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Dr. Larry Arnn’s Hillsdale Dialogue On the Tax Bill Title IV Endowment Tax and the Historical Setting of Darkest Hour

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HH: That radio hour music means it is time for the Hillsdale Dialogue. The last radio hour of the week is brought to you by Hillsdale College. Each week at this time, all things Hillsdale covered at And all of the conversations we have at the Hillsdale Dialogue, which is the last radio hour of the week, are collected at I was thrown a little off my game, Dr. Larry Arnn, president of Hillsdale College, by watching a nativity scene video which I have just tweeted out where the two year old steals the Baby Jesus and gets into a Baby Jesus tugging contest with Joseph or one of the three kings. It’s unclear. But it is nevertheless very much worth your while to watch.

LA: (laughing)

HH: (laughing)

LA: I bet that really happened, too, because everybody knows what two year olds are like.

HH: Oh, not, it did happen. I have tweeted out the video, and it was not prearranged, I assure you. It was wonderful.

LA: So I mean, I think it probably happened back in the day.

HH: Oh, it could have. If there was a two year old going by the stable, and they saw the kings and the shepherds, they would have wanted in on that, you know? They say what’s the deal? Where’s mine? Dr. Arnn, you have an op-ed in the Wall Street Journal today, “About That Hillsdale Exemption, we forgo money in order to spare our students, faculty and administrators the bureaucratic interference.” Tell us about the genesis of this piece and why you felt obliged to put it into the record.

LA: Well, when was it, last Friday night, I can’t remember, the Senate was doing the vote-a-rama on the tax bill, and they, the part that became the most controversial concerned little Hillsdale College. They had proposed an endowment tax, I don’t know at this minute whether it’s in the thing that’s going to get passed or not, by the way, because it’s in conference committee now. But this tax on college endowments, if you have an amount, some, any, there was various amounts named, but an amount of endowment per student above a threshold. And so I thought that was a really stupid idea, and made that known. I was asked, actually, by several people in the Congress, and I said you’re subsidizing these colleges, you know, there are 35 or 40% of the money spent in colleges comes from the government, I’m told. And so now you’re going to tax them, too. Why don’t you just cut the subsidy, because then the private sector and the independence of colleges will get bigger, and the government will get smaller. The way you’re doing it, the government always gets bigger. And so I objected to the whole thing. And they heard those objections, but they said hard duty about you have to pay the tax, because tell me how your endowment works. And I said well, we use it pay for expenses related to the students, mostly need-based aid. And you guys, the federal government, is paying for the need-based aid of all of our competitors. It’s one reason why there’s, if you’re really poor and smart, you’re more heavily-competed for than if you’re middle income and smart.

HH: Yup.

LA: And so that’s all. There are just distortions everywhere, right? I mean, poor kids ought to get scholarships to go to college if they’re smart enough and if they’ll do the work. But anyway, so I said so now you’re going to, you know, we’re sparing the taxpayer the expense of all of that at Hillsdale College, and you’re going to tax us, too. And so they said well, we’ll take that out. And on the Friday night, Pat Toomey, who’s an awesome man, was explaining the bill, the amendment that would exempt any college that doesn’t have, that doesn’t take what we call Title IV funds. That’s the money that comes from the federal government for student aid. There are many titles of support to college in the Higher Education Act, and we can summarize them all by saying Hillsdale College participates in none of them, but not that one, and that’s the big one. And so somebody, a Senate staffer, came up with the idea that only Hillsdale College qualifies for this thing, so it’s an exemption for one little, crazy college that’s very influential and powerful. I was referred to as influential and powerful.

HH: Oh. (laughing)

LA: And the only celebrity friend I have is Hugh Hewitt.

HH: The fact checker didn’t call me.

LA: Yeah, there you go. You know, so yes, yeah, I’m a really big cheese. I know Hugh Hewitt.

HH: Yeah. (laughing)

LA: But anyway, and then they brought up Betsy Devos, and she gave us money and owns us, and all of this. And so it’s just a jangled bit of mess. Hillsdale College is not for sale, but if it were for sale, it would take a very great deal of money to buy it. And nobody’s given that much. Anyway, so that’s just, and then what’s that guy’s name from Oregon, Senator…

HH: Merkley.

