"Angry Populist Politics: Why is it Happening and What To Do About It" with Ian Shapiro

0:05 good evening everybody um Alan Levine together with Tom Merill I run the political Theory Institute the host of this evening's event we've got two other events this semester on March 28th we have Roosevelt Montas from Columbia on rescuing Socrates how the great books change my life and why they matter for a new generation and on April 10th we have Nathan tarov of the University of Chicago be a mavelli poet and

0:35 lover today we are very fortunate to have Ian Shapiro of Yale University Ian is the Sterling professor of political science and Global Affairs at Yale he's written widely and influentially on Democracy Justice and methods of social inquiry a native of South Africa he has received a JD from Yale law school and a PhD from the AL political science department where he's taught since

1:06 1984 he's also a fellow the American Academy of Arts and Sciences the American philosophical society and a member the Council on Foreign Relations he's also had visiting appointments at the University of Cape Town KO University in Tokyo Newfield College Oxford and seon Po in Paris he's uh published a whole series of of books and articles the most recent book is Uncommon Sense uh from which he will be drawing today and in our email

1:39 exchanges I when I was intending to tell him we were looking forward to hosting him and I actually wrote we are looking forward to hosting him I'm not sure exactly what that means but I like the idea of it so I'm looking forward to you all to ask good questions and hoist them okay with that we have today Ian Shapiro angry populist politics why is it happening and what to do about it please welcome help

2:10 me all right so is this good enough holding it here this works okay and the people online can hear I can't see that but I'll imagine if they are passive consent uh so thank you all for coming and I'm going to talk today about uh what's happening around us and uh in that we're all living through in one form or another I'm going to talk about

2:41 uh a whole range of countries and I think that that's important because I think that um uh in in many individual countries people focus on features of their own political system or individual political leaders in trying to diagnose what's you know what's happening in their political system and what should happen um but the same problems are coming up in so many

3:11 democracies that it's obvious that there must be some uh more General things going on uh and we need to attend to them it's also because uh I think you people often misidentify uh the causes of the Malay in their own system so for instance you know many people here say what you know the problem is a two-party system we need we need multi-party systems um but

3:43 that turns out to be based on a a perception of what went on in multiparty last century when I think about people extolling the virtues of multi- party systems it they it reminds me as as I mentioned to the students earlier of Li where he said the cure for being impressed by the House of Lords is to go and look at it uh the cure for being impressed by multi-party systems in 2025 is to go and look at what's going on in

4:12 them so uh the grass is often thought to be greener someplace else um but there's lots of fallacies there um so that's a reason I'm going to talk about two party systems and multi-party systems um so this is what I'm going to talk about I'm going to say what say something about what is popularism at least as I understanding the kindur of populism we're dealing with today um what are its underlying causes and you'll see I'm

4:42 talking about both economic and political things uh I'm the first is economic long-term job insecurity that has been building in all of the older capitalist democracies since the 1970s and has accelerated in the last two decades um but it's not it's the economy stupid as Bill Clinton said in fact I think it's the politics stupid because uh I think the the other two underlying

5:12 causes are um the weakening and fragmentation of political parties and I'll spend some time unpacking what I mean by weakening and what I mean by fragmentation and then uh issues about leadership responses to the financial crisis in particular uh in most of these countries and the down which political elit responded to the financial crisis of 2007 and

5:43 2008 um so that's a kind of a big menu I will try and talk for about 50 minutes but um I should say I'm perfectly happy for people to interrupt me and stop me and and ask questions if I wanted if I said I'm going to get to that later I'll I'll tell you uh feel free toop me and then we will talk a little bit about what to be done depending on how much time there is

6:14 um so I think these are the main elements of the populism we're seeing weing its in all of the older democracy this trust of establishment Elites alienation are from mainstream parties and governments hostility to immigration and support for protectionism and openness to charismatic leaders selling fix all solutions I think these are you know

6:45 this is not every you know 19th century agrarian popularism was something very different from that um FDR was a populist in a certain this is this is the kind of populism I think that that all of the populist movements we're seeing in the in the Democratic systems today share share these speeches in um and so I'm as I said I'm going to talk about um these three things now

7:18 longterm job insecurity weakening and fragmentation of parties and then responses to the financial crisis notice I'm focusing on insecurity and not inequality um we've seen in all of these systems since the 1970s massive increases in inequality as well um but my one of my messages is there's been too much attention to inequality and not enough attention to insecurity and um it's the

7:50 it's the the they are not unconnected but it's the insecurity that is especially politically I think in in okay how's that okay so this is the inequality story and as you can see uh you can portray this in many different ways um this is uh you know uh if we look at the the top 1% since this is since the

8:24 1970s um they've got uh you know the vast majority of um percentage change has gone to the people at the top but I think that and you know many people have written about this Thomas pti's book uh very much put it in play but the the bottom 90% whose whose income has largely been stagnant since the 1970s is what I think

8:55 we have to understand what's going on in the bottom 90% if we want to understand the we're dealing with and uh so this is about income but if you look at wealth uh you again you see the the bottom 90% um massive decline in uh in wealth because we moved from uh defined benefit systems where people had a guaranteed pension working

9:26 at for an employer for a lifetime to the systems we have now defined contribution systems which makes everybody internalize much more the cost the risk if you like of not having retirement rather than have your employer carry that risk we all now carry it and um the the erosion it it's no longer the case that people have a mortgage for 30 years and pay it off and

9:57 then have a nest egg of of equity because since the particularly since 198 the mid1 1980s people have been borro out the equity in their houses to finance current consumption um and so people have a lot less wealth as well I think this is an enormously important um raft this is a a panel study that the US Department of Labor has been doing uh of

10:28 baby boomers and since the the the takeaway from this slide is that um you know it used to be the case that you finished your education whether it was high school or college you then went to work for an employer for 30 years 35 years and then you retired that world has gone away um most people your age are going to change jobs between 12 and 15 times during

