Americans' Appetite for Pessimism … Any Reason Will Do

THE OPEN MIND
Host: Richard D. Heffner
Guest: Robert Bartley
Title: “American’ Appetite for Pessimism … Any Reason Will Do”
VR: 1/7/90

I’m Richard Heffner, your host on THE OPEN MIND. I’m also a long-time Bartley-watcher … referring, of course, to my guest, Robert Bartley, the brilliant Editor of the Wall Street Journal who writes such acerbic copy, the skillful likes of which can be found nowhere else in America today, copy that seldom fails to rouse my own admiration for its craftsmanship, or raise my own hackles for its content.

Of course, Mr. Bartley sticks to his last, choosing now to ring out the 1980’s and ring in the 1990’s with what he calls “A Resolution for American Society: Let Us Shake Off Our National Hypochondria. The decade just closed has a special place in our history,” he writes, “in no other have we accomplished more and enjoyed it less.”

And while he writes that “part of this is of course ideological sour-grapes” (The conventional media academic wisdom that always suffers at Mr. Bartley’s pen), he notes, too, that our national hypochondria (finding that the glass is always half empty rather than half full) must have deeper American roots, because even many of his own ideological allies and personal friends have joined what he considered the woeful chorus.

In the second half of the 20th Century, my guest has written, “American society has developed a nearly insatiable appetite for pessimism; any reason will do.” … While Bob Bartley surely doesn’t see very much reason at all! “We are witnessing,” he writes, “the world-wide triumph of American values and the collapse of the empire that threatened us for two generations …” Besides, “last year our per capita gross national product was 17% above 1980 in real terms, 38% above 1970 and 68% above 1945. The economy expanded for nearly the whole decade … peace and prosperity.”

And still so much pessimism, which Bob Bartley believes is the American “paradox that needs to be explained” … but which I would suggest to him may be simply the American prescription: a wise and continuing tension between yea-sayers and nay-sayers.

How about that as an explanation, Mr. Bartley?

BARTLEY: Well, I think there’s something a little bit deeper than that, Dick. We have had a very sour mood, I think, theses last 10 years, or maybe back in the ’70’s, and I think that there is something there that needs to be explained, and you have a nice summary of my views except you didn’t give my diagnosis, which is simply that we are under such enormous pressure from technological change that everyone feels very nervous, feels that nothing is quite in control, and I think that that affects people, you know, on all sides of the political spectrum, and give us books like The Decline and Fall of the Great Powers, The Great Depression of 1990, and all of these other pessimistic sounding best-sellers.

HEFFNER: But if there is that feeling that things are out of control, isn’t that, itself, an indication that we haven’t done as well as you would like us to think we’ve done.

BARTLEY: Oh, I think that there are lots of things that we can do better. One of them is to get rid of the hypochondria, and realize what enormous progress we’re making, and certainly there’s always room for a lot of debate between the yea-sayers and the nay-sayers, as you have. But at a certain point, pessimism starts to become self-fulfilling, and people get so down that they can’t really recognize their own accomplishments then because, you know, they can worry themselves to death at times, and I think that that’s one of the things that, that American society needs to avoid in this period of rapid change.

HEFFNER: Well, let’s … let’s stay with this matter of the period of rapid change. You contrasted it, compared it to earlier periods of rapid change, you said, “At the very moment that the Industrial Revolution was beginning and the progress … the economic progress that would be made, was about to be made, we were involved in a kind of Malthusian depression.

BARTLEY: Well, that’s when Malthus wrote. I got to wondering about this current pessimism, and going back, you know, this last year was the 100th anniversary of the Wall Street Journal and we were doing a lot of retrospective things, and I was looking back over this 100 years, trying to find a period in which there had been such rapid progress and a lot of pessimism, and I couldn’t find one in that 100 years, so I figured “well, where else do you look?” and I said, “Well, when did Malthus write?” So I looked it up, and sure enough it was right in the middle of the Industrial Revolution, and I went, “Well, where did that pessimism come from?” And I pulled down a copy of Schumpeter, and looked at his economic history, it’s not …

