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Hugh Hewitt Book Club

AEI president Arthur Brooks on The Battle, his defense of the free enterprise system

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HH: This is a very special hour and next of the Hugh Hewitt Show, so pay very close attention. There is a new book out by one of America’s big idea guys, and you’ve got to get the book, you’ve got to read it closely, and more importantly, we need you to buy into the contents of it. The Battle is the title of the book, subtitled How The Fight Between Free Enterprise And Big Government Will Shape America’s Future. It’s linked at Hughhewitt.com, it’s at Amazon, of course, The Battle is. It’s in bookstores everywhere, and its author is Arthur C. Brooks, who is the president of the American Enterprise Institute for public policy research, otherwise known as AEI throughout the United States. You’ve heard many AEI people on this program for years, including most recently last week, Michael Rubin, but they’ve been legion. Arthur Brooks, welcome to the program, it’s great to have you on.

AB: Thanks for having me on, Hugh. It’s great to be with you for these two hours.

HH: Well, I want to begin with a little quote from Page 91 of The Battle, because I believe in biography before substance. “At 19,” you write, “I dropped out of college to take a full time job playing chamber music. I made a little money, and spent months every year driving around America in a van with four other guys. Once, we drove straight from Baltimore to San Francisco, only stopping for gas, but it was a great job.” Now we’ll come back to why that’s here, but it’s an intriguing little bio entry into Arthur Brooks. Fill us in before and after that. How did you end up running America’s preeminent think tank.

AB: It’s a winding path, which is pretty typical for Americans. You know, how the free enterprise system works, it’s you match your skills and passion which change throughout your life, and that was certainly the case for me. I grew up in a house full of musicians and academics, and my road led me to becoming a professional musician right out of the gate. I didn’t do so well in college, my first year, and dropped out, which is probably what a lot more kids ought to do to find themselves, and I played music for twelve years full time. It was great. It was a dream come true.

HH: You know, I think that is so fascinating given what you are doing now, and the passion in the book, The Battle, is that you’ve always been about following your passion. Your passion is now free enterprise and the culture of prosperity. But wind it back a little bit. You say a house full of academics and musicians. Where and what did they, what kind of legacy did they give you?

AB: Well, I grew up in Seattle, Washington. And you’re out on the West Coast, and you know the crazy Pacific Northwest, which is really politically progressive, as they like to call it, and I grew up in a family of political liberals. But I grew up in an educated family that took values really seriously, and I’m grateful to my parents for that, despite the fact that looking at the preponderance of evidence later, as I got a little bit older, led me to understand that a lot of their political views were kind of taken culturally, and they weren’t really based on the facts. And I’ll give you a little vignette on how this came around. You know, I had grown up, and my parents were Democrats, were liberal Democrats, and I went away playing music, and started reading. And I came across this crazy stuff from these authors at a think tank I’d never heard of called the American Enterprise Institute when I was in my 20s. And it started filling my head with these ideas, and I started looking at the data, and got really interested in social science and the world of ideas. And my parents started to get kind of alarmed, because they knew that something was afoot with my ideology. And at one point, I came back home. It was Christmas time, and I was cooking dinner with my mother, and she said, you know, Arthur, I have to ask you a personal question. And I thought uh oh, this is one of these, you know, lifestyle questions that your mother asks you when you’re an adult. She said have you been voting for Republicans?

HH: (laughing)

AB: And I think it would have been better, I think it would have been easier on her if I’d told her I was smoking pot, or something like that.

HH: Well, what were you reading? Who…

AB: She was like really elicit. Are you voting, my goodness, are you voting for…what did we do wrong with you? This kind of thing.

HH: Who was forming you, because I’m always fascinated by where idea people come from. And your passion for free enterprise in The Battle is so palpable. Who hooked you?

AB: Well, I started reading the work of Michael Novak in The Spirit Of Democratic Capitalism…

HH: I thought so.

AB: …which is a book that I know you know really well.

HH: Yup, yup.

AB: I was reading Charles Murray, Losing Ground.

HH: Yup.

AB: It talked about the failure of the welfare state, and I started, it just, I started studying economics as a result of these things. As a matter of fact, I left the music business, and went to get my PhD in public policy, because I wanted to do the kind of social science, meaningful social science research that would tell me what the facts are. I wanted to be able to crunch the data myself, and not come to some preconceived conclusion based on what people said inside a certain group. I mean, people always get so wrapped up in taking their politics by flavor. You know, this is what my friends think, this is what my family thinks, without actually considering the evidence for themselves. And I said you know, I’m going to put my foot down. I’m going to consider the evidence as I see it. And the only way I can do that is to get a little bit more training. So AEI, the organization that, of which I’m now the president, really changed my life. I mean, I started looking at the work that these scholars were doing. It sent me back to school to get the kind of training that they had, and it was a winding road through more than a decade as a college professor, actually, before I started showing up here at AEI as a visiting scholar. And then ultimately, I took the big plunge when there was a chief executive change, and weirdly, ended up in the corner office.

HH: Well, I’m going to talk a little bit about AEI in a second, but I want to pause on Michael Novak. I would guess, Arthur Brooks, if anyone goes back and looks at the intellectual history of the United States in the 20th Century, that one of the people who had one of the more profound effects on untold hundreds if not thousands of other opinion leaders, will be Michael Novak. I don’t know if you guys have ever done a retrospective on a guy who’s still living, breathing and writing a lot, but he’s the guy.

AB: Oh, yeah. And Michael is amazing. And what Michael Novak does better than probably any other living American writer, maybe even any American writer in history, is he ties together what culture means for the free enterprise, in other words, the seamless garment of culture and economics. And that’s really the inspiration from which I take in the book that we’re talking about here today. The whole idea that free enterprise is not just an economic alternative, freedom, individual opportunity and entrepreneurship are at the core of our culture. They’re the ultimate social issues. That comes from thinkers like Irving Kristol, Charles Murray, Michael Novak, and in fact, great economics like Milton Friedman.

HH: On Page 97 of The Battle, you write, “The purpose of free enterprise is human flourishing.” And there are four other great principles that we’ll come to, but it does seem to me to be that that is the centerpiece of The Battle, your book, that this is all about human flourishing, nothing else, and that’s why The Battle has to be fought, and why it has to be won.

AB: That’s right. You know, we have a tendency, those of us who are in the free enterprise movement who like it a lot, we have a tendency to get backed into a corner just talking about it as if it were about the money. People will say, I mean, free enterprise advocates will say well, don’t you understand that Obamacare could cut permanently a quarter percentage point off the long term economic growth rate? And people just yawn when they hear that. And the reason that they find it boring is because it is. You know, in an already rich country, money’s not really about the money. Money is expressive. It tells us what we’re doing during the biggest part of our days. It says something about our lifestyles and our character. And if we don’t get more used to talking about the fact that the entrepreneurial system, the system in which we put capital at risk because we’re looking for explosive rewards, and we’re looking for creativity and a better world for ourselves and our children, and we just talk about that as if it were about the money. We’re totally remiss, because you and I both know that the happiest people, and this is the big point in this book, we have the data that shows that the happiest people are the people who earn their success, no matter how much money they make.