10:58 their life life times and uh for some people that's great you know particularly maybe people in this room you uh might uh you know finish college go work with McKenzie for a while um do one or two startups then go off to Business School uh do some networking and you know go on so changing jobs might be going from you know opportunity to opportunity all the while building up uh you know 401k and

11:33 and by the time you're 35 you have a few million already uh that is not what is T the case for most people so if you look um this is some stuff I've done with some students if you look at what happens to the income of people um who goes straight from one job to another these people their income goes up so that's when you know you have a job and something come better comes

12:04 along and you go take but if you if you are if you have um shortterm six months or less of of um unemployment between jobs comes down and if you have more comes down even more and so most people are in those categories most people as they move from job to job are going from you know a a secure job with good benefits uh to a job with less good

12:35 benefits maybe to a job with no benefits and then to working multiple jobs um so they're bouncing down the socioeconomic ladder um if you look at this is the US story um you can see that at least through 10 years ago the group that was most vulnerable to uh having to have a shorter time spent in a job were middle-aged men right but if you update

13:08 it this is uh this is statistics from uh last year you can see now uh pretty much every every age group um uh are having people have is this one better let's see in every age group is this better yeah in every age group there's less and less long-term employment um uh and it's you can see here it's

13:41 also this is the these are very recent statistics this is much worse for uh people in uh in uh blue blue col professions uh this is Germany just in case you thought I just talking about the us but you can see the same story um duration of employ of year number of years in employment this is between 2012 and 22 is going

14:12 down um so people are spending more and more time you know more and more of their working lives hopping from job to job and often it's going down uh it's going from more secure to less secure jobs going down the status scale going down the income scale um this is a very interesting set of studies there was reported on the financial in the financial times a couple of years ago and what it tells you is um when

14:45 economic growth is low when econ you know when the economy is not doing well people tend to see the world much more in Zero Sum terms they think uh people only can get if one person gets Rich it must be at the expense of somebody else and success is mainly about people's luck it's about their connections and so on whereas when economic growth is higher people tend to think that um uh

15:16 everybody can get ahead you know your my gain is not uh your loss um and that hard work brings success one of the things we have seen um in the last uh you know um since the 1970s is much lower growth rates and people having zero people therefore so the correlation is not quation but that's what they're trying

15:47 to pin down that as we get into a more of a very low growth economic growth environment um people are much more likely to see this the world in zero some terms so you know if that Mexican immigrant comes into America and gets a job some Americans not getting that job that's a zero some perception of the world and so uh you know as economic growth has slowed people have tended to see the world much more in Zero Sum

16:20 terms this is just I think another very dramatic measure of insecurity um this is where people are asked the question if you had to find $400 for an medical emergency uh could you come up with it in a way that didn't require you to put it on a credit card that you couldn't pay off at the end of the month so could you could you find uh $400 and if we even if we focus on the best of gr so uh

16:55 you look at white nonh Hispanics uh people under this was when the median income was about 40,000 people under the median income over 60% couldn't find that $400 um that they could would be able to pay off at the end of the month if you look at between 40 and 100,000 still 40% couldn't find that $400 without borrowing it and even even above you know even above a

17:27 100,000 um you know 20 23% couldn't find to an emergency expend that tells you something about how close to the edge so many people are living right they they are even if they're not living hand to mouth pretty much all their income is committed and so a very slight bump in the road can upset their apple cart very quickly that's what I mean by

17:57 insecurity um so uh this is I I I think this is also re revelatory this is Trump primary voters in 2016 I think primary voters because you know in a two-party system once the candidates are picked if you don't like if you don't like Hillary your option is Trump but that's not the case with primary voters that he Trump ran against 16 other people there were all kinds of Republicans right um Bush or whoever um

18:32 so but still one only onethird of uh Trump primary voters were earning less than the median income onethird were earning between 50 and 100,000 and one were earning more than 100,000 so 2third of trump primary voters um were earning more than the median income so you know some of the people out here might have be very rich people uh interested in um you know taxs

19:05 for the top but but the very big part of what we think of is the middle class of people who uh in the as even in the primaries in 2016 were feeling like the mainstream parties are not working for that I I want to bring into the conversation the concept of L aversion this is uh so here's an

19:35 example get a phone call and they say Gabe you've won the lottery and the prize is $2 million and then the next day they call you back and say well actually we thought we thought it there were you the only winner but there two winners so you're only getting a million doll on the other hand Alex gets a call and says you have one of two winning tickets um went half a million dollars but then the next day they put back oh actually

20:06 there wasn't second tiet so you you a million doll they both a million dollars richer than they were two days ago but who's happier why because he didn't have an expectation of so expectation is part of this uh anyone want to add to that yeah there's the idea of one party

20:38 lost while the other party gained um as a result of the tickets being um split to so that's just the concept of loss verion yeah Gabe thinks she's lost them she you know she thought she had $2 million last she feels like she's lost whereas you know Alex just goes from one good things another a good thing right so this is what K and tury this is the only time a psychologist ever got the Nobel Prize for economics uh tury didn't

21:10 get it because he was dead by they did the work together so this is their famous diagram um and what it shows you is that uh losses and gains are not symmetrical for people so and and there's now this this is the this is the this is what's at the heart of Behavioral economics the the rise of Behavioral economics takes off Froman and turki because it's

21:40 economic in the in the sense of a neoclassical model of rationality this is irrational so but you know it shows up in ear Walk of Life there's been just gazillions of studies of it so if you want if you want people to bring their shopping bags to rather than give them shopping bags it makes a difference whether you say uh if you want a shopping bag we're going to charge you a quarter versus if you bring your own shopping bag we'll

22:11 take a quarter off your bill but this notion of actually having to Bear a cost uh is not symmetrical with a foregone benefit of the same we are more we are loss a worse um lots of specul about why I think the the most widely accepted answer is that so much of human history people lived so close to the the you know starvation level that even a small

