 Welcome to Economics and Beyond. I'm Rob Johnson, president of the Institute for New Economic Thinking. I'm here today with Thomas Ferguson, the research director of INET, and a longtime friend of mine and teacher of mine. He's written many, many books about the relationship between capitalism, money, and politics, not the least of which was the Golden Rule. Tom has been an enormous influence on the direction of INET research, and he's been an enormous influence on my mind since I was before the age of 20. Today, Tom, I want to thank you just for being here and bringing forth your insights. But I really have to tell this audience, and I think they probably already know that you are one of the people who has been most influential in shaping my mind in the direction of my career and my entire life. The focus, I think, in the light of the pandemic, in light of the unmaskings, in light of all of the kinds of loss of trust and faith and governance and expertise that I'd like to explore with you today, Tom, is how money-driven politics creates what our mutual friend from China, Wang Hui at Tsinghua University, has called the crisis of representation and also what we want to do about it. Tom, describe for us in America and beyond what big money does to the political process. All right. Thank you, Rob, although I think I begin by saying, well, I'm honored and humbled by your introduction. Thank you very much. Now, let's talk in general terms and then move into getting ever more specific. What's the basic problem with politics and money? The short answer is this. Everybody sort of walks around with what we might call the representative democracy model in their head. It is drilled into them in high school civics classes and sometimes lower. All reporters seem to have reflexively absorbed it. And if you do courses in political science or economics, you go on to study things like the so-called median voter. And all that stuff is just basically high-tech versions of this simple model in which the population votes. They choose between political parties. Never mind how many they choose from. That's an institutional detail we can worry about some other time. But they choose between political parties and to get your vote, the political parties have to give you what you want or at least some of it. And the people, the guys who win, guys and certainly these days in the last generation, women too in those parties. The suggestion is the logic of the situation. They got to make you an offer that they think you can't refuse if you like. It's just good. And the first time people spell this out, it seems very compelling. I remember when we were being told as young people, that's how far I go back. During the Cold War, well of course the difference between America and Russia is that we have free elections and they don't. And that seemed for a while like it was compelling. But the problem is basically this. The costs of actually trying to wield power over the state are a good deal higher for ordinary people than sort of the democratic theories tend to allow. They treated this as a sort of costless thing. You know what's going wrong. You can sort of figure out in another version of the theory you can at least vote against what you don't like and things like that. But basically it's pretty simple and cheap. Well it's not. That's the basic problem. When you actually look at what people spend in elections, and I would add pretty much everywhere in France, England, the United States, they're actually very costly. That's a warning. And then the question is, alright, how do you raise the money to make these campaigns? And basically I think the proposition is very simple. If the costs of campaigning are relatively high compared to the average incomes for most of the population, they're in trouble. Because they can't raise the money to get somebody out there to be in effect their champion, if I think like that. Almost as though one were hiring an attorney as it were for yourself. If that's expensive, then power is going to pass by default into the hands of the people who really can't afford political parties to pay. And in other words, people with big money. Now before we go another step, you can see right away, this means that there's a really deep relation between the income distribution and political power. I mean Aristotle, not my favorite authority on anything, but he sort of thought that you had to have a middle class for stability. And I noticed that those comments have become ever more popular as the American middle class has disappeared. Aristotle thought you have a middle class or just disappear. Well, in the US and just about every other country now, what you see, thanks to globalization to put it simply, this is after all a podcast and not a three hour lecture. Income inequality is massively increased. And I mean, there is a point and I think we may actually have reached it in the United States where the problem of income inequality is so overwhelming that there isn't much of anything you can do to deal with it. I hope we aren't there, we will talk about it. I know later in the podcast, what do you do about this? I'm not claiming that we all have to sit back helplessly and just be the objects of a bunch of super rich companies and people. But income inequality is an enormous background condition here. Okay, now then the next step is, all right, you got to understand that there's lots of ways money is important in politics. One of them is campaign contributions. We'll get around to talking about that later. But there's all these other ways money matters and it's important the whole spectrum of political money, if you like, sort of you need to keep in front of you. Here's some simple examples that may like, for example, and it was I think George Stigler at the University of Chicago who first brought this up very nicely. Lots of payments by corporations on rare occasions, labor unions, there are not being too many of those left now. We had 6% of the population organized or something like that in unions in the working population. Employers get paid to do lots of things by companies. Well, the pricing of those services is