Ep. 575: Tyler Cowen Interview with Michael Covel on Trend Following Radio

This is Trend Following Radio, where great thinking comes alive. Nobel Prize winners, legendary traders, bestselling authors, and the pros that know what drive us irrational human beings. I am your host, Michael Covell. Not filtered, raw, honest. That's my passion. Before I jump into my guest today, a quick reminder. Now out in audiobook, my newest edition of Trend Following. Trend Following: How to Make a Fortune in Bull, Bear, and Black Swan Markets. Now out in audiobook, 34+ hours. Get it before they run out. Can they run out today? Can they run out in 2017? I think they can run out, so you better buy it now before they run out. My guest today is Tyler Cowen. He is an American economist. He happens to be an American economist at my alma mater, George Mason University. George Mason University, that small? Well, it's not small these days, but that under-the-radar university that got to the Final Four. Gosh, was that a decade ago? Hey, still, that's a big-time deal, man. When you get to the Final Four from a school like George Mason, that sets a mark. But it's not just basketball that sets George Mason apart. It's its economics department.— distinctly libertarian, for lack of a better term. My guest today, Tyler Cowen, is one of the leaders. His blog, Marginal Revolution, if you don't read it, you probably have a mental defect, I would say. Like, if you don't read Marginal Revolution, you have a mental defect. There you go. That's the best I can offer. You've got a problem if you don't read Marginal Revolution. Today in the show, we dive into Tyler's newest book, The Complacent Class: The Self-Defeating Quest for the American Dream. Boy, has he nailed that. I'm just jealous of the idea. Complacency. That's it. That's where America is today. It's complacent. And Tyler takes that big picture in directions you probably don't expect. Again, I'm fortunate to have such a cool university with such a cool economics department. And many of them have appeared on this podcast. So please, I hope you enjoy this conversation for the second time on this show, Tyler Cowen. So Tyler, the last 5 years of my life I've spent mostly in Asia, a ton of that time in Saigon, Vietnam, one of these one of these really crazy entrepreneurial, on fire, gangbusters economy places. And as I go through your work, as I read your work, as I read The Complacent Class, I sort of feel like I've been chasing a feeling for 5 years, trying to find something. I mean, I've run my life and do all that kind of fun stuff, but trying to find this feeling to figure something out. And I think you've done a fantastic job, at least for me, I'm sure for some other people, of taking my feeling about what I think is missing in America and putting it to print, putting it in word format. And I just think you've done a great job with this. And we're going to tear apart this newest work of yours, The Complacent Class. Give me some genesis, though. How did this begin for you? I know sometimes for you, a book can get from idea to finish pretty quick. So how did this hit for you?

I've been thinking about these ideas since the financial crisis. As we all know, recovery after the financial crisis was slow, and everyone has their own explanation for who or what was the villain. And I started wondering whether or not these might be deep structural forces, that we were simply doomed to be less dynamic, less innovative in general, with or without a financial crisis. And maybe in a sense, the slow recovery helped cause the financial crisis rather than vice versa. And then I started traveling to China quite a bit, somewhat like your adventures in Vietnam. And I saw what a dynamic, greater risk-taking society looks like, which by the way, can be quite unpleasant to live in. I'm not saying we should be like that, but life in America has now become so comfortable for so many people, so risk-free. But I thought it was important for someone to point out there's actually a great danger in all of this. And that, in a nutshell, is the genesis of the book.

Trying to eliminate all risk. As a species, we have just completely dropped the ball. I mean, eliminating risk— if there's no risk, what's left?

It's about the riskiest thing you can do to try to eliminate all risk. And for a lot of individuals in the short run, it works well. Move to the right neighborhood, get a very safe job. Right? People do these things for good reasons. We're not stupid. We're not evil. But when everyone does it, if too many people succeed in limiting risk, you slow down your own dynamism. And at some point, your own society can't even deliver the goods anymore. It can't deliver opportunity. It can't deliver upward mobility for people who are less fortunate.

There's a great— early on in this book, there's something that really hits with me. And I've been observing it. Maybe I've been afraid to say it. Maybe I've been afraid to admit that's what I'm witnessing. But you talk about there's— and this is a generalized statement, but I think it's quite applicable— no sense of urgency. It's gone.

