A Conservative Futurist and a Supply-Side Liberal Walk Into a Podcast …

Primary Topic

This episode explores the intersection of economic policies, technological advancements, and their societal impacts from the 1970s to the present, featuring a dialogue between conservative futurist Jim Pethokoukis and host Ezra Klein.

Episode Summary

In this engaging episode, Ezra Klein delves into the shifts in economic growth, productivity, and technological innovation since the 1970s with Jim Pethokoukis, a senior fellow at the American Enterprise Institute. They discuss how various political and economic decisions have shaped the current technological landscape, contrasting the optimistic expectations of the past with today's reality. The conversation highlights the role of government and private sector in innovation, examining the regulatory environment and its impact on the ability to build and grow new technologies. They also touch on the societal implications of technological advancements, including the potential benefits and challenges they pose.

Main Takeaways

  1. Economic growth and productivity significantly slowed down since the 1970s, deviating from the optimistic predictions of continual advancement.
  2. The regulatory environment has become a critical factor in shaping technological innovation and economic growth, often stalling significant progress.
  3. Political and societal shifts towards risk aversion have impacted the pace and nature of technological advancements.
  4. The conversation underscores the importance of understanding historical economic and policy decisions to avoid repeating past mistakes.
  5. Both guests agree on the need for a balanced approach to regulation that fosters innovation while addressing potential societal impacts.

Episode Chapters

1: Introduction and Background

Discussion on the historical context of the 1970s and its impact on modern economic policies and technological advancements. Key insights into the expectations vs. reality of technological progress.

  • Ezra Klein: "What happened in the 1970s that changed the trajectory of our technological and economic growth?"

2: Technological Stagnation and Its Causes

Exploration of the factors that contributed to the slowdown in innovation and economic growth, including regulatory changes and societal attitudes towards risk.

  • Jim Pethokoukis: "The regulatory environment has significantly impacted our ability to innovate and grow economically."

3: Future of Technology and Policy

Discussion on the future pathways for technological innovation and the role of policy in shaping these directions.

  • Ezra Klein: "How can we balance innovation with the need to address potential societal impacts?"

Actionable Advice

  1. Advocate for balanced regulations that encourage innovation while safeguarding public interests.
  2. Support public and private partnerships to foster technological advancements.
  3. Engage in public discourse on the importance of technological innovation for economic growth.
  4. Educate yourself and others about the history and impacts of economic policies on technology.
  5. Encourage policymakers to consider long-term impacts when crafting technology-related legislation.

About This Episode

“The Jetsons” premiered in 1962. And based on the internal math of the show, George Jetson, the dad, was born in 2022. He’d be a toddler right now. And we are so far away from the world that show imagined. There were a lot of future-trippers in the 1960s, and most of them would be pretty disappointed by how that future turned out.

So what happened? Why didn’t we build that future?

The answer, I think, lies in the 1970s. I’ve been spending a lot of time studying that decade in my work, trying to understand why America is so bad at building today. And James Pethokoukis has also spent a lot of time looking at the 1970s, in his work trying to understand why America is less innovative today than it was in the postwar decades. So Pethokoukis and I are asking similar questions, and circling the same time period, but from very different ideological vantages.

Pethokoukis is a senior fellow at the American Enterprise Institute, and author of the book “The Conservative Futurist: How to Create the Sci-Fi World We Were Promised.” He also writes a newsletter called Faster, Please! “The two screamingly obvious things that we stopped doing is we stopped spending on science, research and development the way we did in the 1960s,” he tells me, “and we began to regulate our economy as if regulation would have no impact on innovation.”

In this conversation, we debate why the ’70s were such an inflection point; whether this slowdown phenomenon is just something that happens as countries get wealthier; and what the government’s role should be in supporting and regulating emerging technologies like A.I.

People

Jim Pethokoukis, Ezra Klein

Companies

American Enterprise Institute, The New York Times

Books

  • "Why Information Grows" by Cesar Hidalgo
  • "The Expanse" series (recommended for understanding complex future scenarios)
  • "The American Dream is Not Dead" by Michael Strain (debunks myths about economic stagnation)

Guest Name(s):

Jim Pethokoukis

Content Warnings:

None

Transcript

Smokey Bear
This year, a very important public figure turns 80. He sent us his wish for his birthday. My wish is for everyone to practice wildfire safety, because only you can prevent wildfires. That sounds easy enough. Bet you don't know who it is.

Nah, of course you do. It's Smokey bear. Let's all make sure Smokey's wish comes true by learning his wildfire prevention tips@smokeybear.com. Dot because Smokey bear lives within us all. Brought to you by the USDA Forest Service, your state forester and the ad council.

Ezra Klein
From New York Times opinion this is the Ezra Klein show.

I don't know if y'all were fans growing up of the show, the Jetsons, but if you were, and if you were superfan enough to take the internal math of the show seriously, George Jetson was supposed to have been born in 2022. He would be a toddler right now. And the world we live in, the world my toddler is growing up in, it does not feel like it is a world on path to the future. The Jetsons imagined, a future that a lot of people in the 1960s thought was totally plausible by the so what happened that got us off of that track? Not just the real track, but the imaginary track?

Another way of asking this question, a question that's come up a lot in the book I'm writing about how liberalism changed and why it's become so difficult to build, is what happened in the 1970s. The seventies are this breakpoint between one era in our economy and our government, our society and our vision for the future and the next. The seventies are when economic inequality really begins rising, when the environmental movement takes off, when a huge amount of legislation is passed in response to the harms of all the building and growth that had happened since the New Deal. But there's this tendency to look at the places that legislation goes too far and to say, well, if we hadn't made all these dumb mistakes, everything would be great. We'd be richer.

We'd have our moon colonies and our flying cars and our nuclear energy. We'd have made it to Jetsons land. But then why did no other country take that path? To just wipe away the politics and the passions that led to the backlash against certain forms of growth and technology in a lot of different countries is to miss something important, something that anybody who cares about growth is going to need to understand if we're not just going to repeat the mistakes of the past. Jim Petecoucas is a senior fellow at the conservative American Enterprise Institute.

He's the author of the technology focused substack faster, please, and of the recent book the Conservative Futuristic. And one thing I've noticed is there are ways in which I feel like he and I are asking a lot of the same questions, but from very different ideological positions. So I wanted to see where our stories converge and where they differ and what happened to the world of the Jetsons. As always, my email is recline showytimes.com dot.

