Of the page. [inaudible conversations] it is great to be with you all to celebrate andd discuss n excellent new book of one of our countrys most original and insightful economic thinkers, amity shlaes. Over the course of our distinguished career, she is brought her wide range intelligence and feel for storytelling to some of our countrys leading intellectual and cultural institutions. Amity to serve as a member of the wall street journal editorial board, a columnist for the Financial Times and bloomberg news, and has taught economic history at the stern school of business. Now in addition to a prolific book writing amity serves as a president ial scholar for kings college, chairs the board of the Calvin Coolidge president ial foundation and chairs the Selection Committee for the Manhattan Institute prize, and award she herself has one. Her latest work, Great Society a new history of the 1960s in america is a stunning achievement. Few decades have imprinted on the popular imagination quite as much as the 1960s and so many of us remember that they get for its most dramatic and turbulent moments. The assassination of the kennedys and Martin Luther king, jr. , the march on washington and antiwar protests. Neil armstrong on the moon and fighting at vietnam. Her focus is not the trauma the play that on Television Screens across the country so much as the failure of washington to control these events and direct the show. Indeed, generation politicians came to realize that the centralized hierarchical and highly regulated model of political economy that dominated postwar america has stopped working. Yet more than just a technical failure, amity captures the feeling of the country run from the top down. America put up with the machinery and culture of mobilization during the two world wars ended early years of a Nuclear Cold War but at some point that old american yearning, swashbuckling, independentminded, mistrustful of authority was bound to reemerge. Thank you. If youcannot hear me please let me know. Thank you. A book about the Great Society deserves great thanks. My thanks to the Manhattan Institute president , ryan and salaam, its former president who is all always here, Vanessa Mendoza and peggy for hosting this event. Id like to thank mypublisher for harpercollins. My agent andrew wiley and his colleague who is with us. Id like to thank the Coolidge Foundationfor supporting me. Certain friends including thomas smith, jim pearson, kim dennis and the kings college, especially Josiah Peterson worked on research. Id like to thank my family, my husband and my daughter flora who areboth here tonight. The first sentence of the thbook is a question. Why not socialism . This is a question we asked d ourselves last night when we watched the president ial debate. How do we answer it . Question all centrists, all common sense people, all market people want to be able e to deliver an answer. We all feel an obligation to undertake the longterm investments in projects that would open american minds so that american minds see the challenge and tragedy of socialism. We want to share the record of the past or the record of venezuela so that when they come to vote or these businesses and families, younger americans recognize what is not useful policy but where are we . Its november in 2019. Educating is a longterm investment and some of us dont have the heart for the long haul. We feel frustrated at the prospect of outcomes and perhapsoutright failure in our intellectual entrepreneurship. Politics are much more funand instant gratification. All of us at some vanity people remember politicians, they do not always remember educators. We journalists, businesspeople, philanthropists, scholars, we want to be remembered to and sometimes we pick shortterm projects for that reason tonight id like to tell you a story of a really long term object, a crazy project. This is the story which starts in the 1950s, features a company, a man and the american public. Those are the three characters. It is indeed a story of a longterm failing project, of humiliation, of business shame and intellectual failure but the story which ends in the 1980s also reveals an unexpected payback. As some of you may know the characters but might appreciate hearing about them one more time. The name of the company was General Electric. In the 1950s General Electric road high. Its factories in new york, massachusetts and connecticut employed many thousands. It was the Industrial Center in some ways. Every year americans bought more tvs, radios or freezers. Ge was not just a company, it was an icon. It served the space program, americans trusted General Electric like it was said they trustedthe game of baseball. A good company that follows rules. As you know, the soviets in 1959 invited the us to create a display aboutprogress at moscow. America sent several modern kitchens and the lemon yellow one was General Electric. Most ge executives at the time, were talking about the late 50s like executives at most companies at that time had a set view of how capitalism worked. A private sector was invincible. It was like a workhorse or a move now. What it was supposed to do was to serve as that milk cow to the public sector. The government heard in the