Matt Asher Talks to Jeff Deist about the Reality of Post Covid America
Matt Asher is an investor, writer, and host of The Filter podcast. He has a background in journalism and statistics.
Matt Asher: My guest today on The Filter is Jeff Deist. Jeff is president of the Mises Institute, where he serves as a writer, public speaker, and advocate for property, markets, and civil society. He previously worked as a longtime advisor and chief of staff to legendary congressman Ron Paul, for whom he wrote hundreds of articles and speeches. In his years with Dr. Paul, he worked with countless grassroots advocates and organizations dedicated to reducing the size and scope of government. Maybe you could start by telling us a little bit about your work at Mises, in particular what you’re focused on right now.
JEFF DEIST: Like most people we’ve been focused on covid, which came out of left field. From my perspective, on the governmental side, it represents a huge overreaction in terms of tradeoffs and also a huge failure on the part of social scientists, in which I certainly include economists, to show us the unseen behind covid. The tradeoffs are enormous that we’re going to suffer from in terms of economic damage, in terms of psychological damage, mental health, obesity, untreated cancer, all kinds of doctor’s visits, people gaining weight, people becoming despondent, people losing social connections and social ties. That’s the job of a social scientist, to help us see and understand the unseen that’s not necessarily right in front of our eyes, in terms of data. Covid has been a bit of a wake-up call and an indictment of economics somewhat as a profession, because economists have not been on the fore of saying, Hey, hold on a minute, the government policies we’re enacting here, maybe we ought to be thinking about this. Maybe we ought to be looking at history. Maybe we ought to be saying epidemiology and virology are not everything; we also need to understand the social science element of what we’re doing with these lockdowns.
For the last year or so at Mises, we have been very focused on trying to promote the idea of freedom over lockdowns. That is, that the marketplace, that doctors, that individual physicians, that families, that individual and local communities can deal with covid in ways that make sense for them. We don’t need a one-size-fits-all policy for a really crowded urban environment versus a very sparsely populated state, like Wyoming.
As with so many things in our society we seem hell bent on having a really centralized top-down, one-size-fits all policy coming out of Washington, DC. That’s a huge mistake. Ludwig von Mises, our namesake at the Mises Institute, wrote extensively about sovereignty. He wrote about self-determination. He wrote about nation versus state and what liberalism would look like. One of the big elements for him of a truly liberal society—in the Misesian sense, a liberal society is one where people have some sort of say over the rules under which they’re supposed to live, when it comes to the state—is secession and decentralization.
We have this situation in the United States where we’re politically at odds over Trump, over red states versus blue states, over the culture wars, and add a new element to this, covid, which brings up lockdowns versus open. It brings up masks versus no masks, it brings up vaccine versus no vaccine, passports versus no passports. It’s almost uncanny the way our government—I would include our state and media complex—manages to take everything that happens in society and turn it into a divisive wedge issue when, in fact, economics is all about social cooperation and people dealing with one another peacefully. It’s been an instructive year. I think a lot of people saw a side of US society and Canadian society and European society and of places all around the world that they’re not so happy with.
MA: I want to go back to the idea of the focus and the idea that at the beginning of this it was almost as if the only thing one could focus on was covid. That was the most striking thing to me about the early days of the pandemic and of the media about the pandemic, was that there was no other topic, there was no other thing one could think about. It was an astounding narrowing. It was almost as if all of society had been put into a fight-or-flight mode, some kind of really heavily cortisol-injected, adrenalized moment where it was hard to think past days or weeks. Everybody seemed to be intently focused on that one thing. I’d never lived through anything like that, as far as just the intensity and the narrowing of the focus.
JD: Yes, and to say that everything was about life and death, first and foremost, was a wild exaggeration. Now— of course, we do have some benefit of hindsight today, to be fair—we know that maybe 80 percent of people were already immune, had natural immunity from previous cold viruses in their bodies. Among that 20 percent, the people who were greatly at risk were overwhelmingly people over sixty, over seventy, over eighty, and also people with obesity problems. Given that, the idea that this was a life-or-death moment for the United States and we had to shut everything down, that we had to focus solely on supposedly humanitarian or health concerns and forget the rest because of the gravity of the situation, I think was untrue then. It’s certainly untrue now.
