Populism Unpacked: Voices from the Heartland

Carl is former chief domestic policy advisor to George W Bush and has written a really , really interesting book called Backbone , which is all about populism and the middle class and the state of the middle class in America . So , joel , you want to want to start us off .

The real aberration of really our lifetime has been the last 20 years when a very , very small number of managerial elites at the very top of society have just corralled a huge amount of power and authority and judgment and decision-making power . So I argue actually that this is actually a healthy thing .

Now , listen , there's going to be some broken China and all kinds of weird things smashed up , so we have to have a little tolerance for that . But I think we're returning to a healthier version of America .

I mean , you can think about it very basically as policy and politics essentially being driven by the interests of everyday working people that make up perhaps more than a majority of the population . They're not at the top end of society , they're not at the very bottom end .

Then I think what we've seen , particularly in the recent years , as people have been talking about populism , is something of a , I would think and Carl and I we haven't talked about this before this discussion , so we may not agree . We'll see where we agree and where we don't .

My interpretation is that what's been happening I think it's been pretty healthy in terms of understanding populism .

It's kind of a cultural phenomenon and what's especially interesting recently is you've seen some of the interests of kind of the working middle part of the country align with some people who actually we would probably call elites , like , like , like , um , technology leaders , entrepreneurs , people in finance , who've also decided to , you know , say , the emperor has no

clothes to actually look at what um , kind of a , an airtight , monochrome , monochromatic sort of uh elite which is highly progressive um , I don't know if that's exactly what Carl was referring to earlier , but where you have fewer people making really important decisions that affect lots and lots of people's lives . They occupy universities disproportionately .

They occupy regulatory agencies disproportionately .

There's a confluence with the foundation world , the philanthropic world and kind of large , powerful nonprofits as well as corporate C-suites kind of deciding for us what we should care about , and there's been just a really big rebellion against that and that's been going on for a while and I think it started in the American middle and it's been joined by people that

maybe even were formerly in the elite to give it more recent force lately , and I think you're seeing a lot of activity in the country as a result of that . So I tend to think and I can get into some numbers on this a little bit later .

I'll just say this quickly and then hand it back over to you I think from some of the survey work that I've done over the last few years and did this mostly at the American Enterprise Institute before I came to the University of Texas we had a definition of the working class that we used in our surveys and we found that people were particularly animated by

these cultural issues , feeling looked down on , feeling like they have to be instructed on how to think about gender , how to think about race , how to think about class and they have to , and they're on the wrong side of all those definitions and they reacted to it . What I think you see less of is support for a populist economic agenda . I don't .

I don't see as much support for the kinds of things that we typically would associate with kind of working class and middle class economic agendas . We could , we could talk about that more .

Are there parts of that expression we should encourage and parts of that expression we should discourage ?

I mean , one of the points in Backbone my new book is to illustrate how broad and deep the wisdom and sense of fairness and good judgment you find across the American population . I mean those of us who've traveled . You've all traveled and you know that , for instance , in Britain , pretty much everything is centered in London . In Japan , it's all in Tokyo .

We are a completely different society . We are much more multipolar , much more uniquely decentralized . So , yeah , new York is a big finance center , but guess what ? Most of the big banks are in Charlotte , north Carolina , and the biggest personal investment firm is in little Malvern , pennsylvania , vanguard . And Warren Buffett lives in Omaha .

And that's true in sector after sector after sector . I was just looking at some art stuff and some of the best museums in this country have nothing to do with New York or Chicago . It's places like the Kimbell Art Museum in Fort Worth and the Detroit Institute of the Arts .

I was in an amazing little , not little an amazing museum of arts and crafts that's just opened in St Petersburg , florida . So you have , we have a nation where resources and intelligence and energy are radically spread across the country and it doesn't really need to be manipulated or squeezed by anybody in control .

The whole point of my book is that the country flourishes best when we let people manage their own individual affairs at the level closest to the ground . Manage their own individual affairs at the level closest to the ground . You let people figure out what's relevant to them and you give them the authority to really make the big decisions .

