We dont want to do it that way. We want to go big, go solid. The country is very strong. Weve never been so strong. We dont want, with this invisible enemy, we dont want airlines going out of business, we dont want people losing their jobs or not having money to live when they were doing very well four weeks ago. So we are going big, and that is the way it will be and that is the way everybody seems to like it on the hill. Susan historian and author amity shlaes, that is President Trump and want in one of his recent announcements about the goals on a big series of Economic Relief packages to stem the Economic Impact of the coronavirus. Other World Leaders are doing the same. As we start out here, since you are looking at this through the lens of history, are there good historical parallels for the covid19 crisis . Amity the crisis is beginning to look like in 192930. It also looks like 191819, 1920. Im honored to be here. I should say, to discuss all these parallels. I want to mention the one, 1918, 1919, 1920. You remember the crash and the great gatsby. That was the crash of the early 20s, not the crash of 1929. People thought america would never come back from the big upheavel of world war i. At that time, there was inflation, we were getting over a flu, the spanish influenza. All of this was going on. At that time, the government took a policy. The policy was lets pull out of the way. The governments response was so counterintuitive, it is almost impossible to utter it now. The government said we will shrink our government, we will go big in cutting our government, which is the opposite of President Trump and we will raise our Interest Rate to be sure money comes here. Raise Interest Rates going into a recession . Very counterintuitive. There was a sharp snap because then there was a very strong recovery, a roar even, the roar of the 1920s. You want to think of different models of how to respond to a crisis like this one. They are not all going big with government interventiontis him. Susan the economy and the Global Economy being so much different than it was 100 years ago, do the parallels still hold . Amity yes, the parallels still hold. The u. S. Dollar, and we are held harmless and crises, what happens when the world is in crisis . Money runs to us. Doesnt it . When the u. S. Misbehaves, people by our bonds. Money runs to us. In those days, the stakes were higher because we were in competition with the United Kingdom to be the world power. We had just become to factor on the basis of our performance in world war i. We were about to lose that if we were not relatively competitive with the u. K. , which have been the power before. The empire. We got into a competition at the beginning of the 1920s with the u. K. About who has the better economy. The u. K. Went to social democratic and the u. S. Went freemarket. It is as simple as that. The u. S. Prevailed. We remember the labor period of the 1920s as a rough period for the United Kingdom. That is where the phrase the dole became the pejorative for welfare. But to your point of, does it matter about being international . It always does. Our currency would have been the casualty in the early 1920s had we not kept our house in order. It always does, whether or not it is merely trade. Susan you often say that nothing is new, it is just forgotten. With that in mind, what are the most significant lessons we can learn, not just from 1918 through 1921, but from the other past national emergencys this country has gone through . Amity while, in my book the forgotten man, i trace all the remedies that we applied with the crash and the great depression. Every year, there were new remedies, helping banks, helping businesses, you hear the phrase moratorium now. International moratorium on debt, Herbert Hoover, helping big transportation industries, we are talking about airlines now, they spoke about railroads then. And yet in the 29, 30, 31 period, we never came all the way back to where we had been in 1929. What i discovered doing the research of that period, was that the government intervened too much. It was faint there was a wonderful economist in the period named benjamin anderson, he was a chief economist at chase bank, he was not exactly marginal at the time. Benjamin anderson said, this allusion when you fail at playing god is not to play god more vigorously. That is, sometimes the government cant rescue a situation sometimes markets are better at rescuing a situation. That was the lesson of the 1930s. Every year, there was the possibility of the recovery in the 1930s and recoveries are like people. Every year, for a different reason, the recovery chose to stay away. So you have a decade of recovery not choosing to come back and double digit unemployment for a good share of the period. Susan before we dig more deeply into history, it little bit of explanation to our q a viewers. This will be in the archives forever. You are joining us by skype in the midst of the covid virus response, the crisis that the country and world is facing right now. How are you weathering it . Where are you and what are you doing to protect yourself and your family . Amity we are weathering it just fine. My family and i are in main part of the time, we are very proud to be here. Susan and when you look around your community, which i presume is very much different than working in new york right now, how are people in the community responding . What are you seeing about society as you are observing the response to this . Amity i would like to praise Oxford County and cumberland county, maine which have some covid. For their friendliness, their post offices, their supermarkets, including food city, the underdog supermarket in bridgeton, maine. We were just there. Everyone is going out of their way to help other people in a stressful moment. Everyone is social distancing, the library is