That's correct. It's very interesting, you know, even in politics, you look right now at how many people are upset at President Trump. Now, to put aside what should be the correct view here. But in the 1960s or early '70s, there would be massive demonstrations every weekend about this. Well, impeach Trump or do something about this. Now there's social media that actually sucks away some of the energy. And life just goes on. So even situations that a fair number of people regard as outrageous, they're simply tolerated. And we've lost the ability to imagine a future very different from the present we have.

Another thing you say that I really love, and I guess this speaks to your travels to China, my Asian travels, the restlessness has been drained from Americans. I mean, I know somebody's gonna be sitting out there right now and saying, "Mike, uh, that's such a blanket statement. I mean, Tyler, how can you say that?" But I think that's a really fair statement for modern America. The restlessness has surely been drained, and I'm going to bring that up with you going into some detail about job switching, moving. I mean, restlessness is— it's just an amazing— it seems so simple to put on print, but you wrote it down. I just love that you noted that.

Well, thank you. We move across state lines at much lower rates. We switch jobs at lower rates. There's less corporate churn than there used to be. Most measures of innovation investment are down or static. I don't think we've all lost restlessness. I think immigrants in particular are very often non-complacent. I think some of Silicon Valley has been wonderful, you know, Jeff Bezos or Mark Zuckerberg or Elon Musk. Maybe we overrate how much of a difference they've made for the whole economy, but still what they've done, you know, I think is great and admirable, and I hope more people follow in their footsteps. But overall, we're more inclined to play it safe.

I love talking, especially when I land at Washington Dulles, I love talking to the taxi drivers. They're almost all immigrants, and when you let them know— they know you're an American typically, but when you let them know that you've been spending a lot of time outside the United States, the conversation just opens up in ways that you can never expect. And then you feel, whereas you're writing about Americans not taking the risk, in the simple act of taxi driving, you can feel the risk-taking, you can feel the desire to get ahead.

If you switch countries, you know you're probably giving up a language, giving up a culture, giving up a lot of customs. It's so hard, so difficult. The payoff can be quite long-term. You're accustomed to the idea that everything's based in trade-offs and opportunity cost. Or as we have this notion, while our life will be a kind of smooth glide, we'll watch our cities slowly get nicer. There'll be better wine bars, you know, a finer selection of foods and cheeses for us to select from. The idea that we can build a society full of safe spaces where it's sort of no one is really harmed. I mean, they're noble ideals. It's not that I want people to be harmed, but I think there's something misguided about so much focus being on that and not enough about really creating more opportunity, more wealth for the next generation.

When you go and you travel to China, I've seen you make this statement that every time you go back, that if there was a problem or there was some advance that needed to be achieved for the greater society, they tackle it.

That's correct.

So much of America is not that today. Now, I will give props to my alma mater, George Mason, and to Fairfax City, which looks like a million bucks these days. They've done a hell of a job. But speak to the greater issue here where we're not improving, whether it's really infrastructure. Infrastructure in America is just taking a real hit.

You know, I take the train to New York City fairly often, and that trip essentially has not improved since the 1970s. In some slight ways, it may be a bit worse. Flying to different parts of the country in many ways is worse. And I don't just mean TSA. I mean, that may be required or understandable. But the overall experience, it's cheaper, but you don't get there more quickly. You get there somewhat more slowly. Traffic congestion is worse. And again, people just take this. The idea that the world's most successful nation cannot solve traffic congestion as a problem is now an underlying assumption. And I think that's insane, but no one really cares. They care when they're stuck in the traffic, at the voting booth. When it comes to politics, they don't do anything to fix it.

Some people might be hearing the beginning of this conversation, maybe they hear the title of your book and they might think that this is a pessimistic view. It's really not. What I find what you've done is very objective in kind of laying out these situations, but the overall optimistic message is clear there. For example, You say, and this, I see this all the time, people can't imagine something better. How can we as Americans not imagine something better? If the average American went to Singapore right now and sat down, you know, across in the Marina Bay Sands.

Yes.

If your jaw doesn't drop and say, wow.

It might does. Yeah.

Right.

It's time for Singapore. It still does.

Yeah. And if your jaw doesn't drop, I mean, there's something wrong with you. And I think, why does America not have Singapores everywhere?

