Recorded August 21st, 2020
Read the full transcript
TYLER COWEN: Hello, everyone. Today, I’m here with Matt Yglesias. Matt needs no introduction, but I should tell you all he has a new and excellent book out, called One Billion Americans: The Case for Thinking Bigger. Matt, welcome.
MATTHEW YGLESIAS: Good to be here. How’s it going?
COWEN: Good. Now I take it as a common theme in your work that you believe in increasing returns to scale, namely, that the gains from interacting with other people typically outweigh the congestion costs of having them around, and that’s certainly consistent with your earlier book, The Rent Is Too Damn High, right?
YGLESIAS: Yes, absolutely.
COWEN: Now, what views do you have that are inconsistent with a strong belief in increasing returns to scale?
YGLESIAS: It’s a little bit a tension with my personal preferences. People will sometimes say to me, “Well, it’s easy for you to say this stuff. You live in this big city.” Blah, blah, blah. But I happened to have grown up in Manhattan, the densest place in the United States by far. I don’t like it there that much. I’ve moved to a smaller-scale place. I like it better.
Anytime I visit a small town, I think, “Eh, I like this.” I’m not personally that into big crowds and huge things like that. I remember I went to Hong Kong one time and I felt like the universe was having revenge on me for having done all these pro-density takes, as I felt incredibly overwhelmed by these huge buildings everywhere.
I genuinely do sympathize with the view that there’s something nice about calm and quiet and things like that. Obviously, everybody knows that, but I do think, on an analytical level, that you see tremendous rewards, just big scale things.
I was working on this book at an early time, and I was in Midtown Manhattan where even New Yorkers don’t go because it’s so terrible, and it’s full of people — I think full of people who would tell you nobody likes going to Midtown Manhattan, and there must be some reason for that.
Now obviously, we’re all doing everything on Zoom right now, and those kinds of effects have gone away. But it’s not like we didn’t have telephones 18 months ago or no ability to do these kinds of things remotely. People were drawn to each other, for whatever reason.
COWEN: Let me put the question another way. In the book, you stress that American growth rates have been declining. You and I agree about that. But if there are increasing returns to scale at the national level, as the US does have more people and more GDP, shouldn’t growth rates be going up? Now, you might think, “Well, there’s increasing returns within a city but not within a country.”
But your argument is at the country level, and you even see a lot of cities dissolving or becoming smaller. You mentioned that also. St. Louis and Detroit are the more obvious examples. But the US as a whole — the population has become more dispersed.
COWEN: So doesn’t that mean, actually, there aren’t increasing returns to scale?
YGLESIAS: Oh, I see. I do think on some level, some of the deep structures of economic growth do have to do with our basic ability to exploit natural resources. I say in the book, it’s like we’re not all farmers here who need to worry about running out of wheat fields. But when you look at the big long-term trends — Industrial Revolution takeoff and slowdown in postwar years — that has to have something to do with the technology of energy exploitation on a pretty fundamental level. That is an area where I don’t think you’ve seen, necessarily, those same clear returns to scale.
We’ve had some big advances in fracking, some promising advances in solar power, some other kinds of things like that. But the fundamentals of how we produce and use energy have driven a lot in the macro picture, and I think the news from the latter quarter, whatever it is, of the 20th century — on that front was just very disappointing, notwithstanding other things that might power growth forward.
COWEN: Would your recommendations be much more potent if paired with a better energy policy? I don’t here mean a greener policy, though that’s justified in its own right. But just command over much more energy, something like nuclear power that, say, Peter Thiel has proposed. Would that make the increasing returns from a billion Americans much stronger?
YGLESIAS: If we had a burst of good luck on the nuclear front. Or maybe it’s purely policy — I’m not that well versed in the nuclear universe and the arguments that people have there. But I think it’s definitely true that if we had a breakthrough there, that could get us the kind of clean, abundant power that was hoped for in the original postwar nuclear years, and that the micro reactor people are very enthusiastic about. That would put us even more clearly in an increasing returns-to-scale world.
COWEN: Do you think that a belief in significant increasing returns to scale means that massive income inequality is simply inevitable? That even with high rates of taxation, the rates of growth of the increasing returns at some point just overcome that, and the wealthy people are just extremely wealthy and possibly politically very powerful, and you live in a Silicon Valley kind of world whether you like it or not?
YGLESIAS: I don’t know exactly where the lines curve on that. I’m impressed, as I think a lot of people who are not hardcore anti-inequality folks, that Sweden has a high number of billionaires per capita despite a lot of social democratic policies. The reason for that, fundamentally, is that they’re a successful company that were founded by Swedish people, and that that’s good, right?
If you’re on the other side of it, and you’re trying to make the case for Sweden — you’re trying to say universal healthcare is good, it’s great that they have all these trains in Stockholm, you’d say, “Look, this is a successful country.” It’s high GDP per capita. They’ve got Ikea. They’ve got Spotify. But that’s also why they have some of that very high-end inequality. Can you balance that out in some Gini coefficient way? Maybe yes, maybe no.
But I think even if you did, you wouldn’t eliminate all of the political inequality that worries people. This thing in California, where they’re trying to regulate Uber and Lyft more strictly, and so now the companies are saying, “Well, we’re going to shut down there.” And left-wing people are now mad at them.
But if you run a significant business enterprise, you’re going to be a powerful person in society, whatever your personal income is because it matters what these big businesses do. I don’t think that there’s ever been a country that doesn’t have that feature. As long as you have big successful businesses, the people who run them are going to be more politically powerful than — I don’t know — the man on the street, and that’s just life.
COWEN: But it seems there is a difference between, say, Denmark and Sweden. Especially if you take away Maersk, Denmark doesn’t have that many global companies. It’s very socially democratic. Stockholm has a huge and pretty successful startup scene. They’re probably going to grow more billionaires or at least multi-multimillionaires in the pretty near future. Would you, in this regard, rather be Sweden or rather be Denmark? I would rather be Sweden.