very hit or miss. I learned this when my wife and I showed up to buy our first house and the guy who showed up to deal for the bank that was making the loan was actually the speaker of the Massachusetts House of Representatives. He was totally stunned and it was then explained to me later. Well, of course, they just give him that service and he collects, you know, some thousands of bucks for just doing it as, you know, 10 or 15 minute signing business. And it's a great system, you know, if you're a politician. If you notice these days, for decades now, more and more people who take jobs in the White House, never mind cabinet positions where they have traditionally had to put in some kind of a conflict of interest statement, but lots of folks in the White House and have to file these conflicts of interest statements. And what you find is the most amazing sets of payments. My favorite was one in the Obama administration for a guy there who got paid just under a million of my memory from an investment house in New York to advise them on charity. Now, look, you don't have to be very smart to realize that going right for giving advice on charities is probably not a million bucks. An unsympathetic being like myself would regard that as a bribe there. And at any rate, the thing that strikes me now about American politics is the way they almost nobody gets into anything from any place in near the White House who hasn't gone through that system of betting that sort of sits off there now. I mean, that was true on the Republican side and also on the Democratic side anyway. So that type of subsidy, if you like, hardly gets discussed. Then there we now know, too, that lots of foundations that are set up by companies match grants with the needs of the companies. So some very nice doctoral dissertations on that. I talked to one woman who'd actually written her thesis on that was actually at Harvard. And I turned to her, she decided not to go into political science, but hey, that was a real contribution to political science. Then there is the whole question of lobbying and most forms of lobbying don't even count as political money. Enormous sums of money for a century or more in the US system have been poured into think tanks, which none of this stuff appears as a political contribution ever. And more recently, we have gotten to cases where we have, for example, it's pretty obvious that stock tips at least sometimes are handed to politicians. There's a dispute in the scholarly literature about whether it's all the time or just some cases. I hold a rather dire view of the business, but that doesn't matter. The point is, is that when you study the portfolios of congressmen and women, many of them turn out to get hugely rich. There are not one but several papers suggesting that they grow their portfolios faster than most people. I have to say there is some literature on the other side. But the point is, if you give a stock tip to a politician, we had a case of that with alleged with Senator Burr, not too long ago. Where he was said to be using the inside knowledge he had as a member of the Intelligence Committee. And he went off and sold his portfolios just as the pandemic was breaking. And interestingly, we know he was telling, like I think it's a Tar Heel group down there in North Carolina, quite different from what he was telling people in public. That is to say he was telling contributors and these donors that there really was a pandemic problem. And he was still behind the official line that President Trump was then pushing, which was this is not really something to worry about. That kind of stuff is really difficult to deal with. It is also true that you got lots of foundations, not owned by companies, but just by foundations. And they've got political alliances and some of their cash is often political. And finally, lots of public relations spending is in fact often hidden politics. I remember once when I asked somebody years ago, was in New Jersey a state where political money sort of runs more plentifully than the Delaware River on many days. I said, how are they going to pay this guy? I'd heard about, I said, don't worry, we'll just have him do a documentary for some station later. And I thought, oh, well, that's interesting. I was an impressionable graduate student. I can't claim to be exactly a credulous and innocent graduate student at that point, but I sort of got the point. All of this stuff, in other words, is political money. And that's before we get to formal campaign spending. All right, so we are talking truly enormous sums of cash here, which then you have to sort of connect. Now it does not help with the press that nearly all of the stuff I've been talking about is barely reported. And the other thing that strikes me is we all know that the cost of the recorded costs in terms of political campaigning have risen hugely over time. Not just in nominal sums, but in real sums too. Although, and although implicitly what I'm saying is a lot of the campaign spending is in effect miscount, because it's not recognized as campaign spending, but even the stuff on the record has been growing a lot. So you don't see this reporting. I mean, almost nobody connects any political activities, whatever, with campaign money. They just wring their hands. So it's not surprising that people don't know quite what to think about this. So let's talk about what all this money actually does very straightforwardly. Okay, and here's how I put it. The first thing you got to realize is that most of the voters aren't sitting around thinking necessarily even about their own pocket books. Though if those are squeezed, they jump. I'm not trying to tell you that most people just want cash handed to them by their government. That's I think clearly not true. In fact, I just quite straightforwardly accept the empirical research that people vote on a whole range of issues there. What that says though is that if you're trying to get elected, you need to appeal to people on a range of issues. And so you need money to do it. Now, let's talk about then what about the cash? And how does it work? Well, here's the really important point, I