Jim Bethakucas, welcome to the show. Thanks so much for having me on. So I want to begin this conversation. In the early seventies, things change in the US economy. On any number of charts, you begin to see something happen to the line.

What are some of those changes? The most obvious change, at least especially from an economics point of view, is that the sort of rapid productivity growth that we saw in the previous couple of decades that economists and other experts in the sixties thought was going to be a permanent state of affairs, slowed down. And other than really the late nineties, early two thousands, it's been in that sort of weaker state. And that it's one of the great still conundrums for economists. I mean, economists still less so now would have debates about what caused the Great Depression.

James Pethokoukis
And to me, this downshift, what I call in my book the great downshift in productivity growth, is as significant as that because of we're not where we could be if it hadn't. So if it had kept growing since the seventies, as it did in the couple of decades before, what would the US economy look like? What would the median household income look like? Bigger, more multiples, more. And that was the expectation.

So instead of having a $25 trillion economy, depending how you want to slice the numbers, it could be twice as big. It could be three times as big. So I don't know. I think conservatively, instead of the median family making $80,000, adjusted for inflation, maybe they make $150,000. Man, it's pretty significant what that economy would look like.

Well, listen, to grow that fast, it would be driven by technological progress. And that's what people expected in those immediate post war decades. So all the sort of the kind of classic retro Jetsons, kind of Sci-Fi things that people imagined back then, it wasn't just sort of cartoons and films. Experts, technologists, CEO's, economists all expected that kind of stuff to actually happen. So nuclear powered everything, nuclear reactors from coast to coast, we would probably have colonies on the moon and Mars, cures to diseases which seem like chronic diseases, which we still battle, would be cured.

All of that together would be part of sort of this grand future driven by rapid technological progress, which drives faster productivity growth, which drives faster economic growth. There's one lesson of a pandemic, is people don't like suffering and shortages, so we better figure out a different way. I see the only path forward is through growth and technology and making that work. What is your theory, though, of what happened in the seventies? What do you see as the contributors to this slowdown?

I think certainly it was probably multicausal. One reason I wrote the book, to be honest, is a paper, a paper by an economist named Ray Fair from Yale University, who noticed something weird happened around the seventies. He wasn't focused on productivity growth, but he looked at infrastructure spending as a share of total economic spending, and he looked at what was going on with the budget, where we started to begin to run smaller surpluses and run budget deficits around 1970. And he asked the exact same question that you're asking. So, like, what happened?

Because from those two statistics, he began to wonder like that. To me, seems like a society that's less future oriented than it used to be. You tended to see it more in the United States than in other places. So what are your theories? Listen, I'm not going to create a brand new theory, just that all the great inventions, the internal combustion engine, electrification of factories and chem, all those great inventions of the second kind of phase, industrial revolution, we had kind of squeezed all the sort of productivity gains out of those, and they weren't replaced by another wave of great inventions.

I mean, that's a theory. I mean, another theory is just that as we've advanced in science, technology, it's just harder to climb that tree of knowledge and come up with more big ideas, and it requires more people and resources. All that is probably true, but, like, our decisions mattered, and there are things that we did which hurt, and I hope we can reverse some of those things. Cause that would help. And I think the two, I think screamingly obvious things that we stopped doing is we stopped spending on science, research and development the way we did in the 1960s, and we began to regulate our economy as if regulation would have no impact on innovation.

Ezra Klein
What's your causal theory of why we did that? I think a lot of that was because of NASA, and we won the space race, and there just wasn't an interest in continuing that. Okay, so that's sort of the immediate short term explanation. So much of that was really just NASA because I think of the R and D surge as the cold war. Right.

And the Soviet Union was going strong in the seventies. Right. Soviet Union was going strong, but we had clearly won that space race. And while we've continued to spend a lot of money on R and D as a share of the economy, it's a lot less than what it used to be. That's not surprising that perhaps there was a shift in priorities.

James Pethokoukis
People did begin worrying about budgets back then. And the regulation part, to me also sort of isn't surprising. When countries become wealthier, they tend to care a lot more about the downsides of economic growth. There are books like Silent Spring and some events like the Santa Barbara oil film. We began learning more about the radiation from Hiroshima and worrying about nuclear.

So that is not surprising that we started to pass environmental regulation. What is surprising is that when it became clear that the economy was not reaccelerating the way they thought, that there was not more of sort of a holistic effort to change that, to not give up on those expectations that people had in the 1960s. So I've been, for my own book, thinking a lot about the seventies and looking a lot at the politics of the seventies. And from where we sit now, we think of environmentalism as a liberal thing. Right.

Ezra Klein
The environmentalists are greens. They're Democrats. And I ran into this quote that Richard Nixon gives in his 1970s State of the Union that I think gives a good flavor of how different the politics had become. So I want to play that here. The great question of the seventies is, shall we surrender to our surroundings, or shall we make our peace with nature and begin to make reparations for the damage we have done to our air, to our land, and to our water.

Richard Nixon
Restoring nature to its natural state is a cause beyond party and beyond factions. It has become a common cause of all the people of this country. It is a cause of particular concern to young Americans because they, more than we, will reap the grim consequences of our failure to act on programs which are needed now if we are to prevent disaster later. Clean air, clean water, open spaces, these should once again be the birthright of every american. If we act now, they can be.

We still think of air as free, but clean air is not free, and neither is clean water. The price tag on pollution control is high. Through our years of past carelessness, we incurred a debt to nature, and now that debt is being called. What do you think when you hear that? I think that's exactly what I would expect to hear.

James Pethokoukis
For a country that has gone through a period of industrialization and economic growth where people had become rich enough that the immediate sort of material concerns could be balanced off with other kinds of concerns, such as the water they're drinking, the air we're breathing. Is it worth losing a little bit of growth, maybe, to deal with that? So that doesn't surprise me. And as you know, some of the key environmental legislation we still have happened under the Nixon administration, a huge amount of it. I mean, I think you can make a very good case.

Ezra Klein
Nixon is the most consequential environmentalist president of the 20th century. But did people back then assume that what they were doing with that environmental legislation was making it very difficult to build the kind of future they had imagined heading into the 1970s? I don't think they did. I believe they thought that the economy was so strong and that technological progress, the momentum was so tremendous that we could have cleaner air and water and still have everything else. The people who voted for, for instance, the National Environmental Policy act, most people thought that was kind of like a good mom and pop and baseball and apple pie piece of legislation.