YGLESIAS: I’d rather be Sweden, too. I think it’s fine if Denmark is Denmark. One of the themes of this book — it’s about America. This is not a book about all countries everywhere and what everyone should do. Anti-Semites troll me on my email all the time by saying, “Where’s your support for diversity for Israel?” I don’t know.
COWEN: I get that too.
YGLESIAS: Yeah. I’m not a super Zionist person, but I’m Jewish secular. I have some critiques of Israeli policy, but fundamentally, to me, the idea of there being a Jewish state is not crazy, just like there’s a Danish state and there’s a Finnish state. You got to do things there, and it wouldn’t be that if you had a flood of immigration. Similarly, economically, Denmark’s nice. It’s a nice place. If Danish people like it that way, I think that’s fine. Good for them.
America is a big diverse country whose strength, I think, has always had a lot to do with scale. It makes a lot of sense for us to see some positive lessons learned from Sweden in terms of ways you can be more humane and still be dynamic. We have big startups, things like that here. I think the idea of trying to turn the United States into a giant Denmark, where people are reasonably affluent, but there’s no really big-deal things happening here, like some guy who makes windmills. To me, that doesn’t make sense.
The United States is a big place. It’s been a big place for a long time. It’s a diverse place. It’s a place that cares about its power on the national scale. To your inequality point, that means it’s going to be a relatively unequal place compared to some other kinds of countries.
COWEN: In your book, you only cover the United States, but a lot of your arguments are pretty general, and I mean that in a good way. So why not, say, a billion people for the European Union? You mentioned that America has a tradition of being diverse, but at some point, it didn’t have that tradition. Do you think that countries or regions that don’t have the tradition of being diverse can start being diverse, and the EU, which is actually now pretty diverse, could take in a billion people?
YGLESIAS: I think it would be interesting. The EU has had a lot of problems, I think we’ve all heard, but at some level, if this project continues and they develop more of a European identity, that would be a diverse identity, right? If you look at their little Euro notes, they’re trying to abstract away to styles of bridges instead of national heroes — then that becomes a more accessible identity. Conceivably, it’s easier for an immigrant to become “European” than to become specifically Austrian in some way.
There could be a lot of benefits to that. I went to Ireland. It was the last international trip I took. It’s a beautiful country, very successful in a lot of ways, but obviously, a really empty country. If you’re working on a book about a billion Americans while going across from Dublin to Galway, I could not help but be struck. It’s like, “Where is everybody here? Couldn’t we do more?”
Dublin is this really exciting international city. Somebody told me there was a good Indian restaurant somewhere, and then the staff there was like, “Oh, it’s going to be very spicy.” I was like, “No, no, no, it’s okay. I’m not Irish.” But I saw there was an Amazon office near there, and they had some foreign engineers, looked like from South Asia, and they were eating in there, and I thought, okay, that’s good. That’s okay. I can trust these guys.
But it’s not the tradition of Ireland. So it’s a tougher political conversation, but I do think that’s a society that you see changing to be more cosmopolitan and more diverse, and that will ultimately help power them through to the next level.
COWEN: As you know, city sizes within a country are quite unevenly distributed. In your vision of the billion people in America, how large does New York City become?
YGLESIAS: It’s interesting. I think probably really, really big. It depends obviously on their infrastructure issues. But the case of Japan, which is a big country, but not nearly as big as current US, to say nothing of a billion-people US — that’s a really big city, much bigger on a metro-area basis than New York, and it keeps growing, even though Japan’s overall population has stagnated or shrunk. That’s because they have a different land-use regulation paradigm there that makes it much easier to keep adding houses to Tokyo.
I read in some book somewhere that in urban growth, you benefit, agglomeration benefits with congestion costs, which makes sense. You could draw a good chart like that. But in Tokyo, it never seems to happen. There’s plenty of other places to go in Japan, but they keep losing people and Tokyo keeps adding them because they don’t have the political constraint that New York or the Bay Area has, and there’s no spot at which Japanese people want to stop clustering in the greater Tokyo area.
COWEN: But say, politically speaking, can you imagine New York City running sufficiently well with 70 million people, which would be larger than most countries in the EU, right? That would be a pretty big country right there. So if we’re ever a billion, is New York City 70 million, and you still have city councils and a mayor and this just huge police force that could beat most armies? How does that work?
YGLESIAS: If we’re talking about the political constraint, then obviously it’s a much lower bound than that. New York has a lot of governance problems and they’re going to take a short-term fiscal hit from the pandemic.
But a question for any political entity is, how do you handle a short-term fiscal hit? Are you able to ride it out and rebound in a strong way? Or do you totally wind up running the car into the ditch? I don’t have incredible levels of confidence that New York’s political authorities can avoid the run-into-the-ditch scenario. I just think that, in that abstract, the ability of an urban area to keep growing is bounded by governance issues rather than by the fundamentals of space or congestion per se.
COWEN: Don’t those governance issues mean we can’t get to a billion because, as we move toward a billion, the new arrivals — a lot of them will want to go to New York City, Los Angeles, Chicago, and they’ll wreck those places, and then we’ll stop. Is that not the equilibrium? Or is the equilibrium somehow New York annexes Connecticut, and a lot of it starts operating more like Northern Virginia, and it works pretty well, and it’s all one big happy ending? Or do we stop?
YGLESIAS: Well, that’s interesting. I don’t know that it’s clearly true that population growth would pour into a place like New York. Some people would, but we have seen incredibly dynamic growth in our Sun Belt metro areas, which are unfashionable in various ways, but people are doing very well for themselves in Atlanta and Dallas and Houston and the smaller ones, Nashville, San Antonio, where I spend a lot of time for family reasons. They’ve become incredibly international just because America is a good place to live.
Chicago, which has a lot of those New Yorky qualities but is much cheaper, has been losing people, which is its own governance-type problems. But I feel like there’s plenty of space for folks.