Oh , this new , this new populism is really no , nothing ism Right , it's , it's it's dumbing down the world , but my sense is that that may not in fact be the case . How do you view it ?

We have to look at populism as a kind of a state of mind , not a checkbook or not a set of origins . I mean , for instance , I would say that Elon Musk has demonstrated he is a classic populist . Yes , he is the richest man in the world and when he hires people for his businesses , he tries to find the 1% of the 1% at the top .

But when it came time to , for instance , deciding how do we keep social media on the rails and responsible , he threw away the very elite kind of small set of experts who were going to impose controls on the rhetoric and he said no , we're going to have a system of community notes where you'll basically have a crowdsourced consensus arise amongst the everyday users

of X and they'll decide what's beyond the pale and what's not . And of course , that's now been copied across other platforms . So again people say to me oh well , do you have to be low income to be a populist Do you have to be part of the working class ?

No , populism is just a decision that we trust ordinary people to make the judgments that really matter across our society . And the first one I would be the first to say they will make mistakes , right . Ordinary people are not saints , they don't have perfect judgment . But the beauty of populism is that the errors cancel .

You get people at one extreme and the other kind of making the mistake and the mass consensus in the middle tends to be very wise .

You probably all know this famous example from history where one of the eminent English statisticians named Francis Dalton was at a county fair and they had a contest where you judge the weight of an ox and you put your guess on a piece of paper and drop it in the pickle jar and then they draw it out later and the average , the average Dalton was interested .

So he said you know , in addition to giving your 10 pound prize to whoever came closest , I want , I want the results of that pickle jar . So he took them home and he figured out that those hundreds of guesses were within like a pound and a half of what the ox actually weighed .

And that's the kind of thing that we're talking about , it's people who are close to the ground are very good judges of who are the best teachers , what is the best health care , what does our economy really need ? Again , not because they're savants or they're perfect and educated people are evil , but just that's the way the world works .

And how do you plan for black swans , how do you plan for exceptional situations that might arise or exceptionalism to be able to outperform ? The mean Is that are we , are we vulnerable with populism , to that ?

We were very lucky that Ben Bernanke was one of the world experts on that kind of a meltdown , was in a position to exert some influence , so there's obviously going to be a place for expertise .

I'm not an obscurantist who doesn't think that we need education or we need good ideas , but at some point you've got to make a decision , You've got to cut the bread loaf , and when that is done , I think it's really important we don't privilege that expert class because their track record is terrible , I mean as recently as COVID .

You look back who was right and who was wrong about the fundamental questions behind COVID ? Where did the virus come from ? Did you know ? Was it possible to suppress the respiratory virus with things like masks and social distancing ? You know , are the vaccines going to make nobody get sick ? Everybody who took the vaccine still got sick .

Now , again , there are still arguments in favor of a vaccine . There's still arguments out there , but the expert class has not acquitted itself at all well in the last 20 years .

I mean , I think you know I'll come to that , but I also want to , just because of what Carl said , just kind of springboard on a point that I think is worth making , which is relevant to the question you just asked me , which is the way that populism expresses itself , not just through working class voters , but also through Main Street shop owners or business

owners that are independent , who actually on paper are pretty wealthy but they're still very heartland types . And I think that's the kind of populism that we haven't done a very good job of articulating in our politics . Certainly when it comes to coalition formation , we haven't done a very good job of identifying those features .

And one thing that I found in survey work that we've done is what those people have in common .

If you're a business owner , started small maybe , you have 10 employees , you're actually doing really well , you're paying them all and you're actually amassing a decent amount of household wealth , you and the forklift driver down the street at a warehouse have a couple of things in common you don't really trust the people at the pinnacle of elite society in New York

and Washington DC and all of that to tell you what's right or wrong for , you know , and increasingly so because of some of the reasons Carl just said . But there's another really important feature that pops up in the survey data that we found really interesting , and that is kind of optimism about America and optimism about the future .

