Latest / Liberty + Leadership / How Family Policy Impacts the Entire Economy with Dr. Veronique de Rugy

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How Family Policy Impacts the Entire Economy with Dr. Veronique de Rugy · Liberty + Leadership

• 0:02
  Speaker 1: Welcome to the Liberty and Leadership Podcast, a conversation with TFAS alumni, faculty and friends who are making an impact.
• 0:10
  Speaker 1: Today I'm your host, roger Ream.
• 0:13
  Speaker 1: I am honored to be joined by esteemed researcher and writer, dr Virenique DeRugy.
• 0:20
  Speaker 1: Dr DeRugy is the George Gibbs Chair in Political Economy and Senior Research Fellow at the Mercatus Center at George Mason University.
• 0:30
  Speaker 1: On top of that, she is also a nationally syndicated columnist.
• 0:35
  Speaker 1: Her research spans a range of topics including federal taxation, the budget, trade policy, homeland security, fiscal sovereignty, financial privacy and cronyism.
• 0:49
  Speaker 1: Her writing is featured in Creator's Syndicate, as well as Reason Magazine and National Review.
• 0:56
  Speaker 1: She has made appearances on Bloomberg Television's Street Smart, cnn C-SPAN and Fox News Street Smart, cnn C-SPAN and Fox News.
• 1:09
  Speaker 1: On numerous occasions, veronique has testified in front of Congress on matters concerning fiscal policy, trade and regulation.
• 1:13
  Speaker 1: To add to her long list of accomplishments, veronique has previously held positions as a research fellow at the American Enterprise Institute and the Atlas Network.
• 1:25
  Speaker 1: Veronique recently spoke to the summer 2024 TFAS students in Washington DC giving our annual Lev Dobriansky Lecture on Political Economy.
• 1:36
  Speaker 1: As the founding director of the first TFAS program in 1970, dr Dobriansky devoted his life to fostering a freer and safer world for all.
• 1:46
  Speaker 1: Since 1996, tfas students have attended this annual lecture to hear from a prominent scholar on a topic of political economy.
• 1:56
  Speaker 1: This year, veronique spoke to the students on the topic Should we All Be Housewives the Rise of the New Right and Women.
• 2:04
  Speaker 1: So I'm looking forward to diving into the insights that she shared with our students.
• 2:10
  Speaker 1: Veronique, it's a pleasure to have you on the podcast today.
• 2:13
  Speaker 1: Thank you for joining me and welcome to the program.
• 2:17
  Speaker 2: Thank you for having me.
• 2:19
  Speaker 1: You recently gave the annual Lev Dobriansky lecture in political economy to our students attending the summer programs over at George Mason.
• 2:28
  Speaker 1: It was a fascinating lecture.
• 2:30
  Speaker 1: Your focus was on the role of women in the economy and also touched on the push by both Democrats and Republicans alike to expand what might be called family-friendly policies.
• 2:41
  Speaker 1: We can debate that.
• 2:42
  Speaker 1: Policies that would include such things as paid leave, tax credits for having children, subsidized child care, etc.
• 2:50
  Speaker 1: I'd like to begin the discussion by focusing on what I thought was a very interesting point you made about Midway or toward actually the end of your remarks on that important topic, and it had to do with the observation which you were sharing, I think came from someone else that prior to the Industrial Revolution, prior to what is called the Great Enrichment by Deirdre McCluskey now and others, most women performed what we would say are household chores, and they were much greater back then.
• 3:18
  Speaker 1: But they did a lot of labor that wouldn't have been included in what we now calculate as GDP.
• 3:24
  Speaker 1: They weren't in a traditional labor force position, of course.
• 3:27
  Speaker 1: That began to change in the 20th century, fortunately, and more opportunities opened up for women in the workforce.
• 3:33
  Speaker 1: Now we've arrived at a point where some people argue.
• 3:37
  Speaker 1: You know it requires two women to work for a family to even survive in our economy, so could you talk a little more about that point?
• 3:46
  Speaker 2: I want to give a little bit of a context for what I was talking about and it's a concern I've been having in, I would say, the last five or six years, where there's a growing push from, I'd say, the national conservative mostly, but maybe conservative more broadly, but I think really the national conservative about this idea that something has been lost because of capitalism, that markets are fine, but really actually the heyday of America was the 50s and 60s and you hear this a lot.
• 4:28
  Speaker 2: That was kind of the context of it's.
• 4:30
  Speaker 2: Like me worrying about this kind of glorifying of the 50s and 60s, which of course you and I know that you know it may have been great.
• 4:39
  Speaker 2: I can't believe I'm talking like the woke person, but like for white men but it really wasn't necessarily the best for women.
