What Happens Next – Sunday March 21, 2021 Loathing the Working Class, Censoring Conservatives, Future of Real Estate, Employment, Outsourcing

My name is Larry Bernstein. What Happens Next offers listeners an in-depth analysis of the most pressing issues of the day. Our experts are given just SIX minutes to present. This is followed by a Q&A period for deeper engagement. I think you will find this discussion to be both informative and provocative. This program is moderated to be politically neutral. Our speakers will give their opinions and then we encourage you to make up your own mind. This week’s topics include Loathing the Working Class, Censoring Conservatives, the Future of Real Estate, How the new stimulus will impact employment, and Outsourcing Work Our first presenter today is Paul Embery who is a trade union activist and columnist for Unherd. He is the author of a new book entitled Despised: Why the Modern Left Loathes the Working Class. Paul lives in the UK and writes about the Labor parties disregard for the working-class voter. We will discuss the implications of UK elites shock at Brexit voters and their belief that these citizens are deplorables. Our second speaker is Eric Kaufmann who is a Professor of Politics at the University of London’s Birkbeck College. We met Eric on What Happens Next during our discussion of political polling when he discussed the failure of pollsters to properly account for Trump voters. Today, Eric will discuss his recent article in the Wall Street Journal about the current wave of censorship of conservative academics on college campuses. Eric has also written on identity politics in the UK, the US and Canada in his book Whiteshift: Populism, Immigration and the Future of White Majorities. Our third speaker is Dean Adler who is the cofounder of the Lubert – Adler Real Estate Fund. Dean spoke on the show last summer and I’ve asked him to discuss today recent trends in the US real estate market. What Happens Next then pivots to labor economics. Our first speaker in this segment is Casey Mulligan who is a Professor of Economics at the University of Chicago. Casey was recently Trump’s Chief Economic Advisor. Casey spoke on the show a few months ago about his new book You’re Hired! Untold Successes and Failures of a Populist President. Today, I asked Casey to discuss his recent Wall Street Journal article about how the recent stimulus law will negatively impact employment growth in the US.

1 Our final speaker is David Weil who is Dean and Professor of the Heller School for Social Policy and Management at Brandeis and formerly an Obama appointed Head of the Department of Labor’s Wage and Hour Division. David has a new book entitled The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It. I’ve asked David to discuss the implications of corporate outsourcing. Let’s begin with Paul Embery:

Paul Embery: Thank you, Larry. My book: Despised: Why the Modern Left Loathes the Working Class, focuses on the serious disconnect that has emerged between on the one hand, the Labor Party and the wider left in Britain and on the other, the working class. And it explains why that disconnect has occurred. It looks at how the values of the modern left are out of sync with the values of millions of ordinary working-class voters in Britain. I've written from my vantage point as somebody who's been involved in the labor movement in Britain for around 26 years. I've been a member of the British Labor Party for most of that time and an active trade unionist. And the disconnect was a phenomenon that I and some others saw coming and I had written about. And in fact, four days before the British general election in December 2019, an election at which the British Labor Party was annihilated in many of its heartlands, I tweeted my prediction that Labor's Red Wall as it is called would crumble. And that's exactly what happened.

Because the truth is that the British Labor Party is now a party largely of social activists and student radicals and middle-class liberals living in our fashionable cities and no longer looks very much or sounds very much like millions of working-class people living in post-industrial and provincial Britain. When labor started to embrace a toxic brew of radical social and economic liberalism resulted in a new kind of Labor Party. It was a Labor Party that was much more middle class. It was very metropolitan in their outlook. It was particularly London-centric. It was very globalist and it was a party that would become to embrace quite militantly the precepts of cosmopolitan liberalism. And all of this represented quite a serious departure from the Labor Party's roots, because the party was founded at the beginning of the 20th century in Britain expressly as a party for working class people, to give workers a voice in parliament. : And the party has always attracted to support of more middle-class liberal folk. And that is undoubtedly a good thing, but its main space support was always it's blue-collar industrial working-class base. Now for example, 77% of the Labor Party members today fall into what we call the ABC1 grade, which is the occupational middle-class and 57% of members are college graduates. And that shows a party that's moving away from its traditional base, and as the party and the left's demographic has changed over the past two or three decades in Britain, so have their priorities. Labor and the wider left in Britain now focus less on less on what we call bread and butter class base issues, such as socioeconomic injustices and more and more on more middle-class activists’ kind of pursuit. For example, the party on the wider left is

2 immersed in what I think is a very destructive creative identity politics and they place issues such as gender identity and Palestine and migrant rights, et cetera, much higher up the agenda than most working-class people do.