22:42 loss could be catastrophic um that may be the explanation um but and it's certainly not only true at the bottom now uh you know it's true at at any at any uh at any level and even with a trivial thing like or get or being uh rewarded for uh bringing your own shopping bag or not bringing your own shopping bag people have this aversion to losing things and so that's an important part

23:13 of human psychology and it affects um it affects the way people perceive things so if you look at the recent inflation that we've had you know uh we had wage grow was that eventually on average exceeded the you know inflation was coming down and real wages were going up but that was not what people were perceiving right but this is what people were perceiving that cost of the

23:44 cost of living has gone up I'm spending more the fact that you know while your income is also gone up uh doesn't in their minds compensate for the fact that um you know gas costs more than it used to cost and that makes them angry so part of that the loss aversion story is um you can tell them the rate of inflation has come down that's not what

24:15 they focused on they and you know your wages have come gone up no I used to be able to buy eggs for 4.99 now they at 11 um so in 2016 uh you know Hillary's bumper sticker was America's best leaders Li ahead and Trump's was make America great again these are both ples ared from Ronald Reagan but when Reagan said America's best

24:47 years lie ahead he said it in 1980 which was at the beginning of this these Decades of wage stagnation for most Americans um when Hillary says it in 2016 it signals that she's out of touch with their reality um whereas when Trump says make America great Again by brilliant strategy or blind staggering luck he is coton to the loss aversion that uh he's saying something's

25:20 been taken away from you and I'm in a bring back I'm going to bring back that lifestyle 50 I'm going to bring those jobs back from Mexico or Asia so much more potent in a world where people are lower growth and people have lost things or they feel they've lost things um and then when you you fast forward you know to to this should say 2024 I'm sorry um Trump sticks with this he

25:52 thinks you know this reality is still there for people this perception that or what they believe and you know um uh Harris didn't learn uh or she thought things had changed but uh she continued with a much more optimistic picture uh and you know Trump was betting that uh people would perceive her to be out of touch with their reality in the same way they perceived

26:23 Hillary to be and it was a pretty good um why well I I'll I don't want to M you can make it go back it's probably better

27:11 just just so think I I

27:43 click okay this

28:15 work promising yeah whenever you on

28:46 they have technological problems slides okay so I'm going to I'm going to skip over these slides and I'll just tell you what they will play because I wanted to get politics but they basically tell a story that the further down the income scale you go the worse problem so that's these phenomena I gave you most in more or less uh extreme forms

29:20 that's that story has gone on everywhere oh yeah much security um people living after this it goes well up but it's it's more uh it's more I want to talk now about how much how we put time just about six o'cl okay half hour minutes but people should interrupt me if you want make sure to

29:50 keep keep the microphone so interrupt me if you want okay so I want to talk about multi-party system two- party systems and how this is played out in them so the big story in multi-party systems is fragmentation and um if you look this is data on uh the number of parties in the legislature the effect number of effective parties is just controls for their size but it tells the same story so n this is uh 26

30:23 oedc oecd countries since since from 19 60 to 2020 um we've gone from a world in which there were fewer than six parties in the legislature to more than eight parties in the legislature and um so this is um puzzling if you look until about 2016 and I'll come back to what's happened since 2016 if you look at parties on the left Cent to left Social

30:55 Democrats saying Germany and everything to the left of them the number of Voters voting for parties on the left didn't change but the number of parties on the left went up why yeah why the delineation of effective in this case so effective number of parties is just that they weight them by the size of the party but it doesn't matter for this purpose because it's it tells the same story

31:27 thank you um so uh you might think well why why would it be that people are still voting on the left until 2016 more or less but they're deserting the mainstream left parties so the you know the social Democrats in Germany um labor parties you know parties like that why would they why would that happen

31:59 yeah I mean it's a representation polarization the because if they do not want support the large left parties it means they feel they do not represent them so it's like kind of form of populism on their end where them true true part is like Grassroots and new sort of people's bir party rather than so why would that change yeah yeah I mean watch thinkon consensus the mainam goes to the Washington consensus that there's

32:31 a okay um I was going to say people on the left tend to want a candidate or a party that aligns with all of their values and as those values become more fragmented the following is the parties are going why would their values become more fragmented because as you have more people joining a party and epically there's going to be conflict about priority of values maybe well I want to come back to the Washington consensus point so what's

33:01 happened is and I think this is we starting to get to the way political Elites have responded to the economic changes okay so what you've seen over this period has been The Disappearance of industrial jobs the declining power of unions and that these old Center left parties were very much wired into the unions right that's where they got their money they got their membership they got their their um people uh going out and canvasing druming out voas that sort of

33:34 thing by but that that industrialized uh unionized Workforce that's been shrinking in all of these economies partly globalization partly the transition to service economies um partly jobs going to technology um and so the people who used to vote for the parties feel like that those parties aren't representing us anymore H they're not doing anything for us because those

34:06 parties and as with the Washington consensus uh those parties were basically you know after 1989 communism's gone away there's no alternative to capitalism anymore so uh the center left parties are just trying to show they can run a market economy uh as well better than the center right parties and so the idea of Washington consensus was this idea that everybody agrees on the basic way

34:37 of running the economy um the old Keynesian methods that uh you know support the spend money at the bottom had been discredited uh because it didn't seem to deal with the St inflation of the 1970s and so uh the center left party are basically no longer serving the people who uh used to vote for them and so um I I could talk about spite of Center

35:10 parties if people want but I think one interesting statistic is that when left of center parties are in government unemployment actually goes up and so our thought is here that it's uh it's precisely because the these Center left parties are if you like defending a shrinking labor aristocracy less well it's shrinking because the unionized workforce is going away and they defending it less well because they have

35:40 less leverage but the long-term unemployed the people not in the in the in the labor market at all all those people feel like these parties have deserted them uh and so they're pursuing the same privatization policies the same regulation party policies uh that the cental r is pursuing and so they're costing around looking for alternators um and so it's pretty dramatic so I think it's good to talk