think, is the big money distorts the entire pattern of political competition between political parties. It distorts it in this way. It means that if they're the only thing you can campaign to get the only kind of campaign pitch you can make is one that you can finance. That point is enormously important. Maybe I just repeated, you know, only campaign appeals that can be financed can be made. Now, that means that you need some block of contributors to want to have something to happen. Now, you could do that. Bernie Sanders did it. Elizabeth Warren to a considerable extent, I think, did it by trying to appeal just to small donors. That's not the way most people put their campaigns together in American politics. You don't have to have the whole business community behind you, but you do need a big chunk of some important segment of it. Now, you'd say, so what? All right, so can't you just compete versus parts of the business community? Yes, exactly. That's in fact been my sort of point about campaign spending for agents that don't think of this as the people versus business. Think of it as blocks of investors on both sides in political parties. Now, what does that mean? It means this is that if you have issues, say taxes, you could which taxes hit something big like big expenditure like Medicare for all, for example, if you have a tax question or property rights question or question about social spending. If nobody in the business community is willing to pick that up, there isn't going to be any campaign bill around it, not by anybody. I mean, I think you get a really wonderful and clear example of this in the Medicare for all debate. I mean, it is perfectly obvious, I think, really so obvious that, you know, as the paraphrase, what's the great force on bed line line of trained in capacity? You'd have to sort of invoke to explain it on both reporters and I think scholars. It's pretty obvious that Medicare for all or some scheme like that is obviously a much better way to do health care. The only reason this can't get through Congress is because of the massive dead weight of political money in both political parties holding it up. That's really, I think, a very clear cut case. Similarly, tax reform is clearly blocked by political money. Now the tax issue in the last generation because of the enormous pressures to cut taxes has affected everything. Look, it turned the American education system from a very strong system that actually was giving more and more citizens access to not just K through 12, but higher ed. It turned it into a system in which more and more people are just shut out because they as a after a succession of economic crisis beginning in the 70s. These states cut way back on public education, public higher ed. They squeeze K through 12, although some a good deal of that's financed locally, but poor neighborhoods, poor areas cannot do those financing. So states have to do something else. You know, some states have done something, but the bottom line is in any case where you need public goods, you know, where the states got to actually do something. And not just sit there and smile while the invisible hand operates. You usually need some money. So what you're sitting around in a world in effect where big money blocks nearly everything in the sense of a negative interest group on something happening. And that's this is really critical. It's not a it's the problem in the American system right now. I mean, the systems virtually paralyzed at every level, you know, not only from dealing with COVID, but in in education in the medical care in taxation. This is really all a problem in political money, and it hits both political parties. It's perfectly obvious that the leadership in both parties not only takes large sums of big money, but then they have to go campaign on something else. Now, in fact, let's just talk about this for a second. What are political campaigns look like in a world in which you have big money on both sides blocking basic appeals to interests of the population as a whole? Well, you know what that is. They've got to find a lot a host of other issues to campaign on. I mean, I sort of got this point when I began to ask myself, why am I hearing so much about stuff? Nobody really cares about like the ethnic origins of candidates as they struggle up from the farm or whatever to become whatever they are. I mean, in these political speeches, what's with the 4th of July speech, in effect, which is sort of famously contentless? In fact, maybe I just might be telling for a joke, there is a famous, I guess, true story where Boise Penrose, who was the boss of the Pennsylvania Republican Party, he was asked by a string of reporters, what's the issue going to be for the next presidential election, Boise? And Boise thought about it for a minute and he said, Americanism. And they said, well, what's that? He said, I don't know, but it's going to be the issue. That actually is sort of perfect. I mean, much political rhetoric is just about anything but what the population wants to hear about. Or it's hitting hot buttons on stuff some parts of it want to hit about. That's the next step in this. You get a lot of bland crap, 4th of July stuff. And then you also get, particularly when times get difficult, people start to preach plain old hate. I'm sorry to say. I don't know that we need to get very specific right now. I can't say it's so obvious that you don't have to be Hannah Harrant to know that alliances between the mob and capital to use her famous phrase happen a lot. But my point is, is that campaigns get both stupid and nasty, mainly as a device to avoid talking about issues that people actually want to talk about and care about. So how does big money affect the political system? It fills your airwaves, if you like, mostly with nonsense. But depending on whether times are basically benevolent or difficult, it can fill them with a lot of really hateful and spiteful stuff. Because you've got to find something that grabs people. We now have memoirs or notebooks from Alderman and Ehrlichman Mix and Aid there. And they were very clearly trying to tie drugs with people they didn't like, which were