 This is Rob Johnson, President of the Institute for New Economic Thinking. I'm here today with Tom Ferguson to discuss his new paper that's on the Inet website with two colleagues, Ji Chen and Paul Jorgensen on the role of money in politics, particularly as pertains to the Senate and House races of November 2020. Tom, thanks for joining me. I'm glad to be here, Rob, for what we'll have to say since this is, after all, an internal conversation. And I net a completely fair and impart inquiry. As you point out in the introduction, people had all kinds of impressions about a democratic landslide, but they lost seats in the House. They didn't have, they basically had a dead heat in the Senate when they expected a substantial majority. And when you look at the diagrams, the role of money seems to have played the usual, as you call it, linear model role on winners versus losers. And the fact appears to be, and you'll have to explain to us all that the money flowed to the Republicans pretty hard in those legislative elections. So why don't you tell tell us the story of what you found? Okay, let me preface my remarks though by saying, hey, I didn't do this all by myself. My colleague Paul Jorgerson and G Chen did a huge amount of work. We worked together on this. And so the question, how did we describe the role of money in that? Well, truthfully, it looks exactly very close to not quite exactly the same. But what we found years ago was that if you just drew a graph on a piece of paper and just graph the percentage of money and look for correlation with the percentage of votes, this is now the two major party votes, you've got an almost straight line, that finding just astounded people, like they just couldn't believe it could be that simple. So Tom, let me let me ask just for a clarification. On that linear graph, you have the percentage of votes for one candidate versus the other or the difference, and that's plotted against the difference in the money that they get or percent now the percentage of money that the party split on the money closely follows drives the party split on the votes. Now, it's that I mean, one reason people didn't notice this. You know, although I want to say since after almost two generations of work on elections, somebody should have, but they were all messing around with various weird ways of doing it, like amount of vote cost per vote or something like that, which varies all over the place between Congressional District, you've got a big congressional district with a lot of with more trees than people, you know, you're going to have a harder time reaching folks and things like that. Yes, we effectively solve that problem by in effect, normalizing just sort of standardizing just take the percentage of money. I mean, just forget how much you actually spent per vote, big district, small district, whatever, even Jerry, weird gerrymandered district, just take the percentage of money and plot and then plotted against the votes. And I remember when I guess I can tell this story, he's dead. And he was close friend of mine. I took it after we had worked this out over to my friend Francis Bader, the former deputy security advisor for Lyndon Johnson. And I was, you know, beginning my the standard political scientist, economist, ritual dance purity to explain, well, of course, it couldn't be this simple. And he said to me, look, it probably is this simple. But, you know, spent a while trying to sort of analyze what when you've got things that fit that closely together, somebody is inevitably going to say, well, you know what, it's really the polls that are driving the money, the need to be with a winner. How do you deal with that? You know, one, there's several levels of response. One response is, look, folks, it's not like people are so clear night they know the winner, and the world isn't so centralized that you can just everybody turns on a dime. I mean, that but beyond that, the you could see immediately that there were some elections. The 1992 House takeover, for example, I remember seeing you actually the morning of after that election, I just happened to appear in Wall Street as though by an invisible hand. And I believe some of your colleagues were jubilating, because, well, they sort of felt responsible for some of this and all other than that. But everybody was in shock. And I mean, everybody was in shock. Nobody really thought that was going to happen. And it did. There were a few other cases like that. But then we sort of worked on this for a while. And I remember reading a Dutch thesis by Peter Epps. And he he was I mean, the standard way you work this stuff up is you use an instrumental variable to try to solve the two way causality problem, you know, the money votes or votes money. Problem is, is that, you know, if you think patriotism is the last refuge of scoundrels, no, instrumental variables in the social values are the last refuge of scoundrels. It really is true. And so like, I just didn't trust anybody's instrumental variables. And so I was looking for an option. I found Epps's thesis. And I took it over to my colleagues. And I said to G Chen, you know, we need a spatial version of this. And she comes back to me two weeks later and says, Oh, I think this will do. Of course, she was right. And so the thing about the Epps approach was you didn't need to know the instrumental