James Pethokoukis
Hey, who doesn't want cleaner water? That's what we're doing here. I don't think anyone imagined that then it would make it hard to build a factory that makes wind turbines in the year 2024. What's the evidence that that raft of environmental legislation, the National Environmental Policy act, you mentioned, the Endangered Species act. We have clean air acts, clean water acts.

Ezra Klein
A lot of them work really well. We really do clean up the air, the water. I mean, I grew up in Los Angeles or outside Los Angeles. The smog is much better today than when I was growing up. You can see the mountains.

Sometimes you can see the mountains. What is the evidence that that is as causal in the slowdown of productivity as you're putting it here? After the space age, after Apollo, we didn't follow it with anything. Right. One thing Nixon thought about following it with waste, building nuclear reactors, 1000 nuclear reactors from coast to coast.

James Pethokoukis
Would it have been possible to build a thousand nuclear reactors from coast to coast with the emerging regulatory regime that was beginning to happen? Absolutely not. Absolutely not. And it became obvious even in the early seventies that there was a problem, that there was a problem that was becoming harder to build. That was the case with the Alaska pipeline.

It became, again, you're too young to remember this, but it was a running joke in the United States in the 1970s that they could not build a new dam in Tennessee because of a tiny little fish called the snail darter. And that fish was preventing that fish that no one, you could barely see it. Nobody knew about it. You couldn't build that dam. Cause that was the Endangered Species Act.

I think the weight of those kind of incidents, the weight of the academic studies I cite in my book, have there been studies looking at how much it costs to build a highway? And does NEPA, the National Environmental Policy act, does it make it more expensive? Does it make it harder to build? Yes. And I think if you just look around right now, I don't think it's a tremendous leap of imagination to think that if it makes it very difficult to build a transmission line, a nuclear power plant, where are the nuclear power plants?

I mean, it's like the dog that didn't bite. Where are they? So let's talk about nuclear here, because nuclear is interesting to me because I basically agree with you. Do you not think that NEPA had a material impact? I don't think there's any doubt that the totality of environmental and regulatory bills passed in the seventies slows growth.

Ezra Klein
Or a different way to put it, is makes it hard to build. I mean, it's a big part of the work I'm doing right now. At the same time, when you're trying to measure or try to understand what has happened to total factor productivity, I think this case is a little harder to make than people want it to be for a couple of reasons, but I'll give you one here. Let's take nuclear. I am 100% on board with the idea that we've made it much too hard to build and iterate nuclear technology in this country.

On the other hand, there is no country anywhere that is living in the nuclear topia that nuclear advocates are always telling me was possible. There are countries that use much more nuclear energy than we do, France being a great example. But France does not have energy too cheap to meter. They do not have a wild level of energy abundance. There is something here where one of the ways this sounds, and it sounds this way to me when I read your book, is that there's been this 20 or maybe thousand or maybe trillion or maybe multi trillion dollar bill lying on the sidewalk, and you would expect some country to pick it up.

But you go from the seventies forward, nobody today is ahead of America. It sort of doesn't surprise me that countries which I think have been over these decades far less innovative and pushing forward the technological frontier might not be pushing forward the technology of nuclear power. So why doesn't France have very cheap nuclear energy? Why doesn't France already have these very small nuclear reactors? I'm not sure what the incentive was, or whether they were capable of innovating to that degree, I don't know.

But the incentive is exactly what you're saying, right? I mean, this was a state, but it's not a market based power system. In France, these are all state subsidized reactors. I mean, but take South Korea, take the UAE, take China. I mean, you can pick your country here.

The kind of question I'm trying to raise about your thesis, because it's also relevant, frankly, to my thesis, is if the problem is that America makes a series of policy mistakes in the seventies, why then in the ensuing five decades, don't a bunch of our competitor countries race past us? There were theories that they would, Japan in the eighties and nineties seemed like maybe they were right, Japan was going to be the future. There are a million books written in the nineties about this. Germany at different times. Right.

But I don't think you would look at anybody today, any rich country of significant size, and say they really got it right and we really got it wrong. So how do you understand that if the story is about mistakes we specifically made in the seventies, we can make. Mistakes that are very specific to us, and other countries may have made different mistakes, even though there was, as you say, this great enthusiasm in the eighties that Japan had it sort of figured out that they could do economic growth and innovation in a brand new way, which turned out not to be the case. And then you mentioned Germany. We seem to have this insatiable desire to find, at least some people do, to find some other model.

James Pethokoukis
I don't think those models have turned out better than the american model. If you were to try to make an argument about why things look not the same, but why nobody has achieved the Jim Pethicoucus world, across Canada, across western Europe, across Asia. Right. All countries during this period that were rich enough to do much of what you're talking about, do you have theories that unite the answer? Yeah, listen, I don't think it is wrong to do sort of a cross country because this productivity slowdown didn't just happen in the United States.

Clearly there were some sort of macro reasons. It just becoming harder and more expensive to do research. Those things affected everybody. So once you've assumed, okay, there was this umbrella effect that would sort of make it difficult to do productivity and economic growth and faster tech progress everywhere. So that mattered.

And then to what extent do our decisions matter? At first we didn't understand what happened, and then when we did, I think we just underestimated the difficulty at least certainly in the United States of returning to fast growth. And the ideas that we put forward, whether it was a little more spending on this program, a tax cut here, maybe those are individually great ideas. But given, I think the headwinds from these macro factors, sort of the tailwinds need to be much, much stronger. And even now, when we're talking about spending more money on R and D, I don't think it's enough.

Ezra Klein
Let me try some theses on you that I think can work across countries. One is that as countries get richer, they become more risk averse. Some of the innovations you're talking about, like colonies on the moon and flying cars, they require a high tolerance for risk. Maybe as societies get more affluent people have enough, their lives are good enough, they aren't as motivated to take that risk. What do you think of that?

James Pethokoukis
I think inherently, people pull back from risk. To go back to the seventies, there are some conservative thinkers who thought that capitalism was doomed because the intellectuals who were separated from actually working and producing wouldn't appreciate how hard it is to do that. They wouldn't appreciate how hard it is actually to grow an economy. And these are the people who would be our bureaucrats, and they'd be focused on risk aversion and creating more rules. So, yeah, I think that's an obvious problem.