closed, but we are all waiting vigorously waving vigorously at one another as we walk the street. Susan you have a brandnew book on the market, tell me and our viewers about it. Amity this book is about a period in which it was prosperous. It was like as a month ago. Where we thought we could afford everything. Which is the early 1960s. In that period, young people, as now, were quite idealistic and they said, why not socialism . Isnt it time for socialism in the United States . There was a big discussion. By socialism politically, we meant social democracy. That is expansion of state from 20 two more percent of the economy if we could get it. Expansion of social programs, the creation of entitlement. Everyone said, why not . We can afford it. The lesson of the 1960s was that most of the projects we undertook to get to our Great Society, again, another echo, we wanted not just a good society, a Great Society, didnt work out. And the book traces all those efforts and all the people who lead the efforts in the 1960s to make america something better. While the course of the economy is different to that of now, the idealism and the ambition is quite similar. And you know, just for a benchmark, we said we would cure poverty. The president uses the verb cure, we did not cure poverty, we flattened the curve of poverty to 10 . The president said, we can take it for granted. What happened as a result, leading to the stock market, is super relevant. When do we expect the stock market to come back . We hope this year. We hope next week. We certainly count on three years from now. The stock market did not go up from the mid1960s until Ronald Reagans presidency. That is not reflecting inflation which makes it look even worse. The stock market flattened out for a decade and a half plus. Oh. That is a real warning to us of government ambition. Government tried too much and the stock market went to sleep. Susan and what is the relationship between the stock market and the u. S. Economy . Amity at the time, the stock market was, i would say, a good meter. One of the meters that doctors say is either the Blood Pressure or heart beat. Maybe you call it cholesterol, but it is an important meter. What it really is, the market is often the reflection of future expectations. You say, are we going to grow as fast as we did in the past . No, we are growing ok but we will not grow as fast as we did in the past. Or, is the quality of the growth we are going to have going to be the same as the quality in the past . Not quite. Then the stock market will pull back. The stock market will respond with exaggeration often to hope in the area of freedom and innovation. And there were parts of the economy in the 1960s that offered a lot of innovation, and a lot of freedom, and a lot of future jobs. One of the companies i trace in the book is the company that became intel. We didnt realize that chips mattered. And that things that the military uses such as electronics. At the time, who would buy materials from a company like that . It would be the federal government in a nasa program. All of a sudden, came this insight that people might want electronics in their home appliances. They might want such a thing as a home computer. In this idea went wild in the 1960s. What i saw in tracing the 1960s was that there was a lot of hope or growth in the private sector, and we probably should have looked to it more, it certainly provided more of the jobs in the long run. Susan your book on the Great Society follows your much awarded and best selling the forgotten man. You also continue to write opinion columns for publications. From what worldview, for people for whom this is the First Experience of amity shlaes, what is your World Outlook that informs your writing . Amity i am what they call a Classical Liberal, which doesnt mean a progressive. A Classical Liberal believes in freedom. She believes in markets. And believes not in no government, not like a libertarian, Classical Liberals tend to believe some wars warrant prosecution. But in less government. I was thinking, trying to think of philosophers. I was once honored to win a prize named after a french philosopher who was popularized in america, some viewers will have the book economics. Anyhow, he spoke of, and it is absolutely apropos for this week, this seen and unseen. He said when you do good for the seen, you create a job, you might hurt the unseen. You think about that now, every day that we stay home, we are saving a life, maybe lives. We hope. That is the seen. The unseen is the diffuse damage of keeping the economy turned off. Maybe we are hurting a life or even killing someone by getting rid of his job. Maybe his job will not come back. That tradeoff between the immediate seen advantage or the immediate seen horror and the unseen that is more diffused is the tradeoff in the political economies that they have to make. Very difficult one to do. I have to keep everyone home so certain groups live. We all feel that with our hearts. It is a question of how many weeks we can shut down our economy without a far greater cost, including death. Susan our focus is going to be on political and economic responses in history. While you are talking about the Classical Liberal worldview, the lens on which you put things. How does it apply to watching the Public Health side of the governments reaction . Lots of intervention, lots of moving parts around it. It is a time when the government is taking a lot of action to help ensure the spread of the virus. How does that process from a political standpoint or your world look . Amity well, we are seeing we have great hopes for what the government can do. But what is interesting right now is of course we are looking to the private sector. What are we looking for . A vaccine. The antiviral. We are praying that x, y, z company we have never heard of will next week, come