36:11 about Germany because Germany's always held out as the most well-functioning M multi-party system um but even in Germany you know as recently as 1994 the two mainstream parties the the center right Christian democrats and the social Democrats and and the center left the the the sorry Christian Democratic Union Christian social Union and the and the uh Center left

36:42 party counted for almost 80% of the vote and it's come down steadily to the point when in 2021 for the first time was less than half of the vote and they had to have a three-party coalition and in last month the SPD and the CDU you know didn't even get between them 45% of the vote but the the these mainstream parties are hemorrhaging support

37:12 massively um and so uh I need that these on so here you can you can see um the the the last four elections the 2021 for the first time it took three parties to form a government um because they had less than 50% yeah we're going to get a two-party government only because the free Democrats uh F Germany has a 5%

37:44 threshold and so there were a bunch of small parties below it so they're actually going to get a two-party government even though the between them they don't have 25% of the vote so when you have this situation it's much harder for governments to govern um because generally speaking it's going to take more parties to form governments they're not going to agree this is partly why the the last German government collapsed because the the

38:16 greens wanted a lot of Green Spending on green projects and green regulation these people are Libertarians they wanted no regulation and eventually the government collapsed um so it becomes much harder for governments to govern and um uh this is what happened in France last year um the this is now the far uh right this is Maran leen's party um you know

38:48 getting close to a third of the vote uh again you you have um this is a this is the uh very deceptive the new popular front was a coalition of all the left parties the only thing they agreed upon was that they hated the right so they couldn't agree form a government and instead um mcon essentially created a minority government for Centrist which couldn't

39:19 govern and fell apart and now created another minority government and so they're kind of Staggering along and of course this makes it easier for authoritarians to come along and say uh these squabbling politicians and the legisl can't do anything and uh what we need is a strong usually man although in in the case of Italy and France it's a strong woman um who should be cut

39:49 through all the py in in um in the legislature just make the same point in Britain they have a two-party system so labor got a big majority but if they had PR they would get the same result uh as we've just seen in Germany we'd have a very fragmented uh multi-party system okay hard not to think of the 1930s right again we had a period of

40:20 massive economic dislocation we had highly fragmented parties governments that couldn't agree with one another about anything and it didn't end well um so when people say the grass is greener on the other side I think as I say you need to go and look at cons system uh I want to just talk briefly about two- party systems and then uh open it up full questions the big story in

40:52 two-party systems is that they become weaker um so so things like the direct election of party leaders it used to be the case in Britain that [Music] um the Parliamentary labor party picked the leader the labor party parliamentary party conservative party picked the leader but people wanted more participation uh of Voters in these selection processes and members so they switched to a system where party members

41:26 pick um the leader so the labor party has 160,000 members they tend to be activists on the left of the labor party uh so much to the left of the med labor voter never mind the medium British voter right so um they can elect a card carrying Marxist like Jeremy Corbin to the leg to the leadership of the labor party who uh

42:00 cannot lead the Parliamentary labor party because if they um implemented his program they wouldn't get reelected in their constituencies so they vote uh 172 to 40 no confidence in Jeremy Corbin and the membership re-elects him by 62% so that's example of a great weakening of the party because the leader of the party cannot work as in a in a team if you like with the

42:31 Parliamentary labor party and so he ends up marching them off fli uh so um that has happened to I could give you more examples that's the most extreme one but it's how the the conservatives also have created uh a lot of input from the Tory membership who are way to the right of the rest of the conservative party never mind Bri and that's how you can get jnes on

43:04 this I want to talk about primaries here uh so the effect of primaries in the US is um you know before you can win the median VOE in the electorate you say well you got to win the median voter in the party except that it's not the part the median voter in the party because who actually turns out and votes in primaries it's the people on the extremes um you get very low turnout in

43:34 primaries 12 14 15% you know so once Jim Jordan has won the Primary for the fourth district in Ohio it doesn't matter who the Democrat is in the general election On's AOC has won the this New York it doesn't matter who she's running against because uh no Republican's going to win the 12th District in New York um so the that's just another way of of showing the the

44:05 the primary voters are on the extremes of the parties just as the party members in Britain are on the extremes of the parties now you could say that well we've had primaries for 120 years what's what it feel uh this phenomenon has become much worse in recent years and the answer is is in this picture here which is the the decline of competitive seats um the vast majority of seats now are not

44:36 competitive in the general election yeah so what that means is in the vast majority of Elections the only election that matters is the primary right because it's all over one Su primaries right so as we've had the decline of competitive seats we have you know we have primary voters determining the general election outcome uh in more and more and more seats and this is what pulls the party apart which

45:09 you face the threat of a primary yeah isn't this kind of circular because we can only have extreme Jerry mandering because of extreme polarization in the first place no that's not true we we've got uh We've the rise of safe seats has a number of different causes one is j m not it's it's it's not the only one some of it is just natural demographics uh urbanization you know blue cities and red States kind of phenomenon some of it

45:39 has the byproduct of of other reforms uh majority minority districts 20% plus of the districts in America are majority minority District while if you you create majority minority districts you improve improve the sctive representation of minorities but you also create more safe seats because generally speaking you're going to push uh all the Democrats and you know and this is why the Reagan justice department got behind um majority

46:11 minority districts in the 1980s they thought this will help uh us consolidate the Republican takeover of the South and they were correct about that so it's it's a it's a it's a whole lot of reasons why we're getting that but what it means is it empowers the primary voters or the caucus participants they're the ones who pull the party apart that's why um this is what makings it so hard to govern

46:42 right you you you look at what what's happening I should I should say this is an interesting picture this is a bigger problem on the Republican side because there are more Republican safe seats so the right wing of the Republican party is more powerful than the leftwing of the democratic party just because of that it's not personalities or ideology it's just there are more safe Republican seats and so that means you know this is