The interesting political constraint, obviously, is on immigration, right? I remember you wrote some time ago — I think in response to Bryan Caplan — that it’s look, if you care about immigration and you care about people’s ability to move, let’s maybe chill with the open-borders talk because you’re going to hit a hard political constraint, and the country’s going to lock down.
We’ve seen something like that dynamic in the United States. We’ve seen it in a lot of countries, so managing people’s level of tolerance for social and demographic change, particularly with foreigners coming in, is an important political concept. That’s where you need — I don’t know what you would call it — wise political leadership and not just strident, analytically correct, abstract people.
COWEN: Let’s talk about fertility for a bit. Is there a danger that the whole world or most of the world becomes like Japan, where the population just keeps on shrinking, and the world becomes a depopulated place? Is that on the horizon if we don’t do what you’re saying?
YGLESIAS: I think that’s a serious possibility. People can disagree as to exactly how dire is that. Japan continues to function, as Dean Baker would tell you. They’re doing okay by some means. I think that’s a sad outcome, in part for the Derek Parfit-type reasons. But also, in terms of growth and dynamism, I think that it’s important that people be able to have families.
My thinking evolved a lot when Lyman Stone and others pointed out that people were saying in America that they still wanted to have the classic 2.5 kids on average, and they just weren’t. The number of children they were having was slipping to more like 1.8, more like 1.7 now, and that’s sad when people can’t achieve their aspirations.
Of course, sometimes people’s aspirations are wildly unrealistic, or they’re incompatible with each other, or something like that. But I think we know that a world in which most people have two or three children instead of one or two children is a perfectly plausible scenario. That’s not like I wish I had a flying car.
COWEN: We have flying cars, so I think a flying car is more likely.
YGLESIAS: [laughs] All right. Yeah.
COWEN: But let’s say we subsidized fertility with all of your proposals, and we implement them perfectly. Won’t it be the case that we’re shifting the composition of the American population toward people who are much less educated? Because the people who are very well educated typically have higher incomes. The subsidies matter less for them, right? You can subsidize another birth for Mark Zuckerberg. It’s not going to affect his calculus.
But for less educated people, it’s a bigger factor. So you’ll make the US, on average, much less educated, and you’ll make voters worse. No?
YGLESIAS: So you’re saying it’s going to be dysgenic to be supporting people —
COWEN: It doesn’t need to be a genetic mechanism.
YGLESIAS: Well, sure. Okay, it doesn’t have to be genetic. It could be a pure cultural inheritance.
That’s interesting. I don’t think it’s a big issue necessarily. I don’t think that the gaps in numbers that we’re talking about are all that enormous. I also think that a lot of the way society is structured disincentivizes educated professional people from having a second or third child, even though it’s not that the objective financial cost of doing it is so high.
But you think about Democratic Party micro-targeting of everything. They’ll say, “Well, okay. If this little extra boost will help lift some people over the poverty line, we should do that. But if you’re making $140,000 a year, you don’t ‘need’ help with your childcare costs.” That’s how the people in the think tanks think. But people care about the impact on their relative standard of living of these things.
So I think a program that gives people child allowance–type money or that organizes afterschool activities for people in a plausible way does have an impact, not on Mark Zuckerberg because, obviously, billionaires don’t have a lot of limits on their consumption of things. But these middle-class professionals who live in Northern Virginia — they do, right? Even though they’re comfortable, economically comfortable people, their consumption possibilities are still constrained in meaningful ways, and how we structure incentives — what we subsidize, what we don’t subsidize — makes a difference to what people do.
COWEN: Now, I think people, on average, should become more religious, in part because that would encourage fertility. Do you also think people should become more religious?
YGLESIAS: Yeah, if I could be full Straussian and kind of —
COWEN: You can be! It’s not a hypothetical.
YGLESIAS: [laughs] No. I don’t really know how to do it. If I put in my book that I think we should make people be more religious, I don’t know how I would do that.
COWEN: Not make them, but just root for it. Talk up religion.
YGLESIAS: Look, if you told me, for mysterious reasons, church attendance is going to start going back up again over the next 30, 40 years, I would consider that to be a very optimistic forecast for America. I think good secondary things would follow from that. I think community institutions are important, and in a practical sense, religious ones are what seems to really work for people.
When I hear people say, “Oh this new woke anti-racism on the left — that’s like a new religion.” I don’t know that that’s 100 percent accurate. I think there’s something to that, and there’s also ways in which it’s not true.
But if it was really literally true — this is a new religion where people are going to get together once a week, and they’re going to know each other, and they’re going to have a higher value system that motivates them, and they’re going to make connections — that would be really good. Bad things have happened by religious people or under religious causes, but generally speaking, it’s good when people go to church.
COWEN: If you’re rooting for a more religious America, does that mean, in a sense, you’re rooting for a more right-wing America? These are correlated, right? Causality may be tricky, but I suspect there is some.
YGLESIAS: I think probably we say that religiousness is almost constitutive of right-wingy-ness, at least in some definitions. Yeah, I think a more traditionalist America, in some ways, would be good.
COWEN: It seems that two-parent families, or maybe three-parent families for that matter, have and support more children than do one-parent families. So what should we do to encourage there being more two- and three-parent families?
YGLESIAS: Yeah, that’s a good one. The book talks about marriage disincentives in welfare-state design because that’s the sort of boring thing I’m into, and because it’s also a real policy lever, right? We could change how Medicaid eligibility rules work and how the ITC [input tax credit] phase-ins and phaseouts work.
I think the Bush-era stuff like marriage promotion — if you could do that, if that really worked — that would be amazing. Some people really sneered at it, like, “This is absurd. You’re going to tell people to get married?” This is a totally good idea. I don’t think that they came up with a program that actually did this.
COWEN: But what’s your program? Elizabeth Warren has a plan for everything, so you should have a plan for this. What is it?
YGLESIAS: [laughs] As I said, I think both liberal and conservative people should take marriage-incentive impacts on program design more seriously. Liberals should admit that this is a real issue and that we should care about it and that you don’t need to go full Jerry Falwell to see that there’s an advantage to encouraging people to form stable partnerships.