• 4:47
  Speaker 2: It wasn't great if you were black, if you were minority, if you were gay.
• 4:51
  Speaker 2: Probably not the best time.
• 4:52
  Speaker 2: And so it's in this context that I was talking about this.
• 4:55
  Speaker 2: And one of the things that's recurring is how families could live on one income and now it's just not possible.
• 5:04
  Speaker 2: And one of the things that I said is like I mentioned the work by Claudia Golden, who got the Nobel Prize in Economics this year and she's done a lot of work on actually looking at labor force participation for women, and one of the things that I didn't know until I read her work was actually it's what she calls the U-curve of labor force participation for women.
• 5:26
  Speaker 2: What effectively boils down to is what she said.
• 5:29
  Speaker 2: It used to be a time long ago, before the industrial revolution, with most of the world, most of the economy was agricultural right, and there there was very little difference between the outside world, the work life, and the home life, because a lot of it was taking place inside the home.
• 5:47
  Speaker 2: That changed as we moved towards a more industrial type of world.
• 5:53
  Speaker 2: Women, and especially as wages start going up, there's a specialization.
• 5:59
  Speaker 2: That happens, of course, not for everyone, right, a U-curve doesn't mean that there was ever a time where no women were working.
• 6:05
  Speaker 2: There was always women working in the service industry and then cleaning homes and things like this.
• 6:11
  Speaker 2: But so what happened is just it made a lot of sense, especially because culturally, women didn't have the same opportunities and they had lower wages, also the cost of doing they weren't you know, kitchen appliances and all of that.
• 6:25
  Speaker 2: So it made sense that you see a division of labor and women were working more, especially in the second half of the 19th century, were working more at home and then gradually they started reentering the labor force, and the 50s and the 60s is some of the lowest point, if not the lowest point.
• 6:43
  Speaker 2: So this notion right that this time period 50s and 60s, that were really an anomaly in a way should be kind of the focal point of what life should be like for everyone, especially because women have been happy, I guess, even if it's hard to actually enter the labor force, as they were more educated, they had more varied and diverse opportunity to work.
• 7:07
  Speaker 2: You know, this idea that everyone was better off when women were at home is really kind of bothersome.
• 7:15
  Speaker 1: Well, I'm sure there are a number of factors at work when the opportunities for women open up, just like there are a number of factors at work in terms of for blacks and other minorities like you mentioned.
• 7:26
  Speaker 1: But is it fair?
• 7:27
  Speaker 1: I mean, I recall once in remarks I was making to a large audience I mentioned I credited capitalism with helping to liberate women because of the prosperity created and the Hans Rosling example of the washing machine and how it liberated his grandmother and all these appliances and things that enabled both partners in a marriage to be able to work, because things could get done without requiring one of them to do all those chores.
• 7:54
  Speaker 2: So wage were going up and also the opportunity cost of staying home, especially considering all the innovation in the home, made that trade-off just actually fairly easy for many women to make.
• 8:07
  Speaker 2: Not all of them, but many women decided they too wanted to enter back into the labor force, and they have continued ever since.
• 8:16
  Speaker 2: There's another component that's kind of infuriating in that narrative.
• 8:21
  Speaker 2: It's this notion of a two-income trap, right.
• 8:24
  Speaker 2: It's like, in a way, it's not at all what you're saying, that the market has actually provided all these opportunities and innovation that have allowed actually women to step away from home.
• 8:36
  Speaker 2: It's the opposite.
• 8:37
  Speaker 2: It's like, as women were entering the labor force, there was a bidding war on the cost of things because there was more demand for middle class goods and services, right, as if the supply side was not moving at all and hence prices started to go up.
• 8:54
  Speaker 2: Life became so expensive that women then had no choice but to continue working if you wanted to have the standard of living First.
• 9:06
  Speaker 2: It's bad economics, but it's also this once again, this notion that women were forced into this situation as opposed to entering the labor force, because it was what they wanted to do and also because they had all this opportunity granted to them by the free market, by capitalism, by a system that actually creates opportunities for lots of different professions and better wages.
• 9:33
  Speaker 1: As your colleague and one of our TFAS professors, Don Boudreau, has shown, the prices of all these goods was coming down considerably and the quality was going way up.
• 9:43
  Speaker 1: He's analyzed the Sears Roebuck catalog from the early 70s, I know, to show that quite the opposite was taking place.
• 9:48
  Speaker 1: Even though demand was increasing as these became available to the middle and lower income groups in our society, the prices were falling lower income groups in our society.
• 9:55
  Speaker 1: The prices were falling.
• 9:57
  Speaker 2: The other thing is kind of people take for granted and I think I told this to the students take for granted how much more we have now and how much more choices we have.
