Policies given to us by the department of justice, not based on politics and that sort of thing. Reporter watch after words on booktv on cspan2. [inaudible conversations] great to be here with you all to celebrate and discuss an excellent new book by one of our countrys most original and insightful economic thinkers, amity shlaes. Over the course of her distinction career and ready has brought her intelligence and feel for storytelling to our countrys leading intellectual and cultural institutions. Amity shlaes has been a member the rhetorical board, a columnist for the Financial Times and bloomberg news, taught economic history at the stern school of business, now in addition to her prolific book writing, amity shlaes is a president ial scholar, chairs the board of the Calvin Coolidge president ial foundation and in a big coup for us that am i chairs the Selection Committee for the Manhattan Institutes high act prize, an award she herself has won. Amitys latest book, Great Society a new history of the 1960s in america, is a stunning achievement. Few decades were imprinted on the popular imagination as much as the 1960s. The assassinations of the kennedys and Martin Luther king jr. The march on washington and antiwar protests, Neil Armstrong on the moon, fighting in vietnam. Amity shlaess focus is not the drama that played out on televisions greens across the country so much as the failure of washington to control these events and direct the show. A generation of politicians came to realize that the centralized, hierarchical and highly regulated model of political economy that dominated postwar america had stopped working. More than just technical failures, amity shlaes catches a cycling feeling of a country run from the top down. America put up with the machinery and culture of mobilization during the two world wars into nearly years of a Nuclear Cold War but at some point that old american yearning, swashbuckling, independent minded, mistrustful of authority was bound to reemerge. This is a vitally important story for our time and we can be grateful amity shlaes has told it with such insight and verve. Im happy to report books will be served in the back of the room. Ladies and gentlemen, amity shlaes. Thank you. If you cannot hear me, please let me know. The book about the Great Society deserves great thanks. My thanks to the Manhattan Institutes president , reihan salam, and the Vice President of mendoza and planners, from harpercollins, jonathan j, agent andrew wiley and his colleague who is with us. I want to think the Coolidge Foundation for supporting me. Certain friends including thomas smith, jim pearson, the kings college, especially Josiah Peterson who worked on the research. I would like to thank my family, my husband, my daughter who are here tonight. The first sentence of the question, why not socialism. This is a question we asked last night when we watched the president ial debates. How do we answer it . A question all centrists, market people, would deliver an answer and answer. We feel an obligation to undertake the longterm investment in projects that would open american minds so that american minds see the tragedy of socialism. We want to share the record of the past or the record of venezuela so that when they come to vote, younger americans recognize what is not useful policy. Where are we . It is november of 2019, educating is a longterm investment. Some of us dont have the heart for the long haul. We feel frustrated at the prospect of slow outcomes and perhaps outright failure in our intellectual entrepreneur ship, politics or more fun, instant gratification. All of us have some vanity. People remember politicians, they do not always remember educators. We, journalists, business people, philanthropists, scholars, we want to pick shortterm projects for that reason. Tonight i would like to tell you a story of a really longterm project, a crazy project. This is a story that starts in the 1950s, features a company, a man, and the american public. Those are the 3 characters. It is the story of a failing longterm project of humiliation, business, shame, and intellectual failure, no way around it. The story that ends in the 1980s, reveals an unexpected payback. Some of you may know the characters, i might appreciate hearing about them one more time. The name of the company was General Electric. In the 1950s, General Electric road high in massachusetts, in the industrial center. And it served the Space Program and the Tennessee Valley authority, and and, through moscow, and america sent several kitchens in these lemon yellow ones through General Electrics. Most ge executives at the time, talking about the late 50s at that time, had a view of how capitalism works. The private sector was invisible, like a workhorse or a mood how. What it was supposed to do was to serve as that milk cow for the publicsector. The government heard of the private sector like a domestic animal, John Maynard Keynes noticed that at one point. Gen to most of ge, it sounded just fine. The Tennessee Valley authority, the big client was the essence of the government project and ge executives liked it very much. They didnt mind serving the Space Program, and strong union law. Social experiments by the federal government, American Business could pay that. Expansion of healthcare, the us could pay that or a longer leave for young