Then add in the fact that as countries get richer, they care more about the environment. You see it in China. As China's gotten richer, they care more about smog. And for people to, I think, move beyond that inherent caution, they have to believe it is worth it. People need a realistic, plausible image of why it's all worth it.

And we used to have people who would do that for us. We had public intellectuals and we had Hollywood who would say, the future can be better and it's going to be awesome. And then that disappeared. So who paints a future? Listen, I used to spend a lot of time going on like the drudge report used to be.

You know, it's still operating. I don't think it is what it used to be. And every article about technology and science and Silicon Valley was, these are crazy people who want a future, an inhuman future for you, where you're gonna all live in tubes and you're gonna all have bugs, eat bugs for no more steaks. We're all gonna have, like, bug steaks. That's just one small example, and I can point to pretty much every Hollywood film in the past 50 years.

So what is our sort of collective imagination of, why are we gonna do this? That we don't live in a world that's destined to burn. That we don't live in a world where if we should have all these wonderful inventions, only the people at the very rich will have it. They'll be living above us on the space platforms while everybody on earth is groveling around. So we've had this inability to say, like, why should you take a risk?

And that has to change.

Smokey Bear
This year a very important public figure turns 80. He sent us his wish for his birthday. My wish is for everyone to practice wildfire safety, because only you can prevent wildfires. That sounds easy enough. Bet you dont know who it is.

Nah, of course you do. Its smokey bear. Lets all make sure Smokeys wish comes true by learning his wildfire prevention tips@smokeybear.com. Dot because Smokey bear lives within us all. Brought to you by the USDA Forest Service, your state forester in the ad.

Ezra Klein
Council, I gave my brother a New York Times subscription. She sent me a year long subscription so I have access to all the games. We'll do word old mini spelling bee. It has given us a personal connection. We exchange articles, and so, having read.

Smokey Bear
The same article, we can discuss it. The coverage, the options. It's not just news. Such a diversified disc. I was really excited to give him the New York Times cooking subscription so that we could share recipes.

Ezra Klein
And we even just shared a recipe the other day. The New York Times contributes to our quality time together. You have all of that information at your fingertips. It enriches our relationship, broadening our horizons. It was such a cool and thoughtful gift.

James Pethokoukis
We're reading the same stuff. We're making the same food. We're on the same page. Connect even more with someone you care about. Learn more about giving a New York Times subscription as a gift@nytimes.com.

Ezra Klein
Gift I think visions of the future, to a degree people dont always appreciate, are built on what people see in the present. And something that has been striking to me, as ive done a lot of research into the politics of the sixties and seventies, is how much people ceased liking what they saw in the present. I want to play a speech that Lyndon Johnson gave in 1964, talking about what America looked like to him in terms that are not how I think of the great society. The water we drink, the food we eat, the very air that we breathe are threatened with pollution.

Richard Nixon
Our parks are overcrowded, our seashores overburdened green fields and dense forests are disappearing. A few years ago, we were greatly concerned about the ugly american today, we must act to prevent an ugly America. So one thing that, that I think, or I've come to believe, is a bigger dimension here is that beauty is part of politics. And wanting a beautiful world, believing that you're going to get a beautiful world matters. Right.

Ezra Klein
This is part of post materialist politics, which are very, very powerful. And begin, I think, strongly in the sixties and the seventies. So how do you think about that dimension of it? The kind of pervasiveness of a fear that the modernity people were getting from rapid growth was an ugly, advertising soaked, concrete gray, deforested modernity. Was that the majority opinion?

James Pethokoukis
Do you think that people thought there was too much affluence and beauty? Again, that's a preference. Some people love this notion of solarpunk. We're all going to live in sort of these giant trees that are part tree, but yet even skyscrapers will be gardens. And that is a personal preference for a kind of world that I'm sure, I think we're maybe taking our views now.

We're kind of imposing on what people thought in the 1960s based on one speech. No. So that I can assure you I'm not doing. I'm just not yet reading you chapter one and two of my forthcoming book. So I'm sure those chapters are excellent.

Ezra Klein
They're glittering. This politics was pervasive. I mean, there are all kinds of books written about this. I mean, this is what the environmental movement comes out of. The environmental movement is not built on climate change.

It's built on conservation of green space. Right. And silent spring. And there were disaster. And I think that's legitimate.

And I want to push you on this because the thing that I hear you doing is wiping this to the side. That's personal preference. But what we're trying to do here, right. What I'm trying to do with you, there's plenty of things you and I disagree on, right? You're a conservative, I'm a progressive.

But one thing that I don't think we disagree on is that we're not building enough and productivity is too low. But what I want to try to understand is, well, then why? And why is it happening in so many places? And one theory that I take very seriously now, having looked at the politics, right, Tikitaki, that's a term that comes from a song recorded about what the homes look like in Daly City in California. Little boxes on the hillside little boxes made of tiki tail tacky little boxes on the hillside little boxes all the.

Same there's a pink one and a. Green one and a blue one. I can show you pieces written in the San Francisco Chronicle where they talk about the people moving to California like locusts, right? Like they're gonna just destroy the thing. And I agree that beauty is in the eye of the beholder, but often the politically powerful beholders are the ones who live in a place already.

So, for instance, one kind of curb on productivity that I believe is really important is the inability to build homes in highly productive places like cities. You bring this up in your book, too, but the people with power there, they like the way it looks now. They like the brownstones. They don't want to see those knocked over for big apartment buildings. So I agree with you.

Right. What you find beautiful, what I find beautiful, what another person finds beautiful. They might all be different. But one thing that I wonder is, do you just discount the power of people's aesthetic preference in politics? Is it a story of aesthetics, or is it a story of a generation sort of repulsed by their parents?

James Pethokoukis
I guarantee the parents in those tiki tacky houses probably thought, those are pretty good houses, probably better houses than what they grew up in. I take my. So why they live in political. Well, because that generation was really, really big, and eventually that generation took control. But okay, to get to.

Ready to get to your question, what is this future going to look like? I could point to some possibilities, and I could maybe, and I would love if sort of science fiction people, and there are people in science fiction who think that as well, that they need to create images that aren't utterly dystopian. Like, that's an entire movement within that community. But, like, I wouldn't say, like, that's my image of the future. I want to give people, like, the tools and make sure the economy is growing, and then we can all kind of create the future we want.

