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Rob Johnson:
Welcome to economics and beyond. I’m Rob Johnson, president of the Institute for New Economic Thinking. I’m here with an old friend and outstanding journalist who’s covered economic issues for over 20 years. Peter Goodman is currently a global economics correspondent at The New York Times, and prior to that, in the distant past was the head of the Shanghai bureau for The Washington Post. He’s got a new book that’s an extraordinary, extraordinary …
Peter Goodman:
Thank you.
Rob Johnson:
Portrait of our time. It’s called Davos Man: How the Billionaires Devoured the World. It comes out on January 18th, and we’re very fortunate for Peter, how do you say? Giving us the time to explore his ideas here today. Thanks for joining me, Peter.
Peter Goodman:
Thanks so much for having me. I’m a huge fan of the podcast. It was a great inspiration to me actually while I was putting the book together, because you kept teeing up this fantastic, interesting speakers who had all sorts of relevant things to say about many of the subjects I’ve been diving into in the book, so thanks for having me.
Rob Johnson:
Yeah, thanks. So let’s talk. What inspired you? What was the itch that made you want to scratch by writing this book?
Peter Goodman:
Well, in a lot of ways it’s the culmination of things I’ve been writing about, thinking about now for a quarter century. I mean, going back to writing about China’s transformation while I was based in Shanghai, covering the Great Recession in the States, and then going off to be the European economic correspondent in 2016. But it’s been triggered really by things that have happened more recently, like Trump becoming president, Brexit happening, something that most of the sort of conventional wisdom thinkers would have said could not have happened. And just the clear sign that there’s a lot of something other than harmony in a lot of our major economies. There are a lot of very unhappy people with a lot of legitimate grievances that has resulted in leaders taking power. Not just Trump, not just the people who delivered Brexit, but Matteo Salvini becoming a force in Italy, the Sweden democrats, this party with root in the Neo-Nazi movement becoming a mainstream party in Sweden.
You go around the globe. The rise of Bolsonaro in Brazil, Narendra Modi in India, Duterte in the Philippines; signs that something fundamental is shifting in our democracies, where suddenly leaders with very unconventional ideas about justice, about identity, about nationalism, are taking power. I found myself writing about these transformations in sort of siloed fashion, while realizing again and again that they all had something in common. That was a basic pillaging of public resources. A lot of people were thinking about economic inequality in connection with what we now call right-wing populism, but a lot of the trends like the fact that a wealthy handful of people in many developed economies were monopolizing and increasing the share of the gains of modern capitalism, lots of people were writing that and observing this link.
But the tone always seemed to be sort of passive. There was this kind of faceless group of beneficiaries. Nobody ever pulled the curtain. And so there was this discussion of these massive shifts happening in our societies as if we were discussing weather patterns, or worse, as if somehow inequality is just preordained. If you want to have vaccines, if you want to have Google, then you’ve got to have some people losing in a tremendously dramatic way. I found myself time and again dissatisfied by the explanation. There is a culprit, and that culprit is a species of humanity I refer to as Davos Man, stealing a name from Samuel Huntington, the political scientist who coined that term back in 2004, to refer to what we can now call the billionaire class. People who are so wealthy and so powerful that they effectively write the rules for the rest of us. They don’t feel any particular loyalty to any particular ideology or nation or set of conventions. They’re really just about perpetuating their own power and adding to their own bottom line.
These are the people who have essentially made modern society and democratic governance come to a place of real dysfunction. These are the people who have effectively liquidated public infrastructure and given the proceeds to themselves through tax cuts, through tax invasion, who privatized important parts of government, who have left our governments in a really pitiful state. Especially in countries like the U.S. and the U.K. where these trends are particularly extreme, but even in places like Sweden, this supposed bastion of social democracy, where in the midst of a pandemic we learned that the public health system has been cut so much that we’ve essentially sacrificed senior citizens in order to build up herd immunity for everybody else.
So that’s a long-winded way of saying, I felt it necessary to focus on the people who are actually responsible for engineering our modern economies to operate in the service of their own bottom line, at the expense of everybody else. That’s the sort of gray matter that explains why so many people are in such a precarious state that they’re willing to embrace some extremely unconventional and usually ineffective solutions to very real problems of scarcity.
Rob Johnson:
Mm-hmm (affirmative). Yeah, I remember a number of books, how’d I say? Walking up the ladder towards where you’re at. A gentleman named, I think it’s David Goodhart, The Road to Somewhere, in the U.K. You mentioned Dead Souls: The Denationalization of the American Elite, which was the original article by Samuel P. Huntington, who is not considered a left-wing critic or what have you. He was just essentially saying, “We’ve with globalization created a place where these people aren’t governed by anybody.” They can, what you might call play in the cracks and the fault lines, or arbitrage between cultures. Things have come way out of balance in that context. I’m curious. When I’m listening to you in the introduction, I always hear musical lyrics. I heard Buffalo Springfield sing For What It’s Worth. There’s something happening here, but what it is ain’t exactly clear. There’s a man with a gun over there, telling me I got to beware. Hey children, what’s that sound? Everybody look, what’s going down?
So you’re sending us a flare. I mean, you might say it’s long overdue in the way you describe thing, but you’re sending us a flare of how to look at what you want to call the psychological resistance from ideologies as it relates to people and actual structures. Davos Man is borrowed from Samuel Huntington’s title, and it’s symbolic. But you also in the book explore the actual nature of the World Economic Forum and Davos, and I’m curious, how do I say, how you arrived at this title I think had to be in part influenced by what you saw in your diagnosis was evident in that context.
Peter Goodman:
Yeah. That, to be perfectly honest, was accidental initially. I mean, what’s become the main thrust of the book didn’t start out that way. I mean initially, I was writing what I thought … I mean, this is pre-pandemic, right? I’m conceptualizing a book that’s about inequality and how in many societies where right-wing populists have taken power, often demonizing immigrants or demonizing other vulnerable populations as the explanation for why people don’t have enough healthcare, why housing is no longer secure, why people who previously could earn a living with their hands can’t anymore without risk of poverty.
And so I was trying to write … I began by writing this story of inequality and right-wing populism, looking at how these right-wing populist opportunists would demonize some other group and capture votes. This is a playbook we saw in the United States with Trump. This is to a large degree how Brexit ultimately happened. This is how the right wing got very popular during the time I was writing this book in Italy. And then I realized, as I went off to Davos in 2017, Brexit at that point was six months into the process. Trump was about to be inaugurated, and suddenly the founders of the World Economic Forum decided that they should at least pay lip service to an explanation of populism and inequality. So there were all these panels about how to deal with inequality and I thought, “Well, let’s go sample what’s on offer.”