HH: There is a famous line from Thucydides – the secret to happiness is freedom, and the secret to freedom is courage. And I think that is just echoed in The Battle again and again. I want to make sure people understand what AEI is, and by the way, the website for AEI is www.aei.org. It’s one of the easiest websites in the world to remember. www.aei.org. So tell people what AEI is, and what it has accomplished, what it hopes to accomplish.

AB: AEI is a public policy, non-partisan think tank, which is to say it’s a non-profit organization, kind of like a university without students. It’s been around since 1938, so it’s a 72 year old organization that has been around with three segments of its mission. We’re basically dedicated to three things – expanding liberty, increasing individual opportunity, and promoting the free enterprise system. Right now, we have 60 full time scholars, 200 full time staff, all located right here in Washington, D.C., but we do events all over the country, and in fact, all around the world. We work in three broad areas. A third of our people are economists, a third of our people work in foreign and defense policy, and a third work in social policy and politics, including education policy. So we’re a full service shop doing research that is academically independent. We have no institutional positions. We simply have mission principles, and hire the best possible people we can get to do the intellectual side of the free enterprise agenda.

HH: And I want to emphasize non-partisan. In fact, later in the show, the one thing I’m going to quarrel with you about is the relative merit of practical pragmatic thinking about politics. When I got to the end of The Battle, I thought well, you really don’t like these pragmatists out there, but they’re a necessary evil, if the battle is to be won once the strategery is in place, Arthur Brooks.

AB: Yeah, I suspect I’m going to concede your point, Hugh.

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HH: Arthur Brooks, I want to get a couple more background things on think tanks. But before that, I was thinking about your background in classical music. You know, your friend and mine, Michael Medved, deeply knowledgeable about classical music, Dennis Prager, just a genius when it comes to classical music, my friend, David Allen White, my Shakespeare expert and just a wonderful beacon of truth and light, loves classical music. Is there something about that? Because many classical musicians are left wing. Is there something here about the people who follow classical music and how it forms their thought that you think might lead them one way or the other politically? And if so, why are so many of them lefties?

AB: Well, the world of artists is really funny. It’s not dominated, necessarily, by deep-thinking people. The world of the arts is dominated largely by highly creative people who like everybody else in the population are just trying to make a living. They’re not thinking full time about public policy. They’re involved in their day to day life. And like everybody else, they live in a community, and the community largely shapes their thought. So it’s kind of like being a graduate student at an Ivy League university, or sitting in a newsroom as a reporter. You’ve got a community around you, and you take most of your political ideas by the basic flavor of what you find. And so if you sit in the middle of a symphony orchestra, for example, to the extent that politics ever even comes up, it’s going to be tilted toward the left. That’s just how the community thinks. Now that said, there, when you find people who are especially interested in public policy in the world of creativity, frequently they will think about things like you and I do. They will talk about personal autonomy, and the ability of a public policy system to set us free. I mean, this is the great promise of the free enterprise system, of course, is that it will help people match their skills to their passions. And there’s nothing that better favors an artistic, creative environment than a system that matches skills and passions. And that’s the reason you do find people like you and Michael Medved and Dennis Prager, who are, you know, big idea guys, I mean, and changing the context of ideas in this country for millions and millions of people who rely on them, who also have these interests in the world of the arts, and the world of creativity.

HH: I also have to ask you, when you brought up going to social science, getting your PhD, I was reminded of a couple of days I spent as a visitor at the Columbia School of Journalism at the invitation of Nick Lemann. And Nicholas was adamant that his graduate students in journalism, most of whom were pretty left wing, had to learn regression analysis, so that they would not be a captive of experts, that they could actually test the facts. And what you said in the first segment is sticking with me. I am afraid we are way too often captive of people who are alleged experts, but we don’t ever get to the data. Is that part of AEI’s mission and The Battle, Arthur Brooks, to force people to actually look at the facts in front of them?

AB: Oh, yeah, absolutely. I mean, this is what changed my thinking, is that I basically got, I learned how to work with data, and I got pinned under the data. I mean, the data are so overwhelming, when you talk about how people can improve their lives, and you know, what kind of equality we should get, what fairness really means. I mean, believe it or not, those are statistical concepts. I mean, what do you most people think is the fairest system, for example? Well, if you go out and you ask and you tally up the numbers, and you crunch the data, you find that most Americans think the fairest system is one that rewards excellence and hard work and merit, and penalizes free riding and corruption and laziness. Well, that sounds suspiciously like the free enterprise system to me, and that pops right out of the data. Most Americans who don’t think about the data very much, they’ll just hear the current president and Congress who talk about we need a fairer system, by which they mean a more redistributive system, and they don’t think about what that means, or look at what most people believe in their actual lives. You can be snowed into believing that fairness is a redistributive system. So data will set you free when you use them properly, and you can come to your own conclusions honestly.

HH: We also have to be open to it, and I found many stunning facts in here I did not know, and I almost wished away, which is that the American tax burden, in many respects, is much higher than it is in Europe. That was very surprising to me, Arthur Brooks, I should have known that. I didn’t. But also, you’re pretty harsh on the Republican Congress of 2000-2008, and on George W. Bush, for their spending, which while it has been exceeded in an order of magnitude now, was nevertheless profligate in its own terms when it occurred.

AB: Yeah, it’s true. We’ve got to face facts. One of the ways that the free enterprise system, which is at a fork in the road right now, I mean, the central premise of this book is that we have a choice to make as a country. I mean, you can listen to politicians and say there’s no choice, we just compromise, and then one little decision after the other, we walk down the road to serfdom. The choice is made for us. And so the central point is we have to choose how we want our country to break – toward the culture of free enterprise, or toward the culture of social democracy, as in Europe. And when we make that choice, we have to have our eyes open about the mistakes that we have made. And that starts with the mistakes that were made under Republican leaders from 2000-2008. Republicans frequently don’t like to acknowledge it, but it’s important, I think it’s crucial for us to be honest about this, that George W. Bush, despite his many virtues, signed legislation containing 55,000 spending earmarks as president of the United States without one veto because of abusing spending. I mean, the largest increase in entitlement spending in America’s history occurred under the presidency of George W. Bush, which was Medicare Part D. And if nothing else, while a Republican president and Congress that talked about the virtues of free enterprise, were abrogating those basic principles with their spending decisions, what this does is it numbs the people. It makes them think that there’s no fundamental difference between the Republicans who talk about loving free enterprise, and the Democrats who talk about not liking free enterprise. You say that people get cynical, and they say look, politicians are politicians. They just spend our money, and they do so unaccountably. And it becomes much easier to accept politicians like we see in our current leadership who say look, I’m not going to lie to you. I think the government should be bigger.