But I don't think it needs to be one particular preference. It needs to be, like, a solarpunk vision or some other kinds of vision. Well, we should have this. I'm not saying we should impose one aesthetic, but what I am saying is that I think there's good reason to believe that this huge generation you're bringing up. Right.

Ezra Klein
And I take that point, that the boomer generation is large. They didn't like what they saw, and that that happened in a lot of different places at once. I mean, I have a million problems politically, as you might imagine, with Elon Musk, just like a million problems. One reason that guy has been a very successful futurist is that he takes beauty very seriously. You could go less controversial.

James Pethokoukis
You could say Steve Jobs, who took how things look, the elegance. I mean, he's a boomer, and he wanted to create beautiful, elegant products. Now, how you translate that into a public policy that creates a beautiful, elegant future. But I think Elon Musk to some degree has that. I mean, who wants to go to Mars, really?

It's cold, there's no air, there's nobody there. SpaceX has created these marvelous little videos about what it would be like to get on a starship spaceship. And you get to Mars and there's these beautiful kind of domes and it's green, and that's an elegant, beautiful vision of future for a place. That's none of those things. One thing when I think about the sort of conservatism in your futurism that actually surprised me in your book was the confidence that if we pumped a bunch more money into the R and D structure, we would get a bunch more output.

Ezra Klein
I hope. I'm confident about that, at least on even days. But let me one counterargument on this. I hear sometimes, as you mentioned, a lot of the R and D surge mid century came from NASA. And when you think about the amount of money NASA's had to spend on R and D in recent decades and the amount of money SpaceX had to spend on R and D, which of course, SpaceX could only do that because of NASA contracts, but nevertheless, they had less money and how fast SpaceX was actually able to advance rocket technology.

I think it should make you wonder why NASA is not as able to make advances as it once was. I think you could say this across a lot of domains of federally funded, government funded R and D. So I think there is a question of how much money there is, and there's also a question of whether the structures support that money turning into innovations, turning into products. How do you think about that? Well, I mean, certainly I think the people at SpaceX would say that they stand on the shoulders of giants, so they did not have to start at a baseline, at zero and figure out how to get something into space.

James Pethokoukis
I think that's important to note. I would like the government spending more money on R and D. I think I would like a hard look at what they call the meta science, which is how is that money actually spent? What is that process like? Are good ideas squashed?

This is sort of an emerging area of public policy where they're taking a hard look at that process. Are good, controversial ideas. Are they not getting funded like those kinds of reforms, I think would have to be part of anything. And I'm not sure that spending more, I mean, great. I can point to studies, but until we actually do it, I don't know.

But I think we're at sort of like a moment that we should try to use every plausible idea to make sure we don't waste a moment that I think we had at the end of the sixties, that I think we had at the end of the nineties to create a much faster growing economy. We have this emerging cluster of technologies that support these technologies, and I think AI is a great example. And see if, like, this is possible. Cause I've lived through 50 years of what some people call the great stagnation, the book I call the great downshift. I don't want that to be the next 50 years.

Cause what does our politics look like after the past decade of economic tumult and stagnation? I don't want to look at our politics after another decade of that. Let's talk about a success story of innovation inside the government, which is DARPA. What makes DARPA work? And is that scalable?

Well, you have highly motivated people working on very specific projects. The managers of those programs are not there forever. Like, they're there to create new technologies that would have some sort of military application. So, like, the easy answer is, we need DARPA for everything. We need to have this.

Can you scale that? I would like. Geez, I would like to try. I would like to try scaling that. I like to try scaling a lot of things.

I think it shows that despite skepticism, that can't accomplish anything. You can point to the successes of DARPA. How do you think about tolerance for failure? Because one thing DARPA has is a tolerance for failure. I think part of that is that it's understood and has been a sort of part of the national security state.

Ezra Klein
And we allow the national security state to waste money, we're cool with it. The fact that some things are not gonna work out, we don't get mad at them. On the other hand, when you have the Department of Energy give out a loan to something like Solyndra that doesn't examine through. There are hearings, there's a scandal. People are furious.

I mean, that same program also saved Tesla, which is something you hear less about. So what allows things in government to make counterintuitive bets, and what allows them to survive those bets failing? When Solinger happened, there was a sort of a deep skepticism that the era of Bill Clinton said the era of big government is over. And now it seemed like the era of big government was back. And I think people were waiting to pounce on that.

James Pethokoukis
I mean, I looked at Solyndra and my immediate thought was this is back then, like this is government failing again. So I don't think I had that kind of tolerance for failure. I sort of do now. My personal tolerance is higher. I don't think for most people on the right right now is yet particularly high, especially if you're looking at it purely in a political standpoint.

Listen, and I'm sure you're aware of this, that like in the past when there have been these government science programs, there have been conservatives who have picked through them, try to find something that sounds like ridiculous. I am. Or silly. You're correct. Yes, ridiculous or silly.

Like why are we spending money to figure out how hamsters survive in orbit or something like that? So we shouldn't pretend not to have a toleration of basic science because the kinds of basic science that didn't seem like it had any application, like, I don't know, the theory of relativity is why we have GPS's. But this seems like an important reformist project in your coalition. I mean, you work at the American Enterprise Institute. That is the kind of place that has made this argument.

Ezra Klein
Right, year after year after year after year. And it partly makes it against democrats. Right. I mean, Solyndra, I don't think Solyndra was the issue there was that you were in a kind of post Bill Clinton turn against neoliberalism. It was that you could make a democratic president look really bad.

Right. And you can make the stimulus look bad and you could, and to me, when I think of why I am nervous as a liberal, that if I pump, we pump a huge amount of money into government R and D, we're not going to get the kind of fundamentals, advances that I'm hoping for. It's that I think a lot of the major government research structures have now been built to emphasize a kind of conservatism, not a conservatism of the political sort, but conservatism of the we don't want to spend money on anything that could make us look bad sort. And so there's a lot of peer review. There's a lot of bureaucracy.

There's a lot of people checking your work. The grant operations are huge. And the amount of time people spend checking grants, there's a big cover your house mentality. And the problem with that is, I think, actually a bipartisan problem. On the one hand, I think liberals are too trusting of process.