I went to a bunch of different seminars, and for those who’ve never been to Davos, which I assume is most people, it is officially a bunch of very earnest seminars on things like gender equality, inequality, threats to the environment, and this supposed search for solutions all under this rubric, committed to improving the state of the world. Which if you think about it, gives away the central absurdity of the whole enterprise, because the people who are gathered there are the people who are responsible for the state of the world. The people who go to Davos could, with the blink of an eye, solve all of human problems if there was consensus right there. But by gathering under this rubric, committed to improving the state of the world, everybody gets to claim that that’s what they’re actually interested in.
So whatever it is that they’re discussing, whether you can have a panel full of pharmaceutical industry executives discussing the inaffordability of drugs as if like, “Hmm, this is a real head-scratcher. Let’s try to get to the bottom of this one,” with everyone engaged in this supposed conversation truly devoted to this, as opposed to posturing to maintain their own privileges. So at this particular Davos in January 2017, I went around to see, “Okay, everyone here has come around to the view that globalization, the system that’s made everybody incredibly rich, is not under threat.” Some wacky things have happened. Nobody expected to see Brexit happen. Nobody expected to see a multiple bankrupt casino magnate who’s threatening to treat the U.S. national debt like the sort of debt that he can renounce as a casino magnate. “These things are wacky. What are we to make of this? Let’s try to understand.”
And as I went around, I heard explanations, supposed solutions for inequality, that always put the onus on the people who didn’t have anything. “Well, workers have to train themselves.” I heard my former boss, Arianna Huffington, talk about how people need to sleep more. If everyone sleeps more, that will solve our problems. I listened to Ray Dalio, who at the time I think was worth 17 billion dollars, one of the largest investment managers on earth, talk about how what we needed to do was unleash more animal spirits so that people could feel more incentives to make money. As if a man worth 17 billion dollars somehow … We don’t have enough incentives in the system to make money to begin with. That was very odd.
What I didn’t hear anyone talk about was strengthening the power of labor, so workers could negotiate for better wages and working conditions. I didn’t hear anybody talk about progressive taxation, so that we could actually redistribute some of the wealth from people who have more of it than they could possibly spend in multiple lifetimes, to everybody else. And that was very striking. So as I began to conceive of the book I thought, “This right here, the gathering of the people who have all the money, wanting to lecture us about how we’re going to solve this …” Solve, I put in air quotes. “The situation where they have everything, but they’re not actually willing to sacrifice, because they’re interested in win/win solutions.” This kind of mythical idea that the billionaires don’t have to sacrifice, the wealthy don’t actually have to give anything up, but somehow through talk and the expressing of good intentions, we can achieve some sort of solution to this problem.
That became my way in to the broader story about how we got to this place. And then I realized that you couldn’t simply refer to the billionaire class in composite. We had to have some cases that we could explore, so we could get into the life experiences and the psychology and the actions of these incredibly wealthy people who have amassed these fortunes, and who have gone to great pains to protect those fortunes and build them, even while they’re giving us lectures about how they actually have our best interests at heart. So I then picked five characters who I thought typified this mindset in various ways, and gave us exposure to different industries.
So I started with Marc Benioff, who’s the CEO of Salesforce, this big software company, who’s on the board of trustees of the World Economic Forum, who’s taken to saying that CEOs are the heroes of the pandemic, that CEOs have saved us. The government hasn’t saved us. I wrote about Jamie Dimon, who of course has JPMorgan Chase and who played a central role in getting Trump’s enormous tax cuts, which have furthered inequality, passed. I wrote about Larry Fink, who’s another CEO like Benioff. He’s the head of BlackRock, which is the world’s largest asset management firm. Like Benioff, talks about this thing called stakeholder capitalism, this idea that we’re passed the day of Milton, Friedman, shareholder maximization. Now companies are thinking about social good. They’re thinking about the environment. They’re thinking about local communities, and who has along the way managed to amass his own fortune along with the power to shape the bailouts that have been spent, not just in the most recent crisis, the pandemic, but previously in the great financial crisis, giving him just tremendous insight into how the Fed in particular really spend its money, how it operates.
I wrote about Jeff Bezos, who needs no introduction. But I’ve come at Bezos in a different way I think than most people who have written about Bezos. I look at him as a tremendous beneficiary of international trade, as the intermediary between factories around the world and consumers in the wealthiest markets, especially the United States. But has monopolized the bounty to such a degree that much of the public has turned against trade, which is really a great loss. Because trade, if we run the rest of our economy as well, is generally pretty beneficial to most people.
Rob Johnson:
Well, we’re at a place now, a juncture, where you might say we’re both looking back and looking forward. We’re looking, while the pandemic is still here, at who’s gotten rich from the pandemic and who’s suffered. We’re looking on the horizon at climate change, and the need to organize, you might say for a common good. And I would say we also have a need to, how would you say, look forward to how despair distorts or impairs democratic politics, and makes people, what would you say? Vulnerable to the temptations of demagoguery or authoritarian solutions, because they don’t see any relief on the horizon for their multiple anxieties.
Peter Goodman:
Right.
Rob Johnson:
So I think, and I guess I’m a doctor’s son … Your diagnosis of the operation of what you call the Davos Men does shed light on some of the, what you might call, depth and persistence of anxiety about future challenges. I’m curious, for instance; when I heard you, you were talking about BlackRock and others. You were talking about the, say, the use of private-sector systems to vigorously address challenges. That some of these people would say, “If you do it to us, it all bogs down. If you do it with us or enlist us …” Maybe you’ve got a problem with managing conflicted interests, where doing well for themselves and doing well for the system they’re asked to invigorate is hard to balance, or to monitor, or to regulate.
But I’m interested in how you’re seeing … Given what you’ve learned, we need to approach this next phase, this next chapter. Let’s say climate change. I know Mark Carney, who is a friend of mine, has talked about channeling the 30 trillion dollar capital markets in the direction of addressing climate change. Others, Adair Turner, who’s been a senior fellow at INET, has talked about the need to engage all of these energy systems companies-
Peter Goodman:
Sure.
Rob Johnson:
To deploy renewables around the world.
Peter Goodman:
Sure.
Rob Johnson:
But the question at some level is, how do you do that without what you might call excessive exploitation? If the systems of governance, regulation and balance is absent-
Peter Goodman:
Sure.
Rob Johnson:
And may lead to further despair and further lurching toward authoritarian rather than democratic solutions?