up with a cool antiviral, a combo antiviral. A Classical Liberal would say, be sure the private sector has the opportunity to provide the benefit to the entire economy that it has the capacity to provide. Dont inhibit it. So if we have to look at experimental drugs, may be suddenly that begins to sound reasonable. Looking at experiment of drugs. What are the risks when we try a drug . And so on. That is how a Classical Liberal would look at it. He or she wouldnt say, only the government can decide everything and make anything safe. There is no alternate safety, is there . There is just relative safety. We want to be as safe as we can be. We can never be perfectly safe. On the other extreme, you have the Health Authorities running everything and making all the decisions. There is a whole body, actually, of political economy, you normally would not bring up, called utilitarianism where they quantify things very acutely. A good unit is a util, good for someone. A bad unit is a disutile. A negative. This is a calculus everyone makes. If i benefit all, well i heard some . How much is the loss of one person to offset by the gain for the rest . Is that fair, is it moral . It is a wonderful time for Classical Liberalism. I recommend everyone go on a reading course and read not only the french philosopher, but certainly john stuart mill. This question of the Public Health has been around a long time. It was around with the smallpox vaccine. Some people didnt do well with the first smallpox vaccine. You think of the stories, but probably most of the time, the smallpox vaccine was worth it. Eventually became a saintly product for all that it save. These tradeoffs have happened in American History and World History so many times before. Susan returning to 1918, 670 75,000 675,000 americans died from what was then called the spanish flu. In what ways in society in what ways did Society Change from that experience . Amity i dont know. Society at that time, i think americans thought the flu was part of the war. Because it came just after the war. All this trouble, right . Imagine a war where one third or more of the men came back severely disabled, missing one leg, never able to work again. In pain for the rest of their lives, may be a quarter, maybe 10 , but a significant amount had to if you taint legs in that because they use to amputate legs in that time. And then the flu on top of it. It all affected the country, it sobered the country. A lot of peoples lives were not optimal. And the question was, how to persevere . It was just a terrible tragic period. I studied this period quite a bit because in my biography of president coolidge, he was Lieutenant Governor of massachusetts in 1918. The year the big hit from the influenza. And he actually, and people who like contradictions will like this, coolidges Lieutenant Governor wrote president wilson and said he wrote other governors and said, help us. He wrote to the governors of the states around him, including his home state of vermont and said, help us. And in vermont and massachusetts, particularly in massachusetts because the people, were closer they were living in a more modern fashion, there were a lot of shutdowns. There was announcements that schools would shut down this september just as there might be now. And it was just one more calvary to endure. Fortunately, the flu went away. There was also im not a Public Health expert, but the flu appeared to go away after a while on the country kind of absorbed the terrible loss and moved on. Susan what were the political effects . Woodrow wilson was president when it arrived but we had a succession of republican president s. Was their correlation between the recession and the flu, and what people were choosing at the polls . Amity there was a great hygiene movement. Right . You want to imagine the first handwashing movement. Some of that is in the library of congress. Wash your hands. It was very powerful. There were no antibiotics. There were a lot of quacks coming out. I honestly dont think it was a republican or democrat problem at the time because nobody really up the time believed the government could do much about an epidemic. The federal government. They looked at the states and towns, they looked to themselves and understood that sometimes, disease came that cannot be stopped. Because we have so much more in our pharmacopia, in our medical arsenal, we look more to governments because they can deliver. A company can make the vaccine. The government might help to deliver it or the government might get in the way of the delivery of the vaccine. That is the different period. In that period, people expected to see death in their surroundings. Im not recommending we return to that. But that was the fact of life. You see that through president coolidges life. Unfortunately, president coolidge lost his son while he was president , calvin junior. Calvin junior was a happy boy, a lovable boy, who got a blister playing tennis on the white house court. The president watched him from his Little Office and saw and was so happy to see his son play tennis, and then this. The blister became septic, the son died, calvin died, 16 years old within a week. There was not much anything anybody could do about it because we did not have antibiotics. They did terrible things to calvin junior to try to save him. Dumping antiseptics in his blood. All the Desperate Measures you would take. He went to walter reed, the whole thing. They couldnt save calvin. When i tried, many people i wrote for the Historical Association a paper about the death, they asked me, how did he take it . Coolidge was very sad. He wasnt incapacitated by the death, but he was very sad. Why wasnt he incapacitated the way we might be today losing a child . And the answer is twofold. One is, all around him he knew people who had lost children. Today when you lose a child, you a