I think conservatives should take their own shit on this a little bit more seriously. If we have to spend a little bit more money to make this work, we should do it. The important building blocks of society, the important building blocks of free-market capitalism don’t hinge on the exact spending level on social welfare state programs, I guess, is what I would hope people on the right would appreciate.
What else can we do? Public leadership probably matters. It’s probably good for Barack Obama to talk about being a dad, right? That was nice. I think Donald Trump is a poor role model in social and personal life, and that we should encourage elite high-profile people to talk about commitment and marriage and why it’s valuable — things like that. That’s not a program. I don’t think we can make it legally mandatory for people to discuss the benefits of being an involved parent, but I think it’s important.
COWEN: But there’s so many subsidies and taxes in the book. Why not have subsidies and taxes for essentially discouraging divorce and single-parent families?
YGLESIAS: That’s interesting. I don’t know exactly how you would discourage divorce in a subsidy structure, but I’m open to it. I don’t know. Do you have a white paper on that?
COWEN: There is a big literature on comparative divorce law, which I don’t know well. But there are some systems across the states which discourage divorce. I’m not sure they’re good for human happiness. If you just look at the parents, it seems especially women are worse off. But the more you wait, a higher number of people is a good thing. Obviously, you’re confronted with the tradeoff.
YGLESIAS: Look, I think back when everybody was debating same-sex marriage, right? Andrew Sullivan, I think, had a troll take where he was like, “How come none of these people talking about the sanctity of marriage are talking about revisiting no-fault divorce?” I think that was actually a good point. It would be worth looking at. I don’t know exactly what the literature on that says or where the tradeoff would be, or what’s even politically plausible.
Obviously, if you tell people straight up, “Well, we’re going to make you miserable, but it has some hazy long-term payoff,” that doesn’t work in the political system. But I think that’s a subject people should think about. I think in so many areas of life, we look back on the 1970s and we say, “We maybe made some bad decisions back then.” And I don’t think we should completely exempt divorce and marriage law from that general critique.
COWEN: Do you think having more three-child families would set back feminism?
YGLESIAS: I don’t think that it would. Well, look, feminism means different things to different people. There’s a version of feminism in the United States that is — well, I suppose other countries too — that is extremely focused on the super duper duper high-end elites. I think having larger families is probably bad for women’s equality in the top 0.1 percent of achievement. If you look at the fact that there are many more male billionaires, that having any prospect of leveling that probably goes against family things.
On the other hand, if you’re saying, “Okay, the mainstream ways in which feminism impacts most people — it’s women’s legal and social entitlements to have jobs, to be financially independent, to be able to get out of really bad marital situations.” That kind of thing. Get school.
The general changes we’ve seen over the decades, where women are now, on average, better educated than men, where the income gap at the median level is starting to narrow — those kinds of things, I don’t think are meaningfully impacted in a negative way by somewhat larger families.
COWEN: My view is this — that for reasons that are probably intrinsic and biological, women, on average, care more about the kids than the fathers do. The fathers are more likely to say, “Ah, let them go out and play. It’ll probably be fine.” Women, on average, are more inclined to worry. That may be hard to change. So if there are more children in the life of the family, the preoccupations of women will shift more towards the children than will the preoccupations of the men.
It doesn’t have to be a bad thing, right? It’s certainly good for the kids to have three of them, but it could harm what many people would consider to be feminism.
YGLESIAS: Right. On the other hand, I think we see that when we had larger families, there was less aggregate worrying, right?
YGLESIAS: That’s part of how that went together. I think it’s true that if you had exactly 2020 parenting norms but with an additional child per family, that would have one set of impacts, I think shifting back to a slightly more relaxed standard might be healthier for everybody involved.
I’m going to try to avoid getting myself canceled with too much speculation as to what’s inherent and what’s sociocultural in terms of the gender difference and interest in parenting. But I do think it’s true that a theme in the book is that we should be thinking about supporting the actual needs and preferences of women rather than the hypothetical egalitarian sketch, right?
We see that women have more desire to have children, that most women, like most men, are working-class people. They have jobs because they need to pay the bills and things like that, and are not necessarily hyper-obsessed with the glass ceiling and who’s leaning into what. And people want to have nice, happy lives with a high standard of living where they could meet their aspirations, and that is 100 percent in line with some strands of thinking of what’s feminism and very much intention with some others.
COWEN: If I think of the well-governed countries in the world, it seems to me that most of them are pretty small. There’s Denmark, there’s Singapore, there’s New Zealand. You know the list, right?
COWEN: If I think of the very populous countries, I wouldn’t quite call them a wreck, but they’re much, much less well governed. It’s amazing, in a sense, the US is not more corrupt and screwed up than it is. So if we move to a billion people, are we lowering the quality of governance in this country? And by how much?
YGLESIAS: I don’t know. That’s an interesting question. I sometimes think, well, one reason that the governance standouts are small is that there’s more variance in the small countries because there’s a lot of them. You go around, and there’s a couple really nice ones, and there it is, which is different from a causal question. Does scaling up make it worse?
I think it’s probably true, though, that a billion Americans will be more of a mess in the sense that people will scan the headlines of the latest in politics. It’s like, “Oh my God! What a catastrophe!” Because it’s people who don’t know each other, people who don’t have anything in common.
Politicians opportunistically are trying to create weird new identity cleavages to mobilize people, and it’s all very ugly, and everybody hates politics, and now all the politicians are unpopular. We would only go more in that direction. Whereas, if you have a homogenous small town, people who don’t like it just leave, right? So you’re left behind with a nice community of people who have a lot in common, who share a lot, who can directly self-monitor each other, that could be really well-informed about whether the guy in charge of the fire department knows what he’s doing.
Probably the right solution is something to do with federalism, but it’s definitely a different book as to why American federalism does not deliver on its promise in the way that we might think it should.