Well, I look at it this way. I don't think the people of any one country are better or worse than the people of any other country. But what a lot of Asia has experienced is that risk is coming for you whether you like it or not. So you need to do something proactive to forestall risk. And you need to take some risks that you have greater control of precisely because your life is in some way tough. And Americans have lost that in part because our lives are so safe and comfortable, which is a nice thing. But there's a cyclicality to this. I think we will only rediscover dynamism and risk-taking when with our current methods, we basically cannot pay the bills anymore, cannot meet all of our future commitments. Then risk will be coming for us and we will rediscover the great American dynamism. I don't think it's gone forever. It's in our cultural DNA. But that transition will be bumpy and tough and painful. And I think we're going through it right now.

But Tyler, I look at the equity indices and all of the retirement accounts, they're stuffed to the gills with all-time highs. What kind of pessimism are you bringing to the table?

Well, in the long run, I'm not a pessimist, but if you look at corporate America, I do think there are significant reasons for concern. Once you get past the tech sector, most jobs are in the service sector. Measured productivity there is probably about zero. And that's becoming more and more of our economy. Our manufacturing productivity, that's okay, could be better, but it's okay. You look at healthcare, you look at education, you look at government provision, In some of these instances, we're even moving backwards. So you have these super companies which may have some market or monopoly power. I don't begrudge them that, but they are successful and often their leaders are not complacent. But too much of our economy is not moving forward in the same way.

Yeah, you could call that the Amazon, Facebook, Google company.

Exactly. And more power to them. But they are not most of our economy and their share prices are high. Again, that's wonderful, but middle-class wages are not moving upwards in proportion. We all know that now.

Let me dig into something that will give people some more meat on the bones on your perspective. In your work, The Complacent Class, you divide America up into— and I'm paraphrasing a little bit here— into kind of 3 sectors. You've got the privileged class, the super wealthy, maybe you'll define it differently, but those that dig in kind of maybe professional, folks, dentists, maybe engineers, and those who get stuck at the bottom, so to speak. What's interesting about your work is that you're pointing out that we're not migrating across these three sectors as much. That upward mobility has— people have seemingly— and again, we're back to the word complacent— people are comfortable I hate to say this, but people seem to be comfortable in their American caste.

Yes, immigrants aside again, but even lower income people, they spend more time living at home. They're less willing or interested in striking out on their own. They may face higher student debt, weaker opportunities. Again, it's not that there's something morally wrong with them, but they've grown up in a world where there's less opportunity and that shapes how they view their lives. You see that in the aggregate numbers. They start businesses at lower rates. That's all a problem.

Give me some perspective. You take off on a flight to Beijing or some other city.

Monday. This Monday. There you go.

And you're going to Beijing?

Well, I'm starting there, but I'm going to Shenyang almost immediately and then to Dalian for World Economic Forum.

So we're gonna— you're gonna feel that dynamism almost immediately. Try and paint a picture for those in America that have not yet done that journey and Look, let's face it, I'm guessing 95, 90% of, 99% of Americans maybe have not done that China journey yet. Try and paint a picture of that feeling that you have when you hit the ground. There is a certain energy that's almost intoxicating, isn't it?

Just to walk around, that's right, intoxicating is exactly the right word. Every moment there for me is in some way joyful and you feel like the forward surge of human progress. But that said, life in China, it's tougher.. It's more stressful. It's far more polluted. The healthcare system is highly unreliable. So it's a mixed bag. You know, we have sought out this great safety because it is so pleasant. So I don't want people to think, well, China is this paradise and we ought to copy them. But at the margin, can we learn something from China? Well, look at the performance of Chinese migrants here in the United States. I think the answer is clearly we can.

You mentioned a moment ago never leaving the house, and sometimes that can be metaphorical, but in 2017, never leaving the house can be a physical, sociological problem, a psychological problem. I mean, our society of never leaving the house is— look, we can have so much delivered and brought into us, delivered either via the, you know, the internet or FedEx or UPS driver. But that is one of those, you know, as you say, progress has got us to that point, but it's kind of a seductress that's taken us, taken our eye off the ball, so to speak, and that kind of Marco Polo, I'm on an adventure, is just dissipated. It's gone.