HH: Yup.

AB: I think we should spend more of your money. And they’ll say at least they’re honest. The Bush administration set the cultural stage for us to be increasing our debt burden, increasing the mortgaging of our future and our children’s future that we’re seeing today.

HH: I’m guilty of this, and as I read The Battle, which is Arthur Brooks’ book. If you just joined us, I’m talking with the president of AEI, Arthur Brooks, and his brand new book, a must read, is The Battle. It’s linked at Hughhewitt.com. For years in the early decade, I would say to Glenn Reynolds at Instapundit, or Rob Neppell at Kithbridge.com, who founded Porkbusters, I just don’t care. I mean, this has got nothing…we’re in a war, I’m worried about defense spending, I’m worried about cultural issues. 3% GDP budget deficits just don’t bother me. And as I read The Battle, I became convicted that you know what? We were giving, I was giving away, not you, I was giving away ground that is very difficult to reclaim now.

AB: It is. It’s cultural ground is the biggest problem. I mean, we’re such a rich country that frankly, you could increase taxes by a couple of percentage points, and my kids wouldn’t go without shoes, nor would most Americans. But what it actually does to our freedom, what it does as we increase the scope of government and the power of government, and the number of government workers, and our ability to pay for those programs into the future, says something deep about the American character. And little by little, we’ve been ratcheting in that direction. Sometimes because we’re not paying attention, sometimes because our leaders don’t have our best interests at heart, and they themselves are not paying attention. But in some cases, there has been a very real agenda to move America more away from the private sector, more away from private initiative, and more toward this idea that the government can and should know best. And we’ve walked into it really with our eyes open.

HH: Our eyes open. I’ll be right back with Arthur Brooks.

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HH: Arthur Brooks, the 70/30 nation, I’ll let you explain it to people. Powerful concept, it’s a phrase that I think is going to stick a long time. Tell people about it.

AB: The…one of the questions that I had when I was setting out to write this book, that said what are the stakes in what I thought was America’s new culture war? Not a culture war of the 90s over God, guns and abortions, but rather a culture war over free enterprise, which I believe is the ultimate cultural issue in the United States today, and over which we have a tremendous amount of disagreement. And my question going into that was in this culture war, how big are the sides? How big are the, how many Americans are real proponents of the free enterprise system, and how many on the other hand are not for the free enterprise system? And the results are really shocking. You can look at all the non-partisan data sources – the Pew Research Center, Gallup polling data, the General Social Survey, and for the listeners who don’t know about these data sources, these are really the best sources of non-partisan, completely centrist data that exist out there. And it doesn’t matter which date you use. On any question relating to the free enterprise system, you find that America is a 70/30 nation in favor of free enterprise. So let me give you an example. The Pew Research Center in March of 2009 was asking people about their attitudes about government and the free enterprise system. And you know, remember, in March of 2009, everybody was really scared. I mean, this was the low point in the recession, nobody knew whether or not we were going to be in this for a ten year ride. It was really scary. I mean, institutions were melting down all around us. Okay, so they asked do you believe that the government can get more involved in the private economy, and predictably at that moment, a lot of people said yeah. About half of the population said yes, which is really disheartening. But in the next question, they asked this. And this is the worst moment. They said do you believe that the free market system is the best system for America’s economy despite severe ups and downs, exactly like that. 70% said yes, 20% said no, and 10% didn’t understand the question or said they didn’t know. Generously, this means that, generous to them, 70%, a big majority in this country, are pro-free enterprise, 30% are either ambiguous or against it. I mean, this is the most mainstream issue in America today. And here’s the big takeaway. Here’s what I love. I’m the president of an institution that stands for freedom, opportunity and entrepreneurship. All of those concepts are 70% issues.

HH: Yeah.

AB: AEI is the most mainstream policy organization in America today. And quite frankly, Hugh, your program is a totally mainstream radio program. And anybody who says otherwise simply doesn’t know the data.

HH: Doesn’t know the data. And it was like hammer blows in Chapter 2. By a large margin, Americans feel overtaxed. 95% of us have a hugely positive image of small business. 81% of us don’t trust the federal government at least part of the time. Even a majority, not a big majority, 51%, believe that unions hurt the economy. I mean, your data was harnessed to driving home this idea. Don’t feel, my audience especially, though there are lots of lefties who listen, don’t feel like you’re part of a silent minority. You’re part of an overarching majority, but one that is politically, at this point, somewhat impotent, Arthur Brooks.

AB: Yeah, now this is the interesting thing. You will read in the New York Times, you will read in the mainstream media that the free enterprise cause that celebrates individual liberty and opportunity, that celebrates the defense of the free enterprise, and this is some right wing thing. It’s a right wing fringe interest. Well, the data say that’s a lie. That’s completely false. The only fringe interest here are the statists and redistributionists, the people who believe that we’d get a much better, fairer, more just society if only the government were to level out the income more. In other words, the people that are weakening our free enterprise system, that are saying that we need to bail out more companies, and are rewarding public sector labor unions, all the things that abrogate the free enterprise system, this is part of the 30% coalition. This is little. This is a winnable fight.

HH: When we come back from break, we’re going to talk about that coalition. I quote, “The 30% coalition is led by people who are smart, powerful and strategic,” Arthur Brooks writes. “These are many of the people who make opinions, entertain us, inform us, teach our kids in college. They are the intellectual upper class. Those in the top 5% of the population in income who hold graduate degrees and work in intellectual industries such as law, education, journalism and entertainment.” I’m reminded of what Peter Berger once said. If Sweden is the least religious nation in the work, and India the most religious nation in the world, America is a nation of Indians rules by Swedes. Well, the 70% ruled by the 30%, we’ll talk about what that means when we come back with Arthur Brooks.

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HH: Arthur Brooks, a little bit of a challenge here, at one point, you write, “The proponents of statism are not evil, but they are dead wrong about what is best for our nation.” Now I often say about my friendly rivals on this program, like E.J. Dionne or Jonathan Alter when they come on and we argue, they’re not rotten. They’re just wrong. And I want to make sure people understand that you are very much in that, you’re very gracious towards the people with whom you disagree. But I also always like to remember that there are some people who are both rotten and wrong out there. There are Alinskyites. There are people who just want the power. Who is the biggest problem right now? Is it the overclass that’s simply wrong but not rotten? Or is it the core within that overclass who are both rotten and wrong?