But you could understand what’s happening here, which is that we have fallen into the trap of “well, that’s mere economics.” Forget the economy, the economy doesn’t matter if we’re all dead or if we’re all sick. We have to be worried about people’s health first and foremost. What this implies is that you can somehow separate the two. There’s no universe where a poorer society is a healthier society. We know this beyond any shadow of a doubt, that more prosperous societies have better health outcomes in terms of longevity, in terms of disease, in terms of deaths at birth, in terms of quality of life. There’s no question about this. As societies get poorer, their healthcare generally deteriorates as well.
First and foremost, if you want to create a healthier society, locking down the economy strikes me as a bad idea and an exaggeration, to put it mildly. But I think this is really part of the overall project, which is to treat economics as a phony or made-up science, to dismiss economics and to say, Well, you know, there aren’t any real laws of economics. Economies can basically be commanded by legislative fiat. We can just create the outcomes we want. We can do it through monetary policy, through fiscal policy, through regulatory policy. I think this is a gigantic error. I think this is a form of hubris, free lunch-ism, which really defies belief.
And the idea that there’s not economic laws, that we can, for example, raise wages forever, that we can give people a UBI (universal basic income) to sit at home and that incentives won’t matter, they’ll still want to come back to work just as strongly—all these things which we might consider economic theorems or economic laws a lot of people on the left, they just don’t buy it. Now, there’s certainly some bad economics on the right. There’s some terrible economics on the right, but this idea that economics isn’t real, that it’s just this made-up profession that’s mostly designed to provide intellectual cover, a sort of pseudo discipline to excuse property and rich fat cats, like the guy in the Monopoly game. That’s not true. But that perception represents a huge advancement of left ideology.
We’re now in the twenty-first century and unless you’re maybe Bernie or AOC—or even Bono from U2—and say, Well, markets work and we ought to have markets in Africa, because that’ll actually do better in terms of helping African people come up out of poverty and increase their standard of living than charity. So, even a Bono will say that and maybe a Hillary Clinton would say that, maybe a John Podesta would say that, so we think neoliberalism has now triumphed. And that represents some kind of social democracy with a strong social safety net and a lot of antiracism focus, a lot of LGBT focus, a lot of feminism focus, but at least a grudging acceptance of markets and their ability to create prosperity. Maybe their accesses need to be regulated, but for the most part capitalism has won the day and now the Soviet Union is gone, and look at Singapore and Dubai and these kinds of places. Well, fast forward and we find that that’s very much in question. Socialism is a mainstream economic form of thinking on the left today. Socialism has not gone away, and I think the Great Reset talk that has surrounded covid has given the Left an opportunity to really push that narrative.
MA: I think certainly what hasn’t gone away is big government. Conservatives threw in the towel on that maybe twenty to thirty years ago. I remember there was a George Will column during the second Bush era where he tried to reframe big government as strong government, and that was essentially throwing in the towel. I see a thread running through both the Left and the Right, though maybe more so on the left economically, that is, a feeling that tradeoffs don’t exist or don’t matter. That goes for covid especially. The idea of this extraordinary state of an emergency was an exceptional cover to be in a place where you didn’t have to consider tradeoffs. If everything is an emergency, if there’s a speeding car coming at you, then you do anything whatsoever to get out of the way and you don’t worry if it costs you everything you have to get out of the way. There is no tradeoff because, as Cuomo famously said, “The virus is death.” It’s death, right? If that’s what you’re facing, then there are no tradeoffs.
And that kind of thinking was certainly at a high point throughout the covid hysteria, but it’s also somewhat endemic of our time that there is no sense that, say, spending limits matter. There’s no tradeoff in the amount of money we spend. There’s no tradeoff in the number of rules or complexity of government or whatnot. Maybe it’s pushed back, maybe it’s pushed forward a little bit, but when those things are implemented, there is very rarely a discussion of what the downsides are.