• 10:10
  Speaker 2: There's this kind of fantasy about you know the 50s and the 60s and to the extent, the 70s of you know family life and everything was peaceful.
• 10:17
  Speaker 2: But it was also not at all this life at all that people take for granted.
• 10:22
  Speaker 2: So MIT did a research where they looked at how many weeks of work you would have to do to be able to afford.
• 10:29
  Speaker 2: They went like the 1990s the 95, 85, 75, 65 and 55.
• 10:36
  Speaker 2: And the one I remember I'm sure of was 75.
• 10:41
  Speaker 2: You could live on one income.
• 10:44
  Speaker 2: You could live that life if you were 23 weeks out of the year, right.
• 10:50
  Speaker 1: At today's wages.
• 10:51
  Speaker 1: So work half a year today and you could live like the average person in 1975.
• 10:57
  Speaker 2: And what effectively.
• 10:58
  Speaker 2: If you wanted a house the scale of the 70s, if you wanted one car not one car for every person in the house, like one landline hooked to the wall, a big TV, but only one after you had saved a lot and it was black and white or I don't know what it was and it had four channels.
• 11:19
  Speaker 2: Yeah, it had four channels and you could absolutely afford exactly that life, working 23 weeks and what it tells me effectively is that other income is paying for a lot of the stuff we take for granted like a computer in our pockets.
• 11:35
  Speaker 2: All of us, even children, who are for better or worse, were 10.
• 11:39
  Speaker 2: It's like after-school programs.
• 11:41
  Speaker 2: It's vacation.
• 11:42
  Speaker 1: Central air conditioning right.
• 11:44
  Speaker 2: Central air conditioning, much larger homes that we have today.
• 11:48
  Speaker 2: People used to have much smaller home, one bathroom.
• 11:52
  Speaker 2: We live very, very different lives and most people wouldn't be willing to actually go back if they were asked.
• 11:59
  Speaker 2: But there's another thing is like Oren Kass at the American Compass says yeah, well and fine, but you know, we do take all of these for granted and all of these things are much more expensive now than they were in the past.
• 12:14
  Speaker 2: And he built this cost of thriving index that it shows life was much more affordable in 1985 than it is today.
• 12:22
  Speaker 2: And that too has been debunked, actually by very serious research by Jeremy Horpindal at the University of Arkansas and Scott Winship, showing that actually really no, if you adjust properly and if you actually measure things, like some of the mistakes that were made, it's counting just, you know, two sides of the health care costs the employer and the employee, as opposed to just the employee cost.
• 12:44
  Speaker 2: We make all these adjustments.
• 12:45
  Speaker 2: There's no affordability issue and to the extent that they are in some areas, they're created by the government.
• 12:53
  Speaker 1: You can't take into account the qualitative improvements.
• 12:56
  Speaker 1: I mean, I'm old enough that you know.
• 12:58
  Speaker 1: When I was a kid we had a car where you had to crank the windows up and down.
• 13:03
  Speaker 1: You had an AM radio with a few stations.
• 13:05
  Speaker 1: You didn't have air conditioning in your car, you just rolled down all the windows and we actually had a TV with those four channels.
• 13:12
  Speaker 1: But you actually had to get up and walk to the TV to change the channel.
• 13:15
  Speaker 1: You couldn't push a button.
• 13:18
  Speaker 2: I moved here 25 years ago and people don't realize that Starbucks didn't exist, all those different coffee chains, like people didn't have Nespresso machines at home to make their own kind of specialized coffee.
• 13:30
  Speaker 2: I remember moving here from France, right, the only thing that resembled the kind of bread that I was used to were bagels.
• 13:37
  Speaker 2: Right, I would buy bagels and use it as bread.
• 13:40
  Speaker 2: I loved it.
• 13:40
  Speaker 2: I didn't expect America to provide me with the stuff I had in France, otherwise I would have stayed in France.
• 13:45
  Speaker 2: Now you, just you could live, you can you have.
• 13:49
  Speaker 2: Like.
• 13:49
  Speaker 2: Everyone has access to really good bread and like any grocery store in America, people are used to different drinking their coffee all different sorts of ways.
• 13:59
  Speaker 2: It's just amazing how much things have changed in the last 25 years that I've been here.
• 14:06
  Speaker 1: I heard a podcast with the founder of Starbucks, Howard Schultz.
• 14:10
  Speaker 1: He actually said according to his people, there are 100,000 varieties of drinks you can get at Starbucks, because they'll make a drink however you want it and they're drinks baristas have never made because people have not ordered all the combinations of 100,000 you can make out of a drink.
• 14:27
  Speaker 2: I mean, and people take for granted the fact that you know, a lot of people have Netflix on their phone.