variable. That was what's so cool about it. And then later, Irene Heuter wrote a great paper for I net on the whole method. And now it's pretty standard, not much in economics, but in a lot of other fields, including a lot of business related stuff where they can't get all the variables they're interested in, but they want to do a serious job of it. And so we tried that, and we got, you know, actually even better results. And then, you know, you had all this, but we've never seen this, we can't understand this, etc. I mean, pretty standard, especially if you, you know, like I did in Todd and Cambridge, Massachusetts. And you went to school there, you're familiar with that problem. And it was basically a version of not invented here. And so I thought that one for a while, I admit there, because I've worked on event analysis, I've written some papers on it, and then I realized, heck, we could use gambling odds to show us what people expected. Because we were getting arguments from political scientists, people at Yale, I'll mention, I won't mention any names, trying to say, Well, you know, they have secret polls. And I'm thinking to myself, if I said these people had secret stuff, they all say I was out of my mind or something. But okay, I guess it works if you're trying to say, you know, conventional political science. Anyway, you could then use gambling odds to show that on average, I mean, we're not, we're not claiming that gambling odds are perfect betting, which you can find through betting markets. We're not claiming that this is always right. I mean, there are people who think that are used to think that 2016 was a real problem for a lot of those folks. And there are other outcomes there. But if you want to know what expectations are, those are really good ones. Right or wrong, those are the expectations. And lots of people have used them for that. There's a whole large literature on this. So we were able to sort of take the case of the 2016 Republican race, for control of the Senate. And remember, at that point, I mean, I think I have to do this from memory, but my memory is you could buy, depending on how you price it, either $1 for eight, seven or eight cents for $1 or $8 for 100. You had way out of the money, in effect, they're way out of the money options on Republican hanging on to control of the Senate. I mean, you could eight bucks would get you about $100 is my memory. And with about like that's in late October, like October 20, it's whatever, it's all in our paper and structural change and economic dynamics that we cite in the IMAT piece on our website. And you could see that in effect, it was hopeless. But the Republicans were desperate because Trump looked like a loser in 2016. So there was a mammoth effort to throw money in there, even though everything said you couldn't win. And that conventional expectation was clear, that was hopeless for Mitch McConnell, they put in enormous sums of money, a lot of private equity money, we wrote this up. And they won. And you know, so when people came to me and my colleagues in this year, earlier, when I saw stuff, I was reading things, I read them in the New York Times, the Financial Times, I read a lot about how there was this lopsided democratic advantage. I just said, look, folks, you got to remember, this is all mid or mid late October reporting. There is going to be a ton of money in in the last week or two. It's going to be an exponential increase. And you don't know what that is, and you won't find out until after the election, I didn't keep people from, you know, rushing off the diving board. And, you know, then all you had to do was just go to the places we tell you we went in our data appendix there, put it in there, and then you can say, well, that's embarrassing. No, there wasn't a huge democratic fundraising advantage in the congressional races in the House and in the Senate. Now there were some races. They're probably I mean, when you graph these things out, there's always a scatter around the line. And so there are exceptions. I mean, that you know, there we and there's some really weird exceptions occasionally. And this year there were, you know, some races that probably the Democrats might have won normally, they lost, but doesn't change the overall fit. It barely budges. I mean, that is still for a sort of simple one, one variable approach. It's a fantastic I mean, it's a it's sort of, it's a fantastic regularity. You know, I admit, look, I'm partial to this. When Noam Chomsky says the other week, well, you know, there aren't very many regularities in the social sciences and the linear model looks like one. I was, I admit I was prone to agree with them. But What happened in the last three weeks of the money? Did it go to one side or the other? I think I haven't, I haven't tried to parse that. I haven't tried to parse it out day by day like we did in 2016. It's obvious a lot of late money went in. And it must have favored the Republicans in a lot of cases. But I'm not claiming either I or anybody else has worked it out day by day. Didn't seem like a type of problem we had that we what we needed were the totals for sort of our pessimists will be back with a great deal more. We're working on various election analysis and things like that. But that's the story. And do you have the data on the two January Georgia elections? Yeah, we