You’re Hired! Chief Economic Adviser to Trump on What It’s Really Like to Work in the White House
2020-08-21 · Guest: Casey Mulligan (University of Chicago professor) · 51:29
Economic policy and life inside the Trump White House
University of Chicago professor Casey Mulligan joins Bob Zadek to discuss his book, You’re Hired, detailing his time as the Chief Economist at the White House Council of Economic Advisers. Mulligan provides a first-hand account of President Trump’s unconventional governing style, the strategic use of Twitter to bypass traditional media, and the administration’s approach to policy-making through experimentation and empirical analysis.
Topics: Trump Administration, Council of Economic Advisers, You’re Hired, Obamacare, Twitter, Tariffs, Immigration Reform, Operation Warp Speed, Federalism, Public Policy
Speakers: Bob Zadek, Casey Mulligan
Introduction [00:18]
Bob Zadek: Hello everyone, welcome to the Bob Zadek Show, the longest-running live libertarian talk radio show on all of radio. We are always live, always the show of ideas, never once the show of attitude. Thank you so much for listening this Sunday morning.
My goodness, do I have a treat for you. Do we have a treat for you. This morning’s guest will give us something that I don’t recall ever getting with the quality that you’re about to hear: an inside, first-hand look at the operation of one of the more unusual White Houses in American history. I say unusual not as a judgmental comment at all, but simply as a matter of fact. And I don’t think that will be disputed when you have somebody in the White House who had never once before held elected office. Things were bound to be a little bit unusual, but in this case, they were a lot unusual, as you will learn.
This morning you will get first-hand views of some larger-than-life figures who have been on the news almost every night. Besides the President, you will learn about Peter Navarro, John Bolton, Bernie Sanders of course, Jeb Bush, and many others. This morning’s guest is Casey Mulligan. Casey served as the Chief Economist at the White House Council of Economic Advisers for a full year between 2018 and 2019. Casey has just published a book that has been called “riveting” among other accurate and complimentary observations. His book is entitled You’re Hired: Untold Successes and Failures of a Populist President, President Donald Trump. Casey will share with us what he observed, what he learned, his opinions on President Trump, on the policies, how these policies were formed, and will give us an inside look of what it’s like to be in the Oval Office, in the White House, during the tenure of a populist president—one of the few we have had in our history. Casey, thank you for joining us this morning. Welcome to the show.
Casey Mulligan: Oh, it’s my pleasure. I wish everyone could get to meet the President. It’s my pleasure to explain to people what it’s like.
Joining the Administration [02:56]
Bob Zadek: Now, you served as the Chief Economist in a group called the Council of Economic Advisers, part of the, of course, executive branch of the White House. And you were—this is a position you were asked to serve in. You got a phone call, you were invited to join, and you of course accepted. Now, you served for a year, that was your term, and then back you went to teach at the University of Chicago, where you now teach.
Now, just opening question: when you offered to serve, accepted the invitation to serve, is it the kind of position that you would have accepted because the position itself is so interesting and it gives you insights, a chance to learn and a chance to encourage others to adopt policies that you believe are correct? That is, would you have accepted the call from any president, any administration who called because the job is so darn good, or did you—would you have declined others and did you accept the offer of this president, and if so, was there a reason?
Casey Mulligan: Yeah, the position is a great opportunity to serve and to learn. The Bush administration twice had approached me about essentially this position, and I took them seriously for exactly the reasons you mentioned. But it didn’t pan out. An important issue was, you know, did my talents—there’s a lot of talents I don’t have—did my talents fit with what President Bush was trying to do? And they really didn’t. And when the Trump administration called, that match was a lot better. I had written some books, for example, on President Obama’s major policies that President Trump was trying to reverse, and so I had a lot of expertise on how we could do better than what President Obama had done.
Bob Zadek: Give us a little bit of insight, if you would. What specifically was there about the invitation from the Trump administration that made it appealing? What policies specifically got you excited and so energized to join the administration?
Casey Mulligan: I would say initially it was Obamacare, or the Affordable Care Act. You know, the President promised his voters that he would repeal that, and when that failed, that he would try to clean it up a lot and make it better. And since that was my most recent book at the time, that was very attractive. And it turns out that was maybe 10 to 20% of my time. I ended up working on a lot of other things that were even more interesting, but I didn’t know those were coming down the pike.