• 14:32
  Speaker 2: Right and back in the 70s, right going to the movie theater was a big deal, taking a family of four to the movie theater was very expensive, but now people just don't even realize.
• 14:43
  Speaker 2: They take all of this for granted.
• 14:45
  Speaker 1: Yes, I always tell our students at orientation that in my pockets I carry two of the most powerful things ever invented.
• 14:53
  Speaker 1: I'll say One is this thing.
• 14:55
  Speaker 1: It's the Declaration and the Constitution.
• 14:58
  Speaker 1: And that gave us this thing a cell phone that has a map of every city in the world.
• 15:04
  Speaker 1: I was in a small town in Northern England two weeks ago using my GPS to figure out how to get from my hotel to a castle that was built 1,000 years ago.
• 15:13
  Speaker 1: It has my entire photo and record collection.
• 15:16
  Speaker 1: It has just so much power in there and we do take it all for granted.
• 15:20
  Speaker 1: But now we come to the point where, despite this progress you're describing, we have lawmakers in both parties that are not satisfied with things in terms of women and family, who want to use government to do much more to address the issues of paid family leave, child care, tax credits, credits to encourage people to have more children, and that was a big part of what you talked about and you took on, you know, a very difficult subject by tackling those issues, but you had a lot of clarity about it, so I'd like to shift and talk some about that.
• 15:57
  Speaker 1: Why do you think we're seeing this call for these policies?
• 16:00
  Speaker 2: It's kind of interesting because one of the things that I fear the most is because a lot of the new right is actually embracing policies of the left.
• 16:09
  Speaker 2: I always worry that all these things that I think would be detrimental for the US and, in some cases, for women, they're going to form this unholy alliance.
• 16:18
  Speaker 2: But now I'm a little less worried about this because, as the new right movement progress, they actually have a different mentality than the left.
• 16:26
  Speaker 2: So, for instance, like if you take paid leave, which is embraced by both sides, but for very different reason, the left mostly likes to encourage women to get into the workforce and they want to actually kind of make life more affordable, easier and all this.
• 16:38
  Speaker 2: The left mostly likes to encourage women to get into the workforce and they want to actually kind of make life more affordable, easier, and all this.
• 16:41
  Speaker 2: The new right is moving away from actually paid leave because, again, they want to encourage women to be at home.
• 16:47
  Speaker 2: But there are some people, like Senator Rubio, for instance, in favor of paid leave, paid for through Social Security, where parents would be able to tap into Social Security benefits before they've even accumulated all the work orders that makes you eligible for Social Security and then you would pay back Social Security by retiring later.
• 17:09
  Speaker 2: There's a move, but it comes from very different to different mentality.
• 17:13
  Speaker 1: Right, there's like yeah, different motivations, but similar interest.
• 17:18
  Speaker 2: One is like really we want more women in the workforce.
• 17:21
  Speaker 2: Senator Rubio was more like we're like we need to encourage parents, you know, to have more children.
• 17:26
  Speaker 2: There's no evidence at all, in fact, that any of these big family policy encourage fertility whatsoever.
• 17:34
  Speaker 2: But what is clear is that there is this move to actually kind of create federal paid leave, and some of the arguments that are used on both sides are this idea that the US doesn't have a federal paid leave program, which is true, it's absolutely true.
• 17:49
  Speaker 2: And then the other argument you hear all the time is like we're the only industrial nation that doesn't have it.
• 17:55
  Speaker 2: Again, true, but the fact that we don't have a government program doesn't mean that there's no paid leave programs in the US, and in fact, we have a remarkable and extensive network of different ways that companies provide paid leave for their employees.
• 18:13
  Speaker 2: The Bureau of Labor Statistics measures how many workers actually get paid leave through a program called paid leave, and that's only like 21%, I think.
• 18:24
  Speaker 2: So that's the number that people is always using to say how horrible it is that workers don't have paid leave in America.
• 18:29
  Speaker 2: But the government, actually government agencies have measured how many workers actually have paid leave programs and that's way north of 65% actually, and that's because we have, like most of the things that America does when the government doesn't step in is like this incredible network of different ways that employers provide paid leave.
• 18:51
  Speaker 2: So, for instance, one of them is temporary disability insurance.
• 18:55
  Speaker 2: But there's also very private arrangement that mostly small firms we could go into, like all the other reasons why I'm against having the federal government provide paid leave, the first one of them being that I think it's not the role of the federal government.
• 19:10
  Speaker 2: But I wanted really to impress on these kids that this kind of instinct that a lot of people have, which is if you want something, if you want a service, the government is the place to start, is actually not correct.
• 19:23
  Speaker 2: But I also kind of took the opportunity to also tell them it's not great for the beneficiaries.