And I certainly don't say that those issues are not important and most working-class people wouldn't say that those issues are not important, but they are not front and center in the everyday lives of ordinary voters. Because usually when you speak to working class people on the doorstep, they want to talk about things that matter to them in their everyday lives. They want to talk about economic insecurity, the lack of housing. They want to talk about law and order. They want to talk about immigration and national security and so on, the things that really concern them. But these are issues that cause left wing activists in Britain to look down at the ground and shuffle their feet in embarrassment whenever they are raised. And what I've tried to do in the book is also explain how much of today's left in Britain has become very authoritarian in nature and largely responsible for an ongoing culture war and the suffocating atmosphere which seeks to silence or cancel or marginalize anyone who doesn't subscribe to its ideology.

And it's what some people have called a soft totalitarianism. And it's growing in Britain. There's increasingly a risk that your reputation or your career may be destroyed if you are argue an unfashionable political or moral view. And the book is written from a very personal perspective. I grew up in a very working-class place in East London called the London Borough of Barking and Dagenham. And Barking and Dagenham was caught very much in the eye of the storm at the early part of this century, the first decade really of this century, over the whole impacts of globalization and how the deepening global market was resulting in deindustrialization and the loss of thousands of blue-collar jobs in constituencies in places Barking and Dagenham was often accompanied by rapid demographic change. And that caused a whole load of the wilderness and disorientation in these communities.

I tried to tell the story from the inside looking out rather than from the outside looking in. And my argument, and I'll sum up on this, is that unless the British Labor Party and the wider left in Britain return to a much more communitarian-based politics, the politics of belonging as some people have called it, and begin again to understand the importance of social solidarity, they will not win back the minds of the millions of abandoned them over recent years.

Larry Bernstein: Let me start out with a question about Brexit. Brexit didn't appear to follow normal political patterns. It wasn't a conservative issue, it wasn't a labor issue, and it had a wide appeal across party lines. And we don't often see that in the United States where a good chunk of the

3 population in both parties will disagree with the elites that run the Democratic and Republican parties. How does your thesis, which you describe as cosmopolitanism and globalism perspective of the new Labor Party relate to Brexit?

Paul Embery: Well, Brexit was a fascinating phenomenon in many respects, because it was what I've called a genuine democratic revolt, particularly by the working class and more particularly by the English working class. And many people actually voted for the first time in that Brexit referendum in 2016. People who hadn't voted in general elections because they just didn't think that general elections were a way of influencing the elites who had moved away from them and just continued to ignore them. But in a referendum, it's different. And they felt that actually they'd been handed this weapon and they it may be the only opportunity they would ever get in their lifetimes to really fire a missile through the political system and force their political masters to sit up and pay attention.

And actually when you consider that the whole ranks really of the establishment or the majority of the establishment were pro remain and were very much opposed to Brexit. And when ordinary working-class people who felt let down by that establishment saw that same establishment lining up and pleading for their vote and pleading for their support, they weren't inclined to give it. And it was really the working class fighting back and the working class saying, "You forgot about us. You are alienated us. You took us for granted. Now take that and deal with that." And I think that explains the Brexit phenomenon in Britain.

Larry Bernstein: Your book was written before COVID. Do you think that COVID in any way has changed this phenomenon? Has it made it worse? Has it highlighted the difference between the elites and the non-elites or has it brought the UK back together, because they're all fighting the same common enemy, which is a virus?

Paul Embery: I certainly think there's an element of unity around fighting the virus. And there's a kind of spirit that you do sometimes see in wartime where people come together and people want to help their neighbors and do what they can to get through it. But I think it would be mistaken to assume that all of the old tensions and the polarization that led to the divisions in Britain over the recent years have gone away. They haven't. They are still there. And when you look at how it's been handled in Britain, it's very much the working class that are bearing the brunt of it. First of all, most working-class people, particularly if they're involved in manual labor, blue collar industries, don't get the luxury of working from home during periods of COVID lock downs, whereas more affluent middle-class people in the professional industries do get that opportunity. So those kinds of divisions have been highlighted as well.