AB: I believe that the 30% coalition is made up largely of fellow Americans who simply have taken their politics as a matter of kind of a community symbol, who haven’t thought deeply about what’s going on, or people who have not, for whom the promises of earning their success have been empty, have been hollow. There are a lot of Americans out there that because of for cultural reasons, economic reasons, luck or birth or discrimination or whatever, haven’t had the promises of the free enterprise system in as great abundance as you and me. And these are the people, of course, who are most likely to be peeled off into this sort of permanent 30% coalition that becomes implacably hostile to the free enterprise system. And this is the call to action, the ethical mandate to those of us who believe deeply, morally, in the free enterprise system, is to see what we can do today to make sure that it’s not a hollow promise for anybody. And that’s actually really expensive and time consuming, but it’s a worthy, noble ideal. And there are a lot of people out there. So if you break down this 30% coalition who are against the free enterprise system, it’s kind of, it’s basically 5% who are in idea industries, or above, just as you read before, above average education, above average income, who are in certain professions – law, entertainment, journalism. They’re idea people who are really at the head of this, as well as politicians. The other parts are actually made up by interesting groups. About ten percentage points of the thirty are made up of people who are in traditional groups that feel that they’ve suffered a lot of discrimination. These are people that we should be able to reach more, and that we should be working really diligently to meet and understand better. And then the last part, about fifteen percent, are simply young people. They’re people in their 20s.

HH: Yeah, that’s a very chilling part of the book. And it’s about the overclass and the youth, and academics especially. Your statistics on social science professors, at Cornell, 166 of them are liberal, 16 conservative. At the University of Colorado, 116 are liberal, 5 are conservative. But they’re teaching a demographic that Obama won, I’m using your statistics again, 66-32%. They’ve got a grip, and media have got a grip, and maybe social media, Arthur Brooks, have a grip on this youth demographic which is deeply disturbing. After I read The Battle, I was thinking to myself, my gosh, what do we do?

AB: I know. I know, and you read those statistics, and you say man, that means, that’s the next generation, really, is what we’re talking about. And if that’s true, then the 30% is going to grow, because that generation will have the next generation, and there is an actual effort to take the 30% coalition and grow them to more than 50%. That’s ultimately how you can sustain a social democratic system. That’s ultimately how you can sustain a cultural change against the free enterprise system, is getting to a tipping point, culturally. And the way you do that is by working on young people. That’s a big challenge for us.

HH: And it’s not a conspiracy. I want to make sure you understand Arthur Brooks is not a conspiracy guy. He’s talking about the natural consequences of overloading certain demographic sectors with certain idea sets. I was wondering as I read this, Arthur Brooks, you know, up until fifteen, twenty years ago, we didn’t send many young people to Europe during their college studies. I haven’t really studied this, but I intuit that a vaster number of college kids now go spend a semester or two in Europe. Do you think we’re just exposing them too much to the café society, and that they kind of like it, and they come back thinking that Europe is just swell?

AB: Well, yeah. I mean, to a certain extent, you can be sanguine about young people, because young people have always had slightly more left wing views when they’re younger, and they tend to grow out of them. I mean, the data are actually kind of encouraging about what happens to people when they leave college. You find that people have kind of an upward blip in their left wingyness when they’re in college, and they tend to go back to the baseline of what their parents are. And as a matter of fact, you find that college educated people from Democrat households are much more likely to be voting Republicans by age 40 than vice versa.

HH: Oh.

AB: The reason, of course, is because they grow up and they learn to pay taxes, and things like that.

HH: Right.

AB: So but the dangerous…that part is okay. The dangerous part is that we have a movement afoot to make sure that they never grow up and pay taxes.

HH: Now the three strategies you talk about to keep young in the 30% coalition – pay off their debts, give them government jobs, and don’t make them pay for the services they receive.

AB: That’s right. And all three are in vigor. We see this just in amazing frequency right now. So for example, right now, 38% of Americans is a statistic that I suspect that your listeners know really well, 38% of working Americans have no federal income tax liability.

HH: Right.

AB: Under Mr. Obama’s tax reforms, which make our tax system even more progressive than they were, and they’re already really progressive, about 47% of Americans will have no federal income tax liability. Now at what point are we at the tipping point where people say look, I don’t care what you do with the federal income tax money. I don’t have to pay it. I don’t care what the tax rate is. I’m paying zero. I mean, these are zero payers. And this is a much higher percentage than we see in Europe. Even though in Europe frequently, there are higher marginal income tax rates for the rich, virtually everybody pays something, because even the Europeans understand that you can’t have a responsible citizenry when most of the citizens have no federal income tax liability, when they feel like they’re not responsible.

HH: Right.

AB: So there is a movement afoot to exempt people from that while increasing, particularly for young people, the amount of services that they’d get – their educations increasingly being paid for, free student loans, or exemption from paying back student loans, and then of course the number of federal jobs.

HH: Massive growth in the government sector.

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HH: Next hour, don’t go anywhere, because we are going to be covering what it really means to pursue happiness, and we’re going to cover the fable of what happened economically. These are all covered in The Battle. And don’t go anywhere. Arthur Brooks, before we conclude this, there is this incredible overbalance right now, and you’ve got the statistics. In 1986, the top ten percent paid 55% of income tax, the bottom 90% paid 45%. In 2006, the top ten percent paid 71%. They only made about 35%. And you point out, President Obama’s plans are going to further this trend. Right now, in California, the top one percent of income earners pay 50% of the income taxes. This is, to use the cliché of the day, unsustainable. Does it make you want to move towards something like the fair tax? I’m not a proponent of the fair tax. I wrote a book with Hank Adler against it, but something that moves towards a consumption tax away from this, so everybody does pay?

AB: Yeah. It’s clear that the rich are always going to pay most of the taxes. And you know, that doesn’t really bother me. They have most of the income, and you take some of the income to pay for basic government services. You’re going to find that tax cuts always give most of it back to the people who pay the taxes, and tax increases are going to disproportionately hit people who make the most. But let’s not forget that taxes, like income, are really expressive about our values. You know, who we tax and for what says a whole lot about what we value as a society. And when we say that 50% of Americans should have no federal income tax liability, what we’re saying is that half of citizens have no responsibility to pay for particular services, to pay for the Army, for example. And you know, that says something about the degree of citizenship that we expect in this country. It’s a really alarming trend to say that certain people have been historically discriminated against, or we have a class society with the winners and the losers, and we’re going to try to balance that out by making a whole section of Americans permanent wards of the state right now. I mean already, this is without Mr. Obama changing anything, 60% of Americans consume more in public services than they pay for. So you think about a public goods society in which certain people are really hard up, and you don’t want people to starve, and they shouldn’t, frankly, in my view, ethically, when we have a rich country. But what, okay, if 10% of the population are net takers, 15%? No, in America, 60% of citizens are net takers.

HH: Wow, that is…

AB: Only 40% are net makers.

HH: That cannot continue, America, and the reasons why are spelled out in the brand new book, The Battle. By the way, Arthur has his own blog, www.arthurbrooks.net.

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HH: This hour, I want to really dig into some of the big themes. I cannot cover the entire book with Arthur Brooks, and I get diverted easily, and so I’m going to try and stay on my outline here. But you’ve got to read The Battle, and you’ve got to get friends to read The Battle. Arthur Brooks, how is it being received?