Bob Zadek: In your book, you offer wonderful insights. And they’re wonderful, they’re first-hand, they are candid. It’s clear to me from reviewing the book that you didn’t have an agenda. You were just sharing what you had learned with the reading public, and you do so quite beautifully, if not brilliantly. When you were serving as the Chief Economist, were you then intending to write a book and taking notes accordingly so your notes would serve you in the book writing, or did it occur to you after the experience that that experience was something you could share with the public and the public would be interested and get a benefit?
Casey Mulligan: It was kind of in between. After I arrived, I realized that there was a niche there, an opportunity, if you will, again where my talents and situation fit in. I mean, I knew going in there—I knew from studying Obamacare that what you read in the press is often quite untrue. And going there, all I knew about the Trump White House in terms of the day-to-day workings was what I read in the press, which I knew was wrong. But then what am I going into? I have no information, right? I have information that pretends to be information, but I knew I didn’t have real information. So I was fearful.
And then when I got there, I got to see what it’s like, and I realized, you know, there’s a need for somebody to tell about what it’s really like. And I’ve written books before, so as time went on, I started having better and better notes and thinking about a book and how it would be organized. Although ultimately, when I got out and reflected back, I ended up reorganizing everything. I realized the populist part, which was not part of my education or thinking going in there, was really essential to understanding how the President operates and how his staff works for him.
First Impressions of President Trump [06:39]
Bob Zadek: We’re going to spend a lot of time, most of our time during this hour, talking about specific policy issues, how the President approached them, what conclusions he reached, and as your book title indicates, successes and failures. Before we roll up our sleeves and get into policy, one question I was really looking forward to asking you: So you had never met the President, I presume, before, one-on-one, before you went to Washington. Is that correct?
Casey Mulligan: That’s right.
Bob Zadek: And so tell us if you would, if you can recall—I’m sure that you can—your—you had I guess more than one either one-on-one meetings with the President or in a very small group where you really could get a sense of the President. Either in a one-on-one, in the first one-on-one meeting or very small group working meeting, tell us about what you thought you would experience and what you actually experienced in that close-up and personal, as they say, experience with the President.
Casey Mulligan: Yeah, all the meetings were in a small group, and I have some pictures in the book to show how it works. But the typical Oval Office meeting, there’s a handful of chairs around the President’s desk where the guests for the meeting are sitting. In my meetings, we did not have press in the room. But maybe the viewers or the listeners have seen pictures like when Kanye was in the Oval Office. It was the same setup; there were four or five chairs for Kanye and his folks. And that’s the type of meetings that transpired.
And the first time that I met him was to review the Economic Report of the President that was talking about how the economy had done in the past year and how that fit or didn’t fit with his policy goals. And that was a whole set of experiences. He covers a lot of ground in a short period of time, which I thoroughly enjoyed. So I was a bit in amazement at the man. That was kind of my first reaction.
And I actually give the analogy in the book: the first time I ever went to a Bears game. I’ve been a Bears fan my whole life, but I was fairly old when I went to my first Bears game in person, Chicago Bears. And they were playing Barry Sanders of the Detroit Lions. And I was really in amazement of Barry Sanders at the time. He ran around our Bears like they were children. And I could really appreciate Barry Sanders. I don’t know if he’s the best football player ever; I couldn’t say that that day. But I could say that, wow, his talents are at another level of everyone in the building and of his competitors. And that’s kind of the reaction I had to President Trump, that his talents are another level. I can’t say he’s the best president ever, maybe he is, but he’s—I feel sorry for his competition. I mean, he’s a tough talent to go against.
And then—I’m sorry, please continue. So that was kind of a lot of the meeting, just me being in amazement. And then at the end of the meeting, we actually brought in a bunch more people for a picture, which is unusual. So we had, I think, 40 people in the Oval Office at the end. And then he pulled me aside in front of all of them and said, “How are you doing? How’s the job going here?” He made me feel like he’d known me forever, which I knew wasn’t true, but I still felt it. And he’s just a good retail politician. He knows how to be in people’s presence to make them feel good.