private sector like a domestic animal. John maynard keynes noted at one point, to ge or most of ge, that sounded just fine. A milk cow was content with the government. The Tennesseevalley Authority essence of a government e project and ge executives at the top like it very much. Ge found that the tva was one of its biggest customers. They didnt mind serving gethe space program. These executives, militaryindustrial complex. Unions existed by virtue of very strong union law. And they demanded big pay packages, all right ge could pay that. Social experiments by the federal government, American Business could pay that. The expansion of healthcare, the us could pay that or perhaps a longer leave for young parents. Thats just a joke. Something like a longer leave for young parents in the early 60s, we could pay that to area heavy unions we could pay any load area stalin was said to have joked that the only country rich enough to affordcommunism was the United States. Why should it not be true . Why should it not be true . In the 1960s, just some benchmarks for you, the Dow Jones Industrial average was approaching a record level of 1000. It seemed only amatter of months before the dow would pass its landmark. But there was one aging, underappreciated executive at ge who saw things differently. He was an older guy. He was a vice resident of Labor Relations and the name of this man was lemuel ricketts. He believes growth didnt come when a government pay hetaxes or hallway are believed growth took place when a lonely scientist in a dumpy lab had an idea and flaunted the world. An idea like the lightbulb, a ge idea. Bulware believed the burden of Government Spending and the burden of Union Demands backed by government would gradually strangle american competitiveness. Even a little bit of socialism. He said could do damage. The reason our 1959 kitchens were better than russian kitchens was filled with those all longterm investments of inventors at the beginning of ge. The reason the companies thrived was that the goods were affordable but the high wages and prices would render ge uncompetitive. In the end the russians would make better kitchens. Nobody could quite imagine japan at this point. That was the scope of the imagination. It was the godgiven e assignment and view of Lemuel Boulware of a Pristine Company like General Electric to inspire america to return to old capitalism and the problem was urgent, boulware said. Im going to read a quote from him. The current rapid trend has to be changed or we lose everything we cherish. The younger executives at General Electric found boulware ludicrous. He wasnt modern. His superlatives irritated them. And in public many agreed with this evaluation Fortune Magazine described boulware as a figure who combined the folksiness of a Kentucky Farm background with the fervor of the washing machine salesman. The other executives at ge did not worry, they were the future. Boulware was approaching retirement. By 1960 or 1965 he would be out anyhow. Let him grant him his recliner in delray beach. Still, boulware determined to use his final years and hours to make his own longterm investment in saving the future , ge and americas. He wanted to teach americans the nature, the death, the preciousness of the gift they had in capitalism. He spent millions of ge money mimeograph and pamphlets explaining thevalue of markets. He wore down where ge operated, that the high wages and all the extra social benefits force companies to leave. One such town was pittsfield massachusetts, and Industrial Center. He warned the people, grass will grow in pittsfield if pittsfield didnt wake up to the importance ofcompetitive prices and wages and costs. Boulware used new media, in his case that would be television to reach the people, creating a tv show some of you have seen call ge theater to showcase traditional american values. He hired staff including that actor be ges spokesman. Remember, the actor was a union man, a democrat who admired glenn resident roosevelt and the new deal. Still i wont say his name yet but this actor was hired had poured potential. We have our cspan audience so lets stick with the story. Boulware kitted out a special ge house with all modern appliances kind of like the ge kitchen. For the actor to live in and boulware pulled the actor who wasronald reagan and adam smith , john locke with little essays added by henry catholic. He gave schoolbooks just like the Manhattan Institute does out and hoped they would be read. This actor, reagan was wasnt exactly popular across ge either. The younger executives didnt like having some kind of western propagandist and complain about reagan but for the few remaining years boulware was there they couldnt stop boulware and his actor and boulware since reagan all around to ge plants to explain all about the tva and the future of industry and the industry might move west and so on. Then actor, he wrote speeches about the dangers of socialism and thatsocializing medicine was a bad idea. The tva was a bad idea. Our could innovate faster when it was free to make its own decisions. Maybe i drove power wasnt the only kind of power in the future of the United States and soon reagan began to take boulwares arguments seriously. He