COWEN: If I think of myself — when I analyze, say, Denmark or Singapore, I’m less libertarian than when I analyze America because I think their governments have a higher chance of succeeding at what they might set out to do. So this Matt Yglesias one-billion-Americans world of the future — will that future, Matt Yglesias, be more libertarian, just like I’m less libertarian when I analyze Denmark?
YGLESIAS: I think in terms of direct public provision of things is one way in which some of the small countries really suggest nonlibertarian solutions to problems that I don’t think is appropriate for America or would be for the future.
I was in Stockholm sometime, and I was super-confused by how their city bike-share thing worked. And I just went into the Teavana, and I asked someone who worked there — obviously in English, not in domestic language — I was like, “How does this public service that you are not responsible for in any way or work for, how does it function?” She explained it really well to me in a foreign language for no good reason. Like, no, I’m sure they have strong unions there.
There’s no reason for her to provide high quality customer service, and no American transit agency employee would do that. That’s just nice, right? That’s not America, and it’s not going to be America, and it’s really not going to be one-billion-Americans America. I think that level of libertarianism in which we do not expect direct public provision of things to be all that high quality is very much baked into the cake and could become even more so.
On things under- and overrated
COWEN: It’s time for a bout of overrated versus underrated. Are you game?
COWEN: You had him for a class — Robert Nozick — overrated or underrated?
YGLESIAS: I think most people do not pay attention to what the end of Anarchy, State, and Utopia actually says, or to some of his other books. But he’s a really deep thinker. Particularly because so few academics are right of center, it is really to people’s benefit. This is probably not to the specific benefit of the Conversations with Tyler audience. But people should really try to engage these major works like his in a serious way, not with like, “I’m going to get my highlighter pen and debunk this guy.”
It was one of the great privileges of my life to be in a small seminar with him and really learn from him. I have obviously not become a Nozick-style deontological libertarian —
COWEN: Nor did he.
YGLESIAS: — but you learn a lot more with that kind of thing.
COWEN: Another Harvard philosopher, Hilary Putnam.
YGLESIAS: Hilary Putnam, I don’t think is that widely rated at all, but I’m definitely a Putnam fan. The pragmatic tradition in American philosophy is good.
COWEN: He taught the single best class I ever took in my life on philosophy of language.
LeBron James — overrated or underrated?
YGLESIAS: I think correctly rated. At this point, everyone with a brain sees LeBron for what he is, and he’s excellent.
COWEN: Gilbert Arenas?
YGLESIAS: [laughs] Well, he got in trouble for that gun thing, right?
COWEN: Of course.
YGLESIAS: The other guy in that conflict turned out to be an actual murderer.
COWEN: They canceled him.
YGLESIAS: Right. I don’t even remember his name, but he was an actual murderer —
COWEN: Crittenton, right?
YGLESIAS: — who went to jail. So, Gilbert got a raw deal in that.
COWEN: He pioneered the long-distance three, correct?
COWEN: So maybe he’s underrated.
Now you spent a number of weeks recently up in the state of Maine. Overrated or underrated?
YGLESIAS: Underrated. It’s a great state.
COWEN: What is it we don’t know about Maine?
YGLESIAS: I think not a lot of people know about Maine off the coast. Interior Maine and the North Maine Woods are really cool and great in a very different way from coastal Maine. A lot of people come up there for a brief visit. They see the rocks, they eat a lobster, and they say, “All right, this is okay.” And then they come back. But Maine contains multitudes. You’ve got to get to Greenville and Millinocket, see the real weird shit up there.
COWEN: What makes it weird?
YGLESIAS: What makes it weird?
YGLESIAS: Because America has a rural culture that is regional in a particular way — southern and midwestern and that kind of northern New England is just different in its own way. It’s cut off spatially from the rest of rural America. It’s tucked away in with Quebec. There’s weird towns up there where everybody speaks French, and it’s a different kind of place.
I’m like you, right? I’m just somebody who likes weird stuff and places not a lot of people go.
COWEN: Why is your father, Rafael Yglesias, so underrated as a novelist?
YGLESIAS: That’s a great question. It’s because not enough old people have listened to you over the years.
COWEN: But that’s true about anything, right?
YGLESIAS: [laughs] People need to see it. I am not a literary person on any level, but I think that a certain kind of social-realist fiction writing has become unfashionable and that applies to him and his books and also to my grandfather’s books.
COWEN: When you revisit your earlier musical tastes, what is your perspective? If I think of a group such as Rancid — you used to listen to them. I bought that CD. I thought it was pretty good. I listened for a while, but now I never go back to it. It just seems derivative of the Clash. I’m not opposed to their body of work, but it seems irrelevant. The music you used to like — do you feel that way about it? The Arctic Monkeys — do they contribute anything of value?
YGLESIAS: You think back on your life, and there’s stuff that you’ve listened to because . . . I’ll say for me, right? Like, I think, most people, I have a curve of new music adoption, right? There was just a time in my life when I was super into going to see bands. I was always checking out new things. I was getting into new CDs, and new music that happened to come out in those mid-aughts years loomed really, really large in my mind.
Then as I become an old person, I stopped going to concerts. I stopped being as on top of new stuff. I have a much longer back catalog to go through. And a lot of that stuff — I don’t even know what you’d call it, but mid-aughts rock and roll stuff that white people in their 20s were listening to — I don’t think holds up that well, and it’s not going to stand the test of time.
COWEN: So what in popular music has proven to be enduring for you?
YGLESIAS: Enduring for me. Well, Rancid is enduring for me. I will always stand up for Let’s Go.
COWEN: Okay, what else?
YGLESIAS: From the era that I was dismissing, Metric is the band that I really liked, that I look forward to all the new stuff. I revisit the old stuff all the time. I don’t know. I haven’t thought that much about popular music.
COWEN: How would you redesign Twitter?