Peter Goodman:
I mean, my intent in writing this book is not to demonize business or billionaires or wealth. Business is full of incredibly intelligent people who know all sorts of important things on a great range of subjects, and have a lot of solutions. I mean, there’s no question about that. It’s not that we need to get to a place where government is the solution by itself to all problems. It’s that we need to excise this unhealthy thinking that we’ve adopted as a society, and not by accident. I mean, mentalities that have been engineered by Davos Man to prevent us from very common-sensical approaches to business, like simple regulations that ensure that the public is protected against pollution, against the risk of financial crises. To ensure that there are basic workplace standards such that ordinary rank-and-file workers don’t have to choose between exposure to a deadly virus in a pandemic, and their paychecks. We need to have some rules, and those rules need to be set by the public through democratic means.
But if we do that, if we get the policies in place, there’s no reason why government can’t then partner with businesses. I mean, how are you going to … There’s simply no way that we’re going to address climate change without engaging the people who are running the energy sector. They know the nature of the problem. The have the solutions. They have the data. They have the science, but we need to change the incentives. What ultimately I’m arguing in this book is, we need to get over this idea that we can simply entrust billionaires who have built a machine that has been incredibly lucrative for themselves and their shareholders. We need to get over the idea that they’re just going to solve our problems, through right now it’s stakeholder capitalism. This kind of absurd notion that we can just count on businesses doing the right thing, so therefore we don’t need government to regulate. We don’t need labor unions to play a role in wage negotiations, in ensuring decent workplace conditions.
We do need to have government play the role that it played, especially in this country, in the United States, in the period in which the market was in fact working most effectively. That’s 1945 until the middle of the ’70s. Now, my book is not an argument that we want to go back in time to the mid ’70s. I mean, we had all sorts of problems that we’ve made a lot of progress on. I mean, we’re a much more representative society, though by no means can we declare victory in terms of race and gender. There are tremendous class cleavages. I mean, we lived through the Vietnam War. We had Jim Crow in that period. I mean, I’m not here to sort of romanticize the post-World War II period.
But in one basic way, a time when unions were stronger, when government regulated much more diligently than it has since on anti-trust, on labor conditions, you did have a situation where economic growth translated into rising living conditions for just about everybody. Just about every community got their piece of the action in that period, and we need to get back to that in a modern context. That’s not going to happen by waiting for Davos Man to deliver on Davos Man’s rhetoric. Davos Man is extremely skilled at expressing empathy. I mean, the whole point of the World Economic Forum is this kind of elaborate virtue signaling for everyone who’s a participant. Even if those of us in the audience are not buying it, Davos Man himself is buying it. Davos Man leaves Davos every year more energized in his own goodness and his own ability to … As Benioff’s actually written books about this … To do good and get rich at the same time.
There’s a conflict between the systems that Davos Man is building for his own enrichment. Legalizing tax evasion, stripping away regulations, minimizing taxation at the top. I mean, this kind of bottom-up income transfer, this is a direct collision between that and the policies that everybody else needs, to do the things that are required to generate economic growth that actually promotes well-being for large numbers of people. That involves investing in public infrastructure. That involves making healthcare, housing, education, more affordable. There are no win/win solutions. Some people are going to have to give something up. The people at the top are going to have to give something up, and they’re simply not going to do it of their own volition. It’s going to require an exercise in democracy.
Rob Johnson:
Yeah. Let me ask you a question about that, the exercise in democracy. Because I know I have a group at INET called the Commission on Global Economic Transformation, that Michael Spence and Joe Stiglitz co-chair. They’re working on five different reports related to what I’ll call disruptors; climate, technology, globalization, a disruptor of governance, which is what we’ll come back to, finance, and migration. In the question of governance as I’ve listened to these experts … There are about 22 of them on this commission … Talk about it, there’s this notion which is, local governance is tangible. It’s like if a guy says to you, “How can I get …?” If you’ve got a local councilman and you say, “How can I get my driver’s license renewed?” he can help you.
Peter Goodman:
Right.
Rob Johnson:
Global governance, it has everything under the tent that can affect you, but it’s a long way away from you. Local governments may diagnosis the maladies, but not have any control over the things that are damaging your life. So when you talk about democracy, I feel like we’re in a place where people who are skillful and not necessarily well-being, whether consciously or unconsciously, can arbitrage between societies. I think globalization, with its high-speed technology financial transfer, has strengthened the bargaining power of capital and technology and financial capital.
Peter Goodman:
For sure.
Rob Johnson:
And weakened people, because the resistance to human migration, particularly among the lower educated, is quite formidable. And so how do we get the kind of governance of the whole system that is both responsive and equitable, but acknowledges this global platform?
Peter Goodman:
I mean, this is the ultimate question. Unfortunately, there are no enormously satisfying answers beyond, people have got to organize around educating their fellow citizens on the real root causes of our problems. How do you reform a system that is effectively controlled by the people who benefit from the system? That’s really what we’re asking. I mean, how do you take a system where the rules have been written by Davos Man, to promote the interests of Davos Man, to protect Davos Man from things like anti-trust enforcement and taxation. And how do you use that very system, that Davos Man basically controls, to make Davos Man pay his fair share so the rest of us can send our kids to college, and go see a doctor when we’re sick without taking out second mortgages on our homes, if we even have homes?
That’s really the question that we’re asking. All we can say is that, I mean in terms of our own history, in terms of American history, our history is full of people who didn’t seem to have any power, finding in the Constitution, in favorable platforms for organizing, ways of securing rights for themselves. That now has to be done on a grand scale, because the status quo seems to be that every time there’s a crisis, and we’ve now lived through two very profound crises in a short period of time. I mean, we’ve lived through the great financial crisis of 2008, which turned into the sovereign debt crisis in Europe and the Great Recession in the U.S., which went on a long time and has left a lot of people nursing very real grievances about how little they got, as they watched billionaires get bailed out.
And now we’re living through the pandemic. What we’ve seen is, we get a lot of rhetoric around, “Oh, we need change. We need a fundamental refashioning. We need policies that will protect ordinary people instead of simply the one-tenth of the 1%.” But there’s a system that … Here we are. I’m tempted to now speak in the passive voice, which is what we seem to default. “Oh, the system replicates itself.” No, what happens is Davos Man. I mean, the phrase I use to describe the billionaires who actually write the rules. They’ve got lobbyists that no one else can dream of. I mean, people who need help with child care so they can go get to work, they don’t have lobbyists. People who are defending themselves against eviction in a pandemic that was not of their own making, where their job is now gone not through any bad behavior on their part but because they happen to be unlucky to live in this moment of time. They generally don’t have lobbyists.
Amazon has 100-plus lobbyists in Washington, D.C. Davos Man has the apparatus that is designed to maintain the status quo and make it sweeter. That’s what happened after the global financial crisis. That’s what’s happening now. The only solution to that is for the people to use the only strength the people have, and that’s numbers. Davos Man is very skilled at dividing and conquering, making sure that somebody is aggrieved about something that implicates someone other than the billionaires who manage to pillage the public infrastructure. We’re always talking about … We’re always angry about some seemingly local issue that comes down to values. Again, this is not by accident. I mean, the worst media in our midst is about getting clicks by demonizing somebody, by making us afraid of crime, by blaming big government, also not accidental.