even boughthis son some ge stock. The year 1960 cast a dark cloud over ge boulware and boulwares propaganda mill. The Justice Department was investigating the company. In 1961 the new attorney general whose name was Robert Kennedy pulled together a strong case that ge was colluding with other Companies Like westinghouse to fix i prices on the turbines it sold to the tva. The Justice Department went to court and the judge sent the ge executives tojail. The irony was undeniable. There was ges Propaganda Department wamouthing off about free markets even as ge cheated the american taxpayer. This was a terrible blow for ge and for boulware. The company looked like the worst hypocrite in the world. People felt betrayed by their trusted company. It was like the blackrock scandal of 1919when this happened to ge , a national betrayal, ge stock went in the toilet. The actor was fired. Ge theater was canceled and Lemuel Boulware got pneumonia and did retire to delray beach. The subject of the Great Society only deepened the sense of failure for such a venture. Ge itself deep in its cooperation as did many other companies with thefederal government. The news on boulwares tv set mocked his old efforts. American voters turned away from socialism, they thought social democracy was just government expansion sounded nice. They voted in Lyndon Johnson and a socializing program, we can call it that, 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 were getting now, medicare. This era, the Great Society leader did strengthen unions and johnson was only the beginning. One of the revisions of the 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 even more rapidly. And other president s just had it on, if you want to magic imagine a great and crossing process of program upon program. We got Charles Murray at the Manhattan Institute was the first to layout the numbers and prize winner john cogan laid out a few more. Some of you were at that event. Theres the scope of what the Great Society yielded. By 1980 health and medical costs were 16 times the 1950 cost in dollars. By 1980 public assistance costs were 15 times the 1930 costs. Insurance costs were 27 times their 1950 level and housing costs were 129 times their 1950 cost. If you recall last night one of the candidates guested we needed to spend more on housing. So what happened . The Great Society failed. The government expansion did not eradicate poverty. It in fact the reduction in the poverty rate, it was already coming down and flattened out and we ended up with 10 percent and stayed there. The programs shackled americans into dependence. Generally speaking there was th a terrible morning after effect of all the Great Society binge. The economy began to flail as it never had before. You know that unemployment went towards 10 percent and we know that Interest Rates went past 15 percent. The high cost of labor under policies backed by the government did drive American Companies to leave town. Grass did grow in pittsfield. Justice boulware as predicted the great fire Thriving Center of detroit and become the rust belt and i write a lot about that and Great Society. The Dow Jones Industrial average day below 1000 for a generation. Today, younger americans believe an ever rising stock market is their birthright. They expect nothing else so you want to stop and contemplate that duration from the mid 60s until the 80s area even in a nominal terms with great inflation we didnot pass 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 is that you dont have to be socialist kall the way to be damaged. Indeed, boulware was right, even a little socialism does incredible damage. This is not zenos paradox, its the highest road to serfdom, you do eventually get there and in fact sooner than you think and the whole while you can imagine boulware who lived decades beating himself up about the failure of his effort at el enlightenment but as you know, one figure was enlightened and didnt care. That was the actor reagan he decided to try politics and ryhe took his standard ge speech out of the can and gave it on tv. It practically word for word, america had to choose socialism or not area this became known as the time for choosing speech and then 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 , respect for markets and when he did run for president and one, it was 1980 and it really was no longer the morning after effect of the Great Society. It could be mourning in america. The entire counterrevolution reagan brought that morning in america came out of those little boulware pamphlets that len had so lovingly prepared. Boulwares longterm investment that no one remembered had paid off in a magnitude that was near unimaginable. Markets arrived ill stop and say there are several lessons from theGreat Society. Thats one of 12 chapters in this book. First of all the lesson, the overarching lesson ofthe book is that government is rotten planning. No matter how much it spent, you get a perverse outcome. The second lesson is that a private project or a philanthropic project, one of ours that looks like a complete goof or a failure in the shorter mediumterm may not turn out to be a complete failure in the end. Sometimes a project is just early and sometimes that h