partly what they thought of as hippies, protesting students, but also with black Americans. And they're perfectly clear about it in private. In that sense, the whole war on drugs scheme in the Nixon administration, as my colleague and occasional co-author, Peter Temmin, just wrote very nicely, just recently in an Inet working paper. It was certainly aimed at getting folks who might vote Republican to think, well, that blacks aid the cities or aid to anything else was really all about crime and helping people who didn't deserve it. That type of appeal, I was pretty amazed when Ben Page and I and several other people, Ji Chen, Arturo Chang, Jacob Rothschild, we wrote this paper that came out just recently on Trump's election. And you could see when you were going through the American National Election Survey data, the way that stuff on Obamacare, issues on Obamacare come out suddenly correlated with stuff that on race. And it's very clear the Republicans, I think Michael Tesla who made the point first in an article in the some political science journal, it's very clear that Republican opposition to Obamacare was deliberately racialized. It shows immediately when you start looking at the data, which is, I mean, I've never seen a pattern like because I was sitting there with Jacob Rothschild and I were trying to sort of make sense of some of this stuff. And then it became very obvious that Tesla was right. It really is that racialized. Well, anyway, the point is big money politics doesn't just show as talking about greed. It's talking about all the other stuff that you mostly you hear. Let me bridge in here and ask you some questions, because I remember, and I'm sure you do too that we were planning our conference in Detroit on race and inequality, the city where I grew up. That's right. And the conference was roughly three days after the election. And on the morning of Election Day, I went into a building and saw a man who was a security guard who used to work in the building where my father was a physician. And I said, I asked him, what do you think about this election? And he looked at me and he said, Mr. Johnson, when there's nothing on the menu at the restaurant, nobody eats. And he looked at him and he said, everybody's going to stay home. And I said, well, you know what he said, you know, nobody likes Trump in the city, largely black community. But the Clintons are remembered for NAFTA, they're for criminal justice reform, for welfare reform. His point of view was Hillary Clinton hasn't even come to Michigan since she lost to Bernie Sanders in the primary. And so, but he was he was exactly right when you looked at the data that whether Democrats or Republicans are least worst in some sense, in absolute, they were all bad. The relative to Obama's reelection in 2012 and 2016 voter turnout in Detroit was down 122,000. Now you're talking about a population, not voter registration of under 800,000 in the city proper. 122,000 down. I think Trump won the state where the outstate tends to be Republican by something in the neighborhood of 13,000 votes net. So I guess what I'm asking you is, when this mask of obfuscation and issues, or when things are blocked that are public goods that are necessary, and the public becomes demoralized, it tends to what you might call increase the license or feed the license of that big money. And like you've said, Warren Sanders and others appealed to small donors with an agenda that they could recognize and want. But it obviously money is important because neither of them prevailed, despite the enthusiasm that they engendered. So I guess, I guess. You want to talk about the dynamics between Democrats and Republicans. Yeah, please. Yeah. Yeah, let's put it this way. I think the question is perfect. What the Democrats have tended to do is run a kind of top-bottom coalition, where the top is almost always somebody hugely favoring globalization, free trade, and related issues. And then they would try to mobilize horror folks and labor unions. And they would do it, in effect, on the vestiges of the New Deal, on the sort of Shesha cat quality of the Democratic Party, which when you can see this, when you actually read thousands of interviews, interview data in the American National Election Survey, open into questions, and you can see people actually lamenting, oh, the Democrats used to stand for something. Back in the New Deal, when labor unions were something like a third of the, well, they didn't, I think their peak was actually in the very early 50s, but we'll just, around 32 or so percent of the population working in, were in unions. That's dropped back to now six or eight, depending on how you count, never mind. The unions are weak now, and big money is, and it is much bigger, put it simply. And so the Democratic Party, you know, in the 80s and 90s, my Joel Rogers and I wrote a book called Right Turn, it was all about that. The old Democratic appeal got weaker and weaker, and because the fiscal constraints were just too tight. I mean, you could see like when Obama and the administration did not help states at anywhere near the level they should have in 2011, 2012, that was just nuts. And they got the lowest turn, they got enormously lower voter turnout in the midterm election in 2014, I think partly because of that. But the point is, yeah, the Democratic appeal got weaker and weaker to ordinary people. And a lot of people, as they looked at the way Wall Street was rescued, but Main Street wasn't under Obama. By 2016, a lot of people were really, really unhappy. And so Trump came along promising not to cut Social Security and to make America great again. And yeah, he was certainly running on race and very clearly running on anti-woman program. But there were a lot of desperate people out there. And, you know, what we found in our piece, which is, that piece is easy to find in two places. One is, you know, it was first an INAT research paper, so it's right up on the INAT website. And then it's just out in the International Journal of Political Economy, the public's version. This is with Ben Page, G-Chen and others? Yes, yeah, Arturo Chang and shit. Yeah, but the, we actually