actually grafted and we weren't I mean, look, this is a technical problem. In House elections, almost always, but sometimes in Senate elections, you have to take account of the fact that some of these states are next to each other. They the effects spill over onto the others, which we use you got to do a special regression. And in the Senate, you don't want to be running regression, you don't want to be doing statistical tests on stuff that are days apart. I mean, that is to say, the Georgia elections were one offs and we should the final elections there were one offs, we treated them like that. And so we plotted them. Yeah, we do. And it was you know, they were, it was a perfect, perfectly reasonable fit. It wasn't grow anything greatly off. But there we are. Yeah, no, my take on this is pretty simple. You can look, you can see, you know, like if you look at the amount of money tossed to try to beat AOC, for example, you can see she's doing better than the money and Bernie Sanders usually always does better than his cash. So neither of these folks have, you know, have had a lot of trouble raising funds recently. Sanders did in the presidential race. That's a big thing. There. Well, that was in part because he refused the big money. You know, working from the website, they weren't going to do it to him. I mean, that might might well be but he made that part of his platform or his policy that that he wouldn't accept it. It's only slightly more probable they'd have given him than if I had announced I would accept contribution for the run for the son of the house. I mean, it's like, how nice that you have made that, you know, who cares? Let's let's accept your result. What do we do to make America more representative of a broad base of the public? What kind of reforms would you advocate? Got to get money out of politics, basically. I don't mind if you give people, you know, $100 tax credits or something like that, although that leaves you with large numbers of people that don't have to file income because they don't have any. I mean, income inequality is now so lopsided in the United States that given people tax credits is going to leave, you know, a substantial block of people completely out of it. That's one problem. I used to like that. Now I don't. Guess what? I mean, for that reason. But I certainly think that like an absolutely rigorous contribution limit of 100 bucks, and I like public financing, I always have. I think it improves politics in the few states that have tried it. And obviously, you don't allow folks to go around that, say corporations to write checks claiming their people to and things like that. I mean, that's all nonsense. But when I was younger, as you know, and I worked with Pete Domenici on the Senate Budget Committee, I once was in a conversation with he and Bob Dole and said, if you guys are really budget hawks, and you want balance in the budget, you should have public financing of elections, because then all the pork and rent seeking would be diminished substantially. And you can't resist it now. Yeah. So budget budget hawks ought to be trying to reduce the influence of money, which which you might call prize open the coffee can for everybody to dig their hands into. Well, I agree. But if I thought budget ox were going to be consistent, I'd probably have to do something else for a living. I mean, but yeah, you got to get money out of politics. And then obviously, you got to make it possible for people to vote easily, cheaply and safely. Now, you know, some of the one off measures adapted for COVID probably were a significant improvement in its contributing factor was far from the only one. I mean, there are people this election was extraordinarily interesting. And lots of people on all sides realized that there were enormous stakes. I mean, there. But yeah, you're going to look, you need basic reforms on ballot access. And you got to get money out of politics. I mean, that's just along on the short of it. And I, you know, it drives me slightly crazy the way folks go crazy about any possibilities of foreign money in American politics, you know, and there's a lot foreign money in American politics, through various ways, much of it legal, probably illegal. But then act like, okay, so we've got we've now secured our borders, like that's our problem. No, I mean, most of this stuff is made in America. And you need a serious reform on this. I've not really just talked something positive and straightforward. The Democrats now have, you know, for at least two years, unless somebody gets hit by a bus, which, you know, this is, I mean, you know, I almost feel like one of those old insurance company things, you know, my insurer winding wing on life, of course, when I see the Democrats coming out of the Senate or something. But you could very easily tell use the SEC securities exchange commission, where they're putting in a chairman who said to be relatively tough on Wall Street, and with some qualifications, I think that might be true. They could tell the public companies that they've got to lift all of their political contributions, including dark money stuff, 527 contributions and all these weird things. And they should also make them list their their charitable donations, because we now have very good research that shows you how corporations use charitable giving through their philanthropic