RX for Prosperity

THE OPEN MIND
Host: Richard D. Heffner
Guest: Robert Bartley
Title: “Rx for Prosperity”
VTR: 4/14/92

I’m Richard Heffner, your host on THE OPEN MIND.

And today’s guest first joined me here a dozen years ago, when he had just won the Pulitzer Prize for Editorial Writing…but when Time magazine had not yet insisted that The Wall Street Journal’s “contentious editorials are a throw-back to the era of opinionated press lords”, or described my guest, Wall Street Journal Editor Robert L. Bartley, as “lean, incisive and full of certitude”.

But Bob Bartley has for a generation now, run what those of a liberal political and economic persuasion consider perhaps not only the leanest, but also the meanest editorial pages in the nation. He suffers fools – even wise opponents – not at all. Not even conservative presidents who may falter at his side; and surely not the Beltway crowd, particularly the “Gang of 535”, as he characterizes the Congress.

Now the Free Press has published his rather extraordinary exegesis of the Reagan years and his prescription for repeating them, appropriately titled “The Seven Fat Years…And How to Do it Again”.

As always with the Wall Street Journal’s editor, there are so darn many questions I want to put before him that I hardly know where to begin. So why not begin at the end of his book, at what seems to be Mr. Bartley’s article of faith that Ronald Reagan’s Seven Fat Years were successfully, productively dominated mostly by a tough-minded, aggressive, I-know-who-I-am-and-what-I-want-so-get-out-of-my-way entrepreneurial risk-taking spirit that could now (but may not now) find its counterpart among the seemingly too patrician, too effete Republican big business conservatives around George Bush who worry a pinch too much about charges of greed and unfairness back in the 1980s, and are much too little tuned into the derring-do it really takes to do it again and again and actually make for another seven fat years and then another and another. But let’s talk with Editor Bartley first about what he deplores as a totally depressing but sort of nicely, nicely “Age of Victorian Finance”. And Bob, if you don’t mind, I’d like to quote the end of the book. You write, “The social background of the Bush decision-makers is a handicap in dealing with another change in the early 1990s, the decline of the entrepreneur. For a sociological chasm rends the Republican party and Conservative or pro-business circles generally. Though sensitive to the preservation of capital, respectable and prudent are quite distinct form the forces for creation of capital, self-made men and admirers of risk-takers”. So, I wonder why you’re so supportive of the present administration and its “nicely, nicely Victorian Age of Finance”.

Bartley: Well, I hope I can live up to the billing you’ve just given me, Richard. It’s nice to be back here again. We support the President on some things and we don’t support them on others…the Administration. The…I should say as kind of a background for the sections you read there that during the Seven Fat Years that I talk about from ’83 to ’90, we created 18…over 18 million new jobs, even though the Fortune 500 declined in employment. We’re going to have the same thing in the 90s…we see IBM, General Motors all laying off people. Probably they should. That’s how big business gets efficient. But if we’re going to put those people back to work we have to have new businesses coming along like we did during the 1980s. We don’t seem to be getting that very much at the moment.

Heffner: Well, you seem to feel to get that…to put these people back to work and more, to be increasingly productive and continue along that path, you have to have a tougher attitude toward the nature of business and of business enterprise than the present Administration seems to have.

Bartley: Well, I think that you should…that the present Administration could be tougher in seeking a cut in the capital gains tax, for example. They keep saying they’re for it, but they aren’t…they keep qualifying it in different ways that suggest that maybe they aren’t really for it. I think that they should be tougher, I guess, in the way they handle banks, that they should be willing to take a few more risks, let the banks take a few more risks than they, they seem to have been willing to, so that new enterprises coming along can get some, get some credit. That is finance in order to build the facilities and build the new businesses.

Heffner: How sanguine are you that if kept in the White House, kept in power now, the present Administration would match, meet your expectations, your needs?

Bartley: I think that depends on the outcome in the Congress. I think that, that the opportunities for a big turn-over in Congress and in many ways for a more conservative Congress are greater now than they have been at any time since 1980. And if that happens, if you’ve got not necessarily a Republican Congress, but a much more…much more conservative one where you have a Republican boll weevil coalition the way they had in the early 1980s, that you would find that the Bush Administration becoming much more Reaganesque than it’s been.

Heffner: You say “more conservative”, but as I read the book I have the feeling that you found in the Seven Fat Years not the conservatism of leanness, but rather the…well, I call it the derring-do of that period that you describe between the end of the Civil War and the turn of our own century. You seem to have a great fascination with and for those robber barons, or industrial giants, call them which you will. And, therefore, is the term “conservative Congress” really what you mean?