4 And I think there's going to be a real debate over the future of the economy. We've had for the last 10 or 11 years in Britain, since the global financial crash, we've had austerity in terms of the economy, and that's had a real impact on working class people. It's hit them in the pockets, it's hit their public services. It's been very difficult financially for people to get by, particularly working-class people. So, the choice for the government now is as we come out of COVID and we have to deal with the economic crisis, if they think that they can get away with another decade of imposing crippling, economic austerity on working class communities, I think they're going to be very mistaken. I think that working class communities are going to say we've had that. We're not prepared to put up with that again. We want some kind of different approach to how we deal with this economic crisis. So those divisions are there, and I think they're about to be played out in the economic debate.

Larry Bernstein: In the United States, we had an election just before the beginning of the vaccination program. If there had been an election in the second week of November of last year or even today, what would happen in the UK? Would the conservatives get pummeled? Would labor do better? Will that near term failure associated with not doing well with the COVID start to become a secondary issue over time when everyone has already been vaccinated and hopefully back to work?

Paul Embery: I think that had there been an election in November, I suspect the Conservatives would still have held onto power. Labor simply hasn't got its act together. Labor is still licking its wounds from the very serious battering that it took in the December, 2019 general election. And at the moment is nowhere near a party of government again. So, the Conservatives would have held on despite the fact that there were many, many criticisms over their handling of the COVID outbreak and the number of deaths that we saw are in Britain. And that's been offset recently by the vaccination program. And what has been, there's no question, what has been a successful vaccination roll out. In fact, the government has plaudits from across the political spectrum really in the way that it's managed to get so many people vaccinated so quickly. And Britain is one of the world leaders in terms of number of vaccinations. And that has boosted the government support.

Paul Embery: So I suspect in the long run, I don't think COVID is going to make a huge difference to the broader political and electoral landscape in Britain. I think what is going to be much more important is whether or not the conservatives between now and the next election show whether they have understood the lessons of Brexit, whether they've understood why working class communities were so alienated, and if they can reconnect the political system with those

5 communities, as well as tangibly improving their lives materially through investment and decent levels of employment, et cetera, then they will have a good chance of winning again, I think.

Larry Bernstein: Changing topics to immigration, in the United States, immigration has been a very topical issue. Our House of Representatives, I think this past week, passed a sweeping immigration bill that would allow a substantial number of American undocumented workers to become citizens. But migration and immigrant rights and the role of immigration was one of the reasons that Brexit happened and doesn't sit well I think with British working-class voters. How do you think about immigration as a topic in British politics?

Paul Embery: It has very sadly become a pointed issue in British politics over the recent years. And I say that's sad because we were getting to a point, I think in Britain where immigration was largely becoming a non-issue. It was an issue in the 1970s and the 1980s when the far right were on the march in Britain and they had big reservoirs of support, but then it faded away out of the political debate. And unfortunately, because of things like EU free movement laws, and because of the impacts of globalization and the rapid movements of labor that we've seen as a result of that, it has become a running sore again in British politics and in British society. And the truth is that most people, I think in this country just lost faith in the system. They saw very acute impacts in their local communities when there was large scale immigration, and these were often people and communities who were tolerant and who were welcoming, but they just saw that there was no proper regulation of the system. There was no proper management of numbers.

And as a result of that, it caused a huge amount of social and economic disruption in some places. I'm on the left, I'm a Democratic Socialist. I actually believe that immigration and the labor supply is a market dynamic and like all market dynamics, I believe it should be regulated. And interestingly, once upon a time that was a mainstream position on the left, that wasn't a controversial position on the left at all. But nowadays it's a position that's seen as a fringe position on the left. And many people on the left are simply in favor of a position of open borders, which until fairly recently, it was only a position that was held by anarchists and Troskyists and radical liberals.

So that whole axis has shifted on the left and more broadly. And until and unless the government in this country gets a grip of the issue and understands that most people are pro- immigration, and most people do welcome it, but the system needs to be managed properly, then it's going to continue to be a running sore.

6 Larry Bernstein: Britain went its own direction from the EU on vaccinations. Does either side take anything away from that in terms of whether more generally Britain could be okay going its own direction?