LA: Merkley, Jeff Merkley, right, and he’s just a fountain of truth. And so he said that the whole reason that we don’t take the money is so we can discriminate, he says. We are specialists at discrimination. And that’s a lot of bunkum, because when we stopped taking the money, we stopped taking the money when it started being given and there weren’t any regulations about that in the beginning. We just don’t think that, we think that if you’re training future leaders, the government should not be in charge of their training. Then you know, because you need an independent society. And so, and you know, Lord, look, the government is extensively in charge of the training of future leaders today, and it is notorious what they are being taught.

HH: Well, I object to this. Having taught Con Law for 21 years, the first thing I teach people is that we don’t like prior restraints, number one, when we come to the 1st Amendment, and secondly, the government does not discriminate on the basis of viewpoint or content. That is a prohibited 1st, it’s like the first day of 1st Amendment seminar. We don’t like prior restraints, and the government may not discriminate on the basis of viewpoint or content. When the senators targeted Hillsdale and the other tax or benefit-rejecting Title IV colleges, they were discriminating based upon your viewpoint. I think it is unconstitutional from beginning to end for them to have done so. And to have targeted you specifically because you target an ideology that rejects their largesse is ironic, as well as unconstitutional. But I don’t think it’s being fixed. I quizzed Peter Roskam about this yesterday, and he does not think it’s being fixed. I think they’re afraid of the political fallout. I am not happy with our Republican members for their lack of spine on this. They ought to be able to stand up and say we are not going to tax the endowment income of people that do not take benefits from the federal government, period.

LA: Yeah.

HH: That’s just easy to say.

LA: Yeah, and just think, that’s an encouragement to others not to take it. That saves money over the long term for the taxpayer. And I, you know, Peter Roskam ought to fix this, right? I mean, it’s not, but you know, look at a larger thing, too. Why, why does the tax bill have the character that it has? This is my prime, because the tax bill is a great thing, and thank God for them passing it. But I will say that it is not nearly as great as it should be. It’s just much better than what we’ve got now. And kudos, I want to keep saying that, to them. Having said that, you shouldn’t have a rule that if you’re going to leave more money in the private sector, you have to pay for it by raising taxes in some other way so that you don’t increase the deficit more than a certain amount. And that’s just a mug’s game, because the Congressional Budget Office makes ten year projections. And their one year projections are always wrong, right?

HH: Always.

LA: And the, how they cut the taxes is constrained by that process. And if they would just realize, you know, I think we don’t even know this anymore. Like if you go into the confines of Washington, D.C., there’s this fantasy land there. And so it’s just a simple fact. You don’t have to add up any GDP number. All of the money that goes into the government comes from the private sector.

HH: All of it.

LA: All of it, right?

HH: 100%, yeah.

LA: And the government never gets its money first, because it doesn’t have any money. It can’t make money. The power to tax is the power, to paraphrase John Marshall, only to destroy. So that, you see, that, in other words, they should think yeah, we need to grow, because we’ve built up expenses in the United States of America that are monstrous. And if we don’t get between three and a half and four percent growth on a consistent basis for a long time, we’re going to have some kind of a collapse. We’re going to be Greece.

HH: I’m curious if you believe, I agree on all that. Senator Rubio, though, is using a legislator’s position to reason towards and persuade his colleagues to give them something that he wants. What do you make of the exercise of leverage by Senator Rubio? I applaud it, myself, but I don’t know what you think.

LA: Well, yeah, there’s, it’s a worthy cause, right? He wants child care, child tax credit expanded.

HH: Right, yes.

LA: …so we can, don’t have to pay any money if we have babies. And I’ve never met a tax deduction that I didn’t like.

HH: (laughing)

LA: And so, you know…

HH: Bravo Marco Rubio, yes.

LA: (laughing) That’s right. You know, is it tax deduction? Good.

HH: Yeah.

LA: But you know, I mean, you know, I would not support tax deductions for prostitution. But short of that…

HH: There you go. But let’s get it done. Give Senator Rubio what he wants. He’s wanted it from the beginning. Get it done. I’ll be right back with Dr. Arnn to talk about Churchill’s Darkest Hour. Stay tuned.