I don’t necessarily go around reading Schumpeter at bedtime every night, but I had it there for this purpose and I had a pretty good idea what I was going to find, and sure enough, that’s what he said, he said because of the Industrial Revolution, because of the technological advances, society was changing, and because society was changing … ceasing to be an agricultural society, and starting to become an industrial society, those short-run changes are always hard to digest, and that was his diagnosis of why Malthus, as he said, “took fright at a scarecrow.” And I think a lot of the same things are true today. I mean we’re having enormous technological change today … just the simple, you know we had the splitting of the atom, we had the invention of the computer, the whole electronic revolution … now we’re decoding the gene, superconductivity … all of these enormous advances … you couldn’t find lifetimes in which you had that kind of scientific advance, I don’t think. And the one that’s really changing society is the transistor and the electronic revolution, and we’re becoming much more inter-dependent, change is becoming much faster … we can’t get away from each other anymore, and I think that’s what you’re seeing in Eastern Europe now, that you know, we have bombarded the Communists with Sears & Roebuck catalogs, the way we talked about in the ’50’s, and it’s worked pretty well … people … the totalitarian states can’t stand up under that kind of information barrage. Similarly here at home, Democratic governments are having some problems, too. The Presidents and Congressmen can’t get away with the kinds of things they used to, simply because the exposure is so so rapid. Big corporations, I mean we can all watch the “poor” chairman of Exxon and … just writhing with his oil spill in Alaska … you don’t, with this kind of relentless exposure … you don’t have the kind of protection that leaders used to have.

HEFFNER: But suppose your friend Pete Peterson were to say, “Bob, absolutely, right on, you’ve just described the reasons among others, why I’m so pessimistic,” or take someone else among you …

BARTLEY: Oh, I don’t think … well, they’re all … Pete Peterson is pessimistic about the growth of debt …

HEFFNER: Yes.

BARTLEY: … debt has grown some as a percentage of GNP, nowhere near to the World War II levels, the levels we had at the end of World War II, and in fact, the US government debt outstanding is not out of line with the debt that you find in Japan, or other countries.

But it has grown and people … somehow there’s an audience for the kind of Wall Street wisdom that this is terrible. Now, certainly there are reasons to be … that these rapid changes are not all going to lead us into some kind of new world … there are going to be disruptions, there were during the, during the Industrial Revolution very serious short-run problems, but the longer-run is very, very promising. On the economic side, the larger a market you have, the greater … the richer everyone’s going to be. It’s called pareto optimality, you know if you can spread that over a larger area, you’re going to create more wealth, more efficiencies. On the political side, what you’re seeing is kind of an empowerment of the people, you’re seeing a democratic revolution really, essentially throughout the world. Now I think these are both very good things, and maybe worth paying some short-run prices for. What concerns me is that if we get too consumed with pessimism, and don’t understand what’s going on in this new age, we do some very senseless things, in particular, we’ll try and wall ourselves off from the rest of the world because of this enormous inter-dependence, and thinking that if we can just keep out all these intrusions of foreigners and so on that we will be able to restore kind of the old certainties, and this surely will not work. This will surely make things worse rather better. I think that protectionism had a great part in causing the Great Depression between the wars, and could cause another one if we, if we succumb to it too completely.

HEFFNER: Bob, who most in our … in the contemporary scene, on the contemporary scene shares, let’s call it your absence of this pessimism, of this hypochondriacal mania. Is it Ronald Reagan?

BARTLEY: Well, I’d say that among the prominent, most prominent people … yeah, probably Ronald Reagan, among the politicians. I think most of my friends that we call “supply-side economists,” also share it. The business that I’ve written here about a new industrial revolution, communications age, communications and knowledge society, you know, George Gilder talks that way, and Art Laffer, and this whole group of people that economically I’ve been associated with, you know, throughout the ’80’s.

HEFFNER: But don’t you have to deal with the phenomenon that the number is not legion, that their number is not legion, and I remember all through the Reagan Administrations, you … you kept editorializing about “Let Reagan Be Reagan,” there were too many people in the White House who weren’t letting him be so.

BARTLEY: Well, I can remember back in the early ’80’s and in the ’70’s when they told us that a tax cut was impossible, you know, because there were so few people for it. I think that over the ’90’s we’re going to become a much less pessimistic society. I think that this particular piece here at the beginning of the decade was probably very well-timed, that these, I think, will be themes that … that will gain during the ’90’s. Certainly the spectacle of what’s going on in Eastern Europe has to have some impact on American society. You see Rumania wanting … people of Rumania rising up and demanding a democracy. That’s certainly a lot, I mean, what a time to be alive. How can’t we … can’t we get … how can we escape an infection from the kind of optimism that comes from that sort of event.

HEFFNER: And yet, it’s a Bob Bartley piece … first a speech and then the piece in the journal that I referred to. I cannot find very many other statements of that kind of optimism, not as consistent, anyway, and you’re the one who’s writing here, “what in the world is wrong with this nation? We are hypochondriacal.” So obviously something else is going, or something is going on that picks at or ticks off fears, concerns in our lives that won’t we respond to the … to the kinds of statements that you make. You talk eloquently, write eloquently about all the positives, financially, economically in terms of gross national product, etc. But there has to be some gross national psychological need that is not growing, or is not growing as positively as you would want, and don’t you have to relate that to the very changes that you’re talking about. You’re saying it’s wonderful … these technological advances, well, obviously we’re made very nervous by them.