I mean, the whole concept of big government, financed by big business to protect itself from regulations, to get out from under regulations. And we fall for it because the people, Davos Man doing this to us, are very skilled in their use of a formidable tool kit. The only way that gets undone is for people to use the democracy that’s there. I’m not looking at this through rose-colored glasses. I’m not saying that’s simple. I’m not saying that’s around the corner, but that’s the only way out of this.
Rob Johnson:
Yeah. Well at some level, using the democratic process … Not necessarily the democracy that is there, and here’s the distinction I would make.
Peter Goodman:
Yeah, that’s a good point.
Rob Johnson:
There are a whole lot of people, let’s say from the Biden administration. I’ll just focus on the United States for a moment … Who wanted to alleviate suffering. But their survival, whether it’s in the House or the Senate or the future White House or whatever, depends upon raising money. And so the question is, would they rather go for it and run the risk of getting bounced out in primaries or what have you, by deep-pocketed counterforces? Or do they want to survive and see if they can edge their way towards something, albeit not satisfying enough to create a change from the existing design to the one you might envision?
This is what I think is one of the most difficult dilemmas, is how do we evolve democracy back into a healthier place when there is so much concentrated wealth, and there is so much use for money in politics, in thwarting those reforms? I think it’s a very painful thing to consider. I think if we don’t consider it, the prolonged despair leads to a further wreckage of the system.
Peter Goodman:
Well, I mean I think that … Sorry. Sorry, Rob.
Rob Johnson:
Yeah. I was just going to say, it leads to the further wreckage of the system, a despondency, and as I’ve mentioned a couple of times, the lurch toward authoritarian solution. Because at least the authoritarian says, “The system is rigged. There’s something wrong.” Not that they’re going to fix it, but they do diagnose it.
Peter Goodman:
Right, yeah. I mean, I think what Trump taught us in the U.S. is there’s a tremendous power in people who have suffered a degradation of their living standards, hearing someone talk about that and identity a cause of that, even if that cause is bogus. There’s a tremendous power. You know the old cliché like, “Everybody just wants to be heard.” I think there’s a lot of truth to that in society. I think a lot of people now … Most of us have been living in a society where we have good reason to think the people in charge are not looking out for us, are not thinking about our well-being. They’re thinking about something else. They’re thinking about the well-being of our donors, if they hold public office. They’re thinking about their own companies and their own shareholders.
I mean a pandemic, more than probably anything we’ve ever lived through, is a sign that we can’t just assume that there’s this system that’s just going to take care of what needs to be taken care of. That’s just clearly fatuous. And so given that, the political apparatus, which is very sophisticated, has figured out how to find someone who can be blamed. Whether it’s China and the trade deficit, or it’s … Not, by the way, to dismiss the idea that China is a significant economic problem. China is a significant economic problem. But the solutions to that problem have been simplistic, and in many cases have actually hurt the interests of the people who are supposedly set to be helped.
The first step in this process of reclaiming a kind of democracy that could work is to at least lose these false binary ideas that Davos Man has imposed upon us. So take vaccines, right? I think the average person is grateful that Pfizer and Moderna in the U.S. have cooked up these life-saving concoctions that have clearly worked dramatically. They have cut hospitalization rates, cut the death rates. They’re incredible. But along the way, many of us have internalized this idea … Not an accidental idea … An idea imposed upon us by the billionaires who run the pharmaceutical industry, that we can either have these vaccines and accept that there’s going to be tremendous inequality with the situation we’re now in. Where you have frontline medical workers in parts of Africa going off to hospitals to treat COVID patients with no protection whatsoever, while we’re talking about booster shots for our children in the United States. You can either have that … That’s just how it’s going to be … Or we might as well live in caves, just praying to the gods to save us from this pandemic.
It’s just nonsense, right? I mean, the vaccines that we have … And actually, INET has done a lot of very good research on this, has done a lot of very valuable research. The vaccines we have are the result, by and large, of publicly-financed research. In the Moderna case, the intellectual property itself is owned by the taxpayer, and we have tremendous capacity to both have vaccines, and dictate how those vaccines are distributed. Now what we’ve lived through is Davos Man distributing the vaccine to people who can pay. And so if you live in a country like the U.S. or the U.K. or Germany or Switzerland or Japan, and your government is willing to write a giant check to Pfizer and Moderna and the other pharmaceutical companies that have developed vaccines, then you have protection. If you live in Nigeria, then you don’t have protection.
That is the world that we’re living in, and that has happened because we have accepted … Not merely accepted. We have been sold by the pharmaceutical industry on this idea that it’s an all-or-nothing proposition. You either accept the inequality, you accept the monopolizing of the returns, or you go without. That’s just demonstrably nonsense. I mean, we’ve lived through many periods in our history … Take the end of the HIV debate over intellectual property, where the pharmaceutical companies can make out just fine. No problem with pharmaceutical executives driving off to their beach houses in their Audis. That’s all well and good. The shareholders can make a nice return, and we can still get life-saving medicines eventually … Far too late, but eventually … Into the bloodstreams of people who need them.
That basic reality needs to be explored in finance, in housing, in healthcare, in education. We need to understand that we have a lot more choices beyond the status quo where a handful of people benefit and a lot of people suffer, but at least we have the fruits of modern capitalism, or we’re Venezuela. That is just a false binary that Davos Man has sold us, and it’s really polluted our sense of governance and our sense of what is possible.
Rob Johnson:
Mm-hmm (affirmative). One of the things I find, how do you say? Makes me shake my head, is when people talk about fiscal prudence, meaning not letting the deficits run out of control because it leads to what you might call future tax liabilities or what have you. And then they want to let the dissemination of these vaccines, that as you mentioned rightfully, the taxpayer largely paid for the R&D, though there’s value added coming from many dimensions.
Peter Goodman:
Sure.
Rob Johnson:
But the idea that … I’m going to be really silly here … That we don’t go to the pharma executives and say, “We’ll double your profit,” and then disseminate all over the world. So we stop variants from happening. We stop having a second and a third and a fourth shutdown, and all of the fiscal [inaudible 00:40:17]. We would save trillions by spending billions, if we would just acknowledge what the playing field really looks like.