Bartley: Well, there are different kinds of conservatives, of course. But I, I mean, you know, if Ronald Reagan was a Conservative, then a Conservative Congress is what I mean (laughter). It’s a, it’s a kind of modern optimistic kind of conservative rather than a backward looking don’t-change-anything-don’t-rock-the-boat kind of Conservatism. Those are, those are quite different…I think you’re right.

Heffner: Do you see that happening? Seriously, you say “if we get the kind of Congress” that you look for…describe it as Conservative or whatever.

Bartley: I, I think that the…that we don’t have that much of a choice, that we’re living in a time now that’s going to be a time of very rapid change, of very intense international competition. That the kind of…and enormous technological advance. And if you look at the technological advances that we’ve seen already…you know, the splitting of the atom, the splitting of the gene, the transistor…the microchip…the world is just changing so fast that I think that you’re going to have a kind of entrepreneurial capitalism if you’re going to keep up with what’s going on in the world. So that I, I think the forces there are greater than merely the conviction of say, one President of some Congressman. They’re all pushing us in that direction.

Heffner: Well, four years ago we were talking about Liberalism, the “L” word. Now I won’t say the “F” word, but the whole question of fairness…you, you…it’s interesting the way you take the concept of fairness and kind of indicate that it burdened this Administration and it burdened too many of its nicely, nicely big business associates. What, what…what’s that all about?

Bartley: Well, I’m not against fairness. I mean, you know, I like…

Heffner: Who in the world is against fairness?

Bartley: I like to be, I’d like to be fair, but…but these statistics that have been bandied around here are, are very peculiar kinds of statistics. I mean as you know from reading the book there are government statistics that say if you take the bottom 20% of the income distribution they, their expenditure is twice their income. And it goes on that way year after year. And that’s because they’re retired people with assets, they’re students with family support. These statistics aren’t the kind of statistics that they’re, that the political masters like, like to portray them. The…this becomes kind of a game to play with these fairness statistics. And you also, we also, I also found in doing…I’d forgotten this, but in doing the research for the book, I found out that well, back after Walter Mondale was, was defeated, the Democratic Party did some focus groups and found that, that when their voters heard the word “fairness”, they were…it conjured, conjured in their mind “give-aways” to people who aren’t working. So that when you find Bill Clinton and the current crop of Democrats talking about “fairness”, they’re talking about fairness not to the poor, but to the middle class…whatever that means in their definition. Now the problem with that is that if you took all the money made, made by very wealthy people and distributed it among everyone, it doesn’t make much difference to those people who get it because there just isn’t enough money to go around to do that. So I, I think it’s all…you know, it’s mostly a political game that’s being played here, and to the extent that the Administration has to cater to that, to the extent that it helped stop further cuts in the capital gains tax, when Senator Mitchell had this filibuster in 1989 on behalf of fairness, I think those have been deleterious to the economy.

Heffner: What interests me particularly though, Bob, is that what your concern seems to be here…obviously your major concern is the use of this concept of “fairness” by “the others”, the other party, the Democrats. But you seem to be concerned, too, that at least the concept has impinged upon the thinking of George Bush as perhaps it wouldn’t have upon…

Bartley: Oh, I…

Heffner: …the thinking of Ronald Reagan.

Bartley: I think that’s right. That if you have someone like Bush and most members of his Cabinet are prep school graduates, never went to public school, whereas if you had Reagan, for example, who made every nickel that he, he ever owned, I think you, you look at those things in much different ways. And if you’re living on trust funds the arguments about fairness get to you a lot quicker than if you made all the money that you ever had.

Heffner: You mean guilt plays a role here.

Bartley: Yeah, sure. Yeah.

Heffner: It didn’t with Reagan.

Bartley: No, or with many self-made men or entrepreneurs. They don’t feel guilty bout it to nearly the same extent that, that people of inherited wealth do.

Heffner: Well you know, I, I used the term “robber barons” before and you referred to Matthew Josephson and…I remember very well after the Second World War when there was a…when there was a first page of the Book Review Section in The New York Times – a dual review – or dual articles in which Matthew Josephson and I believe it was Alan Evens, made reference to a book about John D. Rockefeller in which one talked about robber barons and the other talked about industrial giants.

Bartley: (Laughter)

Heffner: And you see them as industrial giants. Are you particularly much involved in this period after the Civil War?

Bartley: Well, I did a little bit of it for the purposes of the book because it seems to me that there are cycles in, in the public attitudes toward these kinds of people, or toward fairness or something so that you have from the Civil War to about the turn of the century you had this enormous development of the American continent with these titanic business figures. Somehow the public turned against them ultimately despite all of their achievements. You had a very similar sort of thing during the Depression that I talk about in the book, about in the…in the 20s the business people were very highly regarded. When things went bad in the 30s many of them were kind of blackened and they chased Sam Insull all over the world trying to, trying to capture him. And then when they brought him back he was acquitted in several, several trials. And I’m interested in the, in the shift in public attitudes. Now I find that…looking at this history…that the periods in which industrial giants or robber barons are given their reigns are periods in which you have rapid economic growth.