Paul Embery: It's an interesting question because of course the EU has been having a nightmare, frankly, in terms of its own vaccination rollout program. And it's had a whole range of problems and has fallen well behind Britain in terms of the number of people is its. And that has actually created something of a debate in Britain, because we had these Doomsday warnings from people before we left the European Union. We had experts and we had the political and cultural and media elites telling us that you just wait and see, when we're out of the European Union, we won't be able to cope. We won't be able to survive. And even when COVID started, people were making that same point.

But I think actually it shifted the debate because what people have seen is that as a nation state, we've probably been able to act much more quickly and in a much more coordinated and decisive way than a supranational institution that's trying to keep 27 member States happy`. Now I'm a realist. I was in favor of Brexit. And of course, there will be some things that will work to our benefit being outside of the EU. That will be some things that won't. We have to be realistic about that, but certainly in terms of COVID and particularly the vaccination program, it has undoubtedly been for the better for Britain that we're outside the EU. And I think even most of the EU supporters probably understand that.

Larry Bernstein: What issues have Labor been using recently to try to coax the working class back to the party?

Paul Embery: Well, the new leader of the Labor Party's is Sir Keir Starmer. I say the new leader, he's been the leader for a year now. He's very interesting, really because when he won the election, after Labor got hammered in the December, 2019 election, Sir Keir Starmer won the election for the leadership of the party just a couple of months after that. And he was in many respects everything that Labor didn't need. He was somebody who very much opposed Brexit. He comes from North London, a very kind of trendy metropolitan cosmopolitan area. He comes from the professional and managerial classes. He's a lawyer by trade and probably the last person you would expect to be able to reconnect with those blue-collar constituencies where Labor had lost so much support.

Actually I think some people have been quite pleasantly surprised by what he's tried to do. He has moved away from the whole Brexit, passionately against Brexit, but he's barely mentioned that since he's been the leader of the Labor Party and he's concentrated very much on the themes the working-class people like talking about. He started talking about the importance of

7 family. He started talking about the importance of community, of the nation state, et cetera, of national security. So, he started to press those buttons. I think the difficulty for him is that he's trying to take a party with him that doesn't really want to go there. The vast majority of the party are still wedded to that hyper liberalism. There's an element of the far left that are quite strong within the party as well, and have very little time for that more communitarian politics built around belonging and social solidarity. So, there's a real mountain to be climbed. Sir Keir Starmer is the leader of the Labor Party and I don't envy him because it's a mammoth task. He's made small steps, but it's still a very long way to go.

Larry Bernstein: I'm going to try to bring Eric Kaufmann into the discussion. Do you want to open with your opening remarks and then join the conversation?

Eric Kaufmann: I'm going to be speaking about academic freedom and the report that I've recently issued with the Center for the Study of Partisanship and Ideology, as well as my earlier 2020 policy exchange report, Academic Freedom in the UK. So really want to begin with two key concepts within universities and amongst the professoriate. The first is punishment. And the second is political discrimination. By punishment I refer to administrative penalties from being fired from your job all the way down to being removed from administrative roles, such as department head or given fewer resources for research, for example, or being told to teach courses you don't want to teach. That's an administrative punishment.

What we find in my reports is that one in three conservative American academics have experienced either a direct discipline from some layer of the administration or threats of discipline. One in three. So, when people say that academic freedom is a right-wing moral panic, I think it's important to remind them that in fact, we have a very pervasive problem in the Academy.

The second arm of coercion is political discrimination. In my work on Britain, I find that one in three British academics would not hire a known leave supporter. That is who supported the leave side in the European referendum. I find that over 40% of American and Canadian academics would not hire a known Trump supporter. Now these are political positions that command either close to or over a majority of the population. And so is absolutely astounding that we have this level of discrimination going on in hiring.

We also have discrimination in refereeing papers and especially grant applications that is in a similar range. So, these are the constraints, punishment and discrimination, constraints that particularly political minorities, notably conservatives, but to some degree centrists as well, particularly in North America, are operating under and also gender critical feminists. For example, gender critical feminists, so the most no platformed group in Britain and only fewer

8 than 30% of American and Canadian social science and humanities academics would feel comfortable sitting down to lunch with a gender critical feminist academic.

