S2:E12 – Populism Saved Us Before. Where is it Now?

The New Untouchables: The Pecora Files
S2:E12 – Populism Saved Us Before. Where is it Now?
September 26, 2021

 

[00:00:05.240] – Thomas Frank [intro/music]

Trump promising again, and again, railing against the financial crisis and against these guys who face no accountability. Trump himself. You talk about a crooked real estate guy. But here he is criticizing other white-collar guys for being crooked. And in a lot of ways, it’s like Boris Johnson claiming to be against the elite.

[00:00:29.880] – Thomas Frank [intro/music]

What you’re saying is what we imagine to be meritocracy is, in fact, a kind of dynastic nobility. That is exactly correct. And this is emerging right now. And if it doesn’t frighten you, then you’re not paying attention.

[00:00:52.050] – Eric Vaughan [intro/music]

In a world of elite criminals, only people of elite character can protect our system. This is The New Untouchables.

[00:01:03.220] – Patrick Lovell

Welcome back to what may be the exclamation point of this incredible journey. It’s our great pleasure to welcome to the program, Thomas Frank, of course, one of the most prescient authors of our times. But of course, for those of you who do read Thomas Frank, it’s pretty amazing to have him join us today – some of the greatest insight into the American experience over the last two decades.

I mean, my journey began with “What’s the Matter With Kansas,” all the way through “Listen Liberal,” and, of course, “The People, No,” three I would say tent poles of what our effort is in addition to this historical moment, I think, which is happening on a day by day basis.

But, Thomas, I mean, you’re in the middle of so many things, obviously continuing to turn out editorials and podcasts, and it’s really quite telling to see where your mind is in context of where you’ve come from. Can you give us some sort of perspective, if you will, on how you might frame priorities in terms of who and what the United States is at this moment?

[00:02:06.900] – Thomas Frank

Oh, my goodness. That is a very large question, sir. Yeah, that where to start. Like, Jeez, I would say that we’ve just come through the Trump presidency, and it’s been a period of radicalization for a lot of people on both sides, by the way. I’m not just talking about liberals here, but I’ve had all sorts of people that I know that were never really politicized, that always thought that there was something wrong with me for being so interested in politics.

They’ve all been politicized by Trump. Usually, the mechanism is by watching CNN or watching MSNBC or something like that. And what’s funny, though, is that for all of this political involvement, we’re all drawn to the kind of the culture war of the thing, and the other side is just so absolutely intolerable. And what they’re doing is just so repellent and repugnant.

And we can’t believe this is happening. For all of that, the grand questions still seem to escape us. And what I’m referring to are, well, the grand question of who owns this country and why does the wealth continues to get hoovered up into the bank accounts of a very small number of people? And this has continued and continued and continued.

And for all of our politicization, we just can’t seem to see it or to understand it. And I don’t know what it’s going to take to make that finally dawn on people. I mean, here we are. And, Patrick, I know that you started on this with your inquiry into the financial crisis, and I always say that for my generation, I always thought that was going to be the biggest event of our lifetimes.

That was so extraordinarily devastating for the entire world, but also, it was an X-ray right through our society. If you studied it, if you paid attention, you immediately understood how things worked and why things unfolded the way that they did.

And I feel like those lessons are forgotten or lost or were never learned in the first place for so many people, and they’ve been obscured by the next disaster, which is Trumpism or the disaster after that, the COVID pandemic. So I like to get these things going on a real happy note like that. I really want people to smile at the start of this.

[00:04:38.180] – Steve Grumbine

Success.

[00:04:38.180] – Lovell

Let me dive in here. This is more of a freestyle effort because we all have our come from’s in this process. But you tapped into something that is extremely important that we’re trying to germinate the audience, the viewing public because what we have done is in the effort, of course, our mutual friendship with William K. Black, who I find to be the centerpiece of our efforts when we learned about control fraud, which for us, is a very paint by the numbers understanding about . . .

[00:05:03.470] – Frank

It’s an eye opening thing when you figure that out that bankers loot their own companies. It’s like, oh, my God. And suddenly it all makes sense. Suddenly I get it. It’s the missing logical piece for understanding the financial crisis and understanding so many other things. And people resist getting it. They have trouble getting it. Although it’s not a difficult concept, but I’m sorry I interrupted you.

[00:05:29.740] – Lovell

Well, I mean, that’s exactly where I was hoping you might take it, because ultimately, I mean, from our perspective, when you start to learn about deregulation, desupervision, decriminalization when you understand each of those parameters and how that frames what we’re living in, I mean, we certainly understand how we have interpreted that from the ground up.

We’ve built the evidence from the ground up in what we consider the crime of the century. I think HBO might stand to confront us based on their beautiful work with Alex Gibney, of course, in the opioid crisis. But please. . .

[00:05:58.750] – Frank

Yes, that’s good that you mentioned that. The opioid crisis. I forgot to list that in my list of these incredible disasters. All of these things have a certain theme uniting all of these things, and that is the status of the professional elite. And Bill Black always talks about the corruption. Well, you just mentioned it yourself – desupervision, deregulation, control fraud.

These are all pathologies of professionalism, of the sort of white color elite. They get the rules rolled back on them. They stop supervising one another or they’re bought off in some ways. And we’ve seen this first came to my attention with the Enron fiasco, which was right before the Iraq war fiasco.