Peter Goodman:
Yeah. I think that’s true, though I think there’s also some credence to the idea that this pandemic is probably not a one-off. People in Pakistan, Nigeria, South Africa, Bolivia, who are still waiting for what COVAX was supposed to deliver, have every reason to say, “Well, we don’t particularly feel like waiting for our former colonial masters to show up all generously with the goods. We need to build up our own productive capacity.” And that’s going to involve some help with the intellectual property, with technology transfers. That’s not going to happen because Pfizer and their CEO, Albert Bourla, signs the business round table stakeholder capitalism pledge that says, “We’re not just running our company for the interests of our shareholder. We’re now thinking about society.” We can’t put stock in that. We need rules, and maybe it’s at the World Trade Organization. Maybe it’s the U.S. government joining with the U.K. government, the European Union. But we need something that’s going to allow this process to happen, beyond just waiting for the goodness of the corporations to come and save us.
Rob Johnson:
But I think by what you might call tolerating powerful ability, what I’ll call Plutocratic ability to influence the rules, regulations and possibilities, and influence the false consciousness with ideologies, we’re actually costing ourselves lives and money.
Peter Goodman:
Well, but who’s the we?
Rob Johnson:
There are unnecessary losses. Well, who is we?
Peter Goodman:
Yeah.
Rob Johnson:
It’s the malfunctioning system. It’s not the public at large, who are disenfranchised.
Peter Goodman:
There’s no question. I mean, I get into this directly in the book, that the failure to distribute vaccines globally … I mean, it’s not just about humanitarian impulses. If it’s not enough to think that we ought to be making sure that doctors in developing countries have access to vaccines when they go treat COVID patients. But if that’s not enough, yeah, that’s absolutely right. How did we get Omicron? I mean I was writing stories, and I was hardly alone, a year ago saying that the impact of this lopsided distribution of vaccines could very well be that we get variants. The variants are going to shut down business not just in the places where they first pop up. They’re going to shut down business everywhere.
Now if you’re Marc Benioff and you’re selling software that allows people to work from everywhere, maybe there’s actually a net benefit. And let me be careful and say, I’m not saying that Marc Benioff is rooting for variants, or happy about this. But certainly, his company is a beneficiary. Amazon is certainly going to reinforce its hold on e-commerce if more of us are stuck at home and don’t feel like going to the shopping mall or the supermarket. I mean, there are beneficiaries in this. Moreover, every time there’s a bailout, Davos Man manages to unleash lobbyists to make sure that a lot of the bailout functions is a kind of corporate welfare system for his own interests. So we is a complicated word when you’re discussing Davos Man, because Davos Man owns his own islands, his own planes, lives in the ultimate sort of gated community. As long as money is moving around somewhere, Davos Man is going to get a cut. Whereas it’s we, the vast majority of the rest of humanity, that will suffer as the pandemic goes on.
Rob Johnson:
Yeah, yeah. But what I was trying to suggest, and I perhaps didn’t do it well, is it’s not a zero-sum game. It’s a negative-sum game.
Peter Goodman:
Right.
Rob Johnson:
That the losses from adhering to Davos Man’s design are much greater than the benefits of doing it right and then paying them a little extra on the side. Even if that’s what we had to do to bribe them to unlock a healthier design, we’re not doing that. I’m very, very concerned on the scale of the pandemic, coming back to the theme that I’ve emphasized over and over. When people see something of this import, meaning the pandemic, and they see us failing, it diminishes further their faith and trust in the capacity of governance, social organization, and makes the temptation of authoritarian alternatives even stronger.
Peter Goodman:
Yeah, I think that’s right, or even just misinformation. I mean, I think it’s fair to say that part of the reason why vaccination rates are so low in the United States is that lots of people … Yeah, I mean to your point, I mean if you live in a system where your needs have clearly not weighed in very heavily in the decision-making in terms of policies, then suddenly you’re supposed to believe that the people running the system have your best interests at heart in deciding to take a vaccine that’s been cleared just for emergency use? Now, let me be careful. I don’t want to feed anti-vaxxer lies. I mean, it seems pretty clear the vaccines have had a tremendously beneficial effect. If you get vaccinated, your risk of dying or even ending up in a hospital get reduced dramatically. We all should be taking these vaccines.
But it’s not difficult to imagine how someone who has seen their low-skilled job shipped overseas, so that somebody working for a fraction of their wages can take that job, who’s gotten very little help while they’ve been out of work, who watched the powers that be bail out the bankers after the 2008 financial crisis while doing little to nothing for average homeowners or people threatened with eviction, would look at this and say, “Well, I don’t know. I don’t really know what to think, but I don’t have a whole lot of faith in the people running the system.” That can be expressed all sorts of ways. One of them can be to lead somebody to anti-vaxxer clickbait, propaganda. That does seem to be what’s happened.
That certainly applied double in terms of climate change, in terms of the biggest challenges of our time, which are not win/win. I mean, somebody’s got to … I mean even if we can accept, and I think we should, that in dealing with climate change we’re going to need a lot of public and private investment. That’s going to create an awful lot of jobs if we do it right, but some jobs are going to be lost. And so you can understand how somebody who in the immediate term … A coal miner whose job is on the line in the face of climate change … Isn’t open to a conversation around a sort of system-wide transition underway, because they simply don’t trust that there’s a process at which their needs weigh in much, if at all. Because again, we all know it in our gut.
I mean, this system has been built by Davos Man for the benefit of Davos Man. The realization of that does not lead toward cooperation. It doesn’t lead toward clear thinking, and it opens the door to all sorts of nefarious interests. The clickbait merchants, the political opportunists who want to have us fear something or someone to get our vote while then doing nothing, or even harming us along the way. It leads to more of the same. That is our fundamental problem.
Rob Johnson:
Yeah. Let me look back at the introduction. I mentioned that you used to be a journalist in Shanghai.
Peter Goodman:
Right.
Rob Johnson:
And I’m looking at a world right now, and I’ll quote my friend … I won’t quote. I’ll, how do I say? Paraphrase my friend Orville Schell. He wrote a book with John Delury called Wealth and Power. In the book he said, you have China, which suffered from the opium wars and the Japanese invasion, on a pathway to regain its national dignity. And you have the United States, which has led the world’s system since World War II, but is smaller in numbers of people and so forth than China, as China is developing. You have a Western system, what Zbigniew Brzezinski used to call the Cartesian enlightenment system. And you have an Eastern philosophical system we might call Daoist, that governs China.
So you have tectonic plates between who believes they should be in control, or is there a changing of the guard? You have philosophical differences. You have a wounded rising country, from the hands of the West, in China. And you have this world that you’re talking about, social media or whatever, clickbait, demonization. We see it in the demonization of race in the United States. The places where everybody’s suffering, maybe because of automation or machine learning or other causes, the fights between black and white break out and the ability to make coherent school systems in heterogeneous parts of the community fall apart. But the U.S./China thing is now moving to center stage. The tensions, whether it’s related to the Taiwan Straits or whether it’s related to the need for collaboration in climate, how are we going to put China and the U.S. together?