walked through, we built a sample. Wait, not sample, we took everybody they had, who had a question. They had a question in there on who'd you vote for in 2012, or did you? And so you could track people who'd been for Obama and changed, who had not voted and voted for Trump. Or, you know, change the other way. And what you could see is lots of these folks who had decided just not to vote this time around. They were saying things like, I just don't see a difference between the major parties. And they, this does emerge quite clearly in our data. Yeah, no, the, what you've got here in America right now are two top down led political parties. And sort of making mild appeals on the mildest form of redistribution has been the Democratic staple. And as things have just gotten worse and worse, that stuff looks like, you know, offering you band-aids as you're losing both legs. And the Republicans, you know, Trump's appeal in 2016, yes, it was certainly misogynistic and racial. No question about it. It was also very clearly, I will fix the economy. And, you know, now he's been thrown off his stride by the COVID response. And many other issues where the sort of, now, this is how best to put this, my opinion. It's pretty obvious that large chunks of the government are hugely disorganized, sometimes quite deliberately, often in the name of laissez-faire. I mean, they don't do anything because fundamentally they don't want the government to do anything. But, you know, that's going to, because of the COVID problem, that's going to cost them heavily. It may well cost them the election. But then we're going to have the question of what's the Democratic Party going to do. Right now, and it is perfectly obvious that despite all of the talk about saving Main Street, the financial markets have done well. You know, lists of the Forbes 400 richest Americans show many of them getting richer. I mean, there are people who report to monitor this. I have a few doubts, but basically I don't dispute it. But the average human is pretty badly off. Unemployment rate is astronomical. We just fell off the fabled fiscal cliff, meaning much of that direct aid to people is at the moment, nowhere. It's suspended and maybe they'll get another bill out and maybe they won't. And, you know, what's the Democratic Party going to do when it gets into power? Trump in 2016 came out and said, the system is rigged. That was like his bumper sticker. So that at some level before he mowed down 15 Republicans and then beat Secretary of State Clinton in the final election, he was appealing to people's awareness that the system was corrupt. Now, maybe his diagnosis was good. It doesn't seem he's prescribed any remedies, but I guess that's your and my job. So how do you see if you want a system that produces those public goods, creates a balance in the income and wealth distribution? You might call alleviates Aristotle's anxiety. What kind of reforms are absolutely necessary to put us in that direction? Okay, I'm going to talk about specific political measures in a minute, but I will just lay it straight out. You can't go on as you have with any quality just increasing massively over time. I think we actually are at the fabled tipping point where it can easily pass into a completely oligarchic system. And you could keep the trappings of democracy. I mean, I have a lot of trouble with all the books walking around claiming fascism, although sometimes when I read recent news, even I wonder about that. But in fact, we're not seeing the type of things that happened in Germany, say in the 20s and early 30s where you have private armies contesting in the streets. You don't have that in the United States, but you do have the democratic forms being exhausted. And it is just the case you look at it. When you get, for example, corporations, this is nicely documented in the case of some of the high tech companies in the big platform companies where they are donating to hundreds of think tanks. And scholars. And the reporting is hit or miss. You know, it came out the other day that for heaven's sake, they had up a thermal Arnold project at Yale, suddenly releases that while she was in fact working with several of the big platform companies. And I and others thought that was utterly ridiculous. And you talk about the Silicon Valley tech companies, big internet platforms. Yes. And I mean, this is tough because of the way the both and reporters, you know, are under enormous pressure. The media is shrinking for lots of reasons. And, you know, among industries that have been well wrecked by the growth of the big platforms. Certainly journalism. I mean, I mean, it was one day. Oh, when was that six, five or six months ago, I forget where something like I read a little item, something like 1500 journalistic jobs in various online media companies were all eliminated in New York City in a single day or two. And, you know, the journalism, I've never been a fan of the American press all of the things we've been talking about in the last 30 or 40 minutes, but none of this stuff happens if the press does its job. But, you know, we'll come to the press in a bit. That's another form of public good. Yes. When you're essentially dependent on private advertising as your means to sustain your company. There is what you might call a tendency to do marketing for them rather than what you might call analysis on behalf of the public. That's what I called in Golden Rule, the black hole theorem. That is to say there's just nobody out there in the in the for profit media that necessarily covers the things you need covered. It's exactly like political parties. The other thing we can add is that as media shrinks, the main what the main papers will speak of them as papers even if they're online. tend to concentrate more and more on the needs and interests of their upper income readers. And that that's very marked in the case of the New York Times or the Financial Times or other stuff and they just, I'm not happy with that stuff, but we'll come back to the media question. Anyway, so you're going to have to do something about income inequality and if you don't, you can probably forget