Live from Music Row, Monday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed Action Insitute Fellow and author of the new book, The New American Economy, Samuel Gregg to the newsmaker line to talk about his book and how to improve the American economy.
Leahy: On the newsmaker line, our very good friend Samuel Gregg. He’s a fellow with the Action Institute up in Grand Rapids, Michigan. He’s got a book out. The Next American Economy: Nation, State and Markets in an Uncertain World.
Samuel, you may recall, I think you wrote a book about the Catholic view of the Tea Party movement I think back in 2013. You and I chatted about that extensively. I wrote a very good review of that book. It was an excellent book. And now you’ve come back and you followed up with The Next American Economy. Tell me the main premise of your book. Samuel Gregg.
Gregg: Hi. The basic premise of the book, The Next American Economy is that America faces a pretty serious choice right now. We can either keep drifting in the direction of what I call a type of state capitalism whereby we have the federal government more and more involved beyond this already massive involvement in the American economy, or we can go back to what we’re supposed to be, which is a free market economy that’s characterized by open and free competition, by entrepreneurship and a dynamic approach towards trade.
Because it’s very clear, if you look at all the numbers, that we’re becoming a society in which our economy is increasingly regulated, in which government is increasingly becoming the center of economic life, in which business leaders are looking to the government to basically solve any number of economic problems.
And we’re drifting really very much towards what you might call a type of soft European social democracy. And one of the things I say is that it doesn’t have to be the case. We don’t have to be going in this direction. We can make concrete choices in favor of some of these things I just mentioned would take us back to what I think America is supposed to be.
We’re not meant to be a soft European social democracy, and we can see the evidence of why those types of economic systems don’t work. I think that’s basically the thesis of the book. And in 300 pages, I basically explain how we got here and how we ended up in this mess. The second half of the book is explaining how we get out of it.
Leahy: This is all great. I think we agree with that. Also, our all-star panelist Crom Carmichael has a question for you. Samuel.
Carmichael: Yes. Can you give us some hints on what you say in the first half of the book and how we got this way? I’m interested in how you think that happened.
Gregg: (Sighs) There have always been pressures in the United States going right back to the founding from different interest groups for the government to be much more involved. So there’s a long tradition of that. But it really starts to happen, I think, with the progressive movement at the end of the 19th century, which was very much about increasing government involvement in every aspect of life.
It takes off in a major way with the New Deal. Right? The New Deal is a really massive intervention on a systematic scale into the economy. And then I think the Great Society programs of the 1960s really made the government the center of economic life for entire communities in the United States.
And since then, we’ve been drifting more and more in that direction because once you set these types of programs up, they’re very difficult to dismantle and they have a momentum of their own. They shift things in a particular direction very, very quickly, and sometimes we don’t even notice what’s happening. So those are some of the big things that have happened.
Leahy: Samuel I noticed from your accent that you’re probably not originally from Tennessee. (Gregg chuckles) Sounds like you might be originally from someplace near London. Do I have that right?
Gregg: (Chuckles) Actually, I’m Australian by birth. I did live in England for a very long time. What’s interesting is that I think in many respects the American economy, resembles some of those of Europe in a way that we’re perhaps unwilling to fully recognize.
Leahy: You have a Ph.D. from Oxford and a master’s in political philosophy from Melbourne.
Gregg: I do.
Leahy: When did you come to the states?
Gregg: I came to the United States in 2001, and it was remarkably different from the way it is now. I’ve lived in America for 21 years. And I think it’s fair to say that I came at the end of a period of time in which market forces and market liberalization were carried on from the Reagan period, which was still very much the economic trend.
But I think over the past 20 years, we’ve slowly drifted down the path of the government doing more and more in our economy. And one of the things I try to do in my book, The Next American Economy, is to explain sort of the trends that have led to this. But I also try and end with a note of optimism to show how we can get out of this situation.
Leahy: Let’s talk about that because I need some optimism this morning. So give me some optimism, Samuel.
Gregg: (Chuckles) There’s a number of things we can do. One is we need a revival of entrepreneurship and we need to think about the things that stimulate entrepreneurship and the things that inhibit entrepreneurship.
Leahy: That’s all true, but let’s be specific about it, right? Because two problems that I see as an entrepreneur myself in the media space is that availability of capital is a problem, and then all of these massive regulations are crushing us. Crom wants to tell you something.
Carmichael: If you could wave a magic wand and change three things, and I’m going to confine it to federal programs or federal law or something that’s nationwide, what three things would you change that you think would have the long-term positive effects that you would like to see?
Gregg: First thing would be in fact, it was just mentioned before you asked that question. One is we have to really rethink the way that we do capital in the United States. It’s very hard for entrepreneurs to get access to capital.
Even though we are the best in the world of entrepreneurship, it’s incredibly difficult and getting more difficult for people to get capital. One of the reasons is that it’s so regulated. That’s the problem. It’s so regulated.
Carmichael: I’m asking you for three things. I understand you’re identifying three problems. I’m looking for three very specific things. If you could wave a magic wand and accomplish it, what would those three things be?
Gregg: Let me give you one very concrete example. The Federal Code of Regulations in the United States is more than 100,000 pages long. If we got that back to less than 10,000, which is what it was at the end of the second World War, that would be a major step forward.
I think the second thing that we desperately need to do is to magnify competition. And that means I think, reducing the role of legislators and regulatory agencies in the way that they’re basically trying to manage the economy. So that means we look at things like the administrative state and we look at all these organizations in Washington D.C. like the Department of Commerce, et cetera like the import-export bank.
And we take a hard look and say do these contribute to more entrepreneurship and competition or do they actively impede it? And I think if I was to be waving a magic wand, those are some of the things I would make disappear and would make a major difference.
Listen to today’s show highlights, including this interview:
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Tune in weekdays from 5:00 – 8:00 a.m. to The Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.
Photo “Samuel Gregg” by Action Institute. Photo “The New American Economy” by Amazon. Background Photo “U.S. Capitol” by Ramaz Bluashvili.