— – —

HH: Dr. Arnn, I went and saw Darkest Hour. And if my efforts were in any way connected with that, I’d be immensely proud. They are not. Yours are. You ought to be immensely proud of whatever contributions you made to assisting Mr. Oldman in that performance, which is an Oscar-winning performance. I have said that he does for us what Daniel Day-Lewis did for us with Lincoln, which is to allow those of us who did not live in the time of the man’s greatness to experience a bit of that greatness via the medium of film.

LA: It, so Mr. Oldman is coming here to Hillsdale College this very day. And we’re going to show the movie tonight, and tomorrow morning, he and I are going to have a discussion of the movie, and I’m very proud about that. I think the movie is very great. It’s been attacked in a few places because some of the things in the movie are not exactly as they happened, and some of them not even approximately as they happened. But what does it do? It, in the days May 23-May 28th, 1940, there was a political crisis in Britain, and they almost accepted a peace offer from Mussolini to end the Second World War, which would have left Hitler in league with Russia and in control of all of Europe, east and west, and between the two of those great totalitarian tyrants. And so Churchill resisted that, and he did it in the most stirring way you can imagine. And the film culminates with the way he did it. The film begins with his speech on May 13th, 1940, when he became prime minister that contains the expression blood, toil, tears and sweat. And it ends with this really great thing he said to the cabinet that I won’t tell you on May 28th, 1940. And that’s what persuaded, some words, persuaded the British government to stay in the war. And of course, there was terrible costs that went along with that, but in the end, Western Europe ended up a united front against the remaining Soviet tyranny. And the world has unfolded to the mess it’s in right now, which does not include the domination of Western Europe and the United States by a totalitarian power. So…

HH: Or the destruction of many, many millions of more people. I won’t credit Lord Halifax. I want to talk about him specifically when we come back from the break, a brilliant performance, by the way, whoever played Lord Halifax.

LA: Yeah.

HH: …about him specifically, but to their credit, they did not know of the killing machine that was underway and being built even as they retreated across the continent in the face of the Panzers. They just didn’t know. So there is that in their defense. But I am curious about one scene. Lord Halifax muttering about the English language being martialed and sent into battle. Is that a writer’s imagination at work?

LA: That was said by John Kennedy, right, and when they gave Churchill his honorary citizenship.

HH: Yes. But did Lord Halifax beat him to it? That’s what I was wondering.

LA: No, I don’t think so.

HH: Okay, so there’s a little writer’s license to make it better.

LA: Yeah.

HH: But Lord Halifax would have been in the gallery, correct?

LA: He was sitting in the room. So there were two bodies. There was a cabinet of about 25 people, and there was a war cabinet of 5 people. And the war cabinet included three members of the Conservative Party – Chamberlain, Halifax, and Churchill. And Chamberlain and Halifax were popular in the House, Churchill suspected some, and they, again, the Conservatives controlled the great majority of the votes. And so if either of them on the really big days where the 26th, 27th, and 28th of May when they had discussions in the war cabinet, and if either of those guys had resigned, then it’s likely that the government would have fallen. And that means that Churchill had to keep them in the cabinet. And yet, they were threatening, you know, we need to have this peace. And so he didn’t have the power to order anybody. They can quit if they want to. And so what he did was talk about it. And Halifax heard that, too. After Churchill gives this really great speech, Halifax says, the war cabinet resumes, and Halifax says well, I think we would be on a slippery slope if we started talking now.

HH: When we come back, we’re going to talk a little bit more, actually, we’re going to talk a lot next week after Mr. Oldman sits down with Dr. Arnn. I hope they are recording it for next week’s Hillsdale Dialogue. Stay tuned, America.

— – – —

HH: Now some specific questions, Dr. Arnn. I have been into the war rooms, and I have not been inside of Number 10. But I do get a sense of the space, and it’s really kind of amazing how they used the space, and how Oldman fills it and manages to project that this vast war raging across all the continents and all the seas is being driven by the decisions of a half dozen men in the war cabinet in one room. It’s so remarkably shot.