47:14 why when the Republicans are in opposition they could vote you know 71 times to repeal Obamacare but when they were in government they couldn't do it because the the Centrist Republicans wouldn't support any bill that the Tea Party Republicans would support and vice versa so they just couldn't do it um and that's that uh you know it's even if you want to uh you know that you will face the

47:46 primary challenge so you can't um so this is this is this is what pulls the parties apart and makes it uh you know theic American system is designed that it's almost impossible to legislate unless you get some bipartisan agreement um is a uh very good political scientist at princ Francis Lee has a book recently about this the vast majority of

48:18 legislation requires um vote votes from both parties and at least one out otherwise nothing can happen the system was designed to make that possible but it's very cost uh if you're if you're answerable to primaries voters to do that so if you look at what's you know Chuck Schumer is being Savaged now by the left of the of the democratic party because he he enabled that uh Bill to go through uh that's exactly what you would

48:51 expect um so the I I'm just going to mention this and uh I could talk more about but my my third you know underlying causal Factor here is the way in which this is It's the politics stupid the way in which politically Elites responded to the financial crisis and the short answer is they bailed out the banks and they didn't do much if anything for the

49:22 vast middle end working class that really B the Brun of the effects of the of the financial crisis and the uh the financial Elites and the people at the top recovered pretty quickly um by by 2009 200 10 the market was already coming back but that wasn't true for the 20 million plus people who were kicked out of their homes it wasn't true for the people who lost jobs and it wasn't

49:54 true for the people who ended up you know when coming back into the labor force getting worse jobs um so uh in in in the book I have some discussion comparing the way in which Obama responded to the financial crisis versus FDR with FDR the New Deal very much focused on the people who were really hammered yeah you think that they could have like recovered from the

50:25 financial crisis without bailing out the big companies or do you think they just should have both bailed out the big companies and helped the people who are individually hurt by it both because you know we didn't have a Great Depression because they didn't let the financial crisis the financial system collapse if they had let the financial system collapse the true crisis wouldn't have been three days the true crisis when the whole financial system was in danger of

50:56 actually falling apart was 3 days you know compare that to what happened in the Great Depression things it could have been a lot worse uh but the quid for the quo should have been that they're also going to help the homeowners they're also going to help uh the people who are are um being harmed but the the you know o over the long run and instead uh they rapidly embased austerity um and by 2010

51:28 2011 Obama was um uh refusing uh to do much more and I have extend I can go into the details if you want in Europe the best source on this is Adam tu's book crashed where again it's an account of how uh anger uh and young for who was the French of European Central Bank between them forced uh all these European

51:59 countries to adopt austerity policies uh having first back stopped and bailed out the financial sector so this produced a lot of rage uh and the downstream effects of that rage is um what they're living with and that's why what people like Trump farage Leen the alternative for deut they saw the opportunity to capitalize on that rage and mobiz and um some mainstream politicians also

52:32 saw it most were in denial but people like Boris Johnson and and auan and erdogan saw saw that there was now this this growing population of angry alienated uh dowly mobile people uh that could be mobilized and uh that's what has been coming home to roost since 2016 uh this is just details on how Obama basically bailed out the people at the

53:03 top and didn't do much um for the people at the bottom whereas you know if you look at what FDR did in the depression uh very much focused on uh the people who had been most harmed um so what is to be done I think the the there political and economic things um as I said earlier to the other students

53:34 I'm old uh and so I'm not I focus on things that wouldn't take a constitutional amendment but uh there various ways to reduce the importance of primaries to reduce the in particularly it's not just primaries it's the interaction of primaries and safe seats and uh this is I can tell you some uh encouraging things about that if you want uh combat fragmentation in the political systems

54:06 um uh that uling party and then uh a whole series of of of economic policies uh that would uh again I can talk about more if people want I can give examples of them um basically my book about the political reforms that I think are needed on this book with Francis Rosen the book about economic reforms that are most important uh to reduce this

54:40 insecurity by my book with Michael grats and that sort of underlying political theory of it is what is sketched in I'll shut up there and you can all tell me why I'm wrong thank you very much it is our custom to allow students to ask the first question but I will let you figure out who the student I'm I'm guessing not

55:13 you wait for like okay thank you for being here um we've seen this increase rise of individualism loneliness lack of community people feeling very isolated from other people do you think that this lack of community with the pandemic rise of Technology social media um contributes to this loss aversion where people are like zero some game see seeing somebody else get something then getting angry about it

55:44 because they don't know anybody else they don't seem to like have much care for outside people because they don't know any of them I I think that uh you know that I think the those studies that were summarized in the final times about zero sum thinking when when economic conditions are bad I think that's the real story um that you mentioned the pandemic the same class effect happened in the in the pandemic in the sense that

56:15 people like us could work from home actually you know the pandemic was great for people like us it didn't you know we we in some ways our quity of life actually went up but people in the service sector people work you know a lot of that that's when most of the jobs were lost um they they uh had a horrific time and uh um so for them the the loss of community at work

56:48 and so on uh was much more potent if you like than it was for the people in the in white color that could essentially you know create their communities at home um so I think it it just accelerated and if you look at the economic data uh postco is is it just like a carbon copy of post the financial crisis the people at the top uh fell the least far and recovered fastest and the people at the bottom

57:20 fell the furthest and recovered most slowly so it's just it's just a a replication of that you don't look like a student I'm not no but if another student has a question go ahead do you think the uh proclivity of Voters to buy L ofeck um over purely positive messaging is socially conditioned or constructed um and thus

57:52 able to be countered by um substantive economic reform or do you think there's some innate facet of human nature that makes people buy that rhetoric and thus it's always going to appeal in some way or another well I think messaging is is important in a in a in a way that's different from what is commonly spoken about which is I think that um if you if you if you look at what affects how people vote the big story I