But you see, it’s just one after another of these things. And Bill talks about this a lot. The Enron people had successfully figured out a way to buy off their accountants. Do you remember this so that their accountants wouldn’t get them in trouble for all of the incredible fraud that they were engaged in? And that was a real lesson. That was kind of an eye-opener and the first overture to the financial crisis.

But since then, I see the same pattern all the time. And then, of course, the most important aspect of this is in the aftermath of the financial crisis, when nobody gets held accountable. That’s the part that will forever blow people’s minds that these guys who are obviously engaged in selling fraudulent financial instruments, obviously engaged in a ripoff of enormous proportions, they weren’t held accountable.

They were bailed out. They didn’t even get fired. They didn’t lose their jobs. Those guys are still there today as we’re conducting this interview. And for me and for my generation, that was the real eye-opening moment that there was not going to be any accountability for these people. Now there’s all kinds of accountability for ordinary people. You step out of line in the slightest way.

I was just looking at somebody who’s been compiling all this footage of the police. Well, you think about the cops. They killed that guy in Minnesota in broad daylight for some petty crime, and they do this kind of thing. They don’t kill people all the time, but they are forever busting people for incredibly petty offenses.

There’s footage on Twitter of police arresting people for, like, drinking beer on the beach. It’s like, what are beaches for, right? But this kind of thing happens all the time. But these guys at the top, no, there’s no accountability for them. And that is fascinating. That failure to hold these people accountable led in both direct ways and indirect ways to Trump and to Trumpism.

It’s hard to believe now. I’m sure you’ve got the footage, Patrick, but in fact, I’m pretty sure you do. In fact, I’m pretty sure that it was your documentary is where I saw it of Trump promising again and again and again railing against the financial crisis and against these guys who face no accountability. Trump himself is like, oh, my God.

You talk about a crooked dealer, you know, a crooked real estate guy. But here he is criticizing other white-collar guys for being crooked. And in a lot of ways, it’s like Boris Johnson claiming to be against the elite. It’s like it’s a joke. And the joke is on us who fall for this stuff. But here’s the thing. Behind all of these battles, there’s been this culture war about the status and position of the white-collar elite.

These battles going back and forth. And these battles were out in the open in 2016 after Brexit happened, and after Trump got elected, where the white-collar elite really felt themselves to be under siege. But their answer wasn’t to say, well, we’ve made all these mistakes over the years. We’ve given bad advice.

We’ve committed crime. We’ve tanked the global economy, got us into a wrongful war, blah, blah, blah, prescribed these addictive drugs that killed people, handed them out like candy. No, they said the problem is that the public has lost their mind. The public has gone insane. And they came up with a word for this. It’s a word that’s very familiar to me because I come from Kansas.

The word is populism. And they decided that that’s the word that you use to describe this kind of public insolence, this insolence of ordinary people rising up against rightful elites, the rightful elites, of course, being they themselves. And this was the text behind all the battles of the Trump years. This is the subtext or however you want to put it, this is the real battle.

And they looked at Donald Trump, and they saw the negation of everything they believed in. He’s such a fool. He’s a blowhard. He’s a liar, doesn’t respect science, doesn’t respect anything. And so instead of having a real debate about this issue, which you have tried to lead us through, that real discussion of that issue, instead, we had this stupid war over Trump, you know, and nothing ever really did get resolved.

[00:10:57.620] – Eric Vaughan

But isn’t that sort of like the point? I mean, it seems to me that the culture wars are used to distract, divide and get us talking about anything except for why the person, my natural ally, is for some superficial reason, my enemy. And we never talked about this stuff . . .

[00:11:16.260] – Frank

In my opinion, that’s what the culture wars are all about. That’s the ‘what’s the matter with Kansas theory.’ And I wrote that book in 2002, 2003. I lived in Chicago at the time. And Kansas, they’d had a big debate there over the theory of evolution. I’m from Kansas City, originally.

I couldn’t believe that that my home state had been like debating the theory of evolution in the year 2002. I couldn’t believe it. And so I had to go there and get to the bottom of it. And what I eventually decided was what you just said, exactly. The culture wars. Why do they succeed? Why are they so attractive to people? Why do we love them?

You know, we can’t wait to fire up Twitter in the morning and see what the new culture war is going to be. And the cultural battles that have been most successful for the right, all of them speak to social class. They speak to their feelings of being left behind, being disrespected, having an elite that tells you what to do.

These are all very standard-issue feelings of blue collar people. And those are very normal feelings because that is, in fact, how blue collar life is, right? You are bossed around by somebody else, usually somebody with a college degree, and they tell you what to do. And this is the difference between blue-collar and white-collar employment.

And they tell you what to do and you do it. But there’s a traditional way of expressing that really normal anger. And that is through traditional left politics or traditional liberal politics, which we had for a long time in this country. And then there’s this other sort of phony way, which is through the culture wars where you are supposed to get angry about the liberal elite because they look down on your values.

We all know the story, but it’s a way of channeling class anger in a different direction. And the more I looked into this every single culture war battle did this, every single one or every single one that was successful. We try out, I don’t know, 10 new culture war attacks every month in this country, but only one or two of them will stick.

And those are always the ones that tend to speak most eloquently or perversely. Or however, you want to put it to this sense of grievance that people have. And the result is that it becomes very difficult for us to talk about things that we should be grieved about. The financial crisis. Jesus Christ, these guys just wrecked the entire world.