LA: Yeah, and it, you know, I will tell you that if you, you’ve been there many times. I’ve been there many times. If you got to the West Wing of the White House, and that’s the West Wing proper, the part that is attached to the White House, the offices, they’re not very big, right? The Old Executive Office Building next door is a big, old building, and there’s a couple of others around, right? The executive branch is too big, too. But the White House is a confined, little space, and 10 Downing Street, and these cabinet war rooms that are directly across the street from 10 Downing Street in the basement, those are not big places. And that means that when you walk down the hall, you have to turn sideways if somebody else is coming. So it’s kind of like being in a ship or something, you know? And it’s a cramped space, and all of it is like that. And so they were all operating cheek by jowl close together, and they were arguing. And then the other thing that the film captures a lot of the sense of it that Churchill became prime minister, chosen by the King, on the 10th of May, 1940. And that’s the day that Adolf Hitler began his attack westwards. There had been no major fighting to the west in Belgium and France up until that time. The war had started in September. Now it’s May of the next year. And that starts happening while Churchill for the first time in his life is becoming prime minister. And then you have to see that that’s May the 10th. And by the middle of June, France was defeated, and I think the 22nd of June, maybe, France surrendered. And that means every day from May 10th to the middle of June, the news from the front was horrific. And so whatever conversation they had in the morning, they got into a pattern that they knew in the afternoon they were going to talk again and things were going to be worse. And that’s very hard work, and that’s the work they were doing.

HH: Yeah. What I don’t fault the film for this, but I would like you to expand on it, there’s another movie out about the same period called Dunkirk. And so to a certain extent, the arrival of Dunkirk first makes this movie’s storytelling easier, because it captures the massive nature of the response of the British people. But they underscore, I think, the resolve that Churchill put into them to do everything that they needed to do. And was it accurately and fulsomely conveyed, in your view, in the Darkest Hour, Churchill’s direct involvement in the Dunkirk operation?

LA: Yeah, the dates are a little off, because you know, Dunkirk was over by the end of the first week of June, and this was over by the end of the last week of May, this political crisis in London. So they didn’t know quite as much about Dunkirk as they appear to know in the film. But they, and see, it’s a doubt. Until, you know, June the 7th, you know, it’s a doubt whether any soldiers are coming back. And by the time, by May 28th, there was worry about that, right? And the, you know, people probably know that the British Army didn’t get back with its heavy equipment, right? It, you know, a modern army doesn’t fight with pitchforks. It fights with stuff that’s really heavy and mechanical and important and explosive. And so they had to leave most of that stuff. And so they come back, and their stores in Britain, but they did get most of their army back. And so they’re small and worse-equipped than they were when the war started. And that’s a calculation, because you know, if you get, you know, you can, I think that Edward Halifax and Neville Chamberlain to a lesser extent are responsible for things that are you know, besmirch their characters and careers, right? But most of those things happened in the 1930s when they should have gotten busy building some weapons, because this guy was a killer, Hitler. And so you know, if you and I or anybody listening to this were in the war cabinet on the 23rd of May, 1940 reading the news, and hearing what the generals are saying, and you hear that Mussolini not yet in the war, but an ally of Hitler, it’s known, is open and offering to host a peace conference, you’re going to take that seriously. You have to, right? And Churchill himself gave it thought. And it went on for days, and it was, you know, and it would just be an unreasonable position to rule that out of hand the minute you hear it, because what it had to look like was maybe salvation. And so you know, and that means that these discussions, see, we don’t, they didn’t know. It’s just like our lives, right? We all have to make decisions today. And some of them will be hard, right? And they’re made harder by the fact that we don’t know about tomorrow. And so none of these guys knew, right? And so they, all of them, reached a decision. Churchill was very cautious talking about this. He didn’t, he never endorsed the idea. But he did say, and you know, also you’ve just got to, now that’s the whole war cabinet. Conceiving this as a body with the same responsibility, now think about Churchill’s position. The hierarchy that Halifax, Chamberlain and Halifax stood atop, had governed the Conservative Party since 1922. And Churchill had been with them, a member of the cabinet with them, in the 20s. But Churchill and Chamberlain never really got along, and Halifax, neither.

HH: And Churchill absolutely loathed Baldwin, who was the mentor of Chamberlain.

