way. But we’re away from this kind of age of illusions where we can all just do our own thing and kind of be dominated by people who hide behind financial markets. That’s over. That’s done.

Rob Johnson:

I’ve often said that America had a false consciousness, what I will call the Horatio Alger myth. The Horatio Alger ideology was that if you put your head down, work hard, get an education, you can control your own fate. And what we saw in 2008 was a whole lot of people who did exactly that lose their homes because of a reckless structure of financial markets. And the issues now of climate will intrude and the issues of the pandemic are overwhelming our lives. So the notion that when you’re scared, you can alleviate your fear and get on track by just controlling your own fate, to me that’s a false consciousness. And I mean, I always encourage people to do their best and strive, et cetera. But you have to pay attention to the collective institutions, to the structures of society because there are a whole lot of things that can come over the rail and soak you if you’re not attentive to those things. Is this a time where political participation in its necessity, the focus on collective action will rise, will emerge from the wreckage?

Matt Stoller:

Yeah, I think so. I mean, people have very passionate feelings about Trump, which is kind of annoying, but that is a form of political discourse. But I think we’re seeing a bunch of strikes that are happening that are kind of Wildcat strikes because people are just like, “I’m doing this. I’m a trucker. I’m a supermarket worker and now I have to risk my life because Jeff Bezos doesn’t want to give me a mask.” And they’re striking over that. You’re seeing anger from doctors and nurses who are having their pay cut even as they’re being asked to do more. And that’s because of private equity, these goons that are sitting in their fancy homes, lobbying government.

And all of that anger is completely disconnected from any political organizing. Right? So there are no political institutions that are channeling that anger. So I mean, I don’t know what … Maybe you’ll see a new crime wave, which is I think that’s a political response because there’s not an organized political response. I mean, I know in Italy for example, the mafia is strengthening because the mafia is handing out food to people that don’t have it. So you’re seeing huge amounts of hunger. And I think there’s going to be a huge reaction to that. And that reaction is going to be political. It may not be the way we understand politics, which is just people choosing to organize and vote and pick among candidates. It might be kind of more the kind of politics that happens in more feudal societies. But I do think that we’re going to see a huge political reaction to the way that this pandemic has hit and the way that our social institutions are and our political leaders are organizing the response.

Rob Johnson:

When you look out down the horizon now, I know you have a wonderful and vital newsletter, but who do you consider to be your comrades? Who do you consider to be kindred spirits? Who are some of the people we could point to, to our audience, particularly to our young scholars as to who they might study? And also who are some of the historical models from previous generations and writers that you found inspiration from learning of their perspectives?

Matt Stoller:

Yeah, so I’m reading Zach Carter’s new book on Keynes. It’s called The Price Of Peace, which I think it’s just wonderful. It’s really fun. It’s all about how John Maynard Keynes rethought, came to rethink his political philosophy and economics. And it’s great. I also am reading, I rely on Dave Dayen’s work. He’s a journalist, runs the American Prospect. He has a great daily newsletter called Unsanitized, which is all about the pandemic. But he’s been looking at supply chains for years. So when he writes about this stuff … There’s a lot of dumb and annoying journalists that are diving in and saying, “Oh my gosh, the medical supply chain is super corrupt. This is all Trump’s fault.” And it’s just like, “No, I’m sorry, but it’s not. It’s been screwed up for decades.” Well, so Dave comes at it from actually understanding the substance here, and I’m really enjoying his work. I really love, as you know, I like Zephyr Teachout’s writing. I think she’s genuinely got a lot of interesting things to say.

I spend time paying attention to what people on the right are I’m writing about and thinking about. So Oren Cass. And then I forget what her last name is, but Zeynep, who’s been doing a lot of really great work on mass-

… Last name is. But Zeynep, who’s been doing a lot of really great work on masks… Let me see, what is her last name? Ah, yes, Zeynep Tufekci. She’s got a lot of really interesting things to say. And then I think historically, the people… I think Frederick Douglass’ work is really inspiring. And Brandeis going back to some of the things that he writes about that I always find that to be compelling. Abraham Lincoln was sort of a wonderful writer and that was a deep moment of crisis. Thomas Paine. These are sort of old school thinkers, but there are people that are… I just read… What did I read? I just read a bunch of work by Ida Tarbell, which I find her work really fun. Talking about the power of standard oil in business. And she’s got some problems, But I always enjoyed reading about how she thinks about the world.

Matt Stoller:

I always like reading New Dealers, how they, in the ’30s and ’40s, some of the ways that Ferdinand Pecora approached the crisis of production that was happening in the 1930s. I like watching a stressful, but I like watching CNBC because it’s an important perspective on the world that’s very myopic, shortsighted. Social thinkers who… They’re not really thinkers, but they’re just like… That’s the sort of the voice of capital. If you’ve watched CNBC, you’ve kind of gotten a sense of how our… They’re the ones that are running things and you can pretty much tell. They say things and then a few days later the political people do them. I enjoy… No, I wouldn’t say enjoy, but that’s who I pay attention to. I don’t know. Does that answer your question?

Rob Johnson:

Very well. I guess I might add, as I listen to you and I see the vitality of younger generations, my old friend, the late William Greider, who I thought was quite prescient and seeing the disintegration of our politics. In 2009 he started a blog. And his first post was called My Optimism. And in that post I’ll quote, “An interviewer asked me why I put so much story in young people. Because young people don’t know what’s impossible. They are less burdened by the past, so will try something new without bothering to ask if it has been tried before. That’s always how big change occurs. When people set out to imagine a different future, there are no authorities.”