foundations that they control for political objectives. I think that's also clear. That only solves the public and won't solve the problem. It just first thing is makes it public. You can see the dimensions of it. But here you need a basic, you need a basic electoral and monetary reform. I mean, this did really matter. Is there also a basis in addition to public financing and limits for making what you may call the cost of an election, or instance, television advertising and other things less expensive. And what I mean by that is making a segment of each network or radio stations airtime, because they do get up charter from the government, set aside for public service announcements, including qualified candidates after a certain point. Look, let me let me back up though a bit. I realized I was somewhat imprecise. And in the question, possibly we ran together, if you think there's an issue about limits, I favor them. I don't see any reason why we should have arms races for how much money each candidate can get from various folks. I've known people, some of them worked in the Senate, who've said to me, you know, I've watched these guys, say, you know, go in and ask groups for contributions and say just which way the money is coming down. Imagine that. And I would favor limits. But even having public money without limits is a very good thing, because it means you can get some cash to get your message out. And you don't have to just spend all your time dialing for dollars. One reason I mean that getting that initial bump up, I think is actually by itself public financing, even with the idiotic and, well, frankly, criminal, almost a racket system that we have, would is a big step forward. It's one reason it's so strongly opposed almost everywhere by money interest. Well, one of my former senators that I worked with who retired from the Senate, I met him a couple of years later in New York. And I asked him, what did he feel about leaving the Senate? And he said, Well, when I was in the Senate, I would drink too much alcohol, I would spend 75% of my time chasing money. And most of the money I chased was for policies that I felt terrible about inflicting upon the American people. But that's what I had to do to survive. And I decided not to live my life that way. So I think there were I have some people who understood the toxicity from the inside. I have a bad feeling about what we might call the development of a censored sample, that is to say, guess who attracts the folks who feel bad about it, the guys and ladies who really like it, probably stick around. That's, you know, the Darwinian aspect of this over 20 or 30 years, which I actually think you can see in the numbers, I think it's clear the Congress has become a crazy racket in many respects where the goal of getting rich on both sides is absolutely paramount. But let me come back to your point about the question, can we do something to make campaigning cheaper? And yeah, your point, I think is exactly right. Corporations are not natural entities. I mean, even though, you know, you think the Supreme Court, the way it wants to treat them, they really take them real seriously, a sort of 14th Amendment persons or something. There, they're not really. And, you know, you shouldn't have to be, well, I mean, you shouldn't have to be all that's bright to see it. And we can put restrictions on corporations that the Congress votes. And yeah, I think they ought to start putting much tighter restrictions on corporations for that. And it's certainly the public airwaves, which are after all auctioned off. You can tell them anything you want. And I think it would be rational to tell people, you know, give everybody all the major parties and candidates sometime to campaign free. A lot of countries do that. They don't do so much. And similarly, I would add to with the right to the internet. I would just stop internet advertisements with like two weeks to go. For example, I wouldn't just I just wouldn't allow. And I would prefer that as a sort of publicly stipulated condition, rather than one that gets imposed by the current owners of said internet right in the in the major platforms. I think that I mean, talking about the notion that just leaving it all to a bunch of private platforms to decide what they're gonna that's crazy. And there they clearly use it to make money. And it's like, okay, we're given this stuff away under the wrong conditions. Yeah, well, let me let me ask you a couple other dimensions of this. You've inspired iNet to support some research on how the performance of the so called Blind Trust portfolios of legislative members perform relative to market averages. And to put it simply, if I were to paraphrase it, as I recall, Warren Buffett and George Soros would be quite envious of the performance of some of these portfolios. Yeah, well, alright, this is a complicated question. The original research was Alan Zabrowski and his colleagues. First in the Senate, then in the House, there were some number one or two later negative papers and things with different times, using different time spans. And there were some suggestions by people. Well, you know, everybody has became more sensitive to the appearances. I am unclear about the current state of that stuff. What I do know, I mean, I want to actually have a iNet do more some more research on this, I think is