That's right. In this sense, some of the tech innovations are not as dynamic as they look. Like, it sounds great. Oh, Netflix, everything gets piped in, you know, streaming. I'm not sure it's a positive for our overall lives, even though it's a convenience. There's something about getting out and mixing with other people and coming across different things, even if it doesn't always please you. I think it's better for our country in general, and we're doing less of it. There's more different forms of couch potato. The returns to leisure have gone way up relative to the returns to being productive at work. And this, I think, is part of the slowdown.

Let me take that off to Elon Musk for a moment, because you mentioned Netflix. And the idea— I mean, look, we've all seen— look, there used to be a Blockbuster. Okay, great. We took Blockbuster, we piped it into the house. That's something we could all imagine. It's not— it's innovative, but it's not, you know, it's not earth-shattering. But you— and I— correct me if I'm wrong as I paraphrase here, but you mentioned Elon Musk. And look, he's a great innovator, but is Musk, from your perspective, this true wunderkind innovator, kind of like a Claude Shannon, for example, or is Musk to some degree a great PR spokesman, a great PR person?

Well, I tend to think, satellites aside, I don't think he will succeed in most of his ventures. So he is fighting against his time. He's saying, "I can be an innovator and do things in the world of atoms and not just in the world of bits and bytes." But he takes on very precarious financial positions. He promises things he can't deliver. He has these highly unrealistic plans to make electric cars much cheaper and much cleaner and to deliver them at prices and for people to buy them at price points I don't think will be possible. Again, I admire this, but even if he succeeds, his public image is of someone who's almost like not human or superhuman. He's not someone people aspire to copy. He's seen as some complete outlier who is not at all what most of the rest of us are like. And that's what I think is most significant about Musk.

Connect those dots for me. You're still on a campus quite a bit. You're around millennials quite a bit.

Sure.

Millennials are growing up with the idea that Elon Musk is a superhero essentially. And in the Iron Man films essentially connect that dots. This is Elon Musk. And I don't know if it's, I can be like him or not, but open this up for the audience a little bit. I mean, I'm in my late 40s, so yes, it's fun to pick on millennials, but I've happened to have been around a lot of 20-somethings in the last 5 years. And it's frustrating, to say the least. Give me a perspective as a professor, you're around young people right now, and look, they didn't necessarily ask for the hand that's been dealt to them. I mean, they—

Right.

You know, the dodgeball thing where, you know, dodgeball was taken away them as kids and what, what's left now in their, their 20s. Go ahead, for the audience, as objectively as you can and paint a picture based on your experience of the millennial generation as it stands today.

Well, I think they're a highly tolerant, highly benevolent group of people who are very nice and genuinely concerned about making the world a better place, and that is admirable. Uh, what might be their possible defects, I would mostly blame on the baby boomers who, you know, often brought them up. Here's a group of people, they were not allowed to just go outside and play. They had helicopter parents. They had so many things scheduled for them. They were given much more homework than earlier generations, which I regard as a negative. Uh, the males typically grew up in school systems that probably, if anything, were designed more to make the females in those systems happier. That is, rambunctiousness was discouraged, being physical was discouraged, in many good ways too, but there's a kind of frustration or passivity that sets in in the males. And then they grow up into slow job markets, possibly high debt, slower opportunities. The great victories they see are not like, you know, putting a man on the moon. It's, you know, more social tolerance, again, a wonderful development from my point of view. But I don't feel they have a deep sense of a utopian vision of the future or how America could now go and do something great. Their vision of improvement seems to be something akin to gentrification and having a nice set of friends and having a job you find meaning in. But I think that's actually not enough.

As we talk about millennials, and I've seen you say this in your work and you remind me of myself in this way, is that you can still imagine pre-internet, and now we're post-internet. Millennials don't have that pre-internet feeling. If you can't find it on the internet, they think it doesn't exist.

That's often the case. I feel quite blessed, actually, that I had a lot of years in pre-internet society, but also a lot of years in post-internet society. And you and I, we're in a sense the last generation that will be able to say that, I guess, ever. We're this kind of special, you know, dying breed. I think there's a— internet overall is a wonderful thing, but there's in some ways a sameness to its diversity. It encourages some kinds of passivity, some kinds of polarization, social media as a substitute for doing things in real space. It's a mixed blessing. I think we overrate what it has done for us so far. Maybe we're underrating what it will do for us in a more distant future.