And it was totally opposite experience I had when I met Jeb Bush when Jeb was on the 2016 campaign trail. Maybe that’s why Jeb lost; he did not make the people around him feel good. I certainly didn’t feel good when I was with Jeb. So that’s the opposite of what you hear in the news. In fact, I remember the New York Times ran a couple stories about how Jeb Bush, if anything else, Jeb was brought up by Barbara Bush, who taught him to be kind and polite and a nice person, and then Trump of course is a mean person. But that is the exact opposite of my personal experience.
Bob Zadek: And I will mention to our listeners that your—as I said in my introduction—your description of the many larger-than-life characters—I don’t mean to be snide—characters in the book, Navarro and Bolton and Bernie Sanders—we’ll get to Bernie Sanders I hope during the hour—and Jeb Bush, are wonderfully—they seem to be fair. You have given thought to how you share your experiences with them. And if our listeners and your readers are at all interested in learning about, in addition to policy—because the book is replete with wonderful policy analysis—but if you want more than policy, this is the book. The description of the players in Washington is so unusual for a book of this type, and that makes the book a good read in and of itself.
The Strategy Behind the Tweets [13:59]
Bob Zadek: Now, before we get into economic policy, of course, which is why a lot of what’s in your book—and since it’s so much identified with President Trump, and because your book offers lots of insights, share with us, if you will, Trump’s relationship to Twitter. Now, Trump—many people, certainly the ruling class—and Casey will of course discuss your discussion of the ruling class, what it means and the dynamics during this hour—but Trump’s relationship to Twitter. That itself is extraordinarily unusual. It’s unusual, of course, for the style, which many people find boorish and certainly politically incorrect—that goes without saying—kind of strange. Often he makes statements that don’t appear to be defensible, and you will help us understand that they’re not supposed to be fact-based. So tell us, if you will, in a few minutes, Trump and Twitter. Why the President does it, whether it accomplishes his goals, what’s that all about? Only because it is so unusual.
Casey Mulligan: One of my favorite things I learned there—my second chapter is called “I Wish He Would Stay Off Twitter,” which I think most Trump voters have said to themselves more than a couple times in the last three and a half years, and actually a lot of the White House staff says that to themselves and to each other. And I think you need to drill down to the foundation here, which is he’s a populist president, meaning he won the election because of support outside of Washington, outside of both parties. Washington is a bipartisan place in the sense that it has Democrats and Republicans who have those Washington resumes. And he wanted and promised and said that he was going to reverse some of the failed—what he considered and his voters considered failed policies. And they’re invested in that. They didn’t want that. And they’re smart people and they can fight back.
And, you know, they run or are heavily employed by TV and newspapers. So he needed his own network. I mean, that was a necessity if you’re going to be a populist president. Maybe that’s why we haven’t had many in history, as you mentioned. And Twitter was his own network. He could go directly to the people. And until recently, when Twitter started putting some labels on his tweets, it was unfiltered by his political opponents. And, you know, you don’t just have a network and people watch. You need to give them a reason to watch. And so he’s been successful at that. He at the time I wrote the book he had 70 million followers, now he’s got 80 million. His stuff gets retweeted, it gets replayed on standard news channels and newspapers.
I have some estimates in the book: something like 200 million people say they frequently hear of what he tweets, which is way more people than would watch a Super Bowl in the United States. It’s been very successful. But he understands that to have a network, you have to have people—give people a reason to tune in. So some of the bizarre and bombastic stuff gets people tuning in. And he understands things are—the world involves a trade. So he’s going to get people to tune in, he’s going to get NBC to mention what he said. NBC’s got to get something out of it. And so maybe they get to call him a name or call him inconsiderate or worse. And he views that trade as being worth it for having his own network where he can reach the people directly.
Another thing he does on the Twitter sometimes, I explain a particular episode in the book that’s fairly typical. He’ll think about, you know, we have something happen in our country that’s important. How much do I need to exaggerate it so that the press covers it? And he’ll talk about that and think about that. The one I tell in the book was with some GDP numbers, which had exceeded expectations. You know, when the Obama people were exiting the White House, they said, “Our economy can’t grow more than one or two percent.” And we were coming in way ahead of that. And the press wasn’t covering it; they had other things they were talking about. And he turned to us econ guys and said, “Well, what do I need to say about these GDP numbers so that the press will cover it? Should I say it’s the best—it was the best in 12 years. Should I say it’s the best in 20, the best in 50? Should I say it’s the best ever? You know, what should I say to get them to cover it?”