AB: It’s being received really well. I’m tremendously gratified. We’ve been able to get the attention of a large number of policy makers and decision makers from both right and left. It’s been an interesting first week, actually. I mean, today, we’re coming to your listeners after a first, one full week after publication. And in the first week, actually, on opening night, I went on the Daily Show with Jon Stewart to discuss The Battle, which was a pretty challenging interview, because let’s just say that Jon Stewart doesn’t share my worldview, and is not very sympathetic to guests getting a word in edgewise. But it was a useful conversation, and one I think that we found mutually satisfying.

HH: Interesting. Have you done the Colbert Report yet, which is the way to mainstream right into the youth demographic?

AB: Yeah, I mean, I have to say it, I got a lot of feedback from people who watched the Daily Show with Jon Stewart and said look, I’m a huge Jon Stewart fan, but it was a really interesting interview, and I learned a lot. And ultimately, this is what we need to do in a free enterprise movement…

HH: Yes.

AB: …is to talk to everybody, to make rational arguments to everybody, and let them make their own decisions.

HH: I’m going out of my outline here, but I want to make sure people hear this at the beginning of the hour. The most powerful segment of this book, which is full of powerful segments, are the keys to happiness, which you’ve written about a lot. And they are optimism, meaning, and control over our lives. I think young people, and old people, will sit up and listen to a message that says you want to be happy, you’ve got to learn optimism, you’ve got to look for meaning, and you’ve got to have control over your life. Why don’t you expand on each of those three, even though it’s out of order, really.

AB: The…I mean, this is something that I find really fascinating. In 2008, I actually wrote a whole book on the subject of happiness, which once against ties in with themes that people I admire a lot, like Dennis Prager…

HH: Yes.

AB: …have written about. Happiness is an emerging science, actually. It’s something that social psychologists and economists have been studying with data over the past decade or so, and we’ve learned a lot about human happiness. And there are a few things that are really salient when we talk about free enterprise. The first is that the happiest people are the most optimistic people. You find that people who have something to look forward to, who believe that the future will be better for them, and their children’s future will be better even than their own, are unambiguously the happiest people. So if you say do you believe that your children will be better off than you are today, most Americans say yes. Now it’s kind of interesting to note that conservatives are vastly more likely to say yes than liberals are.

HH: Yeah.

AB: And it’s probably pretty telling about how they see the world. So optimism is a big deal. If you’re not optimistic, it’s really hard to have a good outlook on life, and you’ll be less happy, clearly. Meaning is a huge driver of human happiness. That’s the reason that the happiest people that you find in America today are people who are very much in touch with their religious faith, and take their family life seriously. These are people who typically will say okay, if I have to put in order my career, my family and my faith, my career comes third, even though I work really hard, and I care an awful lot about it. And the reason is because those other two things, family and faith, are a tremendous source of meaning. And the more meaning you feel like you have in your life, the happier person you’re going to be. And finally, the last major source of happiness is control. If you feel that you have control over the circumstances in your life, you’re going to be a happier person. If the control is stripped away from you, that’s an instant source of misery. And we found this in study after study, in economics, and politics, and in every area of social psychology. In experimental situations, you take away people’s control, you take away their happiness. Now all this comes together in an interesting way for guys like you and me, because those are the three central elements that we get from something that in the book I talk about, which is called earned success.

HH: Yup.

AB: When you earn your success, in other words, you feel that you have worked hard to create value in your life or the life of somebody else, you get more optimism, you get more meaning, and you exert control over your environment. And that’s the reason that earned success, not money, because money follows earned success, but it is not earned success itself. Earned success is the biggest driver in happiness.

HH: And it really is not about the money. I think if there’s a recurring theme in The Battle, the negative theme, it’s not about the money, though money shows up around people who are successful, because many very successful people are not wealthy, but they are very happy, because free enterprise, the supermarket of free enterprise is stocked on every shelf with meaning and optimism, and the opportunity to succeed. And status supermarkets just don’t give you those possibilities.

AB: That’s right. And it’s a very interesting thing. When we talk about earned success, you can denominate that any way you want. So you can denominate your earned success in the happiness of your children, or in the vibrancy of your community, or the number of people that you help to feed in Africa, or the number of people who are exposed to classical music through your philanthropy. There are many, many ways to denominate earned success. Only one of them is money that comes from starting a business or working hard. And that’s the reason you will find that people who say that they feel very successful will, a high degree of self-perceived earned success cancels out the role that money brings in any kind of happiness at all, as long as people are not starving. This is true almost the world over, but it’s especially true in the United States. You can take two people and compare them statistically, which I’ve done in this book, and they’re demographically equivalent. In other words, the same age and race and religion and education level and sex, and everything else, but they both feel very successful, earned success in their lives. One earns eight times as much money as the second. They will be equally happy, statistically.

HH: That is so amazing, and it’s a revelation people have to understand. They will if they read The Battle: How The Fight Between Free Enterprise And Big Government Will Shape America’s Future. It’s by Arthur Brooks. He’s my guest. Arthur, you also write that productivity has got so much bound up in feeling like you’ve got meaning. And, “feeling productive does not mean being protected from competition. It means beating the competition through merit and hard work. It does not come from a collective bargaining agreement and the threat to strike, but from a job well done. And it certainly doesn’t come from a welfare check. All of this explains why our free enterprise system produces happier workers than in most of Europe.” And the illusion of security is really kind of, is like ether on the human spirit.

AB: Yeah. People like security, but they like security in the short run, and are usually regretful about security in the long run. It’s an interesting thing. In particular, you can even take entrepreneurs, real entrepreneurs and give them the choice of having more safety and security, and they’ll take it in the short run and always regret it. This is a phenomenon that’s really recurrent in the way that you see people making decisions, and it’s a very important one for understanding why it is that when people are not exposed to a complete secure situation, when the people do have to put their capital at risk everyday, they end up, even in spite of occasionally failing, they end up as the happiest people. I mean, this is really what one of the big things that distinguishes Americans from Europeans, quite frankly. And there are a lot of theories about this. I mean, there are theories that say that our entrepreneurial spirit is in our DNA.

HH: That’s early in your book. I was surprised by that, yeah.

AB: Yeah, and what is suggests, I mean, there are good reasons for this. If the United States is a nation based on immigration, and the single most entrepreneurial act, where you put the most capital at risk, the most not just money capital, but cultural and psychological and linguistic and religious and everything at risk, you move to a country where you don’t speak the language and don’t know anybody, is immigration. And so what might be kind of a mutation from the norm, most people don’t like to put a lot of capital at risk, could become the norm in a country like the United States. And so some psychiatrists, I mean, this is not just a crazy idea from me, there are some psychological data that suggests that it probably is encoded somewhere on the human genome, disproportionately in the United States, that we like entrepreneurship. We actually respond well to risk. And that tells us, once again, that if we move toward a social democratic system like Europe, we might get a kind of short term security payoff, but it’s the sure route to misery.