You mentioned the minimum wage. I think raise it as high as you want, it does not matter: there’s no tradeoff there, and there’s no need for discussion of it. We have a lot of people who are basically living in a reality in which whatever their goal is, there’s no reason to consider the downsides of trying to obtain that. Partly that may be kind of a rationalization, and partly I don’t think that we’ve been conditioned to think that there are those tradeoffs. In part, the universe hadn’t handed them to us that harshly until covid, in which case the lockdowns had huge, clear tradeoffs, but those were somewhat buried in stimulus and in shock. Do you see that kind of general feeling that we no longer live in a world where people have to worry about tradeoffs?
JD: I think the rise of MMT, modern monetary theory, as a phenomenon, which is gaining traction in left progressive circles is really a symptom of that, this idea that deficits don’t matter, at least they don’t matter much unless and until we’re running huge hyperinflation. The idea that the United States is sovereign, so we can simply print currency and we can finance deficits as far as the eye can see, this is not a crackpot theory in the sense that even people like Paul Krugman will give it grudging respect in the New York Times. Things that seemed crazy maybe five or ten years ago have been brought to the fore.
The idea of tradeoffs, that you could have everyone sit at home, that you could create money either on the fiscal side or on the monetary side, that you could reward people for not working, well that comes with a price, and increasingly a lot of Americans just don’t believe there’s a price. They think economics is something that can be commanded.
And so, we bring up minimum wage, but you could also bring up the capital gains tax hike. Joe Biden is proposing to take long-term capital gains from about 20 percent now to, for people with enough money, up over 40 percent. When you double that, there are tradeoffs, but I think a lot of folks on the left would say, Well what’s the tradeoff? Yeah, the rich guy has to pay more, so he’s unhappy, he has a tradeoff, but the rest of us don’t have any tradeoff whatsoever. We just benefit because government gets more money in its coffers and then they spend that on us, so there’s no tradeoff for me. The only way you could think this is if you have simply given up on the idea that a prosperous society results from production, not consumption, and production is the result of profit, capital savings, and capital accumulation poured into more productive mechanisms within the economy. Everyone used to understand this simple fact, but if you don’t believe that, if you don’t believe that capital accumulation is required and capital investment is required to drive a healthy economy, if you simply reject that (almost as a political matter, but also I would say as a matter of faith. That’s a faith-based belief), then you don’t see a tradeoff in doubling the capital gains tax rate.
At some point you have to say, What’s the answer to dealing with people who believe this sort of thing? Is it to give them another economics treatise? Is it to hand them a nine hundred–page copy of Human Action? Well, certainly some of them, but not very many. We’re in a situation now where the education system and the political system and what I would consider a very complicit media have made people believe things which are crazy and untrue, and that’s where we are. We ought to be honest with ourselves.
MA: We’re ruled by a combination of magical thinking and mob rule at the moment, whether that is literally mobs in the streets or a kind of woke mob online, keyboard warriors. And that kind of mob action is very rarely influenced by logic or reason.
I kept waiting for someone to come along, some charismatic preacher, and see covid as the end of times and drive forward a religious group of separatists who saw this as a signal, one of the horsemen of the apocalypse. And then it very slowly dawned on me over time that what had happened was not a single or multiple little split-off cult or sect, but that mainstream society had turned into covidians, a large number of people in society had created a new religion out of this that was an orthodoxy of medical doctor saints and a clergy. A clerisy and a set of new rules for living—that your face was impure and had to be covered at all times because you were spewing vile, infectious evil spirits out into the world.
The doomsday cult was what happened to mainstream regular society. Everybody was coopted into that and had their brains washed. It was startling to me and it took a long time to realize that, because you always think of extremist movements as being a small fringe that goes off and comes together as a small community and lives elsewhere. But in this case, it was all of us.
JD: By definition, a cult is a movement which cannot be challenged or questioned and so that certainly represents the prolockdown, promask covid side of things and the antilockdown, antimask side of things. That’s true, but when you say that what we might need to right the ship here is some sort of magic, maybe we could rephrase saying it’s going to take rhetoric as opposed to dialectic. I can hear Mises rolling over in his grave because he was somebody who really lamented the end of enlightenment rationalism in the conflagrations of the twent
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