So he clearly viewed this as a trade: that the press gets to call him a liar, but then they have to talk about the issue that he thinks is not part of the conversation and needs to be, such as how well the economy was growing at that time. Or he’ll say things like, “I’m the best president for African Americans ever, or since Lincoln.” And then, of course, there’ll be a fact-check by the Washington Post who’ll say, “Well, no, he’s not. Maybe he’s done some good things for African Americans, but maybe Lyndon Johnson was better.” And that’s the trade: that they got to call him a liar and give him Pinocchios, but they had to talk about some of the things, the policies that he did for African Americans.
Now, in the case of the GDP one, we had this conversation about how much to exaggerate, but in the end, he didn’t exaggerate it. He told Dan Scavino—by the way, who runs the Twitter; the President’s not sitting on the couch in the middle of the night typing on his own phone. He has people handle these. He’s the inspiration, for sure. He said, “Dan, you know, just take what the Council of Economic Advisers has typed up here and put it exactly into the tweet. Take out the chart, just put the exact words, and we’ll see how that plays out. And if it doesn’t get enough attention, then maybe we’ll exaggerate it.” So that’s—exaggeration is one of the methods that he uses to kind of have that trade.
Bob Zadek: And Casey, that’s a perfect example of what you do throughout your book, which makes the book such an easy and pleasant and informative read. And that is that America, the country, me included, would look at those Twitters, those tweets, and say, “This is an example of no impulse control. It’s all impulsive.” And you explain, no, it’s quite the opposite. It’s carefully thought through. Whether or not it’s a sensible strategy, that’s not the conversation. What it is not—it is not just some impulse middle-of-the-night wake up, have a drink of water and send out a tweet. It’s carefully thought through to accomplish a goal. We’re not going to have a conversation whether it achieves the goal; it probably does based upon the goal that you have described. But it’s the kind of insight that the country really benefits from. And so those examples in the book are just wonderful, and my compliments.
Empirical Governance and Federalism [21:56]
Bob Zadek: Now, getting over to policy a bit, there are certain—and during your tenure at the Council of Economic Advisers, and before you got there and after you left, economic issues have, as they always are, front and center of the measure of a successful administration. And some of the very large and so obvious that I just have to say a few syllables, issues like trade and immigration, which have been big deals. Now, they are more than just economic issues, but they really are profoundly economic issues. That’s the major thrust. Does the President have a governing philosophy? When he approaches these issues and the others we hopefully will have time to talk about, is there—are there a set of core values? For example, the importance of economic freedom, federalism issues of move policy down from the feds to the states? Are there certain consistent governmental policies that throughout your experience there that can help us, American voters, sort of understand more what dictates how the President will make decisions? Or is it more pragmatic? Pragmatic not being a bad term, just a different term, where you look at every issue, no governing philosophy, and you just decide what’s the best decision for this particular problem.
Casey Mulligan: I’d just push back a little bit on the term “philosophy.” I mean, I would not call him an ideologue. It’s not like he read Ayn Rand and said, “I understand the world now and this is how I’m going to organize what I do.” He’s more empirical. He’s not a young person; he’s been around a lot of years, and he continued to learn while he was in the White House. And he sees patterns that work. And so then he’ll reapply those patterns. So it’s not on a case-by-case basis.
So, for example, the idea of federalism, that maybe things are better handled at a local level where the information and maybe incentives are better. You could get that from a philosophical point of view or a theoretical point of view, but he arrived at things like that from a more practical point of view, seeing it enough times where it worked and when somebody wasn’t doing federalism it didn’t work, and so he would be willing to apply that. In fact, that particular one, I think he’s really increasingly grown attracted to that approach.