It's this really interesting , almost paradox where the people who distrust the people in power who make decisions over our lives are actually more likely than those people in power to say that America's best days are ahead of them . And we found this over and over again in survey data and especially with working class people .

We have a definition that we use of working class , which I can get into the details . It's a very think tank thing to do .

We spent a year coming up with a definition of the working class , but the way that this data reflected my own working class family and friends back in the heartland , the Midwest , where I'm from , is when you ask them is your life going to be better or worse in five years , they would say better .

You ask someone with multiple graduate degrees who's progressive and they're going to say it's going to be worse and America's best days are over . And we also found that highly educated Trump voters at the end of Trump's first term also were more pessimistic than working class voters .

So even it was like the more education you have , the more time you spend reading news , the more apocalyptic you get and the more you're triggered by what we consider the culture , war issues , whether it's renaming statues or how you think about whatever , um , uh , the hot button issues , whereas working class people , small shop owners , who we kind of think of as

the heart and soul of populism , are more optimistic about the future and more optimistic about their own lives , which I think is just really interesting , and that's something that we could talk more about , I think .

To get back to your question , joe , I think the more malevolent , or the downsides of this particular movement is taking pages out of the playbook of grievance politics , which I would say progressive elites abuse probably more effectively than anybody , and turning populist politics into that .

So where , where grievance becomes a lever of power rather than some more I guess , noble policy goal , you know , whatever that might be . Cause I guess noble policy goal whatever that might be , because I think the main thing here is to try to free up people in the heartland to be able to build , make and do more good things .

A lot of them don't have the resources to overcome what the regulators put on them , whereas people in large corporations have all the legal help that they need . And so I think putting the boot on this particular population economically is a real problem and they should be .

You know , putting putting the the the boot on this particular population kind of economically is it's a real problem and they should be able to build , make and grow more things and we should have an agenda that talks about those things , because we found , even in our own I mean , if you just talk with people , as Carl goes around the country doing , you see

this . And if you ask him the questions and surveys , you also see the same thing .

I think Brian might know better than me he's a historian of these ideas but I don't think in our entire history Americans have been so suspicious about our Supreme Court and about our business class and about our churches and about our military as they are today . And that's not good , it's not healthy .

But I would say that that's not a function of too much rabble , rising populism . That's a function of really dysfunctional management from a top down , and people have intelligently recognized how awful it has been and , and , and and . Those elites at the top , as Ryan was just saying , are extremely cynical in , in , in a lot of ways .

They , they , they talk about freedom and democracy and fairness and and wealth , and , but they , they really are in many cases hoarding power . And you know it's interesting . Our founders did a really intensive study of this . You read Madison and Jefferson .

They went back and they studied from the Venetian Republic to the Greeks and the Romans and they said what are the real risks and the dangers of tipping point dangers in a society ? And they consistently came to the conclusion it's when a group of very smart people get a hold of the levers of power .

It's not that they're not smart , it's not even that they're not well-intentioned , but it's dangerous when that small group of people gets a hold of the levers of power .

So our founders were very adamant to resist that and to work against that and to try to make sure that you didn't have that monopolization , and it's one of the wisest things that they really did and something we really need to return to .

I mean , ryan and I worked together on the White House and I'm now putting together a little reflection on my time in the West Wing and it's kind of been startling to remind myself how many times we were told oh , you can't possibly do that . That's just . You know , that's nothing that ever happens . That's beyond the pale .

You can't , you know , speed up the process of GPS air traffic control . There's just too many obstacles in the way . You know you can't clean up the awful system of paper records at the VA and the Department of Defense and get electronic records . That's just too hard .

You know you can't possibly straighten out the system of Native American land ownership in the West . It's just too fragmented , leave it alone . And there was just this horrible situation where we were suffocating in the conventional wisdom and the existing ways of doing things and we've seen that a lot of those excuses don't have to be respected .

We've had an enormous amount of things smashed up in the last few weeks , and I don't want to be glib , there's going to be downsides to that too . But one of the things that's most encouraging to me is we're getting away from this era of all the things that can't be done instead of thinking about the things that can be done .