• 19:29
  Speaker 2: Paid leave is a fantastic program.
• 19:31
  Speaker 2: That's not the problem.
• 19:33
  Speaker 2: Not wanting to have the government provide it doesn't mean I'm against paid leave.
• 19:36
  Speaker 2: I think it's a wonderful thing, I benefited from it.
• 19:39
  Speaker 2: But the problem is that it has a real cost to have it provided, even by the private sector.
• 19:44
  Speaker 2: These trade-offs, right, this idea that you're going to mandate these trade-offs and decide basically the mix of benefits, whether, like it's fringe benefits versus wages, for instance, for everyone, or you're going to actually say, like we've seen in most European countries, that actually women are going to get fewer promotions because they have these paid leave benefits mandated by the government.
• 20:06
  Speaker 2: I think this is kind of unfair.
• 20:08
  Speaker 2: It's not fair to actually kind of just talk about the benefits of these programs without also talking about the cost.
• 20:14
  Speaker 1: Yeah, and one cost is probably that it does hurt the employment of young women if the employer is required to give paid leave.
• 20:22
  Speaker 2: I think there's several things.
• 20:24
  Speaker 2: It's like what you see when you look at the wage trajectory of women.
• 20:29
  Speaker 2: What you see and that is clearly established is like men and women before they have children, usually they're on par paid-wise, right, and there is a gap that's created after having children.
• 20:40
  Speaker 2: That remains true even when you have a paid leave program right, because a lot of people are saying you need to have paid leave.
• 20:48
  Speaker 2: It's actually much more pronounced in countries that have government-provided paid leave or government-mandated paid leave the gap is wider than in the US, or government-mandated pay leave the gap is wider than in the US.
• 20:58
  Speaker 2: And also, what you see is that the work hours are diminished for women and opportunities for promotions are diminished.
• 21:05
  Speaker 2: So it has a real cost.
• 21:07
  Speaker 2: It's not nonexistent when the private sector provides it without any obligation by the government, but it is much less.
• 21:18
  Speaker 1: You mentioned in your talk in passing that there's very few things that annoy you more than when someone calls for more government to address a problem that's been caused by government in the first place.
• 21:29
  Speaker 1: That is certainly true in this area, I think, when, as you pointed out, many of these areas child care provision, for instance are much more expensive because of government, especially at the state and local level where government interferes with child care.
• 21:44
  Speaker 2: And housing or higher education.
• 21:48
  Speaker 1: Housing health care education.
• 21:49
  Speaker 2: Basically, the best way to sum it up is to say what the government interventions tend to do and often at state and local level, but it's also a lot at the federal level is that they tend to subsidize demand while restricting the supply.
• 22:02
  Speaker 2: So child care is actually kind of a good example.
• 22:05
  Speaker 2: Yes, it is true that the cost of child care has gone up as women have entered the labor force, but it wouldn't matter if the child care supply had been able to expand as much as needed.
• 22:15
  Speaker 2: Unfortunately, a lot of state and local government imposed licensing requirements, education requirements, parking requirements, all sorts of things that actually make the cost of child care much more expensive but also really restrict the supply.
• 22:31
  Speaker 2: When a lot of the child care has been provided with people without education.
• 22:35
  Speaker 2: It was a good kind of first step to income mobility and that now you need to have like a bachelor in education to be a child care provider.
• 22:44
  Speaker 2: Well, it restricts the supply.
• 22:47
  Speaker 1: One thing we haven't touched on is the tremendous cost of a lot of these programs, and they're being proposed at a time where our national debt is $34 trillion, the unfunded liabilities are over $100 trillion.
• 22:59
  Speaker 1: We'll be running close to $2 trillion annual deficits, and I can just imagine a program like the one you mentioned Senator Rubio proposed, where you can tap into your social security early.
• 23:10
  Speaker 1: I can already hear a future president deciding to cancel those debts that people have from borrowing from their Social Security account, just like our current president is canceling student debt in the name of fairness.
• 23:23
  Speaker 2: But also I don't understand like Social Security is insolvent as it is and in 2034, benefits are going to be cut by 20%, roughly a little more.
• 23:33
  Speaker 2: If Congress doesn't act.
• 23:35
  Speaker 2: I'm worried that the way they're going to act is to maintain the benefits, as opposed to cut some of the benefits, and there's basically pay all these benefits with debt I'm not exactly sure Like basically, since you take more money, more benefits now than schedule, I mean that basically the time of cutting benefits is going to be way sooner.
• 23:55
  Speaker 2: So that's the first thing and you're right.
• 23:57
  Speaker 2: The public choice side is like we know those same conservatives that are saying that parents should have paid leave and we should facilitate things for parents.