And a few times people asked me, “Oh, you know, I’m going to be in the Oval Office and I’m going to argue my position.” And I said, “You know, your position can be given that federalism angle, which I think the President appreciates.” And they did that, and I think they were successful. Whether that—I wasn’t at those meetings, but for example, one very recent one about Ben Carson’s agency’s regulations around zoning in suburbs. There was a battle in the administration about that, and my advice to some of those going into that battle was, you know, remind him of how federalism can work and has worked, that maybe the localities have better information and better incentives to what’s going on with really the people. And yeah, Ben Carson’s agency’s not going to want to surrender power because they’re the opposite, right? They want the power in Washington. But that hasn’t worked so well on so many issues and maybe it’s not going to work well here. And in the end, that carried the day, that the President wiped out those agency’s regulations that had been in place since the Obama administration.
Policy Experimentation and the Individual Mandate [26:12]
Bob Zadek: Trump’s—one of the complaints about Trump’s policy-making is that he vacillates, he changes his mind, he is not consistent. You explain in the book that that again is a function of something that the public doesn’t know about, which is the use of experimentation in policy-making, which to me was an eye-opener. Tell us about how President Trump does or does not use experimentation, and maybe with an example to show the result of that way of policy-making rather than a decision-maker who is committed to a certain point of view and will hold on to it, hell or high water. So tell us about—because you mention it a lot in your book, it was fascinating—about Trump and the use of experimentation.
Casey Mulligan: He’s very much an experimenter, which is my phrase. I mean, coming from the academic world, that’s what we call it. I believe business people call it “fast failure.” But in any case, it’s pretty novel in the political sphere. In fact, I think one of the things the President maybe gets a little bit wrong is he sometimes assumes that other politicians operate that way, and they really don’t.
But certainly that’s the way he operates. He—again, not being an ideologue, that maybe gives him the freedom to do that. He’d say, “Try something. You know, we have some maybe many, at least some, intractable problems that previous presidents haven’t been able to budge on. How are we going to solve it? Well, you could formulate a new theory from the ground up and use that, or maybe just try something and see how it works. And if it works, you stay with it; if it doesn’t work, you get rid of it.”
And that’s been his approach. One example I give in the book was with the individual mandate, the requirement in Obamacare that everybody has to buy health insurance. And the experts, most of them, have said, “Yeah, we need to do that, otherwise people won’t sign up until they’re sick, and that’ll raise the prices, and then people won’t buy, and there won’t be a market for health insurance, and that’s a terrible death spiral you get if you don’t force people to buy health insurance.” And so his first approach was, “Okay, I hear the experts tell me that, I’m going to try that out and see.” This is more a political experiment. And he tried on the campaign trail a couple days, and he was hearing from a lot of people that weren’t experts and some pretty compelling arguments against.
And so he changed something like six or seven days, he changed 180 degrees and was saying that the individual mandate is one of the worst policies ever and he’s going to get rid of it. And he did get rid of it. And he still brags to this day, probably today he will again brag about how he got rid of the individual mandate, which I guess candidate Biden wants to bring back. And that was his experiment.
And then, you know, I had a book about Obamacare which discussed the individual mandate a little bit, but I didn’t totally understand it myself. I did not give the party line that you have to have it and so on. But once I was brought on board with his administration, I had to—it was one of my assignments is you’ve got to give some serious thought to this individual mandate. What are its costs, what are its benefits? And as we thought through it, we realized, you know, this individual mandate doesn’t make sense. The experts were actually wrong about this, that what you’re doing is you’re punishing somebody who doesn’t buy subsidized health insurance, who turns down government assistance. Shouldn’t we send a thank-you note to people who turn down government assistance? Why are we punishing them?
And the experts had kind of failed to think about—when they think about the individual mandate—to realize that so much health insurance is subsidized. Maybe it would make sense in a world where you didn’t have subsidized health insurance, but that’s not our world, that’s not the Obamacare world. And so really getting rid of the individual mandate was a huge gain for consumers and taxpayers, kind of a double whammy there. And there’s a good reason he brags about it in terms of economics. And I’ll leave it to him, but he says it was a great political move too, that a lot of people, even Obama privately acknowledged to some of his people, “Maybe the individual mandate was a big political mistake of ours if we could do it over again.” And he discovered it literally in a few days by experimenting.