YGLESIAS: How would I redesign Twitter? They have to make blocking tools much more prominent, right? It’s really important on Twitter, I think, to be constantly editing your experience, and they don’t present it that way for, I’m sure, various reasons. But one thing I always want to do is — sometimes you see a post, and it’s terrible, and you should be able to just mass block everybody who gave it a little heart. Because there’s too much — I don’t know — just like trolling.
Twitter’s great, honestly. It’s an incredible way to be in touch with other people, to have these kinds of mechanisms. But so much of what people do on there is just reinscribe their affiliations, and to get value out of it, you need to try to dial that down and really take control over what you see.
COWEN: Today is, I think, August 21st, give or take. At this point, what do you think we are learning from the NBA bubble? About basketball, not about COVID testing.
YGLESIAS: What are we learning about the NBA bubble? That is an excellent question. I think we’re learning that there is stuff going on off the court that is impacting what we see on the court in a more clear way than we necessarily knew.
The games have been more different. The quality of the defense has been lower. Something is off, and I think it stems from people’s routines being disrupted. I don’t think we know exactly what it is that’s going on in there, but there’s something more to the game than what’s happening within the four lines of the court.
COWEN: What’s your prediction about what kind of team or what kind of player is favored by the bubble?
YGLESIAS: Hmmm, that’s a good question.
COWEN: People will hear this and be able to judge your prediction, just to be clear.
YGLESIAS: I know. I really hesitate to make sports predictions. I think it’s like having incredible amounts of self-confidence with your offense.
We were talking about Gilbert Arenas and how he pioneered the really far long-range three. There were all kinds of problems with him, right? But it was that kind of spirit of, “I, in fact, can hit this shot, so I’m going to go take it.” Knowing that and being assertive, I think, has proven its value in the NBA over the past 10, 15 years. And with what seems, to me, to be a slipping level of defensive focus inside the bubble, it’s even more just like, pull the trigger.
COWEN: Some urban and YIMBY questions. Will there still be a YIMBY movement, say, three years from now, when coronavirus, we hope, is more or less gone?
YGLESIAS: Yes, I think that there will be.
COWEN: But if you see a lot of the YIMBY movement as coming for the Bay Area, the impetus to build there might be much weaker. Support from builders might be weaker. Rents could be, say, 15 percent, maybe 20 percent lower. Palantir’s moving out of Palo Alto. Maybe COVID-19, in a sense, is the rent-lowering mechanism, not in a good way, but —
YGLESIAS: Yeah. I think you’ve seen, in some ways, the biggest YIMBY political successes in Oregon rather than in the Bay Area, and the people who work on that — they all say to me that the fact that the prices are not as high as they are in the Bay Area is helpful to them, that it becomes more comprehensible to people why new construction, new market-rate construction improves the market because it’s not so mindbogglingly out of reach for normal people. It’s like, “Okay, this nice new house might just be better than the house that I’m in, and I could move into it.” So I have a case for new construction.
I think that unless we see cities unraveling, having somewhat of a decline in the incredible pressure on prices in the Bay Area could be constructive. Also, there’s at least some chance — with fiscal problems affecting cities — that the municipal budget stakeholders get more involved in the fact that . . . A city like New York actually has the ability to increase and enhance its tax base anytime they want to, by making it easier to do market-rate building.
That constituency — even though there’s a robust group of people who would like their salaries and their pensions to be paid — have not really been mobilized on behalf of that cause, so we’ll see. I don’t want to go too into this “it’s a crisis, but it’s also an opportunity”–type paradigm. But places prove themselves when they are hit with problems. It forces you to either try to address your issues in order to survive or get much, much worse. I think we’re going to see a bit of a turning point.
COWEN: Say 10 years from now — how do you think New York City will be different for having had Covid-19 as compared to a non-Covid trajectory?
YGLESIAS: I think probably more of a reset to even more of a youth-oriented nonfamily-type place. I’ve been going back to New York sporadically for years, and I’ve been struck that it’s become a lot more family friendly than I remember it from growing up there. I think there’s a pretty good chance that Covid pushes it back toward more of that ’90s equilibrium.
COWEN: If there was a mutual fund for each and every well-known American city, which one would you go long on?
YGLESIAS: Which one would I go long on?
COWEN: Relative to market opinion.
YGLESIAS: Relative to market opinion. The future for Austin is very bright, but I think market opinion already knows that. Maybe Nashville, maybe San Antonio, Minneapolis. I’m going to say Minneapolis actually, because right now people are getting very low on Minneapolis because of their looting problems, but the fundamentals there are very strong.
COWEN: And where would you short?
YGLESIAS: Where would I short? I think definitely San Francisco, which is not just taking this Covid hit. But I think had a real . . . New York — there’s a lot of different things happening in New York. There’s a lot of different foundations that economic cluster there, and there’s a real proven ability to lose certain things and gain other kinds of things.
The attitude between people in San Francisco and the technology industry is really toxic and poisonous in a way that would give me serious pause about the city’s future. You could actually imagine civic leaders there thinking that they welcome the departure of that entire ecosystem, which is really dangerous for them. It’s true that there have been problems associated with the growth of tech in San Francisco, but the number of people there — serious, well-informed people — who don’t see that that’s more of an asset than a penalty. It puts them at big risk.
COWEN: Now I’m very much an outsider to Portland and Seattle. But just from my great distance, it strikes me as a public-choice puzzle that the mayors seem to put up with so much nonsense in their cities.
COWEN: You don’t have to believe the most extreme right-wing conspiratorial view of this, but I still don’t understand why what happens there happens. Can you explain that to me?
YGLESIAS: It’s very mysterious. I don’t know either of those cities well. I think it must have something to do with the fact that those are the whitest of the major cities in America, and that they don’t have the . . .
I saw a lot of people remarking at the Democratic convention — they say, “Oh, they put all these African American mayors up there instead of the activists who are yelling at the mayors.” I was thinking, “Well, yeah, of course.” You put up responsible, accountable elected officials who have to manage the various considerations that are up there, not activists yelling in the streets.