BARTLEY: Well, sure, that’s why I’ve tried to explain here, and I think that’s … that’s a normal reaction when, when change becomes so very rapid, even if in the long run it’s for the better, what you feel is a kind of undermining of confidence.

HEFFNER: Yes, but you know …

BARTLEY: But I think if you can understand that, then that’s the kind of the first step toward having some balance and restoring some optimism.

HEFFNER: Now, but are you talking just about a decade? Aren’t you talking about a long-term feeling of “things are out of control,” to use the phrase that you began with?

BARTLEY: Well, I guess if you were going to pick a date, you’d say “1968.” 1968 was a very traumatic year, and then following up now, so you have probably closer to a generation, rather than a decade, but I think, in any event, we’re coming to the end of that period.

HEFFNER: You do?

BARTLEY: Yeah.

HEFFNER: You do. You, you write about American values having triumphed on the world scene, and yet that’s something that I wanted to ask you about. It seems to me from reading the journal editorials, your editorials, for so many years now, that I’ve had the feeling that you’ve written frequently about “returning” to American values, almost as if you haven’t felt that real American values have triumphed. You, as a mid-western American, have felt that “something” has happened to those older values.

BARTLEY: Well, I sometimes think that they’re easier to appreciate in Rumania than they are here. But that’s maybe a little bit unfair. I mean what’s triumphing … what we’re witnessing around the world is a demand for democracy and a demand for free markets, for capitalism, or market economies, at least. Now, these are, these are pretty substantial, long-term American values and they … I think their success is worth celebrating. Now I think that from that we may … it would be a good thing if it led us to, to respect those values a little more completely here than we do. I think we have … for example, I think we have a democratic problem in the Congress … little “d” democratic … because of the entrenchment of incumbents in the Congress, it’s almost impossible to defeat them, or for anyone to even come close, the way the district lines are jiggered and the way they’ve taken advantage of the PAC contributions, and all that, and I’d like to see more democracy there. Similarly, I’d like to see more respect for markets in the United States, and more, you know, less regulation … less interference with markets, lower taxes. These are the kind of things that people want in Easter Europe and in China. We’ve got them here to a much greater degree, but we ought to be very careful about giving them up inch by inch.

HEFFNER: Why do you think we are giving them up inch by inch?

BARTLEY: Oh, I don’t think we are. I think here the trend has been, been … I mean we had a big deregulation, we had big tax cuts. I think we … I don’t know whether we can make Congress … turn Congress into a democratic institution real soon, but I wouldn’t be surprised to see that happen, too.
HEFFNER: You do put the concept of the free marketplace at the very core of American values, don’t you?

BARTLEY: Yes. Free men and free markets, yeah.

HEFFNER: “Free men and free markets.”

BARTLEY: That’s right.

HEFFNER: That’s an old fashioned notion.

BARTLEY: Well, it’s I think one worth, worth sticking with. It certainly is one that the Wall Street Journal has stood for over these 100 years. But I think it’s one that’s served us pretty well, and one that has stood … served the country pretty well.

HEFFNER: You think this is a nation now that’s based on the concept of the free marketplace?

BARTLEY: Oh, I think that by comparison with almost any other foreign nation, certainly, and I think that foreigners would tell you that. And foreign businessmen, in particular, would say, you know, “the United States is a much freer market than the ones in Europe and maybe Japan.”

HEFFNER: And by comparison with ourselves a decade ago, two decades ago, a half-century ago?

BARTLEY: Well, a decade ago – it’s certainly there’s more play for the market now than there was a decade ago. I think there’s no question about that. Two decades ago, I don’t know. Certainly there’s a time in there in which, in which after, after World War II in which there was a growth of regulation … kind of a disposition among the public and among the politicians to try and control the markets, rather than give them free reign. I’ve never thought much about exactly when that question … we started moving the other way.

I suppose late in the Carter Administration, with the Carter airline deregulation proposals was probably the first kind of crack in the philosophy, and we’ve moved, I think, a fair ways since. But you’ll always have … politicians don’t like markets very well. They, you know, can’t control them. So you always have people wanting to go out and regulate something, or raise taxes so that there will be constant tension there, I think, for the rest of history.

HEFFNER: If you were to put on your prophet’s hat, would you then make the assumption that we will see more re-regulation?

BARTLEY: Well, there will … it will be a see-saw, there will be attempts to re-regulate, but they will be probably turned back,, most of them, because we’re not going to regulate the airlines again, I don’t think, because people like low fares.