I mean, I’ve seen some of your Davos Men have been trying to build in China, even in recent months. Others are probably making a lot of money from having built there and avoiding, whether it’s labor or environmental restrictions. Others talk about how the uplift of the average living standard in China over the last 40 years is miraculous. But how do we build this governance across these tensions, these philosophical differences and fault line? You’ve been in China. How do you see that scenario playing out?
Peter Goodman:
Well, I was in China from roughly 2001 to 2006, at a time when businesses were still inclined to sell the almost comically absurd notion that increased trade would inevitably lead to pressures for democratization in China. I think, I mean to answer your question, in terms of the work that we need to do outside of China, we need to disabuse ourselves of the fairy tales that have guided our policies, I mean particularly U.S./China policy. And again, not by accident, because for Davos Man, China was central to the profit-making equation. I mean, China was ultimately allowed in to the World Trade Organization in 2001, and got access to markets around the globe. Because Davos Men like Jeff Bezos found that … And eventually Steve Schwarzman, who’s a character in my book who’s been engaged in all sorts of financial and real estate dealings in China … Larry Fink now, setting up mutual funds.
From the beginning, I mean if you go back now more than 20 years, China was the ultimate way for companies that were organized around enriching shareholders, often by reducing costs, to make their stuff much more cheaply than they ever could in their home countries, and then ultimately to sell into a country of 1.3, 1.4 billion consumers, making it the world’s largest potential consumer market for damn near everything. And that was the pressure. I mean, what China’s WTO entry was really about was opening up this great frontier not only for sales, but eventually for investment as Chinese financial entities would take the money they were earning by selling stuff to Americans, Europeans, and then plowing it into productive enterprises for Davos Men like Steve Schwarzman, who sold real estate in New York to Chinese interests.
It was never about how it was packaged, right? What the public was told by people I refer to as Davos Men enablers, like Bill Clinton, like Larry Summers as treasury secretary in the U.S., was that this wasn’t really about business. It was about democracy. It was about civil liberties. We engage with China, then Chinese consumer class will develop demand not just for our Gucci handbags and our Hollywood movies and our Coca-Cola, but also for democracy. There was clear evidence that that was not happening, and yet … That in fact the reverse was happening. That in fact, engagement between China and the West was changing Western companies more than it was changing China. So J.P. Morgan got caught basically handing out internships to the children of powerful Chinese Communist Party officials, and guess what? Those officials then developed a taste for J.P. Morgan investment banking services.
Steve Schwarzman runs this Schwarzman Scholars program, which brings high-level students from around the world to Tsinghua University, which is this very prestigious campus in Beijing. The Chinese Communist Party selects its own candidates, and through this exchange we’re supposed to get mutual understanding. Yeah, I’m sure some of that happens, but a lot of deal-making happens as a result. That was always what the game was about. And now that we have clear evidence that the Chinese Communist Party has taken a dramatic turn toward the authoritarian, there’s much less of a healthy civil society than there was when I was there 15 years ago. Dissent is stamped out dramatically. We’ve seen the treatment of the Uyghurs, this ethnic minority in the Western province of Shinjang, who have been housed in concentration camps. I mean, the word genocide is now commonly used to describe what they’ve suffered. It’s impossible to cling to this idea that by engaging in trade with the West, China would become democratic.
So what we’re left with is the knowledge that China is vital for the solution of any global problem. You cannot address climate change. You simply cannot address questions around financial stability. You can’t address questions of national security in the shipping lanes around the world. You can’t address the supply chain cast that we’re living through, without a real relationship with China. But that relationship has to be based on the genuine interests of the people and the societies that are engaging with China, and not the handful of people, Davos Man, that has previously monopolized the conversation and set the policy for everyone.
Rob Johnson:
Now I recall in your book, you paint portraits going to the actual Davos World Economic Forum, of what it was like when Donald Trump gave a keynote speech as the new president, and also a little bit later in time as Xi Jinping presented a vision of what he was to the Western society, that was perhaps … I won’t take apart Klaus Schwab. He’s the host, and you’ve got to be gracious to the people who agree to come to be your keynote speakers. On the other hand, neither of those men was particularly subject to debate then or after, as a result.
Peter Goodman:
I mean Klaus Schwab actually praised Donald Trump the last time Trump was in Davos, for building an inclusive American society. I mean, he actually used the word inclusive. He at one point said, “We know that you’re the subject …” I’m paraphrasing now, “Of a series of misunderstandings, so it’s good to hear from you personally.” I mean, as if writing off all of the investigations, the allegations of impropriety, the clearly aligning himself with white supremacist organizations, saying horribly misogynist and racist things. As if these are just sort of misunderstandings, misreported by the scribbling class, people like myself. I mean, that’s a lot more than just graciously welcoming your host.
He praised Xi Jinping when he was in Davos in 2017, described him as … Again, I’m paraphrasing, bearing the responsibilities of his nation, as if he had somehow been chosen through some election. No Chinese leader in our lifetime has been chosen in a popular election, of course. Xi Jinping is incredibly important, and a figure that we have to engage with, again if we’re to solve any of our problems. But let’s be honest about what we’re dealing with. We’re dealing with an authoritarian who rules under a one-party system, who’s sent a lot of people to concentration camps along the way.
Rob Johnson:
Yeah, I remember I was there during the Donald Trump speech. Our mutual friends Joe and Anya Stiglitz were in the audience with me, and they were quite unsettled. I remember trying to calm everything down after Trump was affirmed in the ways that you described.
Peter Goodman:
But you know what I found so interesting though about Trump’s appearance was that the conventional wisdom … I mean, if you sort of chatted with the other journalists, “Well, what are you writing?” And to read the coverage, you got the sense that Davos, the World Economic Forum, was aghast that Trump was showing up, because Trump represents an attack on globalization, an attack on democratic governance, a trend toward authoritarianism and nationalism and misogyny, et cetera, as if everyone at Davos would be so horrified. And what was so interesting about being there was to see that that was of course not true.
I mean, the people in Davos who matter the most are the people who run giant consulting companies and tech companies and finance companies; Davos Men. And let me tell you, you’ve been to Davos a lot more than I have been. I mean, I’ve been going there for a decade, and if there’s one thing that we can clearly say about Davos Man, it’s that Davos Man doesn’t really believe in any ideology, any particular model. Davos Man believes in whatever is required to get the next deal done, to get the policies, to be beneficial toward his own interest. And in this particular case, Davos Men understood Donald Trump. “We may not like the packaging. We may not like the crude remarks that he makes. We may not like that he’s threatening to just walk away from the American national debt, which can send titters through the marketplace. But we get that he’s going to give us tax cuts and deregulation, and those are the things that we actually care about. That’s the stuff that’s bankable.”