I think liberals have become just a kind of process obsessed institutional defenders. But I think conservatives have, in some ways, created a bunch of that because they've created the conditions in which people in government, and particularly civil servants, are terrified of being the ones to have done something that gets our agency embarrassed and their funding cut. And so I'm curious, when you think about this as a reformist project in your own coalition, how do you think about that? So I was listening to the podcast you did fairly recently with Jerusalem Demsis and thinking about some of these issues of zoning, housing restrictions, and why it's hard to build anything. And housing actually is the perfect issue.

James Pethokoukis
Housing seems like we need more housing, and conservatives should like, because that's growth. And conservatives are supposed to like economic growth and tumult and dynamism, and people can move to high productivity cities. But conservatives seem to be against housing reform. At least some conservatives, they don't like the idea because they view it as a cultural issue which eventually eats up everything because you're destroying the suburbs, you're gonna bring the wrong kind of people to our neighborhood and all that kind of thing. So the people who are on the left, who are looking at these issues and think we need, maybe need to grow faster, and there's things we need to build in this country, and regulations are a problem and funding is a problem.

There needs to be an ally on the right where you're certainly not going to agree on everything, but there's a common ground of people who have some sort of confidence that we can actually move forward on problems. But right now, I think while there are some pockets of that, I think on the right and in the Republican Party, it just seems to be sort of more abundant. The moment the one of these that blows my mind is I am not a person inclined to give Donald Trump huge amounts of credit, but Operation Warp speed is one of the most successful government programs ever, full stop. It is just like a tremendous, astounding success. Is he running on eight or ten more operation Warp speeds?

Ezra Klein
No. Is a republican party proposing a bunch more operation warp speeds for other kinds of things? As far as I can tell, no. By the way, the Democrats aren't either. I've talked to them about why, and I kind of get the sense it has something to do with whether or not, you know, they want to give Donald Trump credit for things.

But here you have just an astonishing, like a truly astonishing policy success. We were able to pull forward a completely futuristic technology in a timeframe nobody thought possible and make it available for free to Americans. Right. It was equitable. It was technological.

We worked with the private sector, the public sector got things out of their way, and it is an orphan. And the political economy of warp Speed's orphan status is, I think, one, an indictment of american politics, but two, also a bit of a genuine mystery, because here Donald Trump could run on this like it was a success of his presidency. Nothing. Crickets. Why?

James Pethokoukis
My hope has been, and as you just suggested, it has yet to be realized, that the pandemic would accelerate this need. I would hope to accelerate technological progress and growth. This is a perfect example of a problem that many people knew was coming, right? I mean, there's a gazillion white papers that we're gonna have a pandemic, but yet, despite that fact, we didn't have enough ventilators and we didn't have enough masks. And what finally, despite all the white papers, all the thoughts about preparation, what finally really allowed our economy and our lives to go on was the fact that America's a really rich country and we're really technologically advanced, and we were able to solve a problem on the fly because of those two things.

And that people will look at that example and we no longer have to go back to Apollo to be excited about something where, like, we all came together and solved the big problem, beating the Russians this time, we all came together and solved a big problem, and people have yet to look at that. Instead, it has sort of gotten lost. And I can blame Donald Trump for that, for not talking about that like he should be talking about that. And if he's not going to talk about it, I would love for the Democrats to talk about it and use that an example. I hope that eventually well be able to look at the pandemic and Operation Warp speed as sort of proof of concept that all the things weve been talking about can work.

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Ezra Klein
One of the things that has been surprising to me in post pandemic politics and policy is we've spent a lot of money since 2021. We've spent money on kind of stimulus for the economy, support for the economy. We spent money on certain kinds of pandemic preparedness. The thing we've not really spent money on is vaccines. We have not put together a huge new project to try to create vaccines across an array of different diseases.

There's possibilities of pan coronavirus vaccines. There's a lot we can maybe do. And I reported on a bunch of this, and what I found was that there wasn't really a constituency for it. You know, there were people in the Biden administration trying to get vaccine money into different kinds of bills. On the one hand, they weren't finding the votes, but on the other hand, the critique I would make of Joe Biden is it, nor was he out there demanding it.

And it got me thinking about the way outside maybe climate. We underrate technological solutions to political problems. One of the lines I have on this is that a liberal can typically tell you sort of five social insurance programs they would like to build or improve, right. Universal pre k, single payer healthcare. You can pick your set.

They typically can't tell you the five technologies they want the government to pull forward into the present. Right. The five technologies they really want to fund to try to make happen. Maybe right now a little bit around energy, people can. But I think outside of that, it isn't a way people think about things.

What is your answer to that? If the government was going to come out with its, these are the five technologies we are going to try to put money behind to clear bureaucratic roadblocks out of the way of make sure you can have the materials for. What is your five technologies for social progress agenda? I don't want to create, like, a China 2025 plan where we're going to pick a bunch of technologies. And I do worry about being locked in a certain kind of technological path, which is why I do like basic research and I do like to see what the private sector is doing and try to support that.

James Pethokoukis
Like with my example about, you know, deep geothermal. Looks like it might be something, but they need more money for demonstration projects. I think having some sort of imprimatur that this is actually going to work and is making progress, I think government has more of a role in that situation. But I'll tell you, I don't know if you recall, but last summer for about a week, there was this notion, and I think it was a korean researchers had figured out superconductivity, that we could create these materials which would allow us to transmit electricity with no loss. And if that was possible, like everything was possible, like 90% of what Star Trek's about was possible, we could build very fast, very cheap, high speed rails, brand new medical devices.

And then it turned out that that's not the case. I'll have to admit, I thought hard, maybe we need a Manhattan project for superconductors. Maybe that's something. All these problems we've been talking about, that kind of breakthrough would utterly change our entire sort of political discussion. An AI that can be 80% as efficient as a human.

We have a very different discussion. All of a sudden, the economy can grow at a point and a half faster for extended period of time. Our entitlement discussion, our politics, is completely different. So, yeah, technology driving progress, driving growth, it's a different kind of politics, and one where we're not fighting over a, you know, a fixed pie, but. But how to grow the economy faster.

Ezra Klein
But I think, and maybe this is the liberal versus in me versus the conservative in you. I think this is a bit of a dodge, because if you want to pump all this money into R and D, if you want to pump it all, even just into basic research, someone somewhere has to decide where this money is going. I can imagine different ways you might do that. But first, somebody has to decide how we are allocating this money, how much to what kind of scientists. But to govern is to decide as your client, to govern is to decide, and people will have to make decisions.