The “Tariff Man” and Trade Policy [31:58]
Bob Zadek: It was not only a bad political mistake, a bad economic mistake as well. As a libertarian, as one who yearns for totally free markets so that the price mechanism of free markets helps us understand what goods and services are really worth, I found myself quite pained with Trump identifying himself—I think it was a self-identifier—as the “tariff man.” So tariffs have been a big deal throughout the Trump first term. I have been kind of pained that he’s been interfering with the free market. Why would he tax American consumers, which is what he ends up doing, merely because of their choice of wanting to buy something made in a foreign country? After all, aren’t I allowed to buy whatever I want to buy? So the whole area of tariffs, it’s kind of painful to me in terms of Trump’s policy. Help us understand—and I of course yearn for President Reagan, he is one of my heroes in American history—and you help me understand in the book that, well, whatever I may think about President Reagan—and it’s passionate—my views of his approach to foreign trade are kind of misplaced a bit. So help me understand, help us the listeners understand, Trump’s approach to tariffs, foreign trade, buying goods manufactured overseas, and what he sees to be the ultimate goal of his policy and whether or not he achieved it.
Casey Mulligan: Yeah, I have a—my book has a social media bibliography, so links to videos and tweets and stuff. And one of them is a link to a Ronald Reagan video talking about the virtues of free international trade. It is an awesome video. It’ll bring tears to your eyes. Ronald Reagan can explain probably better than anyone, including Milton Friedman, why free international trade is a good thing.
But that’s not what he practiced. There—and this really goes for all the presidents in between and before Reagan—there are special interests in Washington that get served. I wish they didn’t, but they do get served. You know, the steel companies perennially served by special favors, the car companies served by special favors. And Ronald Reagan was serving them up just as well as other presidents had. And what Ronald Reagan used at the time was mainly a quota arrangement, saying to the Japanese car companies, for example, “There’s only so many cars you can send over here. So you guys figure out which cars you’re going to send, but there’s going to be a limit on how many cars.” And the Japanese companies loved that because then they didn’t compete with each other for space in our market. In fact, after I had written that chapter and sent it around to some of the Reagan people, they said, “Oh yeah, the Japanese companies would come to the White House during the Reagan years and ask for a quota.”
So what does a quota do? Yeah, the American car companies love it because that keeps out competition. The consumer of American automobiles in America has to pay more. But who do they pay more to? They pay more to the Japanese companies, also to the American companies. President Trump did very few quotas. He did tariffs instead. So he would put a tariff on imported goods. And yeah, the consumer would pay more, the domestic producer is happy, they’re the special interests that are going to get served. But at least the money didn’t go to the Chinese companies; it went in our Treasury. And that would be an improvement, I would say.
And I think Milton Friedman wrote in the Wall Street Journal a few times in the ’80s that same point. He didn’t know Trump was coming, but he was saying Reagan is so bad with these quotas that it actually be an improvement to have a tariff man. And we have our tariff man. So that’s one thing to recognize. They were both dealing with—now, one question if I can just—both Reagan’s quota policy and Trump’s tariff policy have the effect of increasing the cost to the consumer. Both have the same effect. Why isn’t there a third choice, which is neither quota nor tariffs, result being consumers pay less, result being some manufacturing is now done overseas because there’s a comparative advantage in economic principle we know about, of course? Why isn’t that the choice? Is it simply that it’s political reality that the car companies have so much power, they will end up being protected, and the only issue is in which way do you protect them, albeit at the expense of the consumer?
Casey Mulligan: Yeah, there would be no tariffs if you had this swamp totally drained, to use the President’s metaphor. There would be no tariffs. But the swamp isn’t drained, and there are interests that have to be served. Need I remind people that Mrs. Clinton didn’t campaign in Michigan where the car companies are? You know, the car companies have been a powerful interest. Ronald Reagan made them many promises and delivered on those promises. So that’s some of the failures in the book, that the President has not totally drained the swamp. There are still special interests that get these favors, and the interfering with international trade has been a common way to deliver those favors.