• 24:05
  Speaker 2: They're going to be the same in the future, saying it's so unfair that those who've had children should be retiring later just for the fact that they've had children, and there's no way to tie the hands of future Congresses.
• 24:19
  Speaker 2: So the cost is high.
• 24:21
  Speaker 2: But if you think about the child tax credit right, which a lot of conservatives and a lot of Democrats and a lot of progressive love and a lot of them would like to expend it, it's already a trillion dollars as it is and they want to expend it much, much more independently of the end and because for the lower income families and parents it would be a payment and there'd be no work requirements is basically going to create a lot of disincentive to work on top of the budgetary cost and it's really weird.
• 24:52
  Speaker 2: Or like for the napkins, they're like.
• 24:54
  Speaker 2: They're like.
• 24:55
  Speaker 2: If you're going to be encouraging women to work through childcare subsidy, that's very unfair.
• 25:01
  Speaker 2: We should start paying women who decide to stay at home with their kids.
• 25:04
  Speaker 2: That is enormous amount of money.
• 25:07
  Speaker 1: Do you have any thoughts on how you would suggest addressing this coming fiscal insolvency of Social Security?
• 25:14
  Speaker 1: You said let's not do it solely through like tax increases but try to do some benefit reductions, and I agree with you.
• 25:22
  Speaker 1: But could you discuss some of those?
• 25:24
  Speaker 2: I have a solution that is a political non-starter, but I'm going to give it to you nonetheless.
• 25:29
  Speaker 2: When Social Security was created, when you stopped working effectively, you were poor.
• 25:35
  Speaker 2: We didn't have the miracle of capital markets.
• 25:37
  Speaker 2: We didn't have like whatever how many years of enormous economic growth, accumulation of savings on the private sector.
• 25:45
  Speaker 2: We didn't have any of this.
• 25:46
  Speaker 2: Now we do have this and, as it turns out, seniors are really overrepresented in the top income quintile.
• 25:53
  Speaker 2: Effectively, what Social Security is is a massive transfer of wealth from the relatively young and poor in society to the relatively old and rich in society, and what I would do is like I would actually move away.
• 26:06
  Speaker 2: The same is true for Medicare.
• 26:08
  Speaker 2: Medicaid is transferred to poor people.
• 26:11
  Speaker 2: So I mean, to the extent I mean there are lots of reforms you could do there because it's actually not serving poor people.
• 26:16
  Speaker 2: Well, you know I'm okay with continuing helping poor people I think I would move away from any age-based program they make no more sense and I would move to a needs-based program.
• 26:26
  Speaker 2: So that means that not every senior has enough money.
• 26:29
  Speaker 2: One in seven retirees rely entirely for income on social security.
• 26:36
  Speaker 2: But I would move to a needs-based system, even though I actually am a firm believer that this is the way to go, we should go this way.
• 26:42
  Speaker 2: But I think kind of the way we're going to have to kind of compromise is to means test.
• 26:47
  Speaker 2: I would means test as dramatically as possible as to kind of limit the amount of taxes that are due.
• 26:54
  Speaker 2: But politically it's going to be probably a mix of both and I worry that if we don't start talking about Social Security reform very quickly, what we're going to have like the Republicans, who in theory would be not opposed to having benefit cuts which include increase in the retirement age would be faced with basically the Democrats' position, which is raise the debt and raise taxes on the rich.
• 27:22
  Speaker 1: Well, you know, the counterargument is hey, I paid this money in through my working career, it's my account, I'm entitled to it.
• 27:29
  Speaker 1: But as you and I know the government spent it long ago on lots of other things.
• 27:34
  Speaker 1: The money doesn't exist except if they take it from people working now or print money.
• 27:40
  Speaker 2: It's amazing how successful they've been in actually selling this idea of you know an account with your name on it.
• 27:46
  Speaker 2: It's so not true.
• 27:47
  Speaker 2: Like every taxes you and I pay, they go to pay for current retirees.
• 27:51
  Speaker 2: It's not for us.
• 27:54
  Speaker 1: Another issue you've written on that is an important one is the issue of free trade.
• 27:58
  Speaker 1: We've certainly seen a sea change in support for that, and it's occurred throughout our history.
• 28:04
  Speaker 1: It's gone back and forth between the parties.
• 28:06
  Speaker 1: Democrats used to be free traders and then the Republicans were, and now it seems like we're all protectionists, except for a few band of classical liberals that still understand the comparative advantage and economic lessons of why free trade benefits a country.
• 28:22
  Speaker 1: Do you get frustrated in having to constantly write about that issue?
• 28:27
  Speaker 2: Yeah, I mean not as frustrated as Don Boudreau, our friend Don Boudreau, right, he spent his life defending free trade and trying to educate people about free trade.