quite worth testing out. What we do know from iNet research, much more recent, and Ahmed Tahun and his colleagues did, is they showed you that individual representatives votes on the famous tarp bailout bill in 2008 that you and I both worked on, from a public interest perspective, I hastily add for folks who may not remember that bill. And it turned out that representatives who were down in the market or if their spouses were down in the market, we're a whole lot more likely to vote for that bill. And I love that kind of research, because well, that sort of makes the point. Yeah, we have some other research going right now, but it's too early to tell where that one comes out yet. Yeah, let me ask you another question. When you talk about having to reform campaign fundraising, isn't there a sense in which incumbents would be reluctant to vote to limit funding because that their ability to sell policy gives them an advantage and therefore a higher probability of re-election? Well, I think that that they incumbents may indeed have an advantage there. Though, you know, you also get these, you can see these folks who in effect spend five, seven years climbing ladders and trying to become understood as completely reliable. I think a lot of political science campaigned as a so-called quality challengers are actually that and the folks doing these indices do not realize that because they don't think about that as a problem. But in that sense, yeah, it's also the case these days in this system, it's getting kind of poorly as we all know. And being an incumbent, sometimes you get these waves of public anger as things really fall apart. It's unfortunate, but true that a lot of things seem to be falling apart in the last few years. And a lot of folks have one interesting point about 2020, people forget how many people retired in that like was quite a large number of folks that were not running. And then they just left. And then you're talking about incumbent politicians, just step down. Yeah, yeah. Okay, Republican politicians right now in the Senate are pulling out. I mean, there's so I think actually three as of this moment, which is an extraordinary number for something two years away. Yeah. Yeah. Well, so if we look at this, I'll ask another question. Let's say you and I had a business. And we thought we knew what we were doing and we were going to make money. Isn't there some basis for being afraid that the system is going to disintegrate? And we won't get to play out our brilliant idea? In other words, are we in a socially unsustainable place where money may not be able to control the environment with the certainty that it has because the breadth and depth of despair related to climate change and pandemic and poverty are starting to drive people a little bit zany. Yeah, you're sketching the conditions for one of these classic model where you appear to be in a rough equilibrium for years and then suddenly it blows out. And there's and I would also add there may be a danger that the response to that discord and despair could be an authoritarian response, not a democratic response. Well, yeah, you know, looking over the last four years of American politics, I think you might without getting into that one. That's another podcast. I think there might be some excellent basis for thinking that surprise, surprise. I do think this you can see you got to climb a disaster building. That's clear. You have, I also think that the gap between rich and poor has become so overwhelming, both in wealth and an income that the whole structure of the system has transformed. It's not is transforming. It has transformed. And I've taken the calling of affluent authoritarianism. Well, even even Citigroup has put out research reports on plutonomy. Yeah. When Wall Street starts naming it like that. Plutonomy. I agree. You know, you're on your way. Yes. But I think it is the case that you can maybe this stuff probably degenerates as it goes takes a while to slowly go down and then greatly accelerates. I have in mind this make up a list of big finance. And for that matter, little finance and guys doing corner borrowing and lending finance payday loan companies. But also lots of business companies are building a model based on stiffing their clients over the long run. I mean, you get medicine, in my opinion. A lot of the biggest sectors, medicine, health, some large businesses that sell even sell sort of fairly high ticket items, they just don't pay. They just think they can squeeze people forever if they got them in payments, for example. So they have to use the economic parlance. Someone in despair has inelastic demand and you can squeeze them in their distress. Or they simply have no way to hit you back. I mean, lots of banks, for example, I think clearly profit to your up older folks. I think that and people just simply trying to get like bank overcharges, for example, have become very substantial parts of bank income. I've been some efforts stamping that down, but, you know, the consumer finance protection bureau didn't work well under Donald Trump, even though it was set up to control things like that. And you had Wells Fargo and other banks actually making up people's account name, just putting accounts, opening accounts in their name, they had no idea of. And as you try to undo these things, it's enormous amounts of time. You know, if