LA: Yeah, the guy that Chamberlain succeeded, that’s right. And he, you know, Baldwin was a very clever man. And one of his features was he always outmaneuvered Winston Churchill. But so there’s, now he’s the prime minister. And the situation is difficult. Just think how he began his premiership. I have nothing to offer but blood, toil, tears and sweat. And you know, Chamberlain, one of the reasons people became impatient with him was they had the sense that things were not going well on the continent with the war, and he was not reporting that. And they came to mistrust him. And so then you get this shocking thing said, right? And this speech is very short and crisp, right? And it makes plain in the last line that life itself is at stake. And it’s the first hint in that speech on May 13th, it’s the first hint that he might say we’ve got to fight to the death in the streets here, even of the civilians, because he’s very, you know, he believes in freedom. And so that is the situation. And then he’s sitting down with these guys, and he’s the prime minister now, but they are great powers. And he’s got an old history with them. And so this offer comes in, and see Halifax is the foreign minister. And that means this offer comes to Halifax. He’s the one having these discussions. Churchill doesn’t really have any power or time to have them. He could insert himself, maybe, but there isn’t any time. And so Halifax has his hands on the control of the information that comes in. And so you’re sitting there on May 23rd, and you’re Winston Churchill, and you look around the room. And just now picture yourself there. There are four other people in the room with you, and you can’t really count on any of them. And this word comes in, and you can’t know instantly what to think about it. And so you, just think of the tension of that. Think of how difficult that is to be in that situation when you don’t, when what you are seeing in your mind is German troops rolling through London, right? And that’s why it’s, that explains why Churchill was so radically bold and different than the others wanting to fight at the end. By the 28th of May, he gave this incredible speech. You’ll see it in the movie. So I’ll tell you what the key phrase is. He goes to the whole, big cabinet, and the pressures in the war cabinet are mounting, and remember, you’ve got to be worried that Halifax or Chamberlain will resign. And if they do, the government’s going to break. And he says to the cabinet at the end of a speech, I’ve been thinking in these last few days whether it is part of my duty to open negotiations with that man, meaning Hitler. He doesn’t tell them people are pressing for it, right? He says, and I believe that if I were for a moment to consider parlay or surrender, every one, you would rise up, every one of you, and tear me down from this place where I sit. If this island’s story is to end at last, let it end when each one of us here lies choking in his own blood on the ground. He said that in an ordinary conference room, right?

HH: And the response?

LA: Well, he records, and others, especially Hugh Dalton, who kept the notes of this, or we wouldn’t know what he says. Hugh Dalton was a left wing Socialist member who happened to adore Winston Churchill. And they, the record is that they leaped up and rushed to the front of the table where Churchill was and mobbed him and cheered. He says, Churchill, I have never seen such a demonstration in a cabinet meeting in my life. And think how old, he’s 65 years old, right? He’s been in government for decades. And so that thing, and then it was after that that when the war cabinet reconvenes, Chamberlain says that maybe we shouldn’t do this, because if we ever announce we’re doing this, we’ll be on a slippery slope and we won’t be able to stop.

HH: And it stops, it ends that. And before long, Halifax is dispatched, what, to be the ambassador to the United States, I believe?

LA: Yeah, and you know, that’s all fun, because Churchill was not at all a vengeful, Churchill was one of those guys that if you happened to be a Churchill supporter consistently for those many decades he’d been in power, and there were very few of those, by the way, then you’d be terribly upset with him. Churchill was extremely courteous to everybody, especially Neville Chamberlain, who did good deeds in these last days around the 28th of May.

HH: Hold that thought. We’ll come back from break. I want to talk about Neville Chamberlain. I also want to talk about Anthony Eden. I’ve also been watching The Crown at the same time I’ve seen the Darkest Hour, and I watched, I’m going to ask Dr. Arnn to compare how Churchill comes between Chamberlain and Eden. They are so different from the man they surround. He is the high point. They are the plains. Stay tuned, America.

— – – – –

HH: You can find all things Hillsdale at All of these conversations, including a 12 part series on Churchill from two years ago are collected at as Dr. Arnn is part of the official Churchill biographical team, and Hillsdale now has custodianship of many of the papers around which the project of collecting all of Churchill’s papers revolves. Dr. Arnn, I just want to go back, a lot of America has watched The Crown, and they’re now doing Season Two of The Crown, and Season One included an old Churchill giving way to a not old, but not as young, Anthony Eden, Eden, who was at his side in the Darkest Hour. And it struck me that it was a good portrayal of Eden in both the movie and the TV series, and a good portrayal of Neville Chamberlain, and that they’re both the same guy. Either actor could have played either guy.