James Pethokoukis
I'm not against making decisions. I am against someone making a decision, saying, this is the kind of engine we need to have. That's why I'm asking about technologies, how we achieve the technologies. I'm quite agnostic on that myself. But the other thing the government has to do, which I do think people really underestimate, is get difficulties out of the way.

Ezra Klein
I remember when I was reporting on the effort to develop a pan coronavirus vaccine, I was talking to one lab that had a pretty promising candidate, and the genius vaccine expert leading that lab was spending so much of their time trying to source monkeys, they just couldn't get the monkeys they needed to run trials. And I remember just thinking, that should be somebody else's job, right? This person who has gotten to this point in medical research, that they're leading this lab and getting this funding to create a vaccine that could save however many lives. At no point in their career was their expertise, logistic sourcing. But functionally, everybody I talked to in this period was like, they're working on grants.

They're trying to find these things. And if you look at warp speed, a bunch of what warp speed did was figure out how to get the correct materials so you could transport these vaccines and they wouldn't break in. Transport. There's a lot of just making the jobs of scientists easier. There's a lot of the government acting as a kind of accelerator of innovation, but it does require the government to make decisions about where it's going to focus its efforts.

So then I'm going to go back to my question, which is after you've written this book, I mean, you write a substack about the future and about all these technologies you don't have in the back of your head, the five things you'd like to see a Manhattan project on a warp speed on. Again, the governance to choose. What would you choose? What do you think? Would if we really put our backs into it, it is possible for us to move forward into the presentation and would do the most good.

James Pethokoukis
Yeah, listen, I think one technology that if we're able to crack it and there's already money pouring into it, is nuclear fusion. I don't think I've ever seen a cabinet officer happier than when Energy Department Secretary Jennifer Granholm was talking about the nuclear fusion breakthrough about a year and a half ago like that. Like, there's more work that needs to be done on that technology. And I think government has a role. I think a lot of these energy technologies, if you talk to these startups, I always ask them, like, what do you want government to be doing?

And of course you guys will point to some regulation, and I'll say, okay, that's great. Now, I'm not surprised that you said that, but what about, is there some aspect of technology that needs more work? And they'll point to what it could be like some sort of drill bit for geothermal. But, yeah, so I think broadly, areas of, I think energy for not going to stop with energy, because that just seems to be the linchpin. I mean, I'm very excited about artificial intelligence and what it can do, and it can be a general purpose technology that can help us do science better and come up with cures.

But already you have people saying, oh, great, maybe it'll do all that, but we just can't afford the amount of power. How are you going to power those data centers? So if that's like the thing, if that's like a key constraint to artificial intelligence, yeah. Then energy is pretty important and we better be doing more work. Again, we've mentioned nuclear fusion, but it might not be.

Maybe it's not nuclear fusion, maybe it is geothermal. And I'm glad we're going to space. I'm glad we're going to space because I love the space program and I love the idea of us doing things in orbit. But you know what? Someday we may be able to use the materials from Mars to build space, solar panels to beam infinite amount of power to Earth.

So, yeah, I think energy is certainly a sector that I would like to see more research done, and I think the federal government has a role. How do you marry technology and sustainability? This is something that I think discussions of technology often miss, that there are values embedded in technologies, which technologies we pursue, which technologies we deploy, whether you leave everything in the market, whether you have a guiding hand of government, whether you're pricing carbon or not pricing carbon, how do you approach the process by which we make those decisions? You'll often hear now economists talking about AI and how it will automate jobs, and they'll say, well, we need the kind of AI that will create new things, but less of the kind that will automate people on jobs. So we need job creating kind of AI, but not sort of the job replacing kind of AI, which is I think we probably need both, but I don't know of any real public policy that can do that.

So to me, then, that's sort of, there's no remedy that's realistic, that. So I'm not going to give that a lot of regard. What we need is both and say, like, well, I'm going to get a certain kind of outcome by tweaking the tax code in this way. Seems to me to be unrealistic. So I guess I'm skeptical about the guiding technology sort of path I think you're suggesting.

Ezra Klein
I don't think that's quite right. So let me give a very concrete example. Using AI as what we're talking about, you could make it possible to make a huge amount of money using AI to manipulate or persuade people to buy things. Right. To hook AI into advertising.

You could also say, we are not going to allow you to hook AI into personalized database advertising. Those are both just choices a society can make. You could say, we're going to allow you to do it, but not for anybody under 18. There's a million things you could do here, and the path of AI development will be different depending on what kind of things you can do to make money with it. If it turned out the government had a bunch of prizes out there where if you could use AI to achieve this or that scientific goal, you got $3 billion, and the answer went into the public domain.

People would build more AI's in that direction. So there are a lot of ways to shape the pathway of technology. I don't know that we can say we're going to have the good kind of AI, not the bad kind of AI, but the decisions we make about how we regulate AI will certainly shape the pathway of AI itself. Well, I mean, to use that example, I'm certainly aware there are people who don't like, for instance, how tech companies make money. They don't like the advertising and the targeted ads, and they feel like there's privacy issues.

James Pethokoukis
I don't really have a problem with that. I certainly know some people do. I think they call it surveillance capitalism. I don't have a problem with it. But isn't it true that that revenue is what is sort of financing all the R and D these companies are now doing into AI and creating the kinds of models that might actually not just create, like, better advertising, but create a cornucopia of scientific advancements?

That's an unexpected consequence. And before we, I think, begin thinking hard about with this emerging technology that none of us really heard of up until 18 months ago, before we start thinking about ways to shape this technology, we probably should have a little humility that we don't know all the things it can be, we don't know the paths it will take, and there might be some unexpected consequences in a rush to begin shaping and guiding this technology. I mean, even people who are really upset about digital platforms, I don't think they're saying, like, the Internet was a bad idea and we should be an analogic society. What is your view? We should not regulate AI at all?

I would be very. I would think very hard about very specific use cases. I would think very hard about existing sorts of laws on the books, things you cannot do. I think my default position would be rather than try to glom on our sort of social media concerns, which I think a lot of policymakers, because they feel like they missed the boat on social media regulation, so now they're taking those concerns and applying into AI, is to think a lot about the Internet in the 1990s, in which we saw that it was an evolving technology and we decided to let it evolve and see what happened. That seems to be an example we've forgotten because we've been so overwhelmed by social media and sort of content and privacy issues.