Also, and it was true then and it was true now, there also is the intellectual property problem around the world. In Reagan’s day, the problem was the Japanese weren’t respecting our copyrights and other intellectual properties, and other East Asian tigers weren’t. And you know, what are you going to do about that? You know, we don’t use the military to go solve that problem. So what are we going to do? Reagan threatened tariffs. He didn’t do so many of those, but he threatened them. And it took him a number of years eventually in his second term he got some trade deals with Japan and Asian tigers to respect our intellectual property rights. And we have the same issue now, although it’s not called Japan, it’s called China. But the same sort of issues have arisen, and tariffs are being used. Maybe the one thing that’s different, there were some economists, even Chicago-trained economists back in the Reagan years, who recommended that tariffs maybe be something we use to change that behavior. No economist recommends that now. I’m not sure what changed in terms of professional analysis, because Adam Smith was still known to all of us. But anyway, those are kind of the two issues: you have the special interest to serve and then you do have this intellectual property, which is an important industry here in America.
Reforming Immigration [39:12]
Bob Zadek: What is the—what is the principle, the core principle that governs President Trump’s immigration policy? Another policy that I find painful, to use the first word that comes to mind, painful because—and I’ll ask you to speak to the economic issues—but just to mention in passing, the issue that doesn’t get discussed, and maybe it just doesn’t have a lot of traction, is that my view is people in this world have an inherent, natural right to travel, to improve their lives, and that right, that personal right which is personal to the immigrant, we ought not be interfered with, they should be allowed to come here. So that’s my starting point. But speaking to the policy, the good for the country, bad for the country, good or bad why, tell us what dictates President Trump’s immigration policy and your own views, which you express very persuasively in your book about immigration policy. Because people—it appears somewhat cruel, is that too strong a word? Somewhat thoughtless. There’s a lot of bad labels that are put on it. Help us understand what drives the policy decisions on immigration and whether, in your view, the administration has achieved their policy objectives.
Casey Mulligan: Sure. Well, on immigration, I’d say there are two areas. One would be more in a legal area, which would not be my expertise: the issue that the laws are broken, they’re not enforced, they’re selectively enforced. You know, there’s a whole set of issues that the President is passionate about and people are passionate about that I don’t have much expertise on. I did notice, you know, a typical pattern: in some of those areas, they would just do the same thing the Obama administration did and then get criticized like crazy, even though Obama was allowed to do them, like to recognize the idea that, you know, if we give special treatment to children at the border, then we’re going to have more people carrying children up to the southern border. This is something that Obama people recognized, which I think is true, but when Trump people recognize it, they were considered cruel.
The area that we worked on in the Council of Economic Advisers is he asked us, in conjunction with others in the White House, to come up with a plan that he could call his own immigration plan. What would the immigration laws look like if we did them right? That’s the project he gave us. You know, we’re heavily empirical, so one of the things we had to do and gladly did was just assemble some a data set on what are the immigration laws around the country, how are they working out—around the world, I’m sorry—what other countries, what are they doing? Do they do it better than us? Are there things we can learn? So we did that.
And we would show the President some of these findings. And one of the things he volunteered, he said, “You know,” he said, “Hey, citizenship’s our most precious commodity, we ought to be selling it. We ought to get money for that,” he said privately. He knew you don’t say that in public. And I was really taken aback by that because that’s exactly what Gary Becker, the Chicago economist, Nobel Prize—maybe the smartest of all those with Nobel prizes, you might say—he wrote a book about called Immigration: A Radical Proposal. And Becker’s proposal is let’s charge for citizenship. And the reason he was willing to consider different than your natural rights view, Bob, was that, you know, we have these welfare systems. And so it might not make sense to let people freely go where they want when welfare benefits are going to be part of those decisions. So he said maybe we should have a charge at the border.
And the President derived that on his own. We did not give him Becker’s book or discuss it with him; he came up with that on his own, which kind of gave me an insight in terms of his capability to think like an economist, at least to think like a Gary Becker economist, and he was able to do that. And what he ended up being excited about were some of the international systems that kind of mimic that without coming out and having a fee, point-based systems like in Australia and in Canada, where the points are based on economic contributions. And we kind of understood, well, that maybe help approximate the radical Becker model in the sense that if you had a fee at the border, the people who would pay the fee are the ones who have the most to gain when they come here. And maybe if you could try to mimic that with a point system. You never get exactly because of course prices are better than regulations and planning, but that’s the idea of the point system. And so he put together a regulation reform package that was essentially the Australian and Canada point-based systems based on economic contribution. That’s what would decide who would—what applications would be accepted versus rejected to come in our country. Now, of course, and we all knew this from the beginning, Pelosi’s never going to sign on to any immigration reform package that the White House put together. But he at least wanted to be able to say what his principles are and how much better things could be if there were a cooperative Congress on this issue.