And so as you wandered around Davos then, you would have these moments where people would just own up to that. It was very clarifying, and it brought into stark relief the nature that the World Economic Forum plays in all this. It’s this place where your simply being there signals your commitment to improving the state of the world, your virtues, that you’re for stakeholder capitalism, which is really a kind of way of fending off change while you’re doubling down on the status quo. And in this case, expanding into this new frontier of deregulation and tax-cutting. Davos Man was very happy to have Donald Trump around, and tuned out all of the stuff about trade, all of the stuff about globalization, all of the footsie with the white supremacists. Just tuned that out as, “That’s just some sort of reality television show that he’s running. We like the money that we’re getting.”
Rob Johnson:
Yeah, I think it’s an article in The New Yorker by a mutual friend of ours, Evan Osnos.
Peter Goodman:
Oh, yeah.
Rob Johnson:
About how Greenwich, Connecticut, where I lived for 15 years … How did Greenwich, Connecticut come to like Donald Trump I think was … I’m paraphrasing the title. But it was essentially the same kind of process in Greenwich as you describe among Davos Men, becoming acclimated to Trump or ignoring the side effects as long as the deal was sweeter for them.
Peter Goodman:
Yeah, that was one of Evan’s best pieces of work. I’m an Evan fan. His greatest hits album is chock full, but that was a very good piece. That landed actually as I was writing the book, and I found it very interesting to chew on.
Rob Johnson:
Yeah. Well as I, how do you say? Engage with correlates to your book, one of our mutual friends, David Sirota, and my former partner in documentary filmmaking, Alex Gibney, have recently made a very, very powerful podcast that’s about eight hours long. It’s free on Audible, and it’s called Meltdown. It comes to the place where it explores, and what do you call it? General Inspector Barofsky from TARP, the overseer of TARP-
Peter Goodman:
Right, yeah. Neil Barofsky, yeah.
Rob Johnson:
Neil gives a very strong portrait and picture, as do others, of a demoralized America because of how the great financial crisis resolution was handled for the Davos Men, not for the people who held mortgages or for the public in general. So as Joe Stiglitz said, “The polluters got paid,” and people like Steve Bannon said, “And this is what brought you Donald Trump.” And-
Peter Goodman:
Yeah, that’s right. Yeah, I’m also a fan of that podcast. I think the work they do on people who are victimized by the foreclosure disaster, and the failure of the federal government to change anything for people who are caught in harm’s way, often … There’s this whole mythology around the housing disaster in the U.S. That it was all about people using their houses like ATM machines, taking home equity lines of credit so they could take trips to Tahiti. Of course there was some of that. In any crisis, in any bonanza, in any gold rush, there are going to be some opportunists that way.
But an awful lot of people were just caught up in the reality of the American economy. I mean, if you had kids who were of school age and you lived in San Diego or Miami, in the years in which housing prices were going up exponentially, society was saying to you, “You’ve got to live in a good school district or you’re not doing right by your kids.” And to live in that school district, you had to pay whatever it cost to live there. Those prices were determined not just by people who were pulling money out of their houses so they could go on fantastic vacations. It was about Davos Man building this apparatus. Larry Fink actually was a pioneer of the mortgage-backed security, and the mortgage-backed security became this way for Davos Man to gamble on the market, with the rest of us living in the assets that Davos Man was trading.
And to see it all crash, and to then see investors at AIG, Goldman Sachs, JPMorgan Chase made whole, while regular people basically got nothing except for a bunch of moralistic lectures about how they shouldn’t have signed on the dotted line, that was truly galling. And yes, Sirota and Gibney really bring that home in Meltdown. The result of that was a lot of unhappiness that’s with us still, and that continues to color our inability to achieve anything close to useful policies on a great range of subjects.
Rob Johnson:
Yeah. Well I would say just, this is from my own lens, having at one time been the chief economist at the U.S. Senate Banking Committee at the time of the savings and loan crisis. As I watched that unfolding, I was very concerned at how the American people were going to react. The organization that’s sponsoring this podcast, INET, the Institute for New Economic Thinking, was really founded in the aftermath of TARP, and the fear of how what you might call faith in authority, with not just the financial sector, would damage society.
And what ended up happening is instead of it being what you might say, we patched up finance and some academics did a little different work, which they all did. The spawning of the Tea Party on the right, Occupy on the Left and everything else, trust and faith in expertise deteriorated across many areas, including medical science, et cetera. Regaining in complex systems some kind of faith in expertise, and trust in expertise, that represents the common good, I think is a very big part of our task. But as Gibney and Sirota show us, the great financial crisis was a real detonator of loss of trust and faith in expertise.
Peter Goodman:
I agree, and one of the things I try to do in my book is show that this is very much a global phenomenon. So, take the U.K. where I was living when I was writing and reporting much of the book. I went up to a city called Sunderland, in the northeast of England, where the largest employer is Nissan. Nissan was employing about 6,000 people, making cars for export around Europe. And so long as Britain was part of the European Union, those cars could be sold across Europe as if they had been made in Spain or Germany or wherever. It was just one common market. So I went up there to try to understand how a majority of people in this city had voted for Brexit. They had essentially voted directly against their economic self-interest. They had jeopardized the jobs at the largest employer in the city.
I asked a bunch of people this question. I got a bunch of answers. The most honest answer I got was … And sorry for the foreign correspondent cliché … From a taxi driver who said, “Listen. Most of us really didn’t understand what the European Union was, what the common market was. We didn’t know about any of that. What we knew was that going back to Margaret Thatcher in the ’80s, who was the enemy of working people here, who attacked labor unions, who dismantled manufacturing, who shut down coal mines … We knew that her party, the Tory party, the conservatives, they weren’t interested in us. And then we watched after the financial crisis, George Osborne, who was the Chancellor of the Exchequer, essentially the treasury secretary for Britain, impose this crippling austerity on us where social services got cut to the bone, where unemployment goes up. And now fast forward, George Osborne and his prime minister, David Cameron, same party as Maggie Thatcher, come up here and they ask us, ‘You got to vote with us against Brexit.’”
Well, he used more colorful language than I’ll use on your podcast but, “We didn’t know what the hell to make of this, but we sure as hell knew we weren’t voting for those people, so we voted the other way. That’s what happened.” I mean to your point, if people don’t trust the authorities, thinking becomes tribal. “Well, I’m not for those people, so I’m for this other thing. Even if this other thing involves, in the case of Britain, severing ourselves from our largest trading partner for no apparent reason beyond feeling good about shutting the borders to immigrants.”