HH: I was just about to use the M word, misery. Arthur Brooks, we’ve got a minute to the break. Very interesting about The Battle is that you don’t say much about religion or faith, and I’m sure it’s intentional, because the free exercise of religion prospers within the free enterprise system. But you’re also not demeaning the role of faith in happiness. I just think, did you consciously decide I’m going to stay away from that battlefield because this is really about a much larger battlefield in which that battlefield, large in itself, universal, in fact, can be fought?

AB: Yeah, I mean, it’s…the role of religious faith had a huge role in my last book, which was called Gross National Happiness. And it’s unambiguously clear that the happiest people are the people who are in touch with their religious views, and practice their interior spiritual lives very actively. In this book, I focus more on something that all Americans, secular and religious, have in common, which is, or which they can have in common if we make the right decisions, which is celebration of the free enterprise system. Now that said, we all have to make a decision in our lives about how we’re going to integrate the blessings that we have, from the blessings of the free enterprise system to the free exercise of our faith. And these are decisions that we need to make.

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HH: Arthur Brooks, one reason I’m going to be recommending The Battle for a long time is it’s very hard for my audience, and me, and everybody else to get a grip on what happened between the summer of 2008 and today. What was that wave? I’m 54 years old, never been anything like it, financially. We’ve had crises like 9/11, we’ve had threats like the USSR, never had a panic like that in my memory. And you walk us through it, and where it came from, in about 20 pages. And it’s actually invaluable, and it must drive the left crazy, because it’s unsparing in its criticism of government’s role.

AB: Yeah, I mean, it was something that took everybody by surprise. A lot of intelligent, educated people, a lot of normal, hard-working folks who knew their way around in the world, were completely blindsided. They said through no fault of their own, their savings was falling by 30 and 40% in a year. It was horrible. I mean, it was depressing. It was demoralizing, and a lot of people drastically and quickly reconsidered long-held beliefs. This, of course, was a pretext for the Obama administration to wage an all-out assault on the free enterprise system by taking the blame for the financial crisis, and saying this was really greedy bankers and an unregulated financial sector that blew itself up and burned down our economy with it. Well, it’s not so simple. And it’s very important to walk through the crisis a little bit, and pay attention to where the problem really started. And the problem started, quite frankly, with misguided government policy. Now Americans have come to know two names that they didn’t know before really intimately – Fannie Mae and Freddie Mac.

HH: Yup.

AB: These were two government-sponsored enterprises, which is to say they were private companies, but they were implicitly backed by the full faith and credit of the United States. And their whole job was to go out and buy people’s mortgages. Now for the longest time, they would go out and they would buy your mortgage or mine, which are called prime mortgages. You’d put down 20% down on your house, and you have good credit, and you get a mortgage. And Fannie Mae and Freddie Mac would buy these mortgages, and make, and invest in them, essentially. And the reason they did that is that way, they would free up capital to the banks themselves so they could make more loans. And they had a mission of getting more people to buy their houses. Some people think it’s smart, some people think it’s stupid, but they did that for a long time. Now in the 90s, that mission changed for Fannie Mae and Freddie Mac. It wasn’t just to get more people to buy their homes. It was to get more poor people to buy homes. And the way that they had to do that was to dig into the population of people who had bad credit, really blemished credit, and give them access to credit that they couldn’t have gotten in the private sector. So Fannie Mae and Freddie Mac started going to companies that issues mortgages, and offering to buy sub-prime mortgages, which is to say mortgages that were made to people who didn’t have good enough credit to get a normal loan. Banks, private banks, made these loans, because they knew that these government-sponsored enterprises would buy them from them immediately, and the risk of lending to people who were bad credit risks would be transferred from the banks onto these companies, and indirectly onto the American taxpayer. Well, they issues, all told, a total of something like 27 million mortgages to people who had really bad credit. That’s what blew up the housing bubble. That’s the reason that where you are in Southern California houses got more and more and more expensive in particular locations, because there was a lot of demand for housing given the fact that lots of people who wouldn’t have been able to buy houses suddenly could. That’s a housing bubble created by the government. And guess what? Like every housing bubble, like every other kind of bubble, it burst. And when it burst, it burned down the financial system. HH: And not only that, people didn’t know where it was. It was a virus because of the wizards on Wall Street slicing and dicing it, which they’re supposed to do. They’re supposed to distribute risk, but it got away from us, Arthur Brooks.

AB: It did, and you know that there are a lot of Wall Street firms that were issuing what we now call mortgage-backed securities, which basically were bundles of people’s second-hand mortgages that are being traded almost like stocks and bonds on Wall Street. They’re traded as investments, and they were riddled through with some terrible sub-prime mortgages, and good mortgages like yours, and nobody could tell what was good. It’s almost as if you bought a basket of fruit, and certain parts of individual apples are rotten. You can’t see. And so the result is you buy something that’s no good. Well in so doing, private firms started to do the same thing as Fannie Mae and Freddie Mac, because they were given an incentive under the new system. So they were pretty dumb and pretty greedy, a lot of Wall Street companies, and they ultimately blew themselves up, and some of them went away, and some of them had to be bailed out. But it was because they had the incentive to do so that was created by the policies of the U.S. government. Now the Obama administration never talks about this.

HH: No.

AB: The Bush administration never talked about this. And the reason is because it was the fault of politicians and policy makers who now are trying to avoid blame in order to save their own careers, and to be able to increase government policies that are pretty antithetical to the free enterprise movement. They’re prevaricating in order to deflect the blame from themselves onto the free enterprise system.

HH: And if I could tattoo anything of your five fables onto someone’s forearm so they could see it, it’s the fable is that government understands the crisis and knows how to fix it. And as you point out, they didn’t see it coming. They have missed every diagnosis since. We are doing some of the same things a second time. Amity Shlaes, who should be read far and wide, and you quote her in the book, is being ignored. It’s as though, now the engine of free enterprise might be sufficiently strong to overcome this, this time, but it’s as though they didn’t learn a thing from the 30s, Arthur Brooks.

AB: It’s astonishing. And just the data come in every day right now to show how badly they understood it, and how bad the remedies that they’ve tried to sell to the American people haven’t worked. Look, last Friday, the data came in on job creation in the United States. And as expected, there was a lot of new jobs. There were hundreds of thousands of new jobs. But it turns out that all but about 40,000 of them, of those new jobs, despite an economic recovery, were simply Census workers.

HH: Right.

AB: In other words, we’ve had all of this, you know, $787 billion dollars in stimulus spending in response to a financial crisis that the government says the private sector started, but actually the government started. And what do we have to show for $787 billion dollars in stimulus spending? A measly 41 or something, 41,000 private sector jobs a year after the fact? It’s a joke. It’s actually hugely expensive, and it’s not working.