Instead, we get hijacked and sidetracked by these crazy side issues that take us nowhere. They just serve to get us angry, but they never achieve anything – like getting angry at Hollywood. Look, I’ve criticized Hollywood movies. I have a lot of problems with Hollywood movies, but I also understand that that’s not what politics is about, you know.

[00:14:01.340] – Vaughan

Why do we fall for it every time, though?

[00:14:04.160] – Frank

It’s fun. The culture wars are fun.

[00:14:06.170] – Grumbine

Low hanging fruit.

[00:14:06.170] – Frank

Yeah. And why did we elect a TV star, Donald Trump? Why do we elect the TV star to be President, you know? It is the sort of logic of entertainment taking over our entire lives. This is the thing about control fraud, Wall Street, financial crisis. It is slightly difficult to understand.

I remember when this happened when the financial crisis broke in ’08, I was a columnist at the Wall Street Journal, no less. I actually was that. That was my job. And I better understand this. I better go from zero to 60 real real fast here. That’s actually how I happen to meet Bill Black because nobody knew what – I forgot what it stands for now. CDS.

[00:14:50.580] – Lovell

Oh, the credit default

[00:14:53.080] – Frank

Credit default swaps, right! Nobody knew what they were. And everybody was saying, oh, this is the next thing on the horizon. AIG is in big trouble. They’ve been issuing these credit default swaps, and I’m like, what is that? I couldn’t find it anywhere. I was looking around. I couldn’t find any stories about it.

And I started calling experts, and they were all like, I don’t know, but, you know, this guy, Bill Black, he knows. And so I wound up calling Bill Black, and he, in fact, did know what they were. And that was the beginning of my friendship with him. But it wasn’t easy to figure that stuff out. Of course, that’s part of the point of it is the opaqueness is a huge part of it.

And it’s not just the opaqueness. Do you remember I wrote about this in “Listen, Liberal.” The complexity of it is actually seen as a virtue by a lot of people, specifically by other members of the professional elite, to be even more specific, specifically by liberals, the wing of the Democratic Party that controls the party’s presidential nomination.

They see that as a sign of you’re a highly educated person. You have merit. You’re able to design these things of incredible complexity. Complexity is admirable in and of itself. And it always reminds me what Bill Black said in his days as a prosecutor, when we saw undo complexity, that was a red flag. It’s like, aha. Let’s look a little deeper.

But with Obama and company, when they saw complexity, they’re like, oh, that’s awesome. That’s what you want. It’s exactly the wrong message. Unfortunately, we just went through this time in our national life, where we should have debated these questions openly. And we should have talked openly about the role of the elite.

The public was mad as hell, rightfully mad as hell in the aftermath of the financial crisis, the opioid epidemic, the Iraq war. These are all cases of elite bungling and deindustrialization. My God, this is all, remember, managed by the Clinton economic team.

They tell us that these trade agreements are going to increase employment in America, not hollow out the interior of the country. And then when that is, in fact, what happens, they turn around and blame the people who live in those places. You didn’t go to college or something like that. You know, you know how they did it.

[00:17:05.640] – Grumbine

Victim blaming.

[00:17:05.640] – Frank

Blame the victims. People have a perfect right to be furious about this stuff and to look at the white collar elites in this country and be absolutely furious. And I’ll say this, I’ll go even one step further. People who want to be part of the white collar elite are furious also, because they’re discovering now that to become part of that is extremely expensive.

Universities have raised their tuition now more or less constantly since the early 1980s, and it’s no longer affordable. When my dad went to college in the 1940s, it was either free or really, really, really close to free. And now it’s, I went to the University of Chicago graduate school. That school cost over 80 grand a year to go. Nobody can afford that.

The very rich can afford that. But ordinary people simply can’t. And the ruination that this has brought down on a generation of young people who were told that this is the only way to get ahead in American life. This is the only way to be a part of the middle class. And look what happens? Then they’re saddled with a lifetime of student debt. And I’m not joking about that.

I get emails from people in this situation all the time. I got one the other day, not from a student who had taken out student loans, it was from parents who had taken out student loans, and they’re going to die with those student loans. I mean, they’re in their 60’s and there is no solution for them. And the interest rate is insane. But they had to do it.

The President, everybody was telling them your kid will go nowhere unless they go to a fancy school. And if you can’t afford it, you can take out the student loans. And we’re going to make sure that everything works for you.

These people who thought they could be members of that white collar group, they’re screwed. It is ruination across the board for a lot of Americans. And, yes, we need to have a society wide reckoning on all of these questions. And instead, we got Trump.

[00:19:03.290] – Grumbine

Thomas, let me jump in real quick. So you started this thing out talking about who owns America. And this brought me back to a couple centuries ago, ironically with Napoleon Bonaparte and how he had realized that one of the things that the elites hated about the revolution was that it did away with class. It did away with nobility.

And what we’ve seen in speaking with people like Michael Hudson and others who talk about a new neofeudalism, we’re seeing the elites find their nobility once again through this elite control fraud through these kind of financial arrangements that are only accessible to a very small number of people. It’s almost like a stealth move to bring about a form of nobility through financial transactions.

[00:19:51.440] – Frank

This came out last year or two years ago. “The Meritocracy Trap” was by a professor at Yale. And you can see from my post it notes, I got a little involved in it. It has a few things wrong with it, but overall, he is really hitting it.

But he argues that we have created a, I don’t know if I would call it feudal, but we have created an aristocracy that is passed, yes, by blood, because it’s so difficult to get into these schools, you have to know exactly what to do. Step back here. We can talk about the industries that control America.