parents. In the early 60s, we could pay that too. Stalin joked to really country rich enough to overlord communism was the united states. Why should it not be true . Why should it not be true . In the 1960s, the Dow Jones Industrial average was approaching a record level of 1000 and it seemed only a matter of months before the dow would pass its landmark. There was one underappreciated executive at ge who saw things differently. He was an older guy, a Vice President labor relation in the name of this man was Lemuel Ricketts Boulware who believed it didnt come when the board paid taxes to the federal government or when it met altogether and wrote big plans, boulware believes growth took place when a lonely scientist in a dumpy lab had an idea and flaunted the world. Ideas like the lightbulb, a ge idea. Boulware believed the burden of Government Spending in the burden of union demand backed by government would gradually strangle american competitiveness. Even a little bit of socialism could do damage. The reason our 1959 kitchens were better than the russian kitchens was the longest Term Investments of inventors at the beginning of ge. The reason the company thrived was the goods were affordable but the high wages and prices would render ge uncompetitive. And the end the russians would make better kitchens. Nobody could imagine japan at this point. That was the scope of the imagination. In the view of Lemuel Boulware, a pristine comedy like General Electric, a national inspiring america to return to edison. And the problem was urgent, i will read a quote from him, the current rapid trend, are we through with everything we cherish. The younger executive at General Electric found where ludicrous. He wasnt modern. His superlatives irritated them. In the public many agreed with this evaluation. Fortune magazine described the where is a figure the combined the folksiness of a Kentucky Farm background with the fervor of a washing machine salesman. The executives at ge did not worry, they were the future. Boulware was approaching retirement, by 1960 or 1965 he would be out, from his recliner in delray beach. Boulware determined to use his final years and hours to make his investment in saving the future he wants to teach americans the gift, the nature, the depth, the preciousness of the gift they having capitalism, he spent billions of ge money mimeograph and pamphlets explaining the value of markets. He warned towns where ge operated the midwest to the east, and force them to lead. One such town with pittsfield, massachusetts. Grass will grow in pittsfield if it didnt wake up. The importance of competitive wages and costs. And television to reach the people creating a tv show, some of you have seen, called ge theater to showcase traditional american values. He hired staff including that aging actor to be ges spokesman. The actor was a union man, a democrat who admired Franklin Roosevelt and the new deal. I wont say his name yet. This actor who was hired had potential. We have our cspan audience, and with all modern appliances kind of like the ge kitchen for the asker to live in and boulware school the actor who was Ronald Reagan in adam smith, john locke, little essays added by henry adler. In the Manhattan Institute, they hoped they would be read. This actor, reagan, wasnt exactly popular across ge either. Younger executives didnt like having some western propagandist. They complained about reagan. They couldnt stop boulware and his actor, he sent reagan all around to hundreds of ge plants, mimeographed pages to explain the future of industry, industry might move west, and he wrote about the dangers of socialism and socializing medicine was a bad idea. The tba was a bad idea, power could in a fate faster what was freedom making own decisions, maybe hydropower wasnt the only power in the future of the united states. Soon enough reagan, the actor, began to take boulwares argument seriously. He even bought his son ge stock. From 1960, a dark cloud over ge, boulware and boulwares propaganda bill. Justice department was investigating the company. In 1961 the new attorney general whose name was robert kennedy, pulled together a strong case. Ge was colluding with other Companies Like westinghouse to fix high prices on what it sold to the tba. The Justice Department went to court and the judge said they ge of executive to jail. The real value it reality was undeniable, the Propaganda Department was mouthing off about free markets even as ge cheated the american taxpayer. It was a terrible blow for g and from boulware. The Company Looks like the worst hypocrite in the world. Nationwide people felt betrayed by their trusted company. It was like the black fox scandal of 1919. A national betrayal, ge stock went to the toilet. The actor was fired, ge theater was canceled and Lemuel Boulware got pneumonia and did required to delray beach. The years that followed the subject of the Great Society only deepened this sense of failure for such a venture. Ge itselfs cooperation, as Many Companies with the federal government, the news on boulwares tv set marked his all efforts. American voters didnt turn away from socialism, they thought social democracy or government expansion sounded nice. They voted in Lyndon Johnson and the socializing program, the Great Society, johnson promised to cure poverty, to make america an even better place, a