LA: Yeah.

HH: And Churchill arrives in between them. He really is an aberration from the old Etonian of the Chamberlain-Eden variety, wasn’t he?

LA: Yeah, well Eden, Halifax and Chamberlain looked like prime ministers. And if you wonder what that is, that means they look like senators.

HH: (laughing)

LA: Most senators, most senators don’t look like senators, but when you see one who does, you always know that guy looks like a senator, right? And so those guys looked the part. And Churchill was 5’ 8”, I like to say exactly my height, and he was a little round guy.

HH: Yeah.

LA: You know, he was very athletic and slender for most of his life. But by the time all this stuff happens, he’s well past 60. And so he was, he was acknowledged, here’s something different about him, too. None of those guys, did people go around saying that guy’s a genius, right? And not nearly as many people about any of them went around saying that guy’s untrustworthy. Churchill had much more of both of those things than the three others combined. And you know, he just was a sparkling man, and people resented that and didn’t trust him.

HH: There is a scene in the movie about the inverted V and what it might mean, and whether or not it did mean that among the lower classes, and he is given to raucous laughter at himself for having ventured off of the proven trail of communications theory. Was he given to that kind of mirth at his own actions?

LA: He was, so you know, I’ll say a word for Gary Oldman, who I happen to know and like a lot, and known him quite a long time. And I just admire him very much, and admire him as an actor. And one of the things about him is if you just look at his various roles, the theme in them is he’s trying to be like what he’s playing. So he wanted to be like Winston Churchill. I saw an interview with him last night from some time in the last month where he talk about, and he and I had talked about this, about how Churchill is played. Churchill was hilarious, right? I mean, aren’t those famous, if you were my husband, I would poison your coffee. If you were my wife, I would drink it, he replied, in front of a big crowd. And instantly, the guy just sparkled with wit, right? And his face, there’s testimony, when he thought of the thing he was about to say, his face would just light up. And if you knew him, you knew that’s the signal. Something great’s about to happen.

HH: Incoming.

LA: See?

HH: Incoming.

LA: (laughing) Yeah, it just was, so Oldman, Gary Oldman captures that. Another thing is although Churchill was 65 and tubby, Churchill, you know, lived until, what, he died in 1965, right?

HH: ’64 or ’65, yeah.

LA: So he’s 90 years old when he died. Churchill could still move. And Churchill had been a fencer, champion fencer at Eton, sorry, at Harrow. And so he, when you saw him getting about, he can get about.

HH: Yeah.

LA: So in this, and you know, they play this guy who’s, you know, stumbles, or you know, halting steps, and he’s got his chin down, and he’s talking into his chest, and he’s growling all the time, right? But you know, Martin Gilbert, Robert Hardy gave a very good performance of Churchill in the wilderness years. It’s called, a documentary in the 70s in Britain, which is the best thing about Churchill expect this movie, in my opinion. And Martin Gilbert helped with that. And he took Robert Hardy, who died lately, by the way, who was a great man, took him out to dinner, and got him laughing at Churchill stories. And then he suddenly stopped and said do you think that the man who told those stories went around scowling all the time?

HH: Ha.

LA: (laughing) So…

HH: He doesn’t. In the movie, he doesn’t. That’s what I want to convey to people is as with Daniel Day-Lewis in Lincoln, you get a chance to sit with Churchill for a bit.

LA: Yeah.

HH: And to have watched him as you might have watched him as a scared member of the British society, as Hitler marches and your boys are trapped, and your world is falling apart, this guy turns it around. And first, he begins with you through the radio. I just, I love the fact that they show him in the BBC with the red light right up until the minute of it coming on. I love every part about it. Dr. Larry Arnn, we will talk more. Good luck with Gary Oldman today. Pass along the congratulations from us at the Hugh Hewitt Show, and our hopes that he has a great speech ready for the Oscars.

End of interview.


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