We all know what they are when 10 years ago, it was all Wall Street. Today, Wall Street has ceded a couple of the spots to Silicon Valley. So it’s those two industries, and they both draw on the same pool of talent and the same handful of universities. By handful I mean five.

[00:20:41.700] – Grumbine

Wow! Literally a handful.

[00:20:43.310] – Frank

Or maybe six, but not very many. And it is literally graduates of those universities. That’s who they choose. And they’re very open about this. This is not a secret. And if you’re not one of those people, if you didn’t go to one of those universities then you can forget about being a part of this ruling elite. Okay.

So then we say, well, those universities we all know, as Napoleon said, careers are open to talent. They choose the best and the brightest. And so no problem. Right. Because the best and the brightest, it changes all the time. Actually, that’s not the case. It can be done. You can game entrance into these schools.

It’s not hard to do, but it is expensive to do. And you have to know how to do it. And this also is fairly well known. And the parents who went to these schools are able to do that for their kids. And so you do see dynastic wealth returning in this country. And the fact that we’ve basically more or less done away with the estate tax and so many other forms of income tax in this country have accentuated that.

And so what you’re seeing is what we imagine to be meritocracy is, in fact, a kind of dynastic nobility. That is exactly correct. And this is emerging right now. And if it doesn’t frighten you, then you’re not paying attention. It is really, really, really scary. Can I change the subject slightly here?

[00:21:59.210] – Grumbine

Sure.

[00:22:00.160] – Frank

One of the things that was most interesting during the Trump years, the underlying debate that you had all through the Trump years was about the place of white collar elites in our society. And they were very offended by the rise of Trump. And they said Trumpism is worship of stupidity.

They called it populism, etc. We all know that. And then in the last year of Trump’s presidency, you had the COVID pandemic. And during COVID, all these people who had been putting up yard signs saying, “Respect Science,”  “In This House We Believe Science is Real,” all this kind of thing, they suddenly got their wish.

And suddenly science was elevated once again to the top rank. And we all put on face mask. I’m still wearing mine whenever I go out in public and we all did what they wanted. They got their way. You see where I’m going with. Well, maybe you don’t see.

[00:22:52.440] – Lovell

No, no, I do. I want you to touch upon that because I think it’s extremely important to get into how science may have made a major faux pas or flood, or however, you’re going to characterize it, because, unfortunately, that gives fuel to the fire that which you just postulated was actually what the elites have been looking down sneering at for the past.

[00:23:12.790] – Frank

Exactly. Exactly. And by the way, I should probably mention at some point because your viewers are watching this. And I’m very familiar with this phenomenon. They hear what I’m saying, and they’re like, “Oh, my God. He’s some kind of Trump supporter.” I’m not, okay? I’m really far to the left. I voted for Bernie Sanders twice in the primaries.

I voted for Clinton in ’16. I voted for Biden. I am a Democrat. I’m a very Liberal Democrat. I am by no means a Trump supporter. However, just two months ago, I was scolding a member of my family, a Trump voting member of my family who was going on about the Wuhan lab.

And I was saying, “That’s not right. That’s a conspiracy theory. Everybody knows it’s a conspiracy theory. It’s been debunked. I’ve read about it.” And then one day, I open up the website of the Bulletin of the Atomic Scientists and read this incredibly detailed article by a former New York Times science reporter basically saying that the lab leak hypothesis is the most likely explanation of the COVID pandemic.

And I’m like, “oh, my God. Oh, my God.” And everything for me fell into place immediately. Suddenly I could see, because this fits the pattern that we’ve been describing. Once you start reading about the details of this, these echoes of the financial crisis start coming back. You mentioned desupervision. This is no laughing matter.

I shouldn’t chuckle like that, but deregulation, desupervision. Oh, my God. These are a bunch of guys fooling around. Who was it that used to call these financial instruments weapons of mass destruction? Was that Warren Buffett? And what this article, I had never heard the term gain of function research before, but it’s a kind of research that a lot of these sort of top level laboratories, virology labs do with viruses to make them more virulent, to make them more infectious to humans in order to study them.

It’s considered legitimate research, but it’s also known to be very, very dangerous research. And the question has always been like, well, we’re doing this really, really, really dangerous research that could easily cause a global pandemic. Let’s hope there’s never a lab leak. And the problem with that is, lab leaks are common. They happen all the time.

They happen in the most secure laboratories all over the world. And you can look this up. There’s long, long lists of all the lab leaks that have happened, and people die from lab leaks all the time. And we know that the Institute in Wuhan, China, where the pandemic first began, we know that they were doing these exact kind of experiments with bat coronavirus.

And suddenly it becomes totally plausible that this took place. And you realize that you’re seeing the exact same phenomenon as during the financial crisis. Two important aspects of that: first is groupthink. With these people it’s always groupthink with all the bankers. You remember what’s Keynes’s famous line about the honest banker?

Patrick, I know you know this quote. Keynes is saying “The honest banker is not the one who sees the crisis coming and is willing to go out on a limb and say, ‘Oh, my God, disaster’s coming.’ The honest banker is the one that does exactly what all the other bankers does.” That does groupthink. Right. And that’s what has been going on in our response to the pandemic.

Everybody was saying, “Let’s circle the wagons. It couldn’t have been this to say that is a conspiracy theory.” And again, whistleblowers are not just ignored in this case, but we have a new phenomenon that didn’t exist during the financial crisis days, which is social media.