58:21 think is that it's the retrospecting voting literature has it right that it in in a sense that it's people don't read manifestos people can't tell you what the party's policies are um uh basically if things have gone well uh while somebody's been in office people will reelect them and if they don't they'll kick them out that's the retrospective voting literature story and I think it's accurate so so um I

58:55 don't think that makes messaging irrelevant but it's the the real fight about messaging is to frame the performance of the incumbent government right so this is you know uh hang the inflation around Joe Biden's neck you know whether most of it was the Ukraine war and Co and all the other countries had it too and it what actually didn't have very much to do with his stimulus bill doesn't you know all of that stuff

59:26 washes out um and it's why when you're arguing in politics you've already lost um most political messaging is about fighting over the frame the framing effects every you know and I think the principle thing that gets framed is the performance in government and and uh that's you know if if things have gone well in government you're going to try and you know the

59:57 government's going to try take credit for it and if if uh things have gone badly they're going to try and Run f but so so I don't think it's it's um positive messaging or negative messaging I think that this is what people are really fighting over in campaigns um but you know I think immigration is another I mean I I should have said this that's another great example of this because

60:29 um all of these countries actually need immigration um because of the demographic any economic demographic of all type countries all need immigration because you've got a shrinking working age population supporting a belowing retired population and if you don't have immigration you're either going to have to have much higher taxes uh which it's easy to mobilize voters or you're going to have intergenerational class Warfare I mean there's no fourth possibility right

61:01 those are the three options right um and you know so what why is immigration so potent as a political issue there's probably no more potent issue we had you know we had dozens of elections in 2024 and IM immigration immigration immigration in all these countries that need immigration right it seems weird but if your life was going well and your career was going well and your job was

61:33 Secure you wouldn't you wouldn't care about immigration right it's you know it's because uh you're in this what you feel is this zero some World these immigrates are going to come and take stuff from us right that that's the world that so you can so the messaging about immigration is again it's messaging about their retrospective experience of their reality and they're trying to hang that in this case uh around the necks of

62:06 immigrants yeah first of all thank you so much for coming this was a very interesting lecture um what you said about the US um house particularly interested me you said that farri voters have more power in the house because there are more safe Republican seats however when you apply that to the Senate which has I think a fairly equal amount of safe seats for

62:37 both parties in the presidency which is never really considered safe you still see a rise in the far rightwing the way you don't see on the left you don't see far- leftist Senate besides standers you don't see far leftist Senate candidates we we haven't had a far- leftist Democratic president in the way we have on the right so how do you account for that other than there's just there is simply a large percentage of people who

62:58 are far right R yeah I think this goes back to his point about the Washington consensus that since the N since you know here's an interesting comparison if you look at the 1930s uh the Great Depression there were a lot of establishment small sea conservative people Business Leaders people like that who supported the New Deal why did they support the New Deal well it was partly you know Keynesian

63:31 type thinking I mean kees is general theory didn't come out out until 1936 but he the ideas were already in currency um but it was also you know there was a communist alternative out there vying for the hearts and minds of American workers you know and the AAL harrymans of this world were worried about that you know we had 20% unemployment we had Communists in the affl CIO and so they thought you know we

64:03 need a world in which American workers don't think we have nothing to lose but our chains and so the that's why they got behind the New Deal and and in the 1950s uh Ralph millerand the father of David millerand and Ed Miller ban the British politicians today he wrote a book saying the welfare state is capitalism best friend for the same reason it you know it makes workers feel like they have a stake in the these

64:34 Social Democratic systems if they didn't they could be mobilized by Communists right after 1991 that goes off the table and I think that the E the economic and political Elites feel much more comfortable just saying you know capitalism is the only game in town everybody's getting get with the program uh you know uh just shape up and uh if you can't well you know it's your

65:05 problem basically they're not worried anymore because they think these people have no place to go and so the center left party's tactic for survival is to triangulate um turn that with you essentially move to the middle and try and show that they can be just as effective at running uh capitalist economy as the center right part and so they seed all this ground

65:37 and the center right parties mainly responded by Shifting the goalposts further to the right and you know so that that is I think why um the center left uh became it it's an it's a it's another reason not just the safe seats the distribution of safe seats or safe States but the the abandonment of chains in economics and all of that uh greatly empowered the supply side is the

66:09 purveyors of the Washington consensus um and the left has been very much back on their heels for those reasons so they don't really know they don't have something to reach for um and so they they you know they get to buy exactly the way this has just happened with Schumer but I mean then you know if you look at deficit spending who are the big deficit Spenders in the last 25 years it's actually the Republicans

66:39 right it's you know Clinton who pays off the debt it's Obama who as soon as the financial crisis is under control starts paying down the debt um so that's it's uh the Democrats don't have any coherent ideology in a way that the Republicans do let's open it up yeah uh I didn't look and see what was in your book so this is very different

67:09 talk from what I was expecting uh but let me ask a question in the spirit of the talk uh in terms of your independent variables like the effect of the financial crisis and party fragmentation there are some democratic countries which look very different froming and particular Canada but it's also true of Israel that uh Japan the in none of these countries did the financial countries have big economic in facts big effects uh you don't um you

67:37 don't see fragmentation which I'm not sure if in your story it's an independent to it's dependent variable so um then so then we would expect somehow that the story in terms of the things you're interested in would be very different well I think it is different uh I mean Israel was probably the least badly affected by the financial crisis of any economy in the world uh with the I mean the Israeli Tech economy uh you know

68:11 they it it didn't take anything like the hit that most of these older uh economies took so I I think they came through the financial crisis extremely well they have a highly fragmented system because they have you know PR they even have primaries in some of the parties and they have a very low threshold and that creates governance problems for them and so governments keep falling and all of that but they haven't been dealt with been dealing

68:40 with the same Financial uh stresses since 2008 um that the others economies have I think it's also you know an economy that's perpetually on the edge of a war footing is very different uh domestic politics anyway Canada no it's not frag Canada is a two-party system I mean basically you know two parties two parties if you have single member districts which they have you get a