I mean , part of it was just mental . I really , for the last 20 years , have been depressed that when you sit down with most politicians or you talk to people who think about political philosophy , I always felt like a tape recorder went off in the back of their heads and they would start spouting all this conventional blah , blah , blah , blah , blah .

And there was really very new fresh thinking , very new ideas of innovating nevermind buying Greenland , you know , but even far short of that . There were just no openness to the idea that we we don't have to accept the course we're on . We can control our own destiny .

So I think this is a massively encouraging , uh and and encouraging and very , very positive development .

because there's all kinds of reasons not to um , and sometimes it's just too hard and you just kind of accept that . And I think what's what's been interesting is like , for the first time in a long time , um , just saying that $10 billion is a rounding error uh , is not acceptable anymore .

You know , we , we would hear this in Washington You're like well , I mean USAID , I mean at the end of the day it's 0.0001% of the budget or whatever it's like . It's really not a big deal . But you know , to people in the country $10 billion is not a rounding error and the idea that we ought to be worried about that .

Most of us , in fact , are executives that have come out of business or started businesses . So the one of the one of the professors said you know , if you go into a company that's hurting and you say let's cut expenses by 10 percent , what you're going to get is incrementalism kind of answers .

If you say we need to cut the business model , the business expense base , by 25 percent or 30 percent , the business model , the business expense base by 25% or 30% , suddenly you have disruptive innovation , suddenly , new things that people hadn't thought about before or hadn't been able to vocalize before come to the fore and I'm just wondering whether you look at

it through that lens . Does that ring true to you ?

So there's just been this massive explosion . What is it ? It's up two and a half times growth and meanwhile the CPI went up . Inflation went up about 50% in that same period . So there's just been this huge bloating of the federal government . And back to this question of is populism dangerous ? Is it going to imperil us ?

Is it going to throw people out on the streets ? There's no reason to think that that has to happen , because we have so much built-in inefficiency and dreadful incompetence that if you can even incrementally reduce that , there's still plenty of room for a good life . And some of this is just criminal .

I mean , I don't know if our listeners are aware that the Pentagon , for instance , is audited every year to make sure they know where their money's going . Well , guess what , folks ? The Pentagon has failed that audit for the last seven years . I don't mean one year , two years in a row . Maybe you could say it takes a while to get your act together .

You fail your audit seven years in a row . Somebody ought to go to jail .

We were in the middle of trying to fix a huge problem in the student loan business and at one point I said I guess I asked somebody at the Department of Education to run a series of numbers for us and the word I got back with oh , the guy who does that ate a bad chicken sandwich and he's out for a day .

Great , Get his deputy to do it , Get somebody else to run it . Oh , no , no , no , he's the only guy who knows how to run this legacy system which has green cathode ray tubes and vacuum tubes in the back , the amount of stuff in the federal government where that's true .

I mean Musk was talking two days ago about how the federal retirement system is run on paper , with rubber bands and paperclips . There's no digitization of the records . I mean these are . I'd like to say that these are exaggerations or that this is just kind of , you know , crazy right-wing propaganda .

But I can tell you from the inside , as well as from as a journalist , from the outside , this is kind of the norm for the way our government works today .

And if you are out in the heartland trying to run a business , you're aware of the fact that on almost any given day you're breaking some kind of law somewhere and , depending on how regulated your sector of the economy is , you maybe have had run-ins with your regulators at the state level who might be enforcing state or agents of the federal government , because

most all , basically , regulatory policy also has the force of law and you can go to jail for breaking it . And I think that the idea that these things have actually been holding back innovation is something that people actually feel at the ground level .

And it comes up a lot when you're not in kind of the areas of high capital concentration like San Francisco or Boston or wherever , or even where I live in Austin , if you're out where people are trying to make and build things .