Social media was actually censoring people that talked about the lab leak hypothesis up until about a month ago. You’d put something up on YouTube or on Facebook or on Twitter and they would take it down.

[00:26:55.340] – Grumbine

Yep.

[00:26:56.840] – Frank

And that’s crazy.

[00:26:58.480] – Lovell

That’s crazy.

[00:26:59.330] – Frank

And they’re doing that because they were assured by whoever the experts were that this could not possibly have happened. And this was a crazy theory that this was some kind of right wing conspiracy theory, and therefore we shouldn’t even tolerate conversations about it. Now, what if they had done that to you, Patrick, when you were making your series?

What if they had done that to me when I was at the Wall Street Journal writing about the financial crisis, when any of us were trying to investigate it, and they had just said, no, there’s nothing to see here. Remember what they used to say, “Who could of known? Who could have known?” It was a perfect storm.

[00:27:35.800] – Lovell

Right, right.

[00:27:37.720] – Frank

What if they’d had that tool in their tool box at the time? They didn’t. It took years, but we were able to largely get to the bottom of it, thanks to all of the investigation that was done. A curious reader now can read the various books about it and can figure it out.

But that’s because these forces, like Mark Zuckerberg with a big red mute button, didn’t exist at the time or existed, but it wasn’t important at the time, but he didn’t have the kind of power to just shut down conversations.

[00:28:08.880] – Lovell

I’m reminded of Yanis Varoufakis recently has been to the world with this concept of techno feudalism. And when you tie in the financial apparatus, the monopolization apparatus to the communication apparatus, it co-joins those into this revelation of what you’re talking about is something so significant as COVID. But I want to frame this for you to further the dialogue from our perspective.

So you ask the question, what if people couldn’t hear what you’re saying, right? And I’m reminded immediately of Bill Black over decades of trying to let people understand what control fraud actually is once you get past the threshold of it being slightly complicated. But hopefully what we are able to do in The Con is make it such that everybody could follow the bouncing ball, quite frankly.

[00:28:51.580] – Frank

That’s right. But you’re exactly right. He was not listened to when it would have made a difference. When the Obama people came in . . . So the Bush people, there’s no hope for those guys. That is a strategy of governance. It’s the wrecking crew, right? And deliberately appointing people to run the administration that are not interested in oversight, desupervision in action.

Okay, so he’s useless. Here comes Obama. Obama seems like a breath of fresh air. Obama seems to get it. Obama even filmed the campaign commercial featuring Bill Black, as we all know, where he’s talking about the Keating Five.

[00:29:25.920] – Grumbine

Yep.

[00:29:25.920] – Frank

And you remember that because John McCain, who is Obama’s opponent, had been one of the Keating Five.

[00:29:31.460] – Vaughan

Right.

[00:29:31.460] – Frank

So they filmed a TV commercial with Bill Black. And I assumed when I saw that commercial and they did eventually run that commercial, I assumed that that meant that Bill Black was going to be moving to Washington to be part of the new administration in 2009. That never happened. And it took years for him to get his message out and to get people to listen to it. And it’s still not widely understood.

[00:30:06.640] – Intermission

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[00:31:00.700] – Lovell

But I want to carry that to why I think that you are so incredibly valuable to the nation writ large, based on where you have come from and your art from “What’s the Matter With Kansas” all the way through “The People, No” because really, Populism has this misnomer with this elite culture to put us into camps that have been very well, quite frankly, I’ll borrow from Pink Floyd, you know, it’s either us or them, right?

And so in the end, for me, what we were able to configure, and it just boggles my mind when I think of gatekeepers, when I think of people who don’t understand the continuum is that they might think a specific element of any of these specific stories that we’re referencing as something that might be historical or dated. No, it’s continuation because it never ends.

There’s just a different virus that enables it to continue in the manner that we’re talking about. So when we were able to go from predatory lending through the woman, Addie Polk, through the collapse, working class with the collapse, we destroyed the golden goose and everything that you referenced.

[00:31:58.660] – Frank

Yeah. Yeah.

[00:31:59.160] – Lovell

When I think back to Populism in your book, especially “The People, No”, and to where we are today, I can’t think of a more important understanding from where you come from. But I think what we’re lost in is this insane fragmentation of the marketplace.

So we’re trying desperately, like you mentioned previously, to get the dialogue on the things that seemingly are out of reach into a way that the mainstream or most of us both on either side of this coin can come to the understanding that we’re all getting played. How do we move that into a populist movement?

[00:32:31.420] – Frank

Oh, my God, Patrick, that’s like eight questions, not one. Okay, but let’s start with what the words mean and what they might mean if you wanted to have a hopeful outlook about things. All of the attacks on populism is what I call anti-populism, all of this reaction against populism, all of these people denouncing populism as a form of insolence, as a form of, like, militant stupidity. Right?

That’s what they think populism is. Of course, that’s not what it is. But in a sense, it does clue us into the real debate, which is elite’s feel that they are threatened at their prerogatives and their status and all that sort of thing are threatened by ordinary Americans who have no reason to complain, that this is all groundless anxiety.

My point is, these people have a perfect right to complain. They’re entitled to their grievances. Their grievances are extremely rational. Okay. B – this is a democracy. The people rule. America is a democracy, and it’s not just a democracy. You guys know this. It’s the most Democratic country in the world in terms of manners and culture.