69:10 two-party system unless there Regional variation so you do get the K quad but it's basically a two-party you know it's like um so they don't have fragmentation um and parties are I think stronger than the American parties but weaker than the British parties so they're sort of in between um Japan has been staggering along since the 1990s in a very low growth

69:47 situation things were pretty bad in Japan before um and they still are so um uh I had a question about um this issue of loss aversion and how you think it might interact with this other sort of Trend in recent years of um kind of a growth in gambling and pseudo gambling type behaviors among uh anti-establishment sort of groups it

70:18 seems you see cryptocurrency is basically gambling Sports gambling is much higher rates than than it used to be it seems like it's kind of a zero some thinking and yet it's also sort of a canonical loss verion like a back of Laos verion so uh I haven't thought a lot about gambling but I mean I think there are two things that have driven increase in gambling one is Supply uh we made it you know we've legalized gambling in a lot of

70:48 places that we haven't before uh governments like it local governments like it it's a it's a highly regressive form of Taxation uh because people don't understand the probabilities of gambling [Music] um uh so that I think that's on all that's on the supply side uh on the demand side uh I mean some of it people just do it for sport but people who get deeply in you

71:20 know I think desperate people do desperate things uh so but I'd have to think it through I mean I've never really thought about it uh from the standpoint I don't think it's to do with loss aversion so much is um desperation if it's not if it's not you know a consumption good and just sort of sport I mean I have colleagues who who gam who you know buy lottery tickets who do they understand

71:52 probability then but they do it anyway that's just like you know watching TV or something I like your economic explanation and your institutional explanation but I'm surprised that you didn't address cultural issues I mean generally recognized the most potent part of the Campa Trump's campaign slogan is uh Tas for they them and com for you are you do you think cultural

72:24 issues are EP phenomenal or why didn't you include this in your ination uh I don't like words like EP phenomenal I'm tend to be an anti-reductionist all the way down good but um keep going um I think I I think um what do I think about cultural I think people un I I think people under who feeling threatened reach for them often and in the sense of you know the

72:56 world we have lost which you know might be a fictitious world but conjured up in memory of the ideal kind of you know 1960s uh nuclear family living in a picket fence um where you know might never often didn't actually exist um but that that image uh is a obviously it's a cultural but I I think that uh in ter if if by

73:29 cultural issues we mean identity politics um I I mean my observation and I've never I haven't seen any systematic study of this but my kind of casual observation is the thing about identity politics is that the right are much better at it than the left uh and it's it's a good example of uh things that are put on the table by the kind of storye left and then hijacked by the much more um uh clear

74:02 sighted right uh so you know Rainbow Coalition everybody should be part of it well you know somebody comes along that's fine Jesse but you know the one color that's not in the rainbow is white um and uh I think that you know ethnic white identity politics uh or ethnic EUR German identity politics or ethnic French identity politics has been far more potent politically than

74:35 the appeals to multiculturalism that emerged on the left um you know if you think about the American story we went from a world of you know kind of Martin Luther King you know saying you know rub America's ruling Elites in the ways in which they're hyp hypocritical and make make America live up to its melting po ideology instead of being hypocritical about to Malcolm X you know no we want multiculture we want you know we want uh

75:09 recognition of our separate culture and so you know you have that debate in the in the 60s and 70s out of which Springs the the move to multiculturalism and know affirming all these different I know I think the the Democrats naively had this idea that uh they could have a winning Coalition as a patchwork of minorities uh because they just assumed that you know Hispanics

75:39 would vote Democrat but you know a lot of Hispanics are conservative one of the biggest fallacies in politics is that immigrants favor immigration absolutely not immigration often the most hostile to immigration uh for reasons that you know doesn't not rocket science so uh I I think nobody has really studied this but I do think that you know the this the sort of uh legitimation of identity politics

76:11 definitely entered these systems from the left and then the right picked it up and ran with it and uh certainly in European politics today it's the same as here the it's the parties on the right that have uh derived uh many much bigger political dividends identity politics we have some questions from our online

76:41 audience somebody should study that though I mean like it's an empirical question right what i'mna see the mouthpiece of Zo um so this is a question from our friend Dean Newman SBA um you did not mention the rise of social media and the fragmentation of political information citizens receive this may not be the cause but does it play a major role as accelerant people used to get information from nationally recognized media outlets and newspapers

77:13 and share a common set of facts the polarization of those news sources can explain both the collapse the left and the rise of less mainstream candidates the right question mark yeah I I think that's hugely important and uh you know we did go from a world in which people did largely get information from the same sources and now they don't uh you know we went from a world in which there were three channels and everyone watched

77:41 you know ABC NBC or CBS at 6:30 every night uh and that was the kind of common ground for S you know uh uh where they would get uh information we had something called the fairness Doctrine which um because there were only three channels the the there was regulation which said if you put on you know somebody from the left you've got to put on somebody from the right uh and so there was argument and conversation

78:12 between them uh then we got cable then we got satellite and so then uh I think it was the Reagan depart Administration said well there's no longer scarcity of channels so we don't need the the Fest Doctrine and then we went from satellite to social media and so more and more and more and more segmentation and all the all the empirical work shows uh I think some of the best work uh is these Studies by Conan and Cass sunstein uh

78:47 that when people talk to like when like-minded people talk to themselves people like themselves they tend to become more extreme and so you know to the extent now people only go to uh like-minded sources um they it's essentially becomes uh self-reinforcing so I think it is an accelerant and it contributes to um

79:18 fragmented populations which then um feed into the fragmented policy yeah I agree with another question from Conor Cole who is interested in the second part of your leure title um he wants to you to speak again about what can we do about stopping the rise of populist like Trends in the US of stopping what what's what's the Practical thing that we can do I you have a slide I can see it

79:49 there well I you know I think I I think everybody is focusing on the symptoms of the problem you know I mean all this all this election was you know Will trump or won't Trump get it like the point is if you if the underlying things aren't addressed there'll be another Trump and another lepen and you know and another um Liz trust because uh you know unless the underlying economic insecurities are