HH: As you point out on Page 56, the cost of a stimulus job is about $429,000. Arthur Brooks, when we go to break, we’ve got a minute, I’m optimistic, though, that there are fables out there, and because of efforts like The Battle, and other people who have been arguing out there, that the public understands this, that they really do understand myth number five. When the left says the only way to solve this is massive government growth and spending, we don’t believe that. The 70% are going to reject that in November. Are you as optimistic as I am about that conclusion?

AB: I’m very optimistic. I have to say that this is the most exciting time that I could possibly imagine to be part of the free enterprise movement, to be part of the American Enterprise Institute. It’s just incredible. I mean, I’ve never seen energy, political or grassroots energy, against the forces of statism like we’re experiencing right now. Now it’s a really dangerous time, because we’re at this fork in the road, and America could make the wrong choice and continue marching down this road to serfdom that we’ve been on. But I’m optimistic.

HH: One reason I don’t think that’s going to happen is because of books like The Battle.

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HH: Arthur Brooks, this is a short segment. I want to run through the five key principles, and have you talk about them. Number one, the purpose of free enterprise is human flourishing, not materialism. Number two, we stand for equality of opportunity, not equality of income. Number three, we seek to stimulate true prosperity, not treat poverty. Number four, America can and should be a gift to the world. And number five, what truly matters is principle, not political power. I’ve set the table. Talk a little bit about which ones of these people have got to take away and recall, probably all five.

AB: Well, these are the five principles that I think are the five key principles of, that make the moral case for free enterprise. And I say that under advisement. Nobody is very comfortable anymore talking about the moral case for anything, because we’re in this relativistic situation where if you talk about morality, it means you’re some sort of a prude. But let’s remember, when we find, as I do throughout this book, that the, I mean, and it’s crystal clear in the data, that the stakes we’re fighting for here are not money. They’re happiness. Then, it becomes a moral imperative. Then if you talk about well, you know, somebody gets a little bit more money than somebody else, but we’re equally happy, fine. We can dispute that until the cows come home. But if we’re talking about the difference between you and the next generation, and my neighbors, and people around the world being happy or less happy, then it becomes a moral imperative as far as I’m concerned, and then you know, all bets are really off. So these are the five principles that I think are really salient in getting us to make the moral case for free enterprise without any embarrassment, and furthermore, which is one of the primary purposes of this book, we’re armed at this point to not lose any more arguments to the 30% coalition. We’ve got the facts, and we have the moral case.

HH: You know what’s interesting about this is I think strategically, you could put these five principles in the hands of, say, an AP government teacher, and he or she may be from the left, but they can’t argue with any of this. This, in fact, is compelling.

AB: I hope so, you know, because the first one you mention is that the purpose of free enterprise is human flourishing, not materialism. That’s actually not just an assertion. That’s not a theory. That’s a dead-on fact based on the data. The free enterprise system, which is a system that we see in the data, is the best system for letting people earn their own success, and earned success leads people to be the happiest. This means, axiomatically, that human flourishing is the central fruit of the free enterprise system, as opposed to just money. The second is that we stand for a quality of opportunity, and not an equality of income. You hear politicians all the time talking about the importance of equality, and equality in lots of areas, you know, equality before the law, for example, or political equality. And we all stand for these things, but you notice when somebody talks about political equality, or equality before the law, and I know you’re a lawyer, so you talk about equality before the law, this is not to say that everybody deserves to have a verdict of not guilty when they go to a trial.

HH: Right, right.

AB: It simply means that they have the opportunity for a fair trial, and their cases will be adjudicated in a fair, even-handed manner.

HH: Now I’ve got to ask you, though, when you, I know a lefty if they were here, for example, if President Obama was here, and he lived by his book, Dreams From My Father, he would tell you about the south side of Chicago, or he genuinely did do a couple of years working with people who’ve got nothing and going nowhere, and gunfights are all around him, and there just isn’t anything. He’d say that this sounds good, but doesn’t work in practice, and we have to do something, because these people can’t get to that first rung on the ladder. Your response, Arthur Brooks?

AB: I completely agree that we need to do more for people for whom the equality of opportunity, the opportunity society has been kind of a hollow promise. We’re simply not doing enough, or not doing good enough for a lot of people who are being held back for various reasons. And part of the problem is that we never talk openly about what the real problems are. So I don’t know if the president would or wouldn’t agree with me when I say that a big part of the problem in the areas that he worked in are cultural barriers to opportunity and earned success. But once we have a frank conversation about the problems that we have in all sorts of rural and urban settings, where people are simply not oriented appropriately to the earned success society, and then we give them the tools through education and various other means, we can be the opportunity society. But one way that we will never help people truly is by simply equalizing incomes. That’s not the kind of equality any more than in a trial, everybody deserves equally to get a not guilty verdict, that a system of true equality can become the American promise.

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HH: Arthur, I’ve got to tell you that of the ten years I’ve been doing this radio show, and the tenth anniversary is July 10th

AB: Congratulations.

HH: There’s been, thank you, no author has been on here longer talking about their books than Thomas P.M. Barnett. I think he’s been on maybe sixteen hours talking about his two books. At the heart of that book, where he wraps up the most recent one, is www.kiva.org, which is a micro lending institution on the web, I think built on the principles of Muhammad Yunus, who you talk about in The Battle as emblematic, really, of everything. Tell people about Yunus.

AB: Muhammad Yunus was an economics professor, is an economics professor in Bangladesh, who at one point several decades ago took one of his economics, his microeconomics seminars, his classes, out in the field to talk to actual poor people in villages about what was holding them back. And when he did that with his students, he found in a little village in rural Bangladesh that women who made baskets for a living were being held back, because they didn’t have any access to credit, and they had these predatory lenders who would lend them the money to buy the materials for their baskets, and they would have to sell the baskets to these same men for low prices. And they could never quite get ahead. They were held back. And if they only had a little bit of extra credit, they could buy their materials, and they could prosper. And so out of his own pocket, he took the equivalent of $20, and he lent it out of several, just a few cents at a time among these women. They bought their own materials, and they broke out of this cycle. And what he found was that a little bit of this micro credit, which he called it, was hugely empowering by giving people access basically to a little tiny version of the free enterprise system. Based on this, he formed something called the Grameen Bank, which grew into more than 50,000 branches across Bangladesh, and then spread around the world, that empowered people who had been held back from the promises of a little bit of free enterprise, to those promises. And it’s alleviated a lot of suffering. And it illustrates a key principle. And the key principle is not just people need to get more loans. The key principle is that when Muhammad Yunus, and people who think this way, when they see the tragedy of poverty, they do best when they say I want to stimulate prosperity. They don’t say I want to put a Band-Aid on the poverty, I don’t to alleviate the poverty. But rather, I want to let those people earn their success. It’s a central component of all effective development efforts around the world that we’ve seen over the past twenty years. Traditional aid, where we give a bunch of money, and they give it to a bureaucrat or a central banker, or something in a third world country, it never works. It never alleviates suffering. We see that suffering simply has not been alleviated, despite hundreds of billions of dollars in aid over the last few decades. On the other hand, these little efforts have a miraculous effect of actually empowering people to become entrepreneurs. It sets free the human spirit, and this is the basis on which those of us in the free enterprise movement should understand the phenomenon of some people having less, and how we can bring people up, and create the promise of free enterprise in our own communities. What are we going to do today not to alleviate poverty, but what are we going to do today to stimulate prosperity. That’s what we should be paying attention to, and that’s the third principle, the third moral principle of free enterprise.