Even if it involves, in the case of the U.S., voting for someone who brings us into a disastrous trade war with China, which has actually weakened our ability to not only run manufacturing in our country, because there are a lot more people who buy steel, and work at companies that buy steel in the United States, than there are companies that make steel. But it’s weakened us in terms of our ability to craft some sort of multilateral international campaign that we can use to try to force China to alter its damaging policies.
Rob Johnson:
Hmm. You just wakened a memory in my life. When I worked in the financial business, I was sitting in a café in Paris. This was in the early ’90s. A gentleman walked out and spoke to me in French, which I didn’t master at all. I said, “May I speak in English?” He says, “Oh.” He says, “The whole world, it has to learn English.” And I said, “Yeah.” He said, “Well, because it’s either that or learning Japanese.” I kind of shook my head and he says, “Sir, the United Kingdom, particularly its northeast, is an aircraft carrier. They launch cars off the deck of that aircraft carrier, and they’re destroying the auto industry in France. We’re all learning English to watch it happen. And it’s not that important to me to get a cheaper car that’s made in the U.K.” And it reminded me of your trip during Brexit. These were the other side.
Peter Goodman:
Right, sure.
Rob Johnson:
That they were … I mean, this guy’s working in a café. He probably could have got a nice car for cheaper. But the social disruption, the coherence, was not evident to him of a global division of labor system, because the displacements, the adjustments, the suffering possibly of friends and family was so profound.
Peter Goodman:
Although trade … I guess, I mean I argue in the book that trade actually is an area where there are a lot of win/wins. I mean, there are always going to be some people who lose.
Rob Johnson:
Oh, yeah. There can be. There can be.
Peter Goodman:
They have to be dealt with.
Rob Johnson:
With adjustment assistance, there can be, that’s right.
Peter Goodman:
I mean in the Nordics for instance, I mean I’ve been struck whenever I go to the Nordics. Labor unions there, they’re very powerful and they tend not to be against change. I mean, they don’t fear automation.
Rob Johnson:
No, that’s-
Peter Goodman:
They’ll say, “Well, if this makes our employers more competitive, they’ll be more profitable.” And their lived experience, contrary to the conversation we’ve been having is, “If my employer makes more money, I’m going to get more money, so I’m for it.”
Rob Johnson:
I remember-
Peter Goodman:
“And if the job I’m doing doesn’t work out-”
Rob Johnson:
You wrote an article in The New York Times in January of 2019 about, “We love the robots.”
Peter Goodman:
Yeah, right.
Rob Johnson:
And Leif Pagrotsky, who was the U.S. counsel from Sweden at the time in New York, had me over for a lunch. He was reading from your article about exactly that notion.
Peter Goodman:
Oh [inaudible 01:13:15], huh. That’s great to hear.
Rob Johnson:
So there are, how would I say? There’s a lot to be explored. At times there’s great complexity, but in an absence of trust and with the people you call Davos Men thinking they can get away with things, it’s not repairing or enhancing trust. And with the concentration of wealth … I’ll never forget the portion of your book where you describe how the COVID vax system of COVAX was a smaller amount of money than the individual money that Jeff Bezos could put into his spaceship system, or endeavor, not necessarily his physical structure. But the idea that the whole planet had less money for taking care of the pandemic than he had to build his own personal space program, does illustrate what I’ll call the pressures that the common good must feel. Let me finish one last question.
Peter Goodman:
Sure.
Rob Johnson:
People like Gabriel Zucman and Emmanuel Saez, Thomas Piketty and others, are talking about a global wealth tax. Do you see that as helpful, viable, a step in the process of counteracting the kind of maladies that you’ve described in your book?
Peter Goodman:
I mean, we have to have some kind of wealth tax. Whether you administer it globally or whether you do it nationally, I mean there’s a lot to debate there. There has to be some kind of wealth tax, for the simple reason that wealth is where the money is. I mean, Jeff Bezos makes about $83,000 a year. That’s his income. So if we live on income taxes, Jeff Bezos is going to pay income taxes that are about equivalent to what an elementary school teacher in California pays. That’s just absurd. I mean, Jeff Bezos’ wealth is tied up in the stock of Amazon.
Most of us can’t get away with evading taxes. The taxes are a fairly simple calculation. If we own a home, the property taxes are part of our escrow. Everybody can see them. They’re clearly calculated. If we work for an employer, the employer withholds our taxes and then we file to maybe get some of them back or pay more, whatever. It’s all very transparent. There’s not much we can do. The Davos Man has billions of ways to evade taxes. The Davos Man has arsenals of lobbyists who are finding new ways to exploit the tax code that exists, and rewrite the tax code further toward his advantage. The only way that we’re going to deal with the redistribution that has to happen … I mean let’s step back, just for an American context. I’ve heard it said, and I subscribe to this view, that the single … That the thing that really distinguishes the United States from every other developed democracy is that we don’t force wealthy people to pay taxes.
And so as a result of that, our tax collections are meager. And it’s worse than that, by the way. Davos Man’s lobbyists make it impossible to even finance the IRS, so the IRS doesn’t even have enough people to do their job. We’re leaving tens to hundreds of billions of dollars on the table just there. So when we then have conversations where ordinary people, people who even consider themselves progressive will say, “Well, it’d be nice to have healthcare, but we can’t afford it. It would be nice to do more for people who can’t afford to send their kids to college, but who’s going to pay for it?” Who’s going to pay for it? The people who pay for it in other societies, that don’t seem to struggle over how to provide healthcare and housing and education. That’s Davos Man, and the wealth tax is the way you do that, because that’s where the money is.
Rob Johnson:
Well Peter, this is an extraordinary book that you’ve written.
Peter Goodman:
Thank you.
Rob Johnson:
It’s a very, very substantial challenge, or a wake-up call to explore how we organize, what we legitimate, what we pretend is legitimate but don’t really say raise the hood and look in at the engine. And I think that this is a debate that has to happen, because if it doesn’t happen, the democratic process which you describe in your conclusion, will wither. So thank you for raising this challenge to me, to the public, and I look forward to your various debates. I know you and Alex Gibney are going to talk pretty soon.
Peter Goodman:
Yeah.
Rob Johnson:
I signed up for that, and-
Peter Goodman:
Oh, great.
Rob Johnson:
And so I think there’s a lot of, how do I say? A lot of heat and a lot of light both in your book, and I hope after a little bit of time passes, you’ve gotten some feedback, you’re seeing the momentum build, we can make another chapter on this podcast together. But thank you, right now, thanks for your work.
Peter Goodman:
Thank you so much, Rob. I really enjoyed this.
Rob Johnson:
It was my pleasure. And check out more from the Institute for New Economic Thinking, at INETeconomics.org.