80:20 actually addressed are you going to have you know tens of millions of people in these countries who are afraid are downwardly mobile are insecure uh objectively speaking economically insecure and uh desperate people do desperate things it's easy to mobilize them uh it often it doesn't matter that these populist remedies don't work you know I mean there all

80:52 these studies Trump didn't bring any job s back last time you know uh any in any appreciable number he didn't build his wall he didn't do the but that that's not why people are voting for him they're voting for him because they're so angry at what the you know has been hung around I think with some justice hung around the necks of the mainstream parties that have essentially governed

81:23 according to the same consensus for 40 years that has been leaving them further and further behind and that's what they're angry about and so uh you know uh I mean I think you know even if you if you look in the book I'm finishing up now even in cases where they've had a real opportunity uh I mean macron came in in 2017 the French parties had completely

81:55 collapsed he had created his assat party on Marsh uh he had a absolute majority in the French legislature could have done anything he wanted and what did he do he just went to the same neol liberal policies that had uh led to being the Finance Minister in Holland's socialist government he just kept right on with those you know and then he was totally shocked when the yellow rests erupted and started um trashing every city in

82:28 France uh and I'm sad to say uh now Storer is doing the same thing you know hear this guy he's beneficiary of the two-party system he's even if you know he doesn't have a big electoral base he's been handed a massive parliamentary majority he's got a fiveyear parliament um he could really do some things differently and he's not doing it you know he's been there almost a year already and basically um he's just uh

83:00 you know ringing his hands and doing austerity and not taking advantage of the uh position that he has he's the Envy of just about every politician in Europe because he's got so much freedom and he's so you know leadership is important and uh when it's not there um you know uh uh people are going

83:32 to he's doing nothing to address the the the fact that all these problems we talking about here are the same things are true in Britain you know all the wealth is in London and the home counties the uh the the level of poverty in the north of England is low is is worse than in Mississippi uh all you know these industrial towns are declining and uh you know he's not making any effort to address

84:04 it take ask my question do you would it be fair to say on your view that the ultimate problem is what people call neoliberalism is that a accurate description here well I think you know I think this is a good example of where the parties on the right are much more confident about what they want so they are opportunistic keynesians right when there's a financial crisis they they go mad with deficit spending or if they really need it if you look at

84:35 what um what's just happening this week in Germany you know merel put in her debt break in 2009 and then through the fiscal com compact they rammed it down the throats of all these European countries for all these years you know and now Mets is coming in and because of the crisis about Ukraine and everybody knows that there just has to be investment in Germany it's like he's having a Nixon to China moment he's you

85:07 know he's getting rid of the debt break he says yeah we we won't we won't count borrowing if it's for defense spending oh and by the way we're going to borrow to create a half a trillion Euro investment frund for Germany that's what Stormer should be doing right that's what they said you know so um and they'll run up big deficits and and then when the when the social Democrats are back in power they'll say get rid of the debt get R of the

85:38 debt and it's the same thing happens here the same thing happens here you know when Trump was in last time they was the Republicans were spending money like drunken Salas and added even before covid uh Trump added more matter 4.2 trillion to the to the deficit to the to the de to the debt um huge deficit and you know and then you know pounding away at at at Biden stop spending stop spending

86:10 so I think the the parties of the right are much more uh confident and they know what they want and uh I think the left doesn't do that it's it's it's very I mean I think if if you want a an array of Hope in in Europe I think what's going on in Germany is fascinating because the fact that this they got this through they got it through yesterday it's not going to be restricted to

86:40 Germany because all these other countries are now going to say that just gonna and they're gonna say the hell with that fiscal compact if if you know if the CDU can do this in Germany you know why are we why are we putting up with this in France and so you're going to see I I think we're about on the verge of a kind of massive era of Keynesian spending in Europe like we haven't seen for

87:06 decades May gonna ask the last question in your book you talk about uh solving the problems with stronger parties and increasing the power of the legislature I didn't hear that much of that in in this talk well I think the can you elaborate both of those and what explaining the rationality so so I think weak parties and fragmented parties make it very hard

87:36 for governments to form and to stay together and to implement policies effectively and so the answer is to strengthen parties and to reduce fragmentation right several places in this book and others talked about what that would mean in different countries um if you don't have that you do get these endlessly squabbling uh you know parties in the legislature in our system where they

88:07 can't control their back benches and deliver policies in the multi-party systems the governments keep collapsing because they the different parties in them can't agree on anything um and then Along Comes somebody's you know whether it's a Hitler or a Muslim or you know the people who are appearing on the scene now saying well these hopeless squabbling people can't do anything so you know give the power only I can fix it as somebody once said only I can fix

88:40 it right and some point people say yeah only he can fix it well only she can fix it and so that that is not a solution um because the I mean the to the most of these far right parties to be took out of government in Europe because people don't want to you know like the OD the was came in second this time around uh and nobody wants them in but where they

89:11 have where they are in government you know where they get in or whether they might as well be in uh the policies that they Advocate aren't going to work either because you know they also want low tax and no immigration and you know unless you're willing like in Denmark you know Denmark but the the Social Democrat the Socialist Party in De Denmark is unusual in that it it saw that they had to limit

89:42 immigration early on because they saw how this TR is going but they're very strong Defenders of the welfare state but Denmark has the highest marginal tax rate and the high highest per capita tax rates in Europe you know you couldn't sell those kind of tax rates to the German voters you couldn't sell them to American voters so for the most part these right-wing parties um

90:12 are you know to the extent they would be governing these countries they just would be driving the Titanic to whats an iceberg so um uh that that's not the answer the answer is uh got to be in the direction of creating political systems that will produce governments that can actually pursue the policies that will allow the

90:43 economy to work for most people you can't do that I think everything else is to the right of the thank you very much thank you