I feel like Seattle and Portland don’t have the kind of political institutions and political stakeholders who can say, “No, this is not helping. I agree that there’s a problem here, and I want to work on it. But the specific thing that you guys are doing right now in the streets is not in any way related to that.” It’s just very white Democratic parties in those cities, and I don’t think it is helpful to managing racial tensions.
COWEN: You wrote a well-known essay suggesting that American democracy is doomed. If I look at the history —
YGLESIAS: There’s some tension there.
COWEN: Why tension?
YGLESIAS: Well, with the idea that we should add more people and that the country is going to collapse.
COWEN: Well, all of that can happen, right?
COWEN: If you think American democracy is doomed, does that make you less interested in adding more people? Or a bit like, “Well, it will be rich here. They’re not going to create that many political problems anyway, since we won’t have democracy. So you might as well crowd in some more people from other nondemocracies and raise their standard of living?” How does the whole picture fit together?
YGLESIAS: Well, I wouldn’t say . . . My forecast there was not that the United States of America will cease to be a democratically governed country in the long run, but that the United States is due for a constitutional rupture.
We’ve seen in French history and a number of other countries over the years that they continue to be democracies or democracy is restored, but you have breaks in the system. You have a moment where there’s a rewrite of things.
Even in the United States — of course, our famous moments in history now are the Founding Fathers calling backsies on some of the Articles of Confederation or the country completely falling apart after Abraham Lincoln was elected. And you come out on the other side of it, and we now call those people the heroes of our historical epic.
How you have a successful country over the long term is that, when things break down, you come out on the other side with something better rather than with something worse.
My main aspiration in writing that essay is to try to get people — American people — to be a little less mad at each other and to have a little bit more recognition of the extent to which there are structural issues in our governance that is making it hard for us to proceed and that it’s not all “Oh my God, what the hell is wrong with those people?” Because if problems arise, if something goes badly wrong, I think you want to say what they did after the Articles of Confederation, which is, “We need to change the rules here. We need to change the system.” Not “We need to kill our political opponents.”
COWEN: What’s the most plausible scenario for that rupture? The Civil War — we know how that went. The Constitution, Articles of Confederation — that’s past history. What do you actually see happening? Not a prediction, but just the modally most plausible path?
YGLESIAS: I think the configuration would involve something like a very unpopular Republican administration being replaced with a very left-wing Democratic president who, for the demographic-balance reasons in Congress, doesn’t have majority support in the Senate, and who then faces a lot of pressure from his supporters to govern in extra-constitutional ways. Then conversely, a lot of elite actors in the business community, in law enforcement, in the military are very motivated to resist that president’s factors.
It’s the kind of thing we’ve seen in Latin American presidential-type systems, and that could happen here very plausibly. That’s not Joe Biden, right? But the Democratic primary could have gone in different kinds of ways. Eight, twelve years in the future, you might have a different outcome in this sort of situation.
COWEN: Now, you and I both know Donald Trump is not favored to win, but he does, in fact, have some chance of winning, even with very high unemployment, serious problems with the pandemic, a long history of being corrupt, other issues surrounding rhetoric I don’t need to tell you. What is your best account of why Trump is still in the race?
YGLESIAS: I think there’s two versions of it. One is that polarization has created a situation in which there’s a lot of loyalty. If you were, broadly speaking, in agreement with the ideas of the Republican Party, you are now highly motivated and highly incentivized to back the leader, right? You can imagine a different kind of political system where you would say, “Okay, we’re going to get rid of this guy. We’re going to put somebody else up who’s going to stand for the same sort of general values, but have a different approach.” In America you can’t do that.
The other thing is that progressive politics in the United States is very . . . I wouldn’t say it’s very unpopular because it was very unpopular, anywhere or whenever. But the public has serious doubts about putting the left in power in places in ways that a lot of people I know are a little bit in denial about, even though the facts are staring you right in the face. Why are there Republican governors in Maryland and Massachusetts and Vermont? Why is Andrew Cuomo so popular even though people on the left complain about him constantly?
It’s because people don’t want to put left-wing activists in charge of the country. Democrats, I think, will probably beat Trump because people don’t think that’s what electing Biden would accomplish. But it’s out there, and it’s not a new fact in American politics, but an enduring truth.
COWEN: How should we attract more talent to state and local governments? I mean this in a purely nonpartisan way. Just smarter, harder-working people.
YGLESIAS: Ooh, yeah, smarter, harder-working people in state and local governments. For local government, I think a lot of this probably has to do with cleaning up some of the muck. There’s too many different local government institutions. People don’t know who they are or who does what — things like that — and trying to get a … Lenin said, “better fewer, but better,” which I think you could accomplish a lot with in local governments in the United States.
State government is interesting. We have a big problem where the media — people who follow politics — don’t get at all emotionally or intellectually invested in what’s happening in Indiana, even though state government carries an incredible amount of the load. All the first-order service delivery is done there, but it’s very . . . It’s not just low prestige. It’s like almost people don’t pay attention to it at all.
COWEN: Well, that is low prestige, yeah.
YGLESIAS: Sure, yes. What can we do about that? I don’t know. David Schleicher says we should concentrate more power in governors’ hands because people do know who the governor is and pay attention, and bad governors tend to get replaced. That has some merit to it. It gives me pause on some level, but I guess if I had to pick, that would be my solution — that you have to strengthen the decentralized institutions of American government by centralizing them.
COWEN: One question on monetary policy: Has the pandemic shown that a nominal GDP rule is unworkable? Because say real GDP falls by 10 percent over some specified timeframe. Then, to stay on the nominal GDP path, you have to inflate by that much more? That seems both not desirable and politically impossible, and that the rule will just break. What do you think?
YGLESIAS: I think hitting a strict target might be unworkable, but it’s also shown the value of the nominal framework. Because we are otherwise finding ourselves spending a lot of time quibbling about how to understand inflation adjustment in a strange period of trajectory.
It’s like if college wants to charge you full tuition, but they’re only giving you online courses. I think probably the right thing to say about that is that that’s massive inflation. But you really can’t redo how the CPI works in real time and then hit a CPI target.