democracy. Now, what would you do to actually stop all of this nonsense or at least a good deal of it? Well, frankly, I think there's one thing that stands out above everything else, which is you have simply absolutely got to have public funding of campaigns. Now, the standard article, the standard objection on this is, wait a minute, why are we making the public pay for campaigns? The important answer is this is a classic, very expensive good and either the citizenry as a whole is going to pay or a few people are going to pay. And, you know, where public corporations really hate public funding, they just even some public funding. I think the evidence of the states that have mild public funding small amounts of stuff is that you get a better system out of it. And I've certainly had legislative representatives say to me, like, well, it means I don't have to spend all my time fundraising, which sometimes unfortunately the unhappy comeback is just lots of it. Well, anyway, public funding is what you need on this thing. And yeah, you would screen out nuts. That's not a serious problem, I think. Now, you can raise the question about the Supreme Court might my check. If the Supreme Court gets in the way, well, you know, Supreme Court is fundamentally going to have to follow the populations thing in the long run, I think I don't favor the kind of public funding sometimes proposed I've seen it. Why don't we ban corporations from funding and leave it to just rich individuals, you know what the problem is there is obvious. I think that's the same type of nonsense you get, especially Democratic Party candidates, or saying things like well, I don't take Pacman, but they take very large sums from individual corporate executives or, you know, 4400 members. Not to mention the fact that wealthy people are invested in the stock market. So they may be advocating for their portfolio. Yeah, so that happens. I regret to say a great deal at the time. Anyway, so it without public funding, you've got to get money out of politics but you know then there's still the problem of all those other forms of political money. I talked about earlier, you know the business of the lawyers payments to political figures foundation grants and things like that. A lot of that stuff you could fix with better disclosure rules, you know, the, not all of it, but a good deal of it the Federal Election Commission is completely unserious. And yet you have now this dark money business where you can be basically setting up what's formally supposed to be a charity. It isn't it's really a totally political pass through or you drop the cash in. They don't have to report where they got it. They do have to report where they spend it but you don't know where it's coming from and so called dark money is a huge thing in the system. And besides raining in dark money, you're going to have to pay people in the government better. I don't mean make them millionaires, but like here for I have for example in mind the following. You know, one thing that Newt Gingrich did when he came into Congress was to make it much harder for aides to congressional aides to qualify for pensions. The idea, if they work there for years, the idea was to make them get out of Congress after a few years and go to work in the private sector. You need to stop that revolving door business at every level. And in particular, I would not allow a Fed chairman or indeed anybody from a high level government position. I just wouldn't allow him for like three or four years to do anything for any business that had anything to do with what they did. You really need the revolving door problem is just crazy because it's become, I mean, look, when Bernanke left the Fed, my memory on this is like within a week or two he was giving speeches for enormous sums. I mean, it doesn't, these guys know that that will happen and nobody has to say anything. I remember doing a radio program with a guy who was later convicted of bribing representatives and are taking money to to, he was actually putting congressional aid to put stuff in bills. And he just said, you know, these guys, when I was outside, I could give, I talked to congressional aides and they could do more for me while they were still formally on the staff. And then when they came over to lobby, and you've got to break that chain, revolving doors, public funds, much better reporting and some absolute bands on the conversion of, you know, if you go out of the system. You know, you can't work for bank if you left the Fed, you can't consult for anybody for three or four years, go do something else, and then pay people if necessary accordingly so that they can reasonably expect to make a living but they're not badly paid at the top of the Federal Reserve. I mean, you and I published that piece, that graph where we graphed the opportunity cost of doing good. Yeah, that was the highest Federal salaries against what you could make by leaving to go to work for, I think our example at the time was Wall Street, you would now add Silicon Valley. You know, we're, I mean, what we had, you know, who is it? One of the major platform companies hired a British minor party politician, you know, to run their public affairs. I mean, was that was that Nick Clegg at Facebook? Yes. Yeah. Yes. Yeah. And, you know, I mean, how crazy is this? And if you got a break back, if you don't, you are not going to be able to get the, but fundamentally, I am, I have some considerable sympathy for the view that, you know, big money will find ways to support. Yes. So public funding, I mean, come back to the case for public funding as being very important, because it really means that a candidate who doesn't want to take large sums of money to just, you know, the amount piece can actually run and can talk to the voters. That's why that's so important. You can see, I think you can see some traces of this already. You could see how the tenor of American public life changed during the Democratic primaries, in the sense that suddenly Sanders and Warren and a few other folks, local races sometimes too. You know, the convention of the American media has for decades been, you just ignore most everybody