Let me take you back in time. One of my favorite books from back in the day, I believe my father gave it to me, Democracy in America. So Alexis de Tocqueville, you bring him up in this modern work about the complacent class. You reach back to a young Frenchman who wrote these very forward-looking statements about the States, about the United States. Many, many, many years ago. He was able to see, you know, saw all that restlessness that we had, knew it was a good thing, but he really kind of saw the future on us too, didn't he?

Very much so. And reading and studying Tocqueville was another of the inspirations for my own book. He feared we would settle into a kind of mediocrity and conformity precisely because our lives would be pleasant. And he thought the United States was headed for this. And in some key regards, it's turned out he was right. And he's writing here in the first part of the 19th century.

It's amazing the forward thinking that he would— that he could see forward so far ahead to where we would go.

That's right.

Yeah.

He saw the rise of Russia, many, many different things. He's a remarkable thinker, one of the smartest people to read.

When I talk to you, I know I can jump around because if anyone goes to your Twitter feed and they see your blog, I mean, look, you are widely read. You're in a lot of different areas. So I feel like I can jump on you and it's fine. Bringing it back to Asia for a moment, as I think about democracy, we talk about democracy in America, is democracy dead today?

I don't think democracy's dead at all. We have elections. I wish participation were higher, but the votes are counted honestly. There's winners and there's losers. I think we're too polarized. I don't think democracy itself solves your problems. Wonderful medium to have for other ways of solving your problems. And we're so focused on the medium, like, "Oh, we're democratic," we're forgetting that it's just a medium. The actual solving of the problems, like say improving infrastructure, it's just not getting done. And then we pat ourselves on the back like, "Oh, we're democratic, China's not." But the funny thing is the government of China, the Communist Party, my goodness, in a lot of key ways they are more responsive to what their public wants than our American government is. And I think that's kind of disgraceful. And it's our fault.

You know, look, from Beijing to Saigon, maybe you could add Tokyo in there, down to Bangkok, down to KL, down to Singapore. I would describe all of the leadership of these particular countries as benevolent dictators.

They're benevolent to varying degrees, I would say.

But when it comes to coming— let's, for example, Of course, there's going to be human rights issues that we're not going to go into all today. But the idea of getting things done on the infrastructure side, for example, they do seem to be doing a really good job for their people. And they're not democracies, really. I mean, I don't know what they're calling Bangkok these days, but I'm not really sure it's a democracy anymore.

They are constrained by public opinion. And precisely because they're not democratic, they feel they need to deliver some kind of result to be considered legitimate. And here, precisely because people do not expect significant positive forward movement and change, governments get away with not doing much in the way of results. And we're suffering under that. We're investing less in science. We have a less ambitious country. Our infrastructure is deteriorating, in many ways going backwards. Obvious issues like cyber-vulnerability, we just sit on. We're waiting for the catastrophe to hit us. Like we're waiting for the next 9/11 and we're stuck.

That stuck part, there's something in your work, there must be a backstory here because you are really, you are really, really strong on your view of the Zoloft, Prozac, OxyContin nation. You are really, really strong that these things, while they seem to be kind of accepted, we all know it's a problem, You're putting those— you're putting that particular pharmaceutical drug problem really high on your list of things that need to change for us to get our dynamism back.

Well, I see it as an issue. Again, I don't intend to give medical advice to any individual. I recognize such drugs probably help a great number of people, but still sociologically at the macro level, I think there is something wrong with a society that medicates itself. As much as we do. When it comes to illegal drugs, the ones we're choosing, they're actually less dynamic than the illegal drugs of the previous generation. It used to be cocaine. Now it's marijuana or heroin. They're even complacent sleep-inducing drugs. So I think there is something wrong where, again, for a lot of individuals, it may make sense to say, take an antidepressant medication. Uh, but overall, uh, we may be producing a less creative, less neurotic society.

Well, as you point out, we're in a situation now where there's less creation. Why have people stopped creating? I mean, to some degree, if you're satiated and you're comfortable, you're kind of zombied out. It's got to be playing a role as to why creativity has dropped.