These two prongs of coercion, punishment and discrimination, produce profound chilling effects. And in fact, no platforming is not the biggest problem, although it is a symptom and it is a problem, it is not the most important threat to academic freedom. The greatest threat is in fact the chill effect produced by punishment and discrimination at the everyday level. For example, three quarters of British and American social science and humanities academics who are conservative report that their departments are hostile rather than supportive environments for their political beliefs. In the US, fewer than 10% of Trump supporting academics report that they would be comfortable revealing their views to colleagues, and 85% of those who did not vote Trump, that is mainly Democrats supporting academics, agree that a Trump supporter would not be comfortable sharing their views.

In Britain, it's close to 70% of remain voters who say a leave voter would not feel comfortable. And it's about 80% of leave voters. So, we have a really profound chill that shuts down a lot of conversations. That then leads to self-censorship. Self-censorship, 70% of conservative American academics say they censor themselves in teaching and research and in conversations. That's an astounding figure, and it is almost 40% among centrists, not just conservatives. We have centrists in North America massively self-censoring.

So what we have here is a system of punishment and discrimination leading to chilling effects and self-censorship. This is the big threat to academic freedom. That then filters into graduate students. Conservative graduate students, 53% say their views would not fit in academia. And this projects them not being interested in an academic career. It's not about the money. Money and the pay in academia is actually not something that distinguishes left-wing and right-wing graduate students in their desire to go down an academic track. It is in fact the sense that their political beliefs don't fit that is having a significant deterrent effect on conservatives from entering academia.

So between the deterrent effects, the discrimination and the ambience that is produced in academia, we get the emergence of a monoculture. In my data, I find there are 14:1 on the left vs everyone on the right in the social sciences and humanities in Canada in the US, and it's 9:1 in Britain. This work has been incidentally replicated. A lot of this work, chilling effects, the work on discrimination, the work on political monoculture has been replicated and in the US case using actually quite complete samples of voter registration data from at the top 60 universities by Mitchell Langbert and his colleagues.

So we have then this a closed system in which punishment and discrimination leads to chilling effects, self-censorship, repels political minorities like conservatives from the academy, producing an ever more homogenous professoriate, which is closed to competing ideas. And

9 this is then becomes a system in which the more monocultural the environment becomes, the higher the degree of discrimination, simply because it's not because academics are worse than anybody else, it's that people tend to discriminate politically. And the more slanted, if it's 10:1 left to right, the discrimination of the right against the left is not going to matter much compared to the left against the right.

And so as this becomes more monocultural, you get worse discrimination. You also get more, a larger pool of activists and you get a more permissive environment, because amongst the moderate left majority, there was a strong cross pressuring between their attachment to academic freedom and their attachment to progressive aims. The combination of this means that the more monocultural, the more punishment, the more discrimination and the cycle begins again. The only way to break the cycle, I argue in previous reports for policy exchanges that we need something like has occurred in Britain with the new white paper on academic freedom, where the government actually proactively enforces the law on academic freedom against universities, including the implementation of fines for violations and actively, not just passively, ensures that academic freedom is promoted, because it's not enough to wait for people to sue. That punishment, that the process of suing and going through tribunals is in fact a punishment that leads to self-censorship. You need the government to be proactively enforcing the law.

The last point I'm going to make release around what the government can do on viewpoint discrimination. And here I would argue that you need to de-politicize administrative layers of the university. No university should be actively supporting a political view. The academics can do that, but not officials within universities. That, too, is part of British law in terms of schools. That should be applied, I think, into university administrators. And diversity, which is being promoted in terms of race and gender, there should be an obligation to have an equivalent, whatever action you take on traditional forms of diversity has to be matched in my view by action on political diversity to help break this cycle.

Larry Bernstein: My first question is, there was a sense in America that there was something particular about Trump and Trump supporters and yet you're seeing exactly the same thing with regards to leave and remain. So it doesn't appear to be Trump specific or American specific. Why is this anti-conservative viewpoint taken hold right now? What is it about the timeliness that's affecting the entire Anglo-Saxon community?

Eric Kaufmann: Well, I actually don't think it's so much about right now. I mean, some of the papers that have looked at political discrimination in the Academy and even more widely in society go back to 2012. Political discrimination is higher amongst educated people. It runs equally in both directions, but it's just a question of, when you have a skew of ten to one, the political

10 discrimination of left against right really has a massive effect and creates a self-fulfilling feedback loop that makes the Academy more and more homogenous.