you have a... I want to add too into that telecom. I mean, if you have a battle with your internet provider, it's going to take you 35 minutes to find maybe even a machine to talk to or a human. And lots of people have realized you can just stiff people. And I think that number is, frankly, accelerating. And so you get... And the burden this throws on ordinary people and institutions generally have found out that they can... I mean, I'm not a big fan of Barack Obama's administration, but one thing he did do was he put good people in the Labor Department that actually did try to stop wage theft. Now the Trump people, as far as I can tell, had no interest in that at all there. But people, when companies know they can just stiff their workers, especially immigrant workers or illegal immigrant workers, I fear that they actually often try to do that. People are building business models, how to just grinding people down, knowing they probably can't sue you. The rule of law has in a basic way sort of just fallen off the charts in the United States for a large chunk of the population. And you can't get the state and the other officials that should do something about this, they won't. I mean, nowadays state attorneys generals take enormous amounts of money running for office. There are even formal party, Democratic and Republican party state attorney general super PACs and things. The, you know, the Republican state attorney general's super PAC was said to be helping out in the Trump rally, though the guy who ran it said he didn't know anything about it. And I guess somebody left. Mayor and I know, I don't know any of the particulars for that, but what I read in the papers was, well, somebody did something and then they were disputing who did it. But the point is, you've got, you don't, you scarcely have a sort of classical situation of what the Germans used to call a Reichstag, a society built on law. This is really eroding for the average human. And it's not, this is by the way, it's not reducible in the short run to any simple calculation of monetary costs, though it costs people vast subs every year. Let me, let me shift the focus for a second to the area where you work. You spent your life as a professor involved in educational administration. I recently read an essay called Dark Age Ahead by Jane Jacobs, the famous Canadian woman who wrote a lot about cities. And her featured chapter in the essay was called Education versus Credentialization. And she talked about, this was written in about 2004, that we were approaching a time where, as the divide in the distribution of income was becoming more severe, that people would be fearful and desperate and would pay anything to get the credentials of an elite education in order to belong on what you might call the affluent team. And that's just like medical or other inelastic demand out of fear. And I'm looking at now movements to cancel student debt. I'm hearing lots of people say I'm not going to college, it costs too much. They're defying that. But how do you see the difference between education and a credentializing system? Well, all right, a couple of things. First of all, the simple economics of this have gotten so desperate that one needs to sort of, then we'll talk, pick up on education versus credentialization. It's just the fact that the percentage of people who actually graduate from college has not really risen that much in a long time in the United States. Since about the late 70s or 80s, they've cropped up a little, but not much. In other countries, it's often actually gone up larger, but not all that many. But yes. And when you look behind that, you see almost a complete starvation which took time to kick in from about the late 70s forward in public education, public higher ed, generally at all levels. Some of the local where the schools and affluent districts are funded basically locally, with some state aid, they get around that. But everybody else has, and the public higher education has really withered. I mean, it's just, so also have, and private institutions have it, except for, you know, the top 150 or so that have some fairly large endowments, not giant endowments. They're pretty, they're pretty well pressed, and everybody has an effect then in like a, it's sort of like Europe, right? I mean, you've had 30, 20, or 30 years of austerity. Same with American higher education, and often lower levels of education. You just keep cutting books and things like that. That's the first thing. And so that makes the administrators desperate. It makes everybody desperate. I had a couple years as a sort of battlefield promotion to effectively the deputy provost of an institution. I remember having to go through a budget crisis with, I think, a total discretionary fund for about seven months, about $50,000, which in an institution that, you know, runs in millions of dollars, that's nuts. Hard to deal with. I mean, just even one shock in your, in serious trouble. Alright, so there's that. And then there's the problem of, in truth, most deans and most officials will sell anything for cash. They're so desperate. And that's a problem, because you get these cases of people chopping entire disciplines out, departments out of the whole university, you know, one afternoon, saying, well, you know, you just got to fund yourself. Well, you know, you're not going to