Heffner: But…you say “somehow or other” at the end of the period of the robber barons/industrial giants, somehow or other we turned against them. But, you know, it wasn’t “somehow or other”, it was again this feeling of fairness in society that they climbed on the backs…their rise was on the backs of the people whom they exploited. Is that…you may not accept that, but certainly that was the…

Bartley: Oh, yeah, I…no, I…well, I accept it as a diagnosis…

Heffner: Right.

Bartley: …of those cycles of feeling, yeah. And then, you know, when that sort of feeling arises and a preoccupation with that arises then economic growth slows and people do more poorly.

Heffner: Well, you describe here…you quote from John Maynard Keynes and describe a…you offer his description of what particularly British society was like early in the century…God was in his heaven, everything seemed to be in place, but was it really that…were things that equitable or quiet and calm, wasn’t there so much social injustice, if you will, that there was not way that the lid could be kept on?

Bartley: Well, I…I don’t really know. But what I do know is that if you have rapid economic growth it tends to benefit everyone. And that if you don’t, if you get preoccupied with trying to divide up the pie, the pie is likely to shrink. And I’m worried that we’re, we’re headed into that kind of a period now. I don’t think it’s at all predestined, but if you just look back at what happened during the, during the 1980s…I mean the 1980s were an amazing time. If you look at 1980 we had 13.5% inflation, we had a 21.5% prime rate, we had a recession at the same time, we had this disease called “stag-flation”, we had the Russians deploying SS-20s and invading Afghanistan, hostages are being held in Iran, and then you go ahead to 1990. We’ve solved the problem of “stag-flation”, inflation’s licked, we had a record peacetime economic expansion, adding 30% to the economy, we could subdue Iraq and we won the Cold War. What is everybody so pessimistic about? That’s…why that seems to be the real interesting question. Why are we now all of a sudden saying “well, none of this happened?”

Heffner: Well, you suggest here and you’ve suggested before that in any period of rapid change people become anxious, nervous…

Bartley: Yeah.

Heffner: …and they begin to question their own society.

Bartley: yeah, I think that’s the, that’s the key to it. That, that rapid growth means rapid change. And rapid change upsets people, whether they’re workers being laid off, or, or Fortune 500 CEOs who find their companies under attack. Half of the companies who were on the Fortune 500 list in 1980 were no longer on it in 1990. They’d been merged or shrunk. So this kind of change upsets people throughout society. But I think in the kind of world that we’re moving into, change is just going to get more rapid. It’s not going to slow down. And it’s the adjusting to that change and living with it that is going to allow us to continue to prosper.

Heffner: You obviously…

Bartley: If, if we’re not going to do that, we’re going to have problems.

Heffner: You obviously feel though, your article of faith is that we are going to adjust to the change and in the adjustment there will be a resurgence of the feeling of confidence.

Bartley: Yes. I…that’s what I hope for. I’m, I’m not…I wouldn’t necessarily say it’s an article of faith, but I’d like to see it happen and I hope that…I mean that’s why I went to the trouble of writing this book is maybe I can help it along a little bit.

Heffner: You know, Bob, it’s interesting…when I, when I…after my introduction in which I indicated the title of the book is, “The Seven Fat Years”, you know, you, I saw the smile start to cross your face when I started to slip and almost said “the seven lean years” because that’s what we’re used to talking about. We never talk about “fat years”, we talk about “lean years”. That’s what makes the news. That’s what gathers our attention. Do you think we really understand full well that they were “fat years”?

Bartley: Oh, I don‘t think that’s been very well digested. I think we forget so quickly. I mean we forget how terrible the 1970s were, that a period like 1980 that I just described…somehow we got through that. And now the fashion is to kind of denigrate the 1980s, when in fact, they were one of the boom decades of the century.

Heffner: Okay. Question then. It’s the same question that I had as I read your…the quotation from John Maynard Keynes “There were those, and who were they for whom even those seven fat years for us were lean years”. And who are they? Who were they? And was their number legion and is their number growing? Don’t we have to deal with those questions?

Bartley: Well, we, we had 18 million people get jobs during those years in which they…that they didn’t have before. Now I think no doubt that there are, you can find people…the United Auto Workers, for example, who had difficult times because…mostly because of international competition…airline pilots probably aren’t making as much as they were at the beginning of the 1980s. Naturally you have an under-class of the homeless that somehow seemed to increase during the 1980s despite the creation of 18 million jobs, or at least our perception of them increased. You have a lot of, a lot of corporate chief executives who lost their jobs.

Heffner: I read about them every day in The Wall Street Journal.

Bartley: And people are…I say people that are upset by change…I mean people are…individual people are hurt by change. I don’t think there’s any question about that. But it’s something that we have to, have to learn somehow to cope with.