I don't actually think Trump and whatever he's saying or doing actually made that much difference to the picture. We've seen some of the previous papers pre-Trump found discrimination in grant bids and hiring that was kind of in the ... approaching 40% range against the right as well. So, it's not a new thing. And my survey took place certainly before the Capitol riots. I don't think this is Trump specific. I think it's much more deeply rooted than that.

Larry Bernstein: And do you think things are going to change or is this the future? I mean, you talked about the government being able to ... fines and violations, but that also assumes that the government will do it or that the academia will listen. Do you think it's over, that the academia will remain hard left and gather steam?

Eric Kaufmann: Yeah, I do. I mean, it's not that they're bad people, but I just think people are going to go with what's comfortable and where their biases are. And again, it's not most academics, but it might be 40% or in some cases higher. One of the points that I really make in the Wall Street Journal piece and in the other pieces is that the time has long since passed for believing that this is a fad, that it's going to fade away, that somehow the universities will reform themselves. They won't. Speech codes were instituted in the late 1980s. We're now on into almost four decades of people writing books complaining about this problem. It's not going to fix itself. It's only getting worse.

And in fact, my data suggests the younger generation of academics, under age 35 are twice as intolerant, twice as supportive of moves to sort of dismiss controversial professors, as those over 50. So, we've got a growing and not a fading problem. It is absolutely vital that governments proactively uphold academic freedom through measures such as the British government's, which is going to be really the world leader I think on this, although we see action at state level in the US, in Iowa, and South Dakota, and Arkansas, and many other places.

I think some of these state level bills need to be more focused and principled, focused in academic freedom, and coming from that principle of upholding the law and giving academic freedom primacy over emotional safety and other rationales, which should have lower priority. But this is going to take government. And there are people who think, "Oh, no, the marketplace will solve this problem." It won't, not in a sector like the university sector, which has strong network effects and legacy effects.

11 Casey Mulligan:

I wanted to ask Eric, we've seen in academia in the past discrimination against Jews. And that went on for a long period of time. The Ivy Leagues were openly prohibiting tenure from Jewish faculty. And what happened in that case, I think, but you should speak on this, was a competitive process. And so Rockefeller formed a university in my city where we did not have that bias. And we gobbled up the Milton Friedmans and others who the Ivy leagues were not accepting. And the rest was history. And MIT did some of that as well. So can a competitive process help us into the next phase of this?

Eric Kaufmann: Well, I would, I guess argue slightly back on that, that I think the sort of decline of anti-Jewish prejudice more broadly in American society, across many spheres ... the universities were part of that movement of kind of liberalism, I guess, I would see that as the more prominent, more powerful force, I guess, in bringing down that barrier. But I think there could be some role for ... let's say that the universities controlled by the red states all have academic freedom prioritized. And those in the blue states have emotional safety prioritized, over time perhaps the kind of name brand recognition of the Harvards and Yales and the ... I mean, maybe over time, those things are going to weaken somewhat and as people realize the cutting edge is in the kind of red state universities. But I kind of think that's such a difficult process given all the advantages and the endowments and reputational networks and all these other things. I just think it's very difficult. I would be very skeptical that much would change.

I don't think we can sacrifice another generation to self-censorship as we have already done. I just think it would be wrong to do that. I think it's kind of ... I think another approach is necessary and it's not going to be popular within the universities, amongst many staff, but I think it has to be recognized. I mean, when the US federal government went and desegregated the Southern universities, I'm sure that wasn't ... that was against the wishes of those universities. It was violating their autonomy, but it was the right thing to do this. This is sometimes the case. You have to sometimes violate the autonomy of institutions to liberate individuals. You don't want to do it too much, but sometimes it's necessary. I think we're at that point now.

Larry Bernstein: I want to bring another speaker, David Weil, into the conversation. David, you were a member of the Obama administration, and afterwards headed back to academia. Was your being in the Obama administration considered problematic to the academic world? And now that you're the Dean of a public policy school, do you feel there's discrimination against conservatives in any way and what are you doing to hire people on the right?