HH: And it really does win the political argument. It takes the Joe the Plumber conversation, which you talk about in The Battle, and turns it completely on its head, and presents an alternative argument that is powerful, because as Kissinger used to say, it has the additional benefit of being true.

AB: Yeah, it’s kind of convenient when the social science backs up the truth.

HH: Yeah, I also want to bring up, you quote entrepreneurs throughout this, and one of whom says the best route to management in his company is by starting in the kitchen at the minimum wage, and I think reaffirming something that’s deep again in that genetic code, which is hard work pays.

AB: Yeah, it’s really quite something. The promise of the free enterprise system is that it will reward incredibly virtuous behavior. And it actually won’t in the long term, particularly if we are ethical individuals, and we do have smart government and the rule of law, it won’t ultimately reward the corruption that our current policy makers accuse the free enterprise movement of rewarding. You’ll notice that the company that’s going to be hurt the worst from the current oil spill is going to be BP.

HH: Right.

AB: BP might actually go out of business because of this problem. If BP had proper oversight, if the government were able to do what the government, what I actually want them to be able to do, as opposed to bailouts and social engineering and pork, which is what they spend all their time doing, apparently, then BP could have actually avoided this better, or at least we would have seen where they are truly negligent, and we could have punished it. We would have had more accountability. So indeed, the free enterprise system is best when we have a system of rules and laws that helps markets succeed more, as opposed to trying to put a cap on markets, put a cap on free enterprise.

HH: Now you also, by bringing up BP, you bring up one of the great obstacles to the message of The Battle being internalized and really understood, which is big media, instantaneous communication, seizes on some stories, like BP, translates them to a manageable amount of time, oil companies bad, and repeats them 24/7 for as long as the visuals are there. That’s a very hard wall to scale, Arthur Brooks. How do you do it?

AB: It sure is. Well, thank God for you is all I can say. I mean, the fact that alternative media and alternative voices are out there for people means that the monopoly’s effectively broken. And all the people that are listening to us today have decided that they’re going to go off the mainstream media grid. They’re actually going to look for what they think is a more accurate representation of what’s going on in the world. You’ll notice that, I mean, there’s no place in the mainstream media where we’re going to talk for two hours about the virtues, the ethical virtues of the free enterprise system.

HH: True.

AB: I mean, this is heady stuff, but it’s the stuff of our lives. It’s kind of the life and life for America.

HH: It’s also, by the way, I believe it’s interesting. I believe people have listened from the start through the end of the two hours, which will come up next segment, waiting to hear more, and that media underestimates phenomenally, substantially, how much Americans are interested in these hugely defining issues right now.

AB: I think so, too. I think that’s exactly right, and it’s a great testament, once again, even to the free enterprise system itself that it would look for solutions in media, it would look for messaging solutions like what we see today. It also is the reason that we’re seeing more and more grassroots activity that are rebelling, openly rebelling right now against the forces, against the 30% coalition forces, to continue to subjugate the interest of the 70% majority as regards our freedom and enterprising system.

HH: And I want to thank you on behalf of the Tea Party people who listen, that you defend the Tea Party against the slanders directed at them based by elites who have no context, especially that CNN reporter. I’m so glad you got that, Arthur Brooks, because I played it a lot on the show, when she began to rebuke a Tea Partier who wanted to talk about the founding fathers’ philosophy, and she said don’t you realize that there’s like a giveaway involved.

AB: Don’t you realize, sir, that you’re eligible for a tax cut?

HH: It was…

AB: It’s really astonishing, you know, that we’re unable to, unable to see this reality. And last week, I had a piece in the Wall Street Journal that talks about how our elite policy makers, how they look down on the town hall protesters and the Tea Partiers, not understanding that the Tea Party protesters are an example of American exceptionalism. In the United States, that what Tocqueville called us the freest people in the world, ideas actually bubble up from the people. And so what I’m doing here in The Battle, I’m intellectualizing certain things, but you know, this stuff, these aren’t my ideas. I mean, people have been marching around with signs, people who’d never been to a demonstration in their lives, who simply sensed that something is wrong in their country, and they’re willing to go to a demonstration. It’s actually heroic.

– – – –

HH: I want to thank Arthur Brooks for spending so much time with me to discuss his new book, The Battle: How The Fight Between Free Enterprise And Big Government Will Shape America’s Future, and I want to close in this short segment, and thank you, Adam and Duane for producing today as well, by quarreling a little bit, because you are not confident in practical politics. I sense you don’t believe that Republicans’ elites have learned this lesson. And I’m much more optimistic that they have. Have you been getting, have you been hearing from conservative operatives and GOP leadership that you underestimate their resolve?

AB: Yeah, you know, I really, really hope you’re right. I really honestly hope you’re right about this. And I have seen a big change between the time that I wrote this book an the book’s publication last week. I have been in contact with a number of really talented politicians, people I feel very good about, on both sides of the aisle, quite frankly, but in particular, guys like Eric Cantor and Paul Ryan, really have taken this message to heart. And it’s a message that they share in a very big way. So I think there’s a very real possibility that we’ll have meaningful conversations before, between now and the midterm election. You know, I can only hope that in my little way, with this book, that I’ve been able to help nudge the conversation toward the big ideas. Not who can be the big winner in the government lotto, but rather what are the big stakes in making sure that we continue to protect our culture of free enterprise.

HH: And I’ve got to close by asking you this. AEI has always been there, always been standing tall doing this. Your friends across the street at the Brookings, for example, or at the Center For American Excellence, you know, all the lefty think tanks, do they understand, do you see in your conversations with them that they understand how far off we’ve gone, and how much in peril we are?

AB: Well, you know, the Brookings Institution is a great institution. Strobe Talbott and I, actually, on C-SPAN last week, we interviewed each other about our new books. And I have to say that he liked my book more than I thought he was going to, and he said, you know, this is a set of big ideas that Americans have to reconsider. In Washington, D.C., it’s actually hard to get that kind of perspective, because in Washington, D.C, it always feels like kind of a zero sum game, where the big mother of everybody, the government, is, it’s a piñata. And you smack it, and a bunch of goodies come out. And so it’s very hard to actually back up, to get a kind of perspective that our listeners here today probably have, simply by virtue of the fact that they’re hard-working, private sector people who live outside Washington.

HH: Well, I encourage you to continue The Battle, and thanks for going on with Jon Stewart and Strobe Talbott, and every lefty you can.

End of interview.

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