HEFFNER: The marketplace ideal being one American notion. Quest for social justice being another. You obviously don’t see an incompatibility between the two. You obviously feel that the free marketplace will inevitably lead to a greater degree of social justice. Am I, am I correctly reading you?

BARTLEY: Well, the free marketplace will certainly lead to greater wealth in the aggregate, greater per capita income. Now, I … I do believe that you have to provide some kind of a safety net for your citizens who are left behind. There’s always a tension there because if you provide too much it … you kind of tend to trap people in those conditions. People who might be able to get out of them. Certainly it’s much better for them if they can work their way out of those dire circumstances, get off welfare, for example. But I think, think you do need to provide some minimum for people who just can’t be expected to work their way out.

HEFFNER: You’ve written about what this technological future is going to mean in terms of those who don’t have educational advances.

BARTLEY: Education will be very important, and it’s, it’s difficult to imagine exactly what we’re going to do with the uneducated if we’re in a society in which most of the economic activity is processing information. It’s just hard to imagine how that’s going to work. I think we do have a serious problem with schools. I would like to see some progress made with schools. As it happens, a little bit is being made. School attendance and reading scores in the inner cities are actually up. But that’s not enough. I’d like to see more.

HEFFNER: Do you think this is essentially a matter of delivering education or essentially … or to a large extent a matter of the ability of individuals to fit into that educated class that alone will survive well in the technological future?

BARTLEY: Now, I think that by and large people have the ability to do this if they’re … if you have the incentives right, and if you can provide the right atmosphere in the classroom, for example, people will learn.

HEFFNER: You think we’re going to do that?

BARTLEY: Well, we’re making … we’re making some strides, and … not as fast as I would like to see. I think if I were to write a little program for schools, I think the first thing would be to bring back prayer. Not because prayer, you know, is going to educate … but it does set a tone. The tone of kind of seriousness in schools, and you find that most good schools do have some kind of ceremonial aspect like that. You know, it doesn’t have to be exactly prayer, but it’s still, it’s kind of the way I think about.

HEFFNER: If you weren’t going to push prayer in the schools, and I think I understand what you’re saying, what would you …

BARTLEY: I think …

HEFFNER: …how would you structure structure?

BARTLEY: I think that we have to think very, very seriously about these proposals to provide educational vouchers and let people seek their own education whether for private … you know, whether from public schools or private ones. It seems to me that that’s how you kind of cut out this, you know, structure that doesn’t seem to be operating very well.

HEFFNER: Is that because …

BARTLEY: That’s de-regulating the schools.

HEFFNER: That’s because of your devotion to the marketplace, to the free marketplace.

BARTLEY: Well, of course, but, but I don’t think you have to look at it from an economic standpoint. What you’re doing is empowering people to make some choices.

HEFFNER: When you say you don’t have to look at it from the economic standpoint, the one point that I wanted to raise with you … in the minute we have left, was whether you didn’t use a nexus, a calculus in your judgment about reasons for optimism or pessimism, it had too much to do with gross national product.

BARTLEY: Well, that’s where a lot of the complaints have been. That’s where a lot of the pessimism has been. It has been about borrowing from the future, about some kind of economic collapse around the corner. Economic collapse was around the corner a decade ago. In 1979 we came very close to having some kind of a world-wide economic catastrophe with the inflation and then the following depression. We’ve kind of forgotten that.

HEFFNER: We’ve forgotten that, but haven’t we experienced some other kind of collapse?

BARTLEY: Not, not that I can see.

HEFFNER: So you’re really an optimist. The glass is more than half full. When I told my wife we were going to do the program, and I said, “You know, he thinks it’s half full, I think it’s half empty,” she said she remembered that you thought it was a glass and a half full.

BARTLEY: (Laughter) Well, it’s half full and gaining, you know, it’s getting fuller.

HEFFNER: And that I suppose, is the best way to end our program. Bob Bartley, thank you so much for joining me today.

BARTLEY: Nice to be here, Dick, thank you.

HEFFNER: And thanks, too, to you in the audience. I hope you’ll join us again next time. And if you care to share your thoughts about today’s program, please write THE OPEN MIND, P. O. Box 7977, FDR Station, New York, New York 10150. For transcripts send $2.00 in check or money order. Meanwhile, as an old friend used to say, “Good night and good luck.”

Continuing production of this series has generously been made possible by grants from: The Rosalind P. Walter Foundation; The M. Weiner Foundation of New Jersey; The Mediators and Richard and Gloria Manney; The Edythe and Dean Dowling Foundation; The New York Times Company Foundation; The Richard Lounsbery Foundation; and from the corporate community, Mutual of America.

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