• 28:36
  Speaker 2: It is really frustrating.
• 28:37
  Speaker 2: And what's the most frustrating about especially the change that happened on the right is that I can sympathize with the concerns that the NatCon, for instance, have about men who've dropped out of the labor force.
• 28:55
  Speaker 2: A lot of their agenda is driven including the concern for one income household is driven by the fact that there are men who've dropped out of the labor force.
• 29:04
  Speaker 2: It's like millions of men dropped out, they've given up on work, and that is disconcerting.
• 29:11
  Speaker 2: They claim that it's the product of men not having access to manufacturing jobs, and so their solution is protectionism.
• 29:20
  Speaker 2: But what's frustrating about this is that, because 50% of what we import is input, if anything, you're going to make manufacturing jobs even more expensive.
• 29:30
  Speaker 2: Further, even if, through industrial policy, you manage to create someone of a manufacturing boom, it wouldn't actually either bring back these men to the labor force, because there's just a bunch of issues and there are also a lot of government incentives for them to not work, including disability insurance, including occupational licensing.
• 29:52
  Speaker 2: There's just a lot of things that are keeping people out of the workforce.
• 29:56
  Speaker 2: But it's also because most of manufacturing, now the biggest factor for the decline in manufacturing job is automation, and the future of manufacturing is even more towards innovation than not.
• 30:08
  Speaker 2: So it's really frustrating because I can sympathize with their concern, but not what they think the solutions are.
• 30:15
  Speaker 2: Industrial policy, which is often protectionism, and protectionism in the form of lots of tariffs, is going to make things worse.
• 30:22
  Speaker 2: It's not going to improve anything.
• 30:25
  Speaker 1: I think, at the same time that manufacturing employment has been falling, which is over decades, manufacturing output has mostly been rising.
• 30:33
  Speaker 1: Yes, because of, as you said, automation and productivity of the manufacturing sector.
• 30:39
  Speaker 2: Employment in manufacturing as a share of employment is peaked in 44.
• 30:43
  Speaker 1: And, at the same time, the number of jobs our economy has created is tremendous.
• 30:47
  Speaker 1: We're creating lots of jobs.
• 30:49
  Speaker 1: They just they're in other areas, and so people who are in manufacturing have to look for jobs in other sectors and be willing to move, be willing to learn a new skill, be willing to find a different job.
• 30:59
  Speaker 1: As you said, there are government incentives that keep them from doing that in many cases.
• 31:05
  Speaker 2: Some of the matcons are actually talking about this problem and they're linked to the women issue in the sense that they actually think that as men were losing their jobs, their employment in manufacturing, then they became less attractive to women, especially as women themselves were finding more opportunity in the workforce and that contributed to a lot of the marriage decline which is, I mean it's, quite significant.
• 31:27
  Speaker 2: I can't remember if it was in the 60s, it was like it's an enormous amount, like 80 percent of people between 25 and 34 were married and now it's just 30 percent.
• 31:36
  Speaker 2: Right, it's like it's a big decline.
• 31:38
  Speaker 2: But they're like saying you know, all these women have these jobs and they don't want to marry men.
• 31:44
  Speaker 2: And it's like we'll solve all these problems, the men problem, make them more attractive by keeping women at home.
• 31:50
  Speaker 2: They don't go out and say exactly like this, but sometimes, like Tucker Carlson, they'll say don't applaud women getting into the workforce because it's the source of all of the problems and all of this.
• 32:02
  Speaker 2: And I have a problem with that.
• 32:04
  Speaker 2: I'm all in favor of trying to kind of lift up men or solve problems, usually by removing government barriers.
• 32:10
  Speaker 2: I'm not for doing it at the expense of women.
• 32:14
  Speaker 1: How would you describe the causes of opportunities for women vastly increasing in the 20th century?
• 32:22
  Speaker 1: How would you weigh the importance of our prosperity, of what capitalism did to make us a prosperous country?
• 32:29
  Speaker 1: And actually you know we needed women to enter the workforce to fuel the growth that was taking place.
• 32:34
  Speaker 1: And to what extent were there also governmental or quasi-governmental types of barriers to women that kept them out of the workforce?
• 32:43
  Speaker 1: Certainly kept them out of some professions.
• 32:45
  Speaker 1: Is there a role there to look at the role of government or other types of barriers that had to be removed?
• 32:51
  Speaker 2: Culturally, obviously there were many of them and some of these cultural barriers were backed by government regulations.
• 32:57
  Speaker 2: But the role of women in economic growth in this country there have been a bunch of studies that were done showing that actually the biggest share of the growth that we've experienced in the second half of the 20th century is driven by women.