It’s the most egalitarian, anti-elitist culture in the world. There’s nobody that even comes close to us in my opinion. Democracy is who we are. And if your party of the left is based on a contempt for ordinary people, you’re going to have terrible problems. And the third point is this the country that I was born into and that you guys are about my same age that we were all born into in that country.

You look back at the speeches of Lyndon Johnson or something like that. The Democratic Party, which was the dominant party in those days, understood what the economy was about and what the mission of government was about. And it was to extend the middle class standard of living to more and more and more Americans all the time, widen the circle of prosperity, make it more a Democratic prosperity.

That’s what it was about. And they did this because they came from a populist heritage. They understood that the people had the right idea. They may not always express it correctly. They may not be right 100% of the time about every detail, but in their desire to have a middle class standard of living, the people were right.

There’s a famous book in the 1930s that I take my title from “The People, Yes,” the celebration of ordinary Americans. I mean, that’s what the 1930s was all about in this country. That’s what the Roosevelt administration was all about – the people, yes. And the idea is you would control Wall Street. You would bring the financial system and the economic system generally under control in order to guarantee prosperity to the largest number of ordinary Americans that you possibly could.

That was the whole idea. That’s what it was all about. You look at the way the system is today, our elites, even our liberal elites, even the ones in the Democratic Party deeply mistrust ordinary Americans, deeply distrust the populist impulse. I want to say something about the actual populists.

They were a left wing party of working class people, of farmers and industrial workers in the 19th century, and they weren’t contemptuous of science. They weren’t contemptuous of higher learning. They themselves were not learned people. Obviously, they were farmers and workers. They, by and large had not gone to University, but they were very respectful of people who had.

But they could also see that the reigning economic theories of their days, which they talked about all the time in their local populist clubs, they knew what those theories were. And this is sort of classical economics, whereas the reigning economic theory of the time, they could see that those theories had no place for them and that those theories didn’t allow for the prosperity of ordinary people.

And even though they themselves were not economists, they were very interested in economic debates. And I think that is healthy and wholesome. And the populists had a way of thinking about intellectual disputes I think it would be healthy for us to rediscover today, which is you have to be able to explain your highbrow intellectual ideas to ordinary people if you want them to debate these things.

And this is a democracy by definition. They have to understand those things. Those people have to go out and vote for our politicians. That’s what a democracy is. Therefore, you have to bring those ideas to ordinary people. And the populists not only believed in this, they did this, and they set up this enormous apparatus for bringing these ideas to ordinary people and explaining them in a way that ordinary people could understand.

That’s what the populist party was all about. Well, today we don’t believe in that anymore. As I said, we worship at the shrine of science, and we worship at the shrine of complexity. And we have basically made meritocracy and this white color status into inherited things passed almost by blood. We are 180 degrees the opposite of that.

People are furious as they watch this way of life that they were brought up to expect being taken away from them. They watch their community being destroyed by deindustrialization and opioids. And, yeah, here comes a demagogue to exploit that. That’s what happens when you don’t have a real party of the populist left, which the Democratic Party used to be when that doesn’t exist any longer.

[00:37:40.420] – Grumbine

When you talked about the economics and the people not really understanding so much of what we are talking about with this elite control fraud and understanding . . .

[00:37:50.860] – Frank

People get control fraud. But they do get that. That’s incredibly an easy idea to get and a really attractive idea to get. The problem is that nobody ever talks about it. And I know when Bill Black would explain it to the FBI. They’d be like, “Huh? How can that be true? How could a banker want to issue bad loans?” It doesn’t compute.

But it does. When I explain that to members of my family who don’t know anything about economics, they get that instantly. They get that instantly. It’s the easiest thing in the world.

[00:38:21.840] – Grumbine

This is all predicated on watching  . . . you’ll notice the news comes out with stories about the Federal Reserve has bailed out so and so. They quantitatively eased their way out of this problem. The latest emergency fund is supporting banks, shadow banks, anything other than we the people. And so folks like myself, who are in the Modern Monetary Theory camp who have been working with advisors from Bernie Sanders campaign like Stephanie Kelton and others, we’re in the process of trying to explain that.

“Hey, you know, that game monopoly? You know when you run out of money in monopoly, and you just write it on a piece of paper?” That’s all we’re doing here, too. The only difference is they’ve convinced you that they don’t have a pen and paper to write when it comes to we the people. But the minute there’s the problem with a bomb. There’s a minute there’s an oligarch that needs some sweetening, the money’s there instantly.

[00:39:15.630] – Frank

Yeah. Yeah. You’re talking about. This is the old, old deficit Hawk. When the Republicans are out of power. I remember this from my childhood. Jimmy Carter was President and Ronald Reagan is coming up as a radio commentator, complaining, complaining, complaining about deficits. And now they’re spending money they don’t have.

And then they get in power. What does he do? You remember the biggest budget deficit of all time for the military, right. They got to pump up the Pentagon spending. And then it happens again. And then they complained bitterly about Bill Clinton. They actually get him to balance the budget. You remember that?

[00:39:48.210] – Grumbine

He was as good a Republican as any Republican ever was a Republican.

[00:39:51.830] – Frank

Oh, my God. He actually meant it. He didn’t realize that it was all a con. He thought it was on the level and he went and did it. He was a better Republican than they were.

[00:40:00.040] – Grumbine

Absolutely.

