Speaker unverified: belief

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…doses. Right? It wasn’t going to be only available to the richest people at the beginning. We were going to try to give it to everybody, sorted by need to the best that we could and it would be free. Now, you’re not going to do that with everything, right? There are places for the price signal to actually function and where it can function to then bring on more supply later. And there’s all the econ 101 stuff that we all know, but there are a lot of places where redistribution and supply increases go hand in hand. Another good example, I’ve done over the course of my career, a huge amount of work on health insurance reform and universal healthcare. And let’s say you got Bernie Sanders had become president in 2016 and had swept in a huge Democratic majority and they passed Bernie’s single-payer-for-all plan, which was by the way, much more expansive than any existing single payer plan in the world. It covered much more than Canada’s or the UK’s or anybody else. If you had done that, what you would have needed immediately was a huge supply increase in healthcare because you would have had a huge demand increase. What happens if you make healthcare free? People are going to use more of it. If you make insurance much more widespread, people are going to go to the doctor more often. Well, if you don’t have enough doctors, you don’t have enough nurses, you don’t have enough surgeons, you need more. We constrict the supply of all those things using residency rules, using nursing rules, immigration rules, who can practice as a nurse practitioner? What can a nurse practitioner actually do? You have to be attentive to the supply side even if what you’re doing is aggressive redistribution. Now, there are places where these things don’t conflict, like I’d like to see a much expanded child tax credit, and I don’t think that has a big supply side implication one way or the other. But on a lot of the things we’re talking about, even if what you want to do, and it is often what we want to do, to do more redistribution, if you’re redistributing some kind of thing that gives you access to a good or a service, you need to expand the good or the service. We do rental vouchers, giving people rental vouchers in the San Francisco housing market, unless you build more housing, just creates something that our friends at the Niskanen Center call cost disease socialism, where you are increasing demand for good at which you’ve constricted supply. If you do that, you’re just going to drive the price up. To some degree, that’s at least part of the story of higher education. We give people Pell Grants, we give people all kinds of subsidies for higher ed, but we have not done nearly enough to increase supply or regulate the way in which colleges just then pocket part of that money. And so they’re building these fancy gyms and they’re competing with each other, but they’re not actually increasing the supply of slots. It’s certainly not the level we want them to. rt of that money. And so they’re building these fancy gyms and they’re competing with each other, but they’re not actually increasing the supply of slots. It’s certainly not the level we want them to. So there’s a lot here where I think it scrambles traditional categories. You cannot do effective redistribution in ways that we would like to see them done, and many people on the left would like to see them done if you’re not taking supply of the thing that you’re subsidizing seriously. If you think about it from a first principle standpoint, what if what you wanted to do was to bring American poverty as close to 0.0% as you possibly could? You got a bunch of smart people into a room. You said, “What can we possibly do?” In my opinion, the answer would include a lot of what are sometimes called demand-side policies, a lot of redistribution of income. The child tax credit, I think would be essential. Expanding the earned income tax credit would be essential. Expanding cash welfare might be essential. Certainly, redistributing income from the rich to the poor would be essential. These are demand-side policies, they’re tax and spending policies. But if you only approach this subject through the demand side, you will utterly and categorically fail. Because like we said, housing is the biggest part of a typical family’s budget. And if your only policy on housing is to increase housing vouchers without increasing the supply of housing, macroeconomically speaking, there’s only one direction for housing prices to go, and it’s straight up to the moon. You’re not actually bringing housing prices down. You’re just subsidizing a constricted market, and therefore creating enormous inflation. You have to solve some of these problems on the supply side.And one of the conceptual scoops that Ezra and I are trying to work out for the left, for liberals in America is to get people to ask the question, “How do we solve this problem with supply? Housing is a crisis. How do we solve it with supply? Energy is a crisis. How do we solve it with supply? Medical innovation, scientific discovery is a massively interesting phenomenon. We don’t even understand how it exists, really. How do great discoveries actually happen? Is there a supply-side policy for that as well?” That’s the question we’re asking over and over in the book. So at the end of the day, demand-side progressivism and what Ezra calls supply-side progressivism really are peanut butter and chocolate. They are two flavors that go beautifully well together, but here’s the problem that I think your question was putting your finger on. I think a lot of Americans don’t believe that these things work together because what they see is a liberalism that just taxes and spends and Americans don’t see the benefits of that spending. The Biden administration authorized $42 billion to build rural broadband in America. Practically, none of it was built. Authorized $7.5 billion to build EV charger stations in America. Practically, none of it was built. How many tens of billions of dollars have been authorized to build high-speed rail in California? Practically, none of it exists. You can’t ride it. ions in America. Practically, none of it was built. How many tens of billions of dollars have been authorized to build high-speed rail in California? Practically, none of it exists. You can’t ride it. So the problem is when the reputation of a tax and spend liberal makes contact with the fact that people don’t see the results in the physical world, like where’s my money going? I have in my head something like this idea of what I call Equinox liberalism, which is to say there’s some forms of liberalism where it’s very expensive, but you see what you’re getting. Like when you spend $270 to go to Equinox for the month, right? It’s a really expensive gym bill, but people who go there seem to love it. They’re like, “The equipment is always free, everything is clean. I go into the locker room, there’s a bunch of Kiehl’s lotions to put on my face after I shower. I am getting exactly what I’m paying for. Yes, I’ll pay out the nose for a gym because I love seeing that money going to work.” And in places like Sweden, Denmark, citizens seem very happy. They’re paying much higher taxes than people are in America, but they’re seeing where the money’s going to work. The problem with the liberalism that blocks rather than builds is that people don’t see the money going to work. All they see are the dollar signs being spent by government, and then they walk out of their house and they see collapsing infrastructure and they see crime and they see housing prices going to the moon. And so they think, “Wait, this social contract is broken down. You’re asking for Equinox prices, but you’re giving me a shit-ass gym and that’s unfair.” And so what we’re trying to say is… In a very serious way because I’m not trying to be flippant about gyms. In a very serious way, what we’re trying to say is a part of this problem is that you Democrats have looked so hard at the demand side of the ledger that you’ve forgotten how powerful the levers are on the supply side. And if we can just pull those levers on housing in particular, we can bring down the cost of living and people might even support the tax and spend model more because they’ll feel like they’re participating in Equinox liberalism and not its opposite.…

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