be able to fund everything that you want to fund in a university off immediate cash returns, because somebody thinks your thing is useful. It's fine if you have a high paying STEM, you know, science, technology, engineering, and mathematics thing. But the notion that, and I, I don't doubt that you can make economies in places, nor that over 100 years, you could do with some major reforms, not just in the humanities or the social sciences, but I dare say, even in the organization of physical science, I have a few thoughts on that. It's not the COVID epidemic, is it? Or I've had to interact with other people. We're not going to talk about that one tonight. But no, you're, it's almost, it just is the case that if you're trying to get students to learn, the impact of individual instructors really matters. I mean, it just does. That's why Roger Benjamin and I have written some stuff on this, and you know, we're thinking about how, how do you deal with a situation where you're now looking, this is really worth pondering right now, because it's clear that all but say the top 150 American higher education institutions are under enormous pressure, and most, but most people go not to those. And so, like you're looking at the beginnings of a large-scale desert in higher ed, and you have this happening while everybody is saying we want to do something about income and wealth inequality. Well, you know, those are round squares. You're not going to be able, I don't know what is going to happen. I am sure it's not going to be good. And I don't think there's, look, right now you can't even, you know, get trying to do something simple, like hand public transit, money to do their ventilation system so that people can travel on them without spreading COVID is like so fantastically controversial in the U.S. Congress, it hasn't happened much. I mean, I think there were some little aid, but nothing fundamental. And this is crazy. I mean, you're not going to be, this something's not, something's going to have to give here. You can't go on, and we are not going on. I can see, I saw this sad case of the universe, I'm not, pardon me, it was a college in Massachusetts that was effectively trying to sort of turn itself inside out. It was a perfectly sensible, small liberal arts college. And then they said, well, we're not making enough money, we're going to try to do corporate education. Well, guess what? Corporate guys don't pay very much for their education. They like low per unit costs and they're dealing with fairly, you typically fairly advanced students who know rather what they are doing and often bring a lot of knowledge in a particular subject that you're getting educated. Then not everybody, but it's a common model. And, you know, that place was just then catching up to the realize there's not enough money. And there are a lot of folks going bust. They could use some reforms. I'm not saying higher ed cannot deal with something. I mean, I will not get started on this. That's a separate podcast by Helen. But, you know, the notion that you're going to improve things by wiping out hundreds of colleges and universities, including many of the historically black and Hispanic institutions, that's insane. Right. Well, your friend and my former teacher and your co-author, Peter Teman, wrote a lot about this in his book, The Vanishing Middle Class, how to use the analogy to W. Arthur Lewis' famous paper, The Migration from the Farm to the City. He talked about the dual economy. Peter talked about the migration from low-margin services to high-margin services, where the migration was through the education system and how things like racial animosity poisoned the climate for, which you might call, appropriate rungs in the latter. But even if the moment is highly unequal, if the rungs are in the latter, so there's a promise of credible opportunity, the pressures on society can be alleviated. But we're going in the wrong direction, according to the things you're saying. Yeah, there's no rungs right now. Rather, the rungs are breaking even as people try to step on them. And then the other problem is, which you can see in Norma, the way globalization has hit the job structure, a lot of folks emerge, there are more folks emerging from college than they can employ in jobs that you'd think would be normally appropriate to that. So you get, all the time, you see folks with large-scale, with all kinds of degrees, and they're sort of hanging in there at some mid-level, mid-entry level work thing, and everybody's desperate for work. That's that too. And now, with the crisis in the U.S. auto industry, it's self-worthy of a separate thing. You're going to lose a lot of jobs, and they're going to disappear, I think, quite rapidly. Because electronic vehicles are not as labor-intensive in the construction and maintenance. Yeah, many different parts, many, a lot different labor requirements. Yeah, this is a crisis that is hitting everywhere in the world now, but, you know, it's going to hit the American, well, wherever their car, the West part, a couple in the West Coast. Yeah, this is a big deal. I asked somebody, a celebrated trade theorist with a lot of connections in Washington, I said, what are you guys doing about this? He said, we haven't the slightest idea. Yeah, well, I've been talking with people like Michael Spence, Danny Roderick, and Joseph