with anything that looks particularly radical as a proposal in the prime that that conflicts with their other norm, which you should cover the primary candidates at least a little bit. And so you can see how the public discourse changes for a while. And I think that that's when you get some sense of what, you know, a little public funding to put a candidate like that up there would do if you had a whole system on that. And at this point, it really needs to be emphasized in the local elections in the United States. It's really, I think you're looking at a really catastrophic situation. And why? Because nobody covers local election financing. And I mean, usually doesn't even get reported until it almost doesn't matter or completely after it doesn't matter. That's one problem. But in the local elections, it's very, very easy for companies now. That's the one place I think where Citizens United really does make a big difference. I can just go in and write a check. Now, I'm not people wildly exaggerate the impact of Citizens United. The reason for that is is the even the McCain fine gold reform bill made it very easy to go outside the political party system to give a huge amount, give huge amounts of money. I mean, you're looking at a system here that is really disastrous. And in many, many cases, in local politics is the point I want to emphasize. Since I went to graduate school in Princeton, I used to talk to some of the neighbors. And one of the neighbors was a top exec for Monsanto at the time. And, you know, George Ball, who didn't live that far down all that far from us. And he just laughed because Ball, who was a famous Democrat, would vote Republican in the local elections. And my point is, is that for a large number of local elections, you often have no opposition to what is effectively a just total deregulatory agenda, what you might identify with the Republican Party in the last 30 years, even on the Democratic Party. So there's almost nobody there. If you have a union around, maybe, but you don't have many unions. And in many states, there's almost no union organization at all. And I suspect that that's part of where the teachers unions related to public schools came under attack. Yeah, I would add that, you know, unions, I mean, I was a union official for quite some time when I was in a university. I actually made the decision, as I knew my boss would support me to recognize a union. There aren't many people around who can say that there. But, you know, unions can also abuse their position. I think somebody needs to say that cleanly. In some cases, it happens. And so, like, you need, if you like, other groups around who can be heard, including community, you know, they have diversity in funding, even from ordinary people is a very good thing. And you need a lot more of it in American politics. Well, I see how do you say many different channels here, focusing on the press to provide scrutiny. Yeah, we haven't talked about the press. One I want to ask you about, Tom, is that campaign funding is used to buy media time. But both radio, television, these are public licenses. Why are they not asked to allocate some of their bandwidth in election years for public service announcements among politicians and reduce the price of running in a campaign? Well, I think, historically in the United States, they didn't have to do that. They did have that much weaker, very different fairness requirement, which meant that if you actually did an open political thing, you had to give your opponent Equal time. Now, the way the papers dealt with that is they decided the news, the broadcast stations, if you were in the news, that wasn't part of that. They didn't do political stuff. But that was abolished in the mid, what, late 70s, early 80s. Under the plea, I'm not making this up. I remember when Mario Cuomo actually defended, I always thought this was the most stupid and mendacious argument I ever heard. That well now with all these proliferation of channels, which was just happening on cable, why anybody could get on cable, you know, which is utterly ridiculous. They should have to do that. I completely agree on the press. I am extremely diffident about telling, laying down government mandates for the press. I really think that's very tricky, but I don't see a problem with telling them, yeah, they're going to have to make a whole blocks of time. I mean, other countries do sometimes do that in France, at least in parts of Simon and in Italy, but that system is very weird. They had the various networks belong with various parties. Now, I think a good chunk of the public airwaves should, after all, be controlled by the public and election campaigns. And the other thing I would be willing to do is given the new era of platform capitalism where you have, you know, Google and Facebook and company. I think the monitoring of this stuff is too hard to do, at least at the moment. That is to say, they can say they don't favor one side, but you can't check it. I'm quite okay with just banning ads for much, which is not that much money for those folks anyway, are political messages of all types in the finals in the, at least, much of a campaign. They have a real problem with platform capitalism because while they'll claim to be even handed, it's just almost uncheckable. You can't tell if they are, in fact, slamming, say, Facebook messages or not. Facebook actually did some experiments on that. They were reported and found out they couldn't move votes and they say they don't do it. I hope they're right, but the lesson I learned from the some years of trying to find out what was actually going on in Facebook and various campaigns is you can't trust them. That the monitoring of online stuff is a separate threat to democracy that needs to be sort of separately discussed. And that's before you get to questions about foreign country interventions and things like that. I guess I better say a word on that. The big problem with claims that it's really all the Russians or the Chinese or the Iranians or the North Koreans, or whatever that sort of put all this misinformation out is it's just obvious that the great bulk of misinformation