And so that would be my instinct. You just mentioned that a lot of people want to rerun the social media experiment, but with AI this time getting ahead of it as opposed to behind it, I think that's right. Something that I often say is that I think it's very much the wrong metaphor. I think it has more like the Internet or more like a foundational technology than it is social media. But on the other hand, one of my theses on all of this is that in key places, we got the regulation wrong, which then, over time, also leads to over regulation as people correct aggressively and often too late.

Ezra Klein
And this, to me, feels completely core to the broader story you're telling, but not something you're comfortable applying here, which is the sort of growth era of the sort of early 20th century created genuine harms. You have Richard Nixon talking about them, Ronald Reagan as president, brags about signing the California Environmental Quality act into law. And so then you have very aggressive regulation. A disagreement I have with the people who call themselves AI accelerationists. The people are just like, let her rip, is, I think they're the real decelerationists.

I think if you let the Marc Andreessens of the world and so on in charge of AI, that is a perfect recipe to get very aggressive, very early regulation, because one, terrible things are going to happen, but two, people are not going to trust them. Whereas, in fact, that Altman and Hasabi and Dario Amade and a bunch of the others seem very cautious and seem very concerned about what could go wrong is almost paradoxically leading to less regulation. And I somewhat know this from reporting on these meetings they're having with members of Congress, because the members of Congress trust that they're going to be careful and that they're sort of harm aware. Now, whether or not that proves to be true, I don't know. But I do think that there's a much more complicated relationship between wise regulation and the social tolerance for innovation and innovative risk than people sometimes give credit for.

James Pethokoukis
I just, I'm not sure where your confidence comes from that we will come anywhere close at this early stage to getting it right. I mean, it did not take long after the passage of the National Environmental Policy act for the problems to become obvious. And did we correct those problems? We did not. So I guess I have low confidence that at this early stage we will get the regulation right, nor do I have confidence that if we figure out we've gotten the regulation wrong, that those fixes will be made, because I think, as you know, once something has passed, it's very difficult to undo it, which is why, even though it's been screamingly obvious for a long time that we have a regulation problem.

So we're making it hard to build in this country. It has been very difficult to undo those rules. But I guess then what I think. So I guess I wonder where your confidence comes from. Well, I don't have any confidence.

Ezra Klein
The humility, and that's why I have a job. But I think one of the questions I have here is that I think I don't, if you don't understand my confidence, which I don't have, I don't understand your political economy. Because you agree, you believe that society is risk intolerant. You agree, you believe that its reaction to things going wrong is going to be to not just regulate, but to try to have a safety first approach to regulation that could be very, very dangerous for innovation. The fear people had of nuclear going wrong and a couple of major events like Chernobyl and three Mile island led to a level of nuclear regulation that effectively choked off the entire industry.

What seems to be to emerge from that is you need some way of balancing the fears people both have and the fears that emerge without going way too far in the other direction. But you're not going to get there, right? I mean, this seems to be the point of the history. You are telling. You're not going to get there.

Telling people edits. Don't be afraid. Don't worry about it. And so I think what I am interested in here is how do you think that you strike this balance? Well, no, and again, I think inherently people are super risk averse, so why should we be confident?

James Pethokoukis
I think confidence comes from my core thesis, which is rapid growth. When the economy is growing, people become more confident, they become less risk averse. And I don't think it's any coincidence that not only did we see light regulation of the Internet in the 1990s, but other times where we've had fast economic growth, we've been able to take more risks with social policy, such as the Civil Rights act. Like good things happen when an economy is growing quickly. So I think, like, that would be very helpful if we went through a period of rapid growth for us to have more confidence that, like, you know what, technology's going well, the economy's going well.

Let's go easy on AI. But doesn't wealth and growth lead, I mean, in the model we've been talking about, to more regulation, to less risk tolerance? I mean, wasn't the seventies coming on the, the tail end of a long period of wealth and growth? Right. And at a certain point, people become more willing to have less growth.

But I would hope that after the past half century of going through a period where that kind of risk aversion has turned out to be the riskiest possible thing. I mean, we're in sort of this populist moment, and one reason I think that you get populist moments because people think the government is really incompetent, particularly on economics. So we've had this period where we've had a war people didn't think went very well, global financial crisis. We had a pandemic that people, you know, maybe we responded well, as we mentioned earlier, but we didn't seem to be particularly well prepared for. So, yes, I'm talking about learning from history.

Ezra Klein
I think that's a good place to end. Always. Our final question. What are three books you'd recommend to the audience? One book which greatly influenced my book was the book why information grows, which is by a physicist named Cesar Hidago, who presents this a very different way of thinking about economic growth, rather than merely thinking about labor and capital and land, all sort of the foundational aspects you may have learned in a high school economics class.

James Pethokoukis
He thinks what matters is connection, people connecting with each other, companies and people and universities and even countries. So that sort of connection, economics and economic openness, is really sort of at the heart of the vision I tried to give in my book. I would also recommend, since I write about Sci-Fi so much on my book the Expanse series, which they turned into a tv series, which I view. I may be in the minority that I view as a future optimist, hard science series because it shows Earth a few hundred years from now that has sort of mastered the solar system, but it's not a perfect world. Things have gone wrong, like climate change was bad, but we seem to have gotten a hold of that.

And technology has meant there are people out of work and on basic income. So it's not a perfect world, but nothing in my vision is about creating a utopia. It's about solving problems, and maybe that solution will create another problem, but we keep moving forward, and that's what I think the Expanse series does. My final book is the American Dream is not dead by one of my AEI colleagues, Michael Strain, which is sort of a no nonsense look at issues like wage stagnation, income inequality, and the supposed gap between productivity. There's productivity again, and worker pay.

And I think it's a bit of a myth, a very cautious, myth busting book, that what you may think about all those issues may not be true. So it's a pretty great book. Jim Bethakukis, thank you very much. Thanks for having me.

Ezra Klein
This episode of the Uzcline show is produced by Roland Hu, fact checking by Michelle Harris, with Mary Marge Lacher and Kate Sinclair. Our senior engineer is Jeff Geld, with additional mixing by Amin Sahota and Isaac Jones. Our senior editor is Claire Gordon. The show's production team includes Annie Galvin, Elias Isquiff and Kristin Lin. We have original music by Isaac Jones, audience strategy by Christina Samielewski and Shannon Busta.

The executive producer of New York Times opinion audio is Andy Roha Strasser, and special thanks to Sonia Herrero.

James Pethokoukis
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