• 33:11
  Speaker 2: There are trade-offs everywhere, so yes, there's a cost of women entering the labor force and the benefits, but there's like the contribution of women to economic growth and to the wealth of this nation is just not in question, in my opinion.
• 33:27
  Speaker 1: Well, I don't want to end on a sad note, but I am.
• 33:30
  Speaker 1: I guess you and I lost a dear friend.
• 33:33
  Speaker 1: June 7th David Bowes, the executive vice president and then distinguished scholar at the Cato Institute, passed away and I had met him in 1973 when I was a freshman in Vanderbilt, and he was a pivotal person in my life.
• 33:48
  Speaker 1: He introduced me just the very next day to David Jones, who was one of the founders of TFAS, and that led to my coming up here for a summer and David Jones hiring me to come work here.
• 33:58
  Speaker 1: I remember him also introducing me to Ron Paul within months of his first election in 1976, I think it was at a party Ed Crane had at his home for Ron.
• 34:09
  Speaker 1: And then through David I met FA Hayek later and Milton Friedman a lot of marvelous classical liberals.
• 34:18
  Speaker 1: You wrote a very beautiful tribute to him and talked about what a remarkably you said a remarkably generous person.
• 34:21
  Speaker 1: I was looking to make all of us better thinkers and better messengers for the fight for freedom and I think that captured what he did for me.
• 34:28
  Speaker 1: He made me a better thinker.
• 34:29
  Speaker 1: He challenged things.
• 34:31
  Speaker 1: If you made statements that he didn't think were either expressed correctly or he disagreed with, he wouldn't stay quiet.
• 34:38
  Speaker 1: He challenged you, sometimes in a sarcastic or funny way, sometimes just with the right question.
• 34:44
  Speaker 2: But it's remarkably sad because I don't think there are two David Bowes.
• 34:48
  Speaker 2: I mean there will be another one.
• 34:49
  Speaker 2: I mean the reason why I really wanted to make that point in that piece is because David came across as harsh sometimes.
• 35:02
  Speaker 2: He was a really harsh editor.
• 35:03
  Speaker 2: Part of it was his love of language, his love of grammar.
• 35:04
  Speaker 2: He was telling B-champion and he was always just very straightforward and he just told you when he thought that what you said made no sense.
• 35:12
  Speaker 2: But he came off as kind of strict.
• 35:14
  Speaker 2: But what was driving him?
• 35:16
  Speaker 2: I learned really quickly actually when you ignore that kind of stern.
• 35:22
  Speaker 2: Look, ultimately everything he was doing was to actually promote the cause for freedom and one way to do this is to grow the army of those who will be willing to fight for freedom.
• 35:35
  Speaker 2: A better prepared army that thinks well and that in this case, and that writes well is a better messenger for a message.
• 35:44
  Speaker 2: And I think that ultimately was really what was driving him.
• 35:47
  Speaker 2: And in the case of Cato, really, I mean Ed Crane was remarkable, obviously created this institution, but David was an essential participant in this task.
• 35:58
  Speaker 2: And really David in his demeanor not what you would think of a libertarian, he was just very proper and he insisted that we were the same and he was the enforcer of rules at Cato and basically he managed to herd a bunch of cats this is what you know we all were and make us better prepared for the fight.
• 36:21
  Speaker 2: And for me he was such an important figure because each time I was wondering, like sometimes I thought, what's the libertarian position on this?
• 36:29
  Speaker 2: And I would just kind of always think I wonder if David has said anything about this.
• 36:33
  Speaker 2: You know, less policy question but that broader.
• 36:36
  Speaker 2: And sure enough, he was just a.
• 36:38
  Speaker 2: Really he was an important person in my life.
• 36:41
  Speaker 1: Well, fortunately, he left a lot of writing behind him.
• 36:44
  Speaker 1: We'll dedicate this episode of Liberty and Leadership to David Bowes.
• 36:48
  Speaker 1: Veronique, thanks so much for being my guest today.
• 36:50
  Speaker 1: I think he would have agreed with everything we talked about, but he would have had some criticisms, of course.
• 36:58
  Speaker 2: Oh yeah, Thank you, Roger.
• 37:00
  Speaker 1: Thank you, and thank you for giving the Lev Dobriansky lecture to all our students last week.
• 37:05
  Speaker 1: Thank you for listening to the Liberty and Leadership Podcast.
• 37:09
  Speaker 1: If you have a comment or question, please drop us an email at podcast at tfasorg, and be sure to subscribe to the show on your favorite podcast app and leave a five-star review.
• 37:21
  Speaker 1: Liberty and Leadership is produced at Podville Media.
• 37:26
  Speaker 1: I'm your host, roger Ream, and until next time, show courage in things, large and small.