Well, Matt, in my own way of seeing, I think Bill Greider was a different kind of journalist. But what his portrait of the inspiration of young people reminds me of how I felt when I read your book, and I see a big wave of younger people coming forward. Zach Carter you mentioned too, I think is an extraordinary man. And I’ll go and I’ll reach into some of the blogs and things that she suggests. But I think it’s very important, as we’ve been talking about collective action, that while each of you is writing, each of you is painting portraits of that future, that you develop community and you work in a collective way, even when you differ, but you stay engaged. And I think… At iNET we have a young scholars initiative that has now over 10,000 members around the world. And I think this pandemic and this time is really going to shake the roots of economics, and it’s people like you that fill the void. And I thank you for that.

Matt Stoller:

Well look, you introduced me to… No, you didn’t introduce me to Bill Greider’s work, I read Secrets Of The Temple when I was in college,. But yeah, Bill Greider… I have One World, Ready or Not, on my nightstand. I’m just reading it right now just, because I haven’t read it. I was like, I want to see what he got right. And it seems like most of it is right.

Rob Johnson:

I worked with him very closely on that book. And that Secrets Of The Temple, and One World, Ready or Not, he and I worked very closely together in the framing and so forth.

Matt Stoller:

You and Jane de Rista were important sources for him. And you and Jane de Rista also taught me a lot about what was going on during the financial crisis, as it was happening. So that was really helpful. And I think that there’s a multi-generational dynamic here, where young people try… They are more optimistic, they’re more energetic, they don’t know what’s possible. But they also need guidance and wisdom from from older people. And that’s why I think a lot of people got behind Bernie, because he seemed like a lot of young people in politics. Because they were like, “This guy seems to not be corrupt.” And that’s why I think a lot of them got behind Obama in 2008, because they were looking, they were seeking. But they don’t necessarily have a tradition, an intellectual tradition that can actually guide them.

And I think that you’ve helped provide that. For me, I think Jane and Greider helped provide that for me. And I’m not young anymore and me and Zack and Dave and a bunch of others are trying to provide that for the people who are coming into politics now, and who are coming into citizenship now who don’t necessarily know what happened before. If we can build a multi-generational, thought collective… Some people do politics, some people do business, some people do finance, some people just are journalists and do the writing, and some people are historians, some people are scholars… And I hesitate to say economists, because I don’t like economists. But let’s just say economists, good economists. Like that world.

It’s been 10 years since the financial crisis revealed a lot of the hollowness of our assumptions. And if we can build that thought collective, and it can be international. And I don’t think there’s any reason why we couldn’t reconstruct an incredibly vibrant democracy that’s better than anyone that we’ve ever seen. That is one story of America. And there’s no reason we can’t make that our story. So there are other traditions in America that are much darker. That’s true for all countries around the world, and there’s no reason that the people who want that can’t make that happen, except us. That’s, that’s the battle. And so I think that’s where we have to go.

Rob Johnson:

A few years ago I had lunch with Bill Moyers, who I know quite well, here in New York. And Bill said something to me that has motivated me ever since. He said, “There are documents with the founding of the United States, Declaration Of Independence, Constitution, Bill Of Rights. And they become a focal point and everybody believes in them. And when they’re contradicted, it creates an energy that is a corrective energy. People rise to defend those principles upon which their society is founded.” But he spoke as though he was worried that those principles would lose their traction. And we’d go to a place where you were considered a foolish romantic if you expected society to abide by those principles and that correct corrective energy. From adhering to them would dissipate and that America would be a failed experiment.

That’s not what he hoped for, but that’s what he feared. The Latin meaning of the word courage can be broken into cour, which is heart, and age. And it was originally courage meant to tell your story of time with your whole heart. And what I see you and Zack and others doing now is to encourage, to bring others along with you, to illustrate by example, and together invigorating the faith in the kind of principles, maybe augmented now. It’s not 1776 anymore, the society and economy are very different structure. But with the vitality that you bring to bear, Which has been evident in this conversation today, you are encouraging and you do inspire courage in others. And I want to thank you for joining me.

Matt Stoller:

Hey, thanks a lot. Can I give a quote to that, on that point?

Rob Johnson:

Please.

Matt Stoller:

This is Brandeis who said… This is to what you just said, “The longing for freedom is ineradicable and it will express itself in protest against servitude, unless that longing itself can be made to seem immoral.”

Rob Johnson:

Wow, that’s great. That’s great. Well, Matt, let’s make promise, in the not too distant future we’ll convene again as things unfold, and talk a little bit more. But thank you for sharing with us today.

Matt Stoller:

Hey, thanks a lot.

Rob Johnson:

Bye. Bye.

Matt Stoller:

Bye.

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About the Host

ROB JOHNSON serves as President of the Institute for New Economic Thinking.

Johnson is an international investor and consultant to investment funds on issues of portfolio strategy. He recently served on the United Nations Commission of Experts on International Monetary Reform under the Chairmanship of Joseph Stiglitz.

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About the Guest

MATT STOLLER is the author of the Simon and Schuster book Goliath: The Hundred Year War Between Monopoly Power and Democracy. Stoller is the Director of Research at the American Economic Liberties Project and writes an email newsletter Big, which you can sign up for here.

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