[00:40:00.880] – Frank

And then Bush gets back in and hits the gas again, you know, standing on the accelerator. Oh, my God. Yeah. They love that game. They love doing that. Where are we now? We have a Democrat in there. Are they doing it yet? Are they complaining? Yes. Well, yes, they are. Let’s check your watch. Yes, they are.

[00:40:21.440] – Grumbine

But the thing, though, is that it’s this back stopping of the elite control fraud through extreme measures by the Federal Reserve with the blessing of Congress that enabled all of this to happen without any fallout, without anybody being imprisoned. A zero risk back stop there. That is their entire plan.

And the reason I want to take us back momentarily. I won’t stay here. But back to the French Revolution again. The reason I even brought up the nobility part was if those nobles were found to have worked or invested or done anything other than just sucked the money out of the free gifts of the population right,

[00:41:04.710] – Frank

Yeah, yeah.

[00:41:05.870] – Grumbine

If they would have done it, they would have lost their nobility. And so they baked this thing in.

[00:41:09.970] – Frank

I remember hearing they worked pretty hard, like standing around Louie’s bed in the morning, you know, when he would wake up and then the other ones who stood around his bed as he drifted off to sleep. That was hard work, Steven.

[00:41:23.720] – Vaughan

Well, to me, I think it’s kind of the point of [inaudible 00:41:28] capital, right, that American and French revolutions were in response to the aristocracy, and instead of a rule by hereditary title, but rather rule of law. And so it seems to me that the people who want to be aristocrats figured out that all they have to do is subvert the law and the people who are responsible for carrying out those laws in order to regain their status as aristocrats. Is it that simple?

[00:41:59.850] – Frank

Well, not always. There’s a lot of things where we don’t actually have the law, but there’s also plenty of examples where you just need to enforce the law. The one that I always talk about it’s now a hot subject here in Washington, DC is antitrust. The laws were passed in the 1890s where we outlaw monopolies in the US. Those laws were passed over 100 years ago.

What happened is that in the 1980s, by the way, once I mention this, you’ll start seeing other examples of this. But in the 1980s, the sort of legal community, the law and economics community decided that it wasn’t a good idea to enforce those laws anymore, not to repeal them. The public would never stand for that, but to just not enforce them anymore.

And that the only time that monopoly mattered is if you could show that all of these mergers were causing prices to go up to consumers, but that in no other way did it matter. And so therefore, we can allow monopolies again in the United States. And that was under Reagan and all the administrations since then, up to the present one where there’s some question about all of the intervening administrations accepted that Democrats as well as Republicans, permitted that.

And I always used to say, when Obama was President, do you remember towards the end of his time in office, they would always, “Oh, there’s nothing he can do. Do you think the presidency has these magical powers? But, no, the President doesn’t have any power at all. There’s nothing he can do to make America more equal.”

I wrote this more than once. All he has to do is call the attorney general into his office and say, “We’ve decided to start enforcing antitrust again in America. Go get them. Go get those guys.” You can have a field day. But no, he never did that. Now, there are hints that the Biden team might start doing that. We’ll see.

They haven’t actually done anything yet, but there are hints that they might actually start enforcing it again. Wouldn’t that be awesome? But once you realize that you start seeing that this is the case, there’s all sorts of other examples of this where communities of professionals, i.e., the same white collar elite we’ve been talking about, they basically decide, they arrive at a consensus among themselves that the law should be defined in a different way.

And, yeah, that’s not what the public meant when the law was passed, et cetera, et cetera, but that doesn’t really matter. We’ve decided that it really means X, Y and Z. And so therefore, that’s how we’re going to enforce it from now on, which is an incredible power to have. This is totally outside of the Democratic process. But that’s the way it goes.

[00:44:23.150] – Lovell

Well, I think it’s an incredible way to end this dialogue because the purpose for us was to try to find that, hopefully zeitgeist, to inspire our audience to further their knowledge. And I would encourage, please, everybody, to go to Thomas Frank’s website to check out his offerings. I mean, “What’s the Matter with Kansas?” “The People, No,” of course, “Listen, Liberal.”

Those are just prescient works to make us understand what reality has been for decades now. And in that context, Thomas, Eric had teed up for us before we even started this journey. I was asking him to postulate really a theme for what it was that he thought we were about to dive into, and he wrote an essay called The New Aristocracy.

And I can’t believe this many years later, quite frankly, that that’s pretty much what we unpacked. Of course, Bill Black taking us to that point. And your final point about enforcement to us is really what it’s all about, because this movement that we’re trying to galvanize, we’re trying to become a populist center of gravity to create a civil rights like movement to purge corruption. I give you the last word.

[00:45:27.710] – Frank

Wow. Well, Eric was completely right about the new aristocracy that is happening that has come to pass. And we definitely need some kind of reckoning with that here in the US. And how do you build a populist movement? Well, so, Patrick, that is the $64 question that all the historians who care about these things have tried to ask.

There’s a man called Larry Goodwyn. He’s dead now. Otherwise, he’d be a perfect guy to have on your show. But he wrote the classic history of the populist movement. It came out in the 1970s called “Democratic Promise,” and he got interested in populism in the 1960’s when he had been a civil rights organizer in Texas.

And he was doing this kind of organizing, and he learned that there had been this movement 80 years before that had done a lot of similar things. And he’d never heard of populism. He started looking into it, he got very interested in it, and he wound up writing the authoritative history of it.