in campaigns is made in America. I think that Benkler et al. study that came out from, it's a Harvard study that just shows you that the great bulk of misinformation, say, from the right wing in the 2016 election was coming from domestic sources. And all these guys who make a big pitch about all the foreign stuff, they don't control adequately for that stuff. And the question I all my colleagues and I took a look at whether we could get a specific Facebook effect on the voting that because in 2016 Facebook was clearly the ticket I think for what would have been a big influence. And you can actually do that with the American National Election Survey you can find out who's a Facebook person and not. It's not a perfect system for identifying but it's very it's perfectly good for the purpose I think we could never find it. And when you add our equations predicting the look at it in Facebook wouldn't work. And, you know, that doesn't mean that something couldn't go wrong if somebody were really trying. And that's why I think this question needs a much wider it's a separate podcast actually. Well, finally, one other thing that you talked about was the revolving door and you and I did that paper for the first inet conference on the den a jar that referred to that. What is the case for not having a revolving door, but actually training funding and paying senior public servants so that they don't have to appeal to those, what you might call sources of future income or wealth to have their kids be educated and have a proper retirement. Shouldn't we, I mean, it's, I don't know a lot about it, but I understand in Singapore, public servants are paid much much higher than they are in the United States. Would that not help correct some of these problems. It certainly would. Though, where I get slightly nervous about this discussion is, you could see in college presidents in the 1990s, the pioneer was John Silver and a protege of his at Delta University, where they decided they ought to be paid like CEOs, and their CEOs on their board, really thought that was great because they sort of assuring themselves about kindred spirit running the place. You got to really reign in inequality in general. And yeah, I would add, you need, you know, your basic public goods like education and transportation need to be very cheaply affordable or in many cases free. That seems to me still just exactly the way to go. But then yeah, once you sort of do something so that I don't favor paying public servants like CEOs, I'd like to compress the CEOs. I'm not telling you everybody has to be equal. Well, last time I looked, the fabled ratios of average workers to CEOs or something like 450 at one point I think it was 650 it bounces with the market. And, you know, Mike, for all I know it might be a mere 380 this, this second, or something like that. I take is, you know, I think you should be able to live with 50 or 100 to one. Well, Tom, any final thoughts coming down to the homestretch here, you've covered a lot of what's wrong and a lot of ways in which you would address what to do about it in the realm of money politics. I would caution against it actually I can hardly almost not believe I'm saying this but it's true. But it's not as though you can't do anything about this. Now, public funding, strict disclosure, closing the revolving door, these are institutional pressures. These are institutional measures that you can take that really would work. It is the case that, you know, people have run reform politics in the United States, you know, in the progressive era, for example, I'm not telling you everything and then worked out wonderfully. It didn't. But it was a great better it was a great deal of improvement over what you had in the gilded age. Your problem today, and this this really is the sort of people are. If you look at gilded age, the way in reform politics in the progressive period work was usually found some local politicians, governors, mayors, wherever, who would actually run against machines but also sometimes against big donors. What you now have in American politics is the nationalization of politics in which the National Party leaderships effectively get auctioned off to donors. Meaning there's like in the Democrats actually had a full system kind of like a serious catalog what what the price would be more how much did you have to raise for the party and raise money from yourself from your other members. I mean, that is to say people when they abolish the seniority system in Congress, it was said to be a reform. Well, it will quickly led to members soliciting cash are also giving cash to other members to get selected. And then they donors came in to and then guys like Gingrich and then the Democrats in on the Republican side and then the Democrats copied the system. The National Party leaders basically became the heads of a pyramid of cash which they could give out there and then you get this sort of heavy interaction at the national level between the donors and the National Party leadership there. Now, what that's tended to do is make everybody all the way down the line quite dependent on sort of funds coming in from outside. Well, Tom, I want to say again, with your books like Hidden Election, like right turn like the Golden Rule, and your relentless work on understanding the structure and incentives of our political system and our political economy. You are an enormous provider of public goods. And I admire your courage. I admire your tenacity, and I admire your intellect. And thank you for being here today. And as you said, right after the election when they're going to put something together again I think you and I should regroup and do another session looking forward and exploring the kind of vision we would like to see implemented by the next administration. But thanks for being here today, Tom. Thank you for having me. And may I just note that in the last few years a lot of my work's done with Paul Jorgensen and G. Chen. And they deserve a lot of the credit too. I agree. I agree. Thanks. We'll talk again soon. Bye bye. And check out more from the Institute for New Economic Thinking at InetEconomics.org.