Stiglitz about the prospects for underdeveloped countries now, where technology platforms with automation, machine learning, what you might call, make the Asian development model of infinite industry protection manufacturing and learning by doing, obsolete. And they're saying, to me, it's actually more daunting than that, that as you go to renewable resources, like wind and solar power for energy, the value of oil or coal in the ground will go down at the same time as the value of labor being replaced by machines goes down. So the question is how will these emerging economies converge with the advanced economies, particularly with the what they call increasing returns, meaning where the monopolies are located, they achieve a scale and nobody can compete with them, rather, whether with cheap labor or by replicating the technology but operating at a much lower level of volume. Yeah, look, you could as well, I mean, there's no reason to privilege some piece of the emerging market. You could be describing, you know, some Midwestern parts. I was going to say it's city of Detroit. Yeah, right. Yeah, yeah. Yeah. So, Tom, coming back around, we've covered a lot of different bases emerging from your analysis of money and electoral politics, but I think that's really a foundation stone because what I call the commodification of social design implementation and enforcement is what leads to the withering and you get an amplifying feedback loop which is once things become unequal, the access of that plutocratic minority exacerbates and makes things more unequal. What used to be tax evasion is now legal tax avoidance and then you say we can't afford it because we don't have the government funds to rebuild or repair the infrastructure education or health system, but it seems to me like the root, which I might call the foundation stone, is actually where you started this conversation. If we can't get our representatives to create balance in society, it's just going to wither and wither and wither until it explodes in crisis. Yeah, well, you can't expect me to disagree with that. They, you know, I'm just shocked, shocked, shocked to hear that there were gambling, you know, going on in the capital. Yeah, but yeah, now I think I'm grinning because I'm your former student, so I guess I'm feeling like I have learned some of my lessons. Yeah, well politics today is, you gotta face this, it's above all these other things that people normally, it's also a racket, the people in it are to a very considerable extent, I'm sorry to say, a racketeers, and they, I'm constantly thinking about how can we, the we here are being small, but quite, how do we all stay or get richer off this stuff. I was quite struck because I did a session with Cooney the other week on Jeffrey Bonkmeyer's book on the Gilded Age on Boss Tweed in New York, and he's really gone into detail, he shows you what, oh he's just, the old generation studies of machine politics used to drive me crazy because they didn't, they weren't very interested in the business structures of these folks, he really takes you inside it, and you know, it made me feel right at home. I mean, and I said, yep, this is, this is the Congress that I know that where you've got folks getting incredibly rich, regardless of their stock, stock portfolio arguments about a particular time lapse, just watch how people come and leave far richer in so many cases, and you know, what this process is just, it's ridiculous. And it's one of the reasons that in 2016, when the former reality show host Donald Trump walked around and said the system is rigged, people saw that as fresh air, as somebody outing the system and he beat 15 Republicans before Hillary Clinton. There, even, how would I say, well educated people can sense now that even if they're on the pathway to success, the system doesn't cohere. And I think that this is an extremely dangerous time. Obviously, things like the pandemic and climate change illuminate the extent in the extremes of dysfunction and that the notion of what you might call the common good is just in tatters. Yep, yeah, but we've got, but to repair it, we've got to move away from despair, because despair may feed acquiescence to authoritarian response. Yeah, it's a pretty interesting situation because I think the Biden administration, you know, we all know its margin of victory was narrow. Democrats, margins in the House and the Senate have both, I mean in the Senate, it's just basically 50-50. Vice President. That's right. And in the House, they lost seats. So these folks need to perform. Otherwise, you know, if they fail as they failed with Clinton and with Obama in the first terms, where people, you know, I mean Clinton walked away from his promises for Medicare for all. They didn't use the term at that point, but that's what it amounted to and the failure to sort of do a big recovery bill in the first two years, the Obama administration. In both cases, Clinton and Obama got emulsified in there the two years later in the off-year election. That's right. That happened again, and you know, it's not obvious that all those folks, let's put it this way. The nicest, the way I can put it, is it's not obvious that all these people are going to sit there if they came in again and allow themselves to be voted out. We've just run that experiment, and it was pretty narrow call. Escape.