Everyone's got their stories about this and so you know what what sounds to some of us who've been around government reform conversations for a long time . I mean , I'm a disciple of Steve Goldsmith and Mitch Daniels and these great Indiana government reform people . You know , we I remember when Al Gore was reinventing government .

I mean , we've we've had had these efforts time and time again , but this time there's a kind of an urgency about what's happening in these , in these efforts , because people see the direct connection to their lives . It's not just the gold plated $7,000 toilets , that toilet seats that we read about , you know , 20 years ago or whatever these are .

These are actual rules that affect the business I'm trying to run , or the one that I work in , and I'm glad that someone's trying to to , to , to roll back the curtain so we can actually see what's what's going on in the minds of the people whose job it is to tell me that I'm doing my job wrong .

Well , it's particularly depressing to be a conservative in that world , Because conservatives are devoted to the idea that you don't just throw things away and burn them down . You incrementally improve and you evolve .

But if you take that conservative ethic and you apply it to a system that is completely sclerotic , as our current system has been , you just end up preserving broken things .

So I think it was a real dilemma for a lot of us as to how to act , and that's why today I'm much more open minded than I ever thought I would have been five years ago to this idea of just break , you know , transform , you know , throw out . And this is something that the left has always been very good at , you know .

Conservatives just kind of either want to tweak , make tweaking reforms or say you want this much spending , we will .

I've got a question about the history of that , though , for both of you . So we're obviously the pendulum is now moved the other way , right . We've gone from tops down to bottoms up . We've gone from elites to populism . Why did the elites come into power or popularity originally , and what are the forces that move that pendulum ?

So how long is this trend going to last ? What's going to undo it ?

And I think , for people that have been able to occupy the commanding heights of the American society to use that expression whether it's universities or the top of government , the media , philanthropy , certain types of companies , if you can persuade enough people in those places that there are forces at work that average Americans can't overcome on their own , then you'd

need people in positions of power to confront those forces . And once you make that argument successfully and you do it on issues whether it's race , whether it's gender , whether it's climate , these sorts of things , you basically control these levers of power that allow you to basically tell people how to live their lives .

And that's been going on for quite a long time . And so I think , I think you know the , the elite overclass that we've seen . You know , gaining power , especially over the last 10 years , is the product of many decades , of that , of that historical arc , and so you know .

So Carl is right , sometimes you have to smash things , you have to break them to fix that problem . But at the end of the day you have to actually change people's opinion about the important role of human agency .

And on the stagnation thing , I mean , I really do think that freeing up people to invent , to experiment , to create , to build , to think big again and to be able to actually act on their aspirations is the positive agenda that should come out of that .

And if you can't persuade enough people that human agency still really matters and that it's actually possible to build and make a really great life for yourself in this country , if you can't persuade enough people in positions of power that that's actually the case , then we might swing back into this position .

We might just have a different set of elites trying to control people's lives . I think that's a really important thing that human agency matters and it has to matter to enough people to be a policy kind of agenda item .

So that would be my hope with the Doge efforts and others is that instead of just getting rid of employees and getting rid of rules and shrinking spending and all that stuff , that there'd be certain sectors at least of the economy that they'd be able to focus on .

But that's the goal is to actually free up more people in more places to build , make and create more good things . That requires some constructive vision .

If you do it in a couple of areas of the economy that are really important whether it's energy , whether it's patent reform or whatever you could actually do something that really helped change things for the long term .

So I wanted to illustrate that by actually profiling real people out in real cities across the country , making decisions that are very , very empirically helpful . And it's not hard it really wasn't hard at all for me to just pull together a million examples . So I think there's a really positive end result if we do make these hard decisions .

However , I think it's going to be incredibly hard to keep elites out of the kitchen . And let me say that , as angry and distrustful as I am over the people that have manipulated us for the last generation , I am a huge admirer .

I mean , these are extremely smart people , they have tremendous energy , they're devoted to their work and , unlike you know , ordinary people who are very busy raising kids and getting to the job site and going to church , most of this elite class is really focused on activism , on manipulation , on symbolic you know interpretation of the world .