Yes, you know, I wouldn't say people have stopped, but I think a lot of our creativity is more complacent. So it used to be, say, movies were the big thing. Every movie was something new and different, and you would go out and you would mingle with other people. Now it's serial TV shows, and a lot of Some of them are very good, but you watch them, it's easy just to call it up on your screen. You're in the second or third year of a series. Not all the episodes are great. You watch it a little sluggishly. You feel locked in. I think it's a very different mentality than that of movies or even music. Music used to be more culturally central. It had a dynamic feel. You would get up and dance. Maybe you would go out and protest. Today, food is more important. Food makes you a little sleepy, or you want to rest after eating, or you drink some wine with your meal. It's a kind of not offensive, least common denominator thing to talk about compared, say, to music. And I think, yes, we're still creative, but we're creative in what are overall less dynamic ways.

I'm glad you bring up music. I was going to go there. And I think what's really important about music, about how you discuss it, is a concept you describe as matching. Back in the day, one might pick up a vinyl album or a CD. You might not necessarily know what all the songs would be. You might not necessarily know the artist. There was a certain amount of experimentation. Try it out, maybe you didn't like it. Now that's gone. Now there's this concept of matching that goes far beyond music. Why don't you explain matching? Because to some degree, while we think we might be In our mind, we think we're adventuresome, but there's a lot of MBA types out there that are programming their companies to make sure that we never have anything that we don't like.

Today, you really never need to buy music that you haven't already heard and decided that you like. In some ways, that stifles innovation. It's a great world for the listener. You don't waste much money. And if you want to hear Beethoven or the Beatles or indeed like anything, gamelan music from Bali, it's right there on Spotify or YouTube or iTunes or somewhere, either free or almost free. But we're spending much less time and also much less attention on contemporary music that's heard innovation. I don't think there's anything today like a Beatles or a Led Zeppelin or Rolling Stones, and no one seems to mind this. We have this broad melange of diverse music, this great menu before us, good for listeners overall. I don't think it's so wonderful for society.

Speak to matching though beyond music. Yeah, dating and marriage, for example.

Several generations ago, you had men marrying women who either they went to high school with or they lived near, or maybe they would meet them in the job. The man would have an executive position, the woman could even be, you know, a secretary. That was not a good deal for women overall, but it did mean that marrying up was a method of mobility. It led to more mixing. And now you have highly educated people much better able to meet other highly educated wealthy people and fall in love with them. Uh, expected bequests are much higher. This limits mobility overall. You get these kind of super clans where all the kids go to great schools. They inherit a few million dollars or maybe much more. Life for them is always safe. I don't feel it's good for the lower income people. I'm not even sure it's good for the highest income people.

Safety, whether you're poor or rich, is not— that gets back to the beginning of our conversation on being risk-averse.

That's correct. So again, it's not that everyone is worse off. Many people make happier matches. For individuals who are gay, the internet is just a godsend to meet other gay people. It is much easier. That's been a, you know, a significant advance. I met my wife online through Match.com, but nonetheless, at the social level, it's a part of how America has been changing.

That matching also extends to every time we log into Amazon, we're being matched to something they think is going to be the highest probability purchase for us at that moment in time.

And often they're right, but the choice of browsing in a neighborhood bookstore, that's something we've lost.

You've traveled to China a lot. I'm bringing it back to China for a moment. Jack Ma— we talked about Elon Musk. So Jack Ma, I don't know if they'd say exactly he's the Chinese version of Elon Musk. I think Jack might win in the long run when it comes to personal net worth. What's your view on Jack Ma? Is it kind of a Chinese Jeff Bezos?

Maybe. But, you know, Tencent is a bigger deal now than Alibaba, and I think a lot of Chinese see Jack Ma as having peaked. Peaked at a very, very high level. But to me, the real heroes of China are the infrastructure people and the people who figured out how you could grow at almost 10% for what was almost a 30-year period and actually kind of make most of it work. And that was very much life on the ground, infrastructure, apartments building, construction, food supply networks, kind of growing in tandem so that you had this movement of literally hundreds of millions of people, the greatest mass migration in human history, I wouldn't say it had no problems, but it's remarkable how smoothly it's come off and how many, like, micro heroes have been behind that process. Jack Ma is just one of them.