Once he was done with that, then he wrote a bunch of theoretical stuff about how you build mass Democratic movements of ordinary Americans for economic reform. How do you do that? It’s very difficult. But there has been three really important examples in modern times that we know of.

These are all transracial movements, by the way: the populist movement in the 1890’s, which was the populist movement of farmers and workers who obviously challenged Wall Street, challenged this sort of economic ruling class of the day; the labor movement in the 1930s, which was explosive, grew by these incredible leaps.

It did the same thing, but actually enjoyed quite a bit of success. The populists wound up losing. It took a long time for their reforms to happen. They did happen eventually, but they lost at first. The labor movement in the 1930s actually won. They won all kinds of enormous victories. And they basically pioneered the middle class society that we all grew up in.

And then the third example is, of course, the civil rights movement in the 1960s, which was this very intensely populist movement, movement of ordinary people in the south going out and claiming their voting rights and doing this en masse. And it wasn’t about leaders. And it wasn’t about experts. It was about ordinary citizens.

And towards the end, it was starting to turn into a movement that wanted to challenge economic oligarchy. This is Martin Luther King talked about this all the time. It was becoming that kind of movement. And that was his idea. He and Bayard Rustin, that was their grand idea was to transition from civil rights into economic rights.

And then he was murdered, of course. And the movement never really got there. But you have these three great upheavals in our history, upheavals of ordinary people, transracial movements demanding economic justice. How do you make that happen again? And we’ve all been struggling with that.

And everybody that learns these things struggles with that because they realize right away that this other model, the model that the Democratic Party has for reform, which is put the elites in charge, put the smart people in charge, and they’ll figure it out for you that that always fails. That model is what gives you the bailouts.

That model is what gives you the Obama administration, which, as I said at the start, looked real good when it first came in, but then look what happens when you just leave it in the hands of the professionals and the lobbyists in Washington. This is always what they’re gonna do.

Okay, you have to have the mass populist movement if you really want to get results. You have to. There’s no substitute for that. Well, how do you build it? It’s incredibly difficult. Okay, that’s it. I’ll see you guys some other time.

[00:49:00.790] – Grumbine

That was your Ted talk right there.

[00:49:03.270] – Frank

I know what the problem is and nobody has the answer. Nobody has the answer. Goodwyn himself said, it’s like trying to climb a ladder while you’re also building the ladder at the same time. It’s extremely difficult to do. And nobody really knows. But I’ll tell you, the one thing that all three of those movements have in common is that they don’t speak to people by saying, “Are you a liberal or are you a conservative?”

They organize people based on where they are in life, in reality, and they don’t sneer at ordinary people. This is hugely important. You don’t sneer at people. You organize people. You talk to them in a way that resonates with how they actually live. So you’re talking to farmers about farm problems.

You’re talking to workers about the workplace and about unemployment. You’re talking to Black people in the south who aren’t permitted to vote about their right to vote and then about their economic situation. And then you get all these white workers also signing up and joining forces with you. That’s how you do it.

You talk to people about their lived reality. And everybody can see that’s where our modern day liberalism completely drops the ball because it’s much more interested in scolding than it is in speaking to ordinary citizens in a way that means anything to them. Look, we can sit here and diagnose this and we can say what’s wrong. But building a movement, man that’s hard. That’s tough.

[00:50:24.200] – Grumbine

We got to influence the influencers. And I’m hoping bringing people like yourself on who are so well connected.

[00:50:32.190] – Frank

Oh, my God. You’re thinking of the other Thomas.

[00:50:35.650] – Grumbine

Anybody that is aware of these things, chances are their influence is down like this because they’re being pushed away from

[00:50:42.580] – Frank

There’s no interest in this stuff.

[00:50:44.060] – Grumbine

None.

[00:50:44.650] – Frank

Exactly. It’s funny how vested our political establishment is in the war between good people and Trump. And what we’re talking about is something completely outside of that and something different from that but overlaps with that here and there, but something that is a much larger story, right.

And when you try to tell that story and talk about those things, they just don’t want to hear it anymore. They want it to be this stupid little fight between them and the Trumpists.

[00:51:12.200] – Lovell

Well, it’s brilliantly, stated, Thomas. And to close this off from my perspective, and obviously, if anybody else wants to offer any final thoughts, but really, I think what Steve just said is so incredibly important because we do have to have nodes of allies. And I think that what you’ve demonstrated, I mean, we’re nobodies.

And yet here we are talking to somebody that we all admire as somebody who’s a huge influence on what we’ve become. So thank you for that. And I’ll just say that we’re desperately trying to move the ball forward based on, and I’ll say it probably for a fifth time in this conversation. I apologize to be redundant, but a civil rights like movement to purge corruption because it’s

[00:51:46.770] – Frank

There you go.

[00:51:47.490] – Lovell

It’s central to the problems of the plight of the south and Gerrymandering. It’s central to the white working class or just working class writ large. And it combines all of these in the confluence has got to be liberty and justice for all because if not that, what is it? It’s your identity.

[00:52:04.850] – Frank

You said it. That is exactly right.

[00:52:07.780] – Grumbine

Thank you very much for your time. And this was fantastic.

[00:52:13.700] – Ending credits

The New Untouchables is produced by Andy Kennedy, descriptive writing by Rose Ann Rabiola Miele, and promotional artwork by Cristina of Paradigms and Revolutions Design Group. The New Untouchables is publicly funded by our Real Progressives Patreon Account. If you would like to donate to The New Untouchables, please visit patreon.com/realprogressives.