Heffner: But…

Bartley: It’s part of the modern world.

Heffner: But look, “part of the modern world”…the old saying, it’s easy for us to say, it is easy for us to say. Aren’t you going to be challenged as the book is published…aren’t you going to be challenged in terms of what you’re saying here at this table?

Bartley: Oh, I’ll be challenged on all sorts of things…

Heffner: Okay.

Bartley: Oh sure, I mean it’s quite…it’s quite…quite a departure…a confrontation with the current conventional wisdom.

Heffner: But how do you meet the challenge that says “Mr. Bartley, you’re right in your statistics. You have to be right in your statistics about the seven fat years…but below the level of those statistics, there were those people who fared less well and there were more of them than before. How are we going to deal with them?”

Bartley: No, I don’t…I don’t…

Heffner: You don’t accept that.

Bartley: I don’t think that there were more of them during the 80s than there were during the 70s. If you take…if you take the, the poverty numbers for example, or the, or the income of the lowest quintile whatever, whatever purpose that can put it, dropped between I think ’73 and ’83 once we…’82 and then once we got an expansion started in ’82, those, those people at the lower end, lower end of the income scale did better until, until the expansion ended in, in 1990. It, it really is true that a rising tide lifts all boats. That doesn’t meant that there aren’t unfortunate people in society at any time, but the, the 80’s with economic growth and with low inflation were much better for people at the lower end than the 1970s were with high inflation and three recessions in five years, or something like that.

Heffner: Now, we have four or five minutes left…it’s not unfair…we’re taping this program early April, 1992…your book will be out early May…the Democrats and the Republicans will meet this summer…given your feeling about the Victorian economics of both parties, who would you choose as a viable candidate in terms of your search for continuing growth for the resuscitation of the economy for seven fat years again and again and again?

Bartley: Well, I guess I would, I would go with a Republican white House and hopefully with a more growth oriented Congress than we’ve had during the last four years. You know, if I had…I would prefer a, a more growth oriented president than Bush seems to have been, a more kind of Reaganesque president than he seems to have been, but I think if Congress changed, the President would change.

Heffner: Well, Ronald Reagan isn’t going to accommodate you and reappear in the White House.

Bartley: Don’t write off Mrs. Thatcher, though.

Heffner: (Laughter) Don’t write off Mrs. Thatcher coming back in England.

Bartley: Yeah. Yeah.

Heffner: But she’s not going to come back here…

Bartley: No, that’s right.

Heffner: …so I question you again, about the occupant of a Republican White House.

Bartley: Well, I’m sure that Bush will be the nominee. I would think that I’ll…I’m almost certain that I would end up voting for him.

Heffner: And your preference would be? If you had your “druthers”, Bob?

Bartley: OH, I…see if we look forward to the ’96 election…You know I like Jack Kemp. He’s an old time friend. He’s in the book a lot. I am increasingly impressed with the Vice President as a spokesman for a lot of the ideas that I believe in, so I wouldn’t write Dan Quayle out as, as a Presidential candidate. I have an enormous respect for Dick Cheney. I think any of those would be wonderful Republican presidents some day.

Heffner: Now what’s your bet about…not the seven fat years in the past, and I know you’re going to say. It depends upon the Congress and it depends upon the occupant of the White House…but what’s your bet that this country is going to follow the direction that Bob Bartley wants it to follow and that we’ll have seven fat years again and another seven fat years?

Bartley: Oh, I’m reasonably optimistic about that. I, I worry about the public temper, but you know, we’ve known each other for a long time and you k now that I’m a congenital optimist. So that I think we’ll find our way through these difficulties. That there have been some lessons that if they haven’t been totally articulated about the 1980s, they’ve been kind of internalized and, and people will begin to understand them. I’m a little worried about, about what’s going on in Japan. We may have to bail them out. People keep talking about how powerful they’ve become, but actually at the moment they look very, very weak and are maybe a threat of some sort…their weakness is a threat to the, to the world economy, rather than their strength.

Heffner: So you see Japan bailing, not Japan bashing as being the theme.

Bartley: That’s, that’s right. That’s what’s likely to happen, I’m afraid.

Heffner: Bob Bartley, I do appreciate your joining me today. I think “The Seven Fat Years” offers probably the best guide for my friends at The Wall Street Journal on how to do it again. I hope we do do it again, but maybe not at the same price.

Bartley: (Laughter)

Heffner: Thanks for joining me again.

Bartley: Thank you very much.

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 to THE OPEN MIND, P.O. Box 7977, FDR Station, New York, NY 10150. For transcripts send $2.00 in check or money order. Meanwhile, as another 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 Thomas and Theresa Mullarkey Foundation; The New York Times Company Foundation; and, from the corporate community, Mutual of America.