Populism and Political History [45:11]
Bob Zadek: We’re running out of time, and you have some interesting observations about Trump’s relationship with observations about interactions with Bernie Sanders, another larger-than-life figure. Is there an anecdote or a story, kind of a teaser? It shows the style of writing and the quality of the content in the book about Trump and Bernie Sanders.
Casey Mulligan: You know, Bernie Sanders is also a populist. He’s not going to be a president, but he’s a populist. And I could tell that the President really appreciated that and paid attention to it. Not only—there’s also the defensive point of view that, you know, maybe Sanders would get some of his populist support and siphon that away, but also could he learn from it? Because Bernie Sanders to some extent, especially when I was there, seemed like an outsider. Now he seems much less like an outsider than he seemed at the time.
And actually, it’s interesting that the President is aware of a lot of elections, for president and primaries and Senate primaries, and he has a lot of these in his head that he’s thinking through. And one of the things he thinks about is the Dukakis versus H.W. Bush, which actually today seems very interesting analogy because remember H.W. made a comeback in the summer, which President Trump maybe be doing right now. And he was thinking about that election and thinking about, you know, would Bernie Sanders be a Dukakis type of character? And he retold the story about Dukakis wearing that army helmet sitting in the tank and how foolish that was and, you know…
Bob Zadek: Yeah, when he looked like the chipmunk. He looked like the chipmunk.
Casey Mulligan: And he thought that that’s the type of mistake that Bernie Sanders would make as well in a campaign. So we were amused by that, but I think that’s insightful.
COVID-19 and Operation Warp Speed [47:32]
Bob Zadek: The last topic I’d like to try to cover, we only have a minute or so, regretfully. But what will be an issue in the campaign, a big issue, is the President’s handling or not handling of the COVID epidemic. Now, you are clearly, of course, not a medical doctor, you’re an economist. So keep your observations, of course, to the economic issue. How much should that be an issue in the campaign, and if so, how should the voters from an economic standpoint evaluate what Trump did or didn’t do with respect to the virus? And we have only a couple of minutes.
Casey Mulligan: Well, it is very important, and people want to put weight on that. I totally understand that. From a lot of perspectives, it overwhelms pretty much any other policy area that many presidents in the past would have dealt with. So it is—it is interesting. Now, it turns out my Council actually had a couple medical doctors as part of it who also had econ degrees. And we actually worked on pandemics before we knew anything about this pandemic. We worked on pandemics, and the President was excited about that.
And the thing that we emphasized in our report, which came out in September—we worked on it a couple years—is innovation. If you’re going to have a pandemic, innovation is what can help prevent its costs from getting too far into the trillions. And we talked about how, you know, you want to get the FDA out of the way in terms of testing and having a vaccine, discovering a vaccine. Also, you need to be able to manufacture that vaccine on a large scale, you know, a massive scale. There are some vaccine technologies that don’t allow that. And that was our recommendation in that report. And the President took that recommendation.
Bob Zadek: Casey, I just want to—I’m sorry to cut you short. But in your opinion, were you happy with the economic aspects of the handling of the pandemic or not? We have about 30 seconds.
Casey Mulligan: Yeah, I think the Warp policy, which came from that report, is very impressive. Now, we’ve got to get a vaccine to in hindsight say it was worth it, but it was a very, very good bet. Arguably, the expected return on that Warp Speed program is 50,000% or something like that. It was—and it follows great from the economics that we had carefully worked out.
Bob Zadek: Casey Mulligan has written You’re Hired: Untold Successes and Failures of a Populist President. It is a must-read for anybody who is interested in politics, interested in economics, wants to understand how our country really works, and wants first-hand observations about many of the people we see on the news every evening in politics. It is a must-read, especially before an election. What you will learn in the book is so different than what you learn from mainstream media. You cannot participate in the political process without reading this book. It is compelling and riveting. Casey, thank you so much for sharing your insights. I wish that we had more time. Thank you for your service in the Council of Economic Advisers and for making our country a bit greater again. Thank you so much to Casey, thank you to my listeners. I’ll be back again next Sunday. Have a good balance of the weekend.