Do you share the belief that in terms of lifting people out of poverty, nobody beats the Chinese since 1979?

Nobody beats them or even comes close, correct.

It is just absolutely amazing. And for those listening, you know, look, sometimes you got to find a real reason to go somewhere, but to go to Shanghai, China to go to the financial district on the other side of the river and just to look, and you just are— it's a complete marvel. And then if you take the bullet train from a place like Shanghai to Beijing, it's just the whole way, it's construction. And I go back to me as a teenager in Northern Virginia in the 1980s. One of the things I love so much then was the feeling of this dynamism, the feeling of constant construction and growth in movement. And you know, I come back to the area now and I feel you— it's again right back when I'm looking at the COVID of your book, I'm like, oh my gosh, how do we get it back?

Yeah. And don't forget the micro miracles of China. So in the 1960s, you have millions of people starving, and now China has maybe the world's best food. Like, how'd they do that? That's remarkable. It's less visible than the high-speed rail, uh, but it's also a very significant achievement.

So let me go into, as we wind down, a couple really big concepts that could be on the outs, at the, on the outside looking in, a little scary. The Great Reset. As we march forward with all of our success on paper in the States, where there is less movement among the cast, people aren't moving from their house, people aren't moving from their jobs, Everything looks great. The stock market is at all-time highs. But you— and I feel myself there as well, too. And there's plenty of other thinkers that say usually these types of things, we are awoken suddenly, just like we were awoken suddenly in 2007, '08, '09. And usually things change. And right now, oh my gosh, I just keep looking at the COVID Complacent. Could we ever be more complacent looking at US stocks right now and the current situation? Is there gonna be a Great Reset from your perspective, and how would you see that unfolding?

I think the Great Reset is going on now. Part of it is simply that we are aging pretty rapidly, and we have actually no plans as to how to pay for this. And we will hit the wall on that at some point. Not next year or the year after, but probably within 15 years. But I think the first major sign of the Great Reset has simply been this country walking away from its international alliances and obligations. And deciding it doesn't really care about them very much. This to me is a major negative and it will make the world a more dangerous place. I'm not sure that all American voters agree, but I don't see them actually being very outraged or doing much about it. And the quality of our governance, in my opinion, is plummeting. And that's, you know, the first strike.

Well, you do make the case chaos will come back. And at some point in the future, we might, as you and I spend this conversation talking about complacency and possibly ways to get around it and get more towards dynamism, you point out in the future that when chaos really hits and the wild times are back, we might all really wish for complacency again.

Oh, absolutely. You know, keep in mind, on one hand, some of my claims sound radical, but part of what I'm saying is American history will just go back to what it used to be like. So we were so spoiled by the 1980s and '90s. Crime rates always falling, one international triumph after another, the economy rebuilding, recovering. Everyone felt great. That's not what most of our history is like. You know, we had the Great Depression and the Civil War, Reconstruction, Revolution, extermination of Native Americans, slavery, high levels of racism. This has not been a peaceful history. And for 20 years it felt peaceful and we all got spoiled. I'm just saying we're going to go back to what America typically has been over the long term, which is more chaotic than what we're used to right now.

We're going to have to share a beer in Asia in the not too distant future. One last quick question before I let you leave, because I know you're reading a ton. Is there anything on your plate right now, a couple titles beyond your title, is there anything on your plate right now that you would recommend to the audience that you find terribly interesting?

Chinese science fiction. You can start with this trilogy, The Three Body Problem. Which I've only read a bit of, but I'm reading through more of it now, and I'm going to take with me to China. That's essential reading, Chinese science fiction in general. I'm going to reread Shakespeare's King Lear. Politics intermingling with family disputes could not be more relevant. The final volume of Knausgaard, uh, I have a copy of it in German. I want to read that. It's not out yet in English. I have a book on Neo-Confucianism, and there's a book in Spanish called Lizard Tales by Juan Marseille that I haven't read. He's from Barcelona. That's my reading for the trip to China, at least to start with.

Tyler, thank you for your time today. The book, The Complacent Class: The Self-Defeating Quest for the American Dream. Great reading. It's great food for thought. If someone doesn't walk away with an aha moment, I'm not really sure they're paying attention.

My pleasure. Thank you very much.

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