I do think you might have to say, “Faced with a big shock, all right, we’re settling for less.” Something like that. But a lot of the apparatus of NGDP targeting — that we should have a futures market, that we should be paying attention to what this is, that we should be trying to get the newspapers to talk about nominal GDP — I think it’s all been validated by this experience. It all got very in vogue as a discussion topic because of the Great Recession, 2008–2009 crash.
But from a macroeconomic perspective, I think that was a very conventional situation, whereas this pandemic is a little bit weird. But the strength of nominal targeting is that it can help you think about the demand-side aspect of real shocks in a clearer way.
On the Matt Yglesias production function
COWEN: Last but not least is the Matt Yglesias production function. As you know, many public intellectuals — they use economics as a base, and then that shapes how they comment on public policy. The way I’ve read a lot of your career is you’ve used analytic philosophy as your base, then later learned some economics. Is that something you did consciously? Do you agree with that characterization? And why do people do that?
YGLESIAS: [laughs] I definitely agree with that characterization. I think it is not a conscious plan of attack. I majored in philosophy for very naive reasons, like I enjoyed the intro class, and my TA was flattering and encouraged me to pursue it as a major. But I do think it’s a good . . . To the extent that people will want to be writers about things, I think that’s pretty good training.
I did a panel discussion at American Philosophical Association one time with Andrew Sullivan and with another writer. We were all old philosophy majors, and we were talking about this. It’s a good background because it’s really about words, and how they work, and how to think about things, and how to draw distinctions, and how to parachute in to conversations that you don’t know anything about and still make some useful contribution to them.
You can always read a textbook about something else, learn something. Economics is obviously an important subject, and economists know a lot of good and useful things. But in academia, you are rewarded for pushing the frontiers, for having the edgiest idea out there. But you don’t really want to base policy recommendations on something like that, right? One promising line of research that some hot shots have two new papers on is not what you want to bet the future on.
To talk about policy, I think you want to know the basics, but the basics are relatively easy to learn.
COWEN: Do you think of yourself, in some ways, as a kind of successor to the 1960s, 1970s Jewish New York intellectual scene, but now hyper-powered by the internet? Is that also your tradition?
YGLESIAS: I don’t think so. I don’t know.
COWEN: How are you different than that scene? You are from the West Village, right?
YGLESIAS: [laughs] Yes. I’m from New York and I’m Jewish. I don’t —
COWEN: And your father’s a writer.
YGLESIAS: Yeah. I don’t know that much about those guys, to be honest. I’m not saying it’s not true, but that’s not something that I think about or situate myself with.
COWEN: What did you learn about yourself from your stint working as an actual manager?
YGLESIAS: Oh, man. [laughs] It’s so easy when you do your job to get mad at your managers, and to then make the subsequent turn to like, “All these people have no fucking idea what they’re doing.”
But it turns out it is challenging to manage. It involves real skills. It stressed me out. I don’t think I did a great job of it. You get a good appreciation for the idea that, even though it might be hard to measure or to see externally, there is real skill being deployed in middle management.
And the meta management skill that must be . . . I didn’t reach this level, but the managers who have to pick the other managers — they are doing something that must be, I think, really hard to even conceptualize, but must have incredible influence on the success of really big organizations.
COWEN: Now, blogging was very important for your career it seems — helped you a lot. Why is it that blogging doesn’t seem like it’s coming back right now if it was useful to you, useful to me, useful to many other people? Is it Facebook? Is it Twitter? Is it something else? Why not?
YGLESIAS: I think we blame Facebook and Twitter, conventionally, for it. But I don’t think that it’s necessarily just about the technological modes. Part of why blogging was such an interesting moment was that it introduced a genuine disruption into the ecosystem, and that people who, early on, were not affiliated with important institutions or necessarily well known, by colonizing the open space became a big deal in our own little niches.
Twitter has had some of that impact, right? There are smart, good people who’ve come to public attention through their ability to tweet, which is good, right? That’s a strong thing. But I don’t think if you brought blogging back, it wouldn’t be blogging in that sense, right? People would want to read the blogs of famous people or the blogs that had big brands behind them, or the New York Times would own blogging or something.
Whereas what was special about that blog moment in its first decade was the extent to which people who we didn’t know would just write stuff and become influential.
COWEN: What did you learn from Paul Joskow, the famous economist and also your uncle?
YGLESIAS: I learned a lot of stuff from Paul. You learn specific things about certificate-of-need rules for hospitals. But we always, in my family — a lot of economists — he and his brother, Andy, and my grandfather, Jules, are all economists, PhD people.
I was always interested in the subject. I liked to ask questions at family discussions. His real specialty is in regulatory-type issues and I came to appreciate from things he said just exactly how complicated these questions are, like, what should we do with utility-type infrastructure, with these regulated-type industries?
So many people I know fall back on very hazy, big-picture, ideological things. They heard something happened that was called deregulation, and it was bad. This is not true that it was bad. It’s like, what is deregulation? It’s a harder question than I think most people appreciate, and that’s something I definitely learned from him.
COWEN: Very last question: what is the most important thing you learned from your mother?
YGLESIAS: Most important thing I learned from my mother — personally or intellectually?
YGLESIAS: I am not a visual person, but she was, and she really helped me. I am always reminded by her emphasis on that, and how much it actually matters what things look like, and how the visual design is, and that that’s not a superficial question, that our communications with one another — not exclusively — we have podcasts, but so much of what we do comes through our eyes, right?
That impacts the message in a profound and real way, and you shouldn’t think of it as just a distorting field, that that’s actually what we’re doing when we write something — we’re creating images that other people look at.
COWEN: Matt Yglesias, thank you very much. Again, everyone, a big plug for Matt’s new book, One Billion Americans: The Case for Thinking Bigger. Of course, you can also find Matt on Twitter and in many other places. Matt, thank you.
YGLESIAS: Thank you. You ask tough questions.