They have skills and time and money and networking , connections and credentials and degrees that make them very formidable . And to keep them in a box ? And again , I don't want to shut them down . I want them to advise us and give us good ideas , but I don't want them to be the ultimate decision makers .

And to prevent that , I think we're going to have to be very disciplined and hard , and there's a couple of things we can do . First of all , we can absolutely shut down and crimp the institutions that they've used to manipulate us with . So you don't just like , cut the CFPB budget by half , you get rid of it All right .

You don't just , like you know , put a few extra regulations on NPR , you shut it down . You actually have to , I think , crimp their institutions , their , you know , take away their levers of power . Second , I think you have to insist that authority be pushed down constantly , over and over .

You have to say push the decision-making authority down to the lowest possible level that you can , and that's a practical thing that we can do . And then the third thing we just have to really condition people that you don't give American citizens edicts . You just don't . You give them choices .

You give them intelligent choices and you ask them to choose the one that's most appropriate for them . And obviously there are guardrails around those choices . You don't say one choice is to have no retirement plan and no health insurance . I mean , that's probably not savvy .

There will be some people who make bad decisions there , but you have minimalist guardrails and then you say , within this framework , why don't you decide what matters most to you ? And if we can condition the population , the public , to think that way , I think we can make this more sustainable .

If you want to have any kind of fresh , innovative change in your future , you can't rely on that . So we're going to have to be super careful and I think part of the necessary thing on AI is just skepticism . You have to really start off with the idea of show me , kind of be the show me state , say oh yeah , you really think that's the best answer ?

Prove it to me , and Americans are pretty good at that , actually .

I mean , it seems to me that the choice is going to be between those two forms . So how would you wager , ryan ?

Then he kind of bats them away . You know , just just when you're trying to make him an immigration restrictionist , he comes out for more H1B visas . Just when you try to make him kind of industrial policy president , he shows no interest in in that kind of stuff Like it's , it's , it's . It's a little bit , um , uh , hard to know exactly where it goes .

What I , what I , what I do think is at the heart of it now , and I think it's different than it was in 2017 . At this time , um , I think that you , you have a more diverse group making up what we call the populist backbone of of the country that has thrown their support behind him . It includes , uh , more working class minorities than it did before .

Um , it includes a greater share , actually , of working class people that are all in it compared to where we were at the beginning of 2017 .

And it includes a lot of people that we would formerly have considered elites , who have started technology companies and mainstream business people , and so I think the deregulatory let me be free to build my life kind of populism is something that actually could emerge out of this , and I don't think Donald Trump is the person to theorize about how to do that , or

at least not a coalition builder but I do think it's up for the next generation of political leaders to figure out where that goes , and so I think that form of populism will be stronger or weaker depending on how successful they are over the next couple of years of achieving some of those outcomes .

If it looks like , you know , in four years time , the elite overclass of technologists is enriching themselves at the expense of everybody else , then then that's an opening for the kind of Bernie Sanders populism that you're talking about . I don't think any of us can predict what four years from now is going to look like , that's for sure .

Just let's remind everybody of all American adults , only a quarter have a four-year college degree to get today . All right , so the people we think of as average are not average at all . The true populism that I'm talking about is is very broadly distributed and and you're not going to find it in many places other than what we're talking about right now .

And , uh , you know , I think Trump has been , weirdly , a kind of a godsend to . He's the bull in the China shop that we really needed to to to get the the clogged arteries opened up , but he's not . It's not sustainable . You can't . You can't function the way he is in the long run .

So we just got to hope and pray that a DeSantis or a Vance or somebody else comes along who is able to administer this new system and not lose some of his magical kind of insights , which is that sometimes you don't just tweak , you destroy .

Sometimes you don't just withdraw and start your own alternative culture , you actually delegitimize the problems in the existing culture .

So those are , those are kind of more warlike approaches that Trump has , I think , taught us all and I think we can keep those alive in an era where the the commander in chief has a little more prudence and a little more temperance and a little bit more gentleness and maybe have the best of both worlds .