great place with an Even Stronger economy and they did create the beginnings of our National Healthcare system that we are getting now, medicare. The Great Society leaders did strengthen unions, johnson was only the beginning. One of the revisions of Great Society in this book is a revision of richard nixon. In my research i discovered nixon actually expanded government as johnson had before him and in some areas more rapidly. Other president s added on to a great interesting process of program upon program, Charles Murray of the Manhattan Institute was first to layout the numbers, recent hayek prizewinner john hogan laid out a few more, some of you were at that event. Heres the scope of what the Great Society yielded. By 1980, health and medical costs were six times the 1950 costs in dollars. They were 13 times the 1950s costs. They were 27 times their 1950 level, housing costs were 129 times their 1950 costs. Room at the call is my, what the candidate suggested they need to spend more on housing . What happened . The Great Society failed. The government expansion did not eradicate poverty. In fact the reduction in the poverty rate, it was already coming down, flattened out and we ended up with 10 and have stayed there. The program shackled americans into dependence. Generally speaking, there was a terrible morning after affect that followed the rate society binge. The economy began to flail as it never had before. We know unemployment went towards 10 , Interest Rates went past 15 , the high cost of labor under policies backed by the government did drive American Companies to leave town. Grass did grow in pittsfield. Just as bull where had predicted, the great Thriving Center of detroit did become the rust belt. I wrote a lot about that in Great Society a new history of the 1960s in america. The Dow Jones Industrial average stayed below 1000 for a generation. Today younger americans believe in ever rising stock market is their birthright. They expect nothing else. You want to stop and contemplated that duration from the mid60s into the 80s, even in nominal terms with great inflation we did not have 1000. Imagine if today we had to wait until 2035 to get to the next barrier. In my book, what i learned in writing it, you didnt have to be socialist all the way to do damage. Boulware was right. Even a little socialism does incredible damage. It is hayeks road to serfdom. You do eventually get there and in fact sooner than you think. The whole while you can imagine where beating himself up about the failure of his effort at been lightened. One figure was now enlightened, the actor reagan, he decided to try politics and in 1964, he took his standard ge speech out of the can and gave it on tv, practically word for word. America had to choose socialism or not, what became known as a time for choosing speech and the actor ran for governor of california where he challenged the Great Society numerous times including the Legal Department that came out of our Poverty Program and he put the policies of ge into practice, government restraint, saving money, fighting expansion of welfare, personal dignity, support, respect for markets, and when he did run for president and won it was 1980 and it was no longer the morning after affect of the Great Society. It could be morning in america. The entire counterrevolution reagan bought that morning america came out of those little boulware pamphlets that were so lovingly prepared. Boulwares longterm investment that no one remembered had paid off in a magnitude that is near unimaginable. Markets thrived and we did get a strongly rising market. I stop and say there were several lessons from the Great Society, that is one of 12 chapters of the book. First of all, the overarching lesson that the government is rotten at planning. You get a perverse outcome. The second lesson, the philanthropic project, looks like a complete goof or failure in the short or medium term may not turn out to be a complete failure, think of it from the deck of view of the voters who learned about markets from ge when reagan gave talks in the cafeteria. Tens of thousands of meetings between reagan and ge did, those voters understood what reagan was saying when he spoke as a politician, that there was another way for the american worker, they emerged in 1980 as reagans famous bluecollar vote. Another point more obvious but worth mentioning is the Great Society offers a lesson on trusting your own judgment. If you suspect a program isnt good it probably isnt. If you suspect a program might be good, invest in it. Think of the institutions that inspired you, and laid the plans for your own institutions. Much of the work is trying to plant these seeds, a theoretical seed can be a most fruitful seed. Individuals matter without individual scholars, without boulware, no reagan. If you think your name, i would like to raise a theoretical glass of wine. You may be wrong. Im standing here in manhattan in 2019 with you, three decades after the death of that of skewered ge executive, everyone is raising the mental glass but also most of all, raising a glass to Lemuel Ricketts Boulware. [applause] amity shlaes is ready to take a few questions. Wont have that yet. I am michael myers, new york civil rights coalition. Two things come to mind, lbj and the race revolution, the riots in the streets, lbjs response to that, helping