12 David Weil: Well, I have a very different view on the whole topic than I think we've heard. I think one person's view about exclusion of voices under the current system needs to explain the fact that we've had an exclusion of many other voices for long periods of time in the history of this country in academic forums and others. And I think what we're seeing is a long evolution to deal with that, that academia is trying to become more inclusive of multiple voices, not just one set of voices that have dominated, not only academics but business and government. That's what this is a long-term, a much longer term, evolution of in my view.

David Weil In terms of serving in an administration, I think in my current institution, as in institutions I've taught in the past, there is a value to coming in with a perspective on how public policies are set and made. And I think it's been my experience of people who have served in the Bush administration, as well as in the Clinton and Obama administrations, particularly if you're teaching in a school of practice, that's valued. It allows us to say things. I would imagine Casey comes back to Chicago with a different perspective on how you get things done in Washington. That certainly was the case for me. And I think that in, any institution regardless, provides some value to students and to colleagues.

Larry Bernstein: Eric, do you want to comment on that?

Eric Kaufmann: I think it's fair to look at your race and gender representation and seek to sort of broaden that. I mean, I don't really have a problem as long as it's done in a liberal way. What really sort of jumps out, however, is the fact that ... the efforts that are being made in that department are not ... there was no effort being made actually to try and politically diversify the university professoriate. In fact, a lot of universities are in fact leaning into an explicitly and overtly progressive ideology and agenda, which is actually chilling things even more. They're permitting the hunting down or sort of persecution of those who've got views that are deemed to be in some way making people feel unsafe.

So I think really what I'm seeing is ... I think you can certainly ensure ... you can try and pursue diversity in one realm. That's fine. But I think just sort of referencing history as a way of sort of dismissing the problem of political diversity is a bit of a diversionary tactic, really. If we're serious about diversity, we've got to be serious about political diversity as well. And it's just not consistent to pursue one form of diversity and close your eyes to two other forms that are not being addressed. And actually, if you want to look at the professoriate, I mean, the political lack of representation is much more glaring now than for example, the racial or gender. And yet there is absolutely no interest in this problem.

13 Larry Bernstein: I wanted to bring back some of the comments that Paul was making earlier about working-class issues and immigration specifically. I know, Eric, that you've done a lot of work on public views on immigration and change over time. And I mentioned that the House this week passed a very liberal immigration position, giving citizenship to millions. From a political standpoint, are you surprised that the Biden administration went so quickly at a very pro-immigration bill? And what do you think it means for politics, both domestically here in the United States, and how similar issues will appear in the UK?

Eric Kaufmann: Yeah, it's very interesting. I mean, I'm not surprised. I mean, because, as Paul was saying, the nature of the intellectual left has really shifted from class to sacralized identity categories, focused around issues around race, gender, sexuality. And immigration is an issue that's sort of adjacent to race, at least in the minds of many progressives, and therefore partakes of this sacred, Holy quality. And therefore, it's a sort of key priority. And it's not surprising that narratives like abolishing ICE and not deporting anybody and so on is .... sort of having a multiple appeal process that allows people to more or less just disappear into American society. I mean, that's not particularly surprising.

I think what's going to be interesting is then how this plays out. Because the majority of the American public, including most members of minority groups, are not in favor of essentially that kind of an open border. I mean, I don't say it's an open border, but it is de facto. When you have a kind of system where people can disappear into society after turning up to a hearing, it's kind of an open border. And I think what will happen is this issue ... this is the issue that launched Trump's primary bid. So, it essentially strengthens the Trumpist forces on the right and it'll strengthen support genuinely for that message.

And I guess the question is how long the identity left part of the Biden coalition can keep the pressure on to maintain this, frankly, quite unrealistic policy, that's not representing the country. If they are successful in kind of keeping Biden on this track, it's simply going to increase support for the Republicans in 2022 in the midterms and strengthen the hand of the Trumpists within the Republican coalition. And more than that, it'll lead to more polarization. And we're seeing similar trends to some degree in Britain, but I think it's more intense in the US and it will continue the shift of politics from the old economic left, right to the new kind of open, closed cultural politics of immigration and wokeness. And these are going to be the issues that the Republicans I think are increasingly going to going to campaign on.

David Weil: I think that is a complete mis-characterization of the Biden immigration policy. The Biden policy is a recognition that we have had an open ... we have had an immigration policy that has benefited the economy and this society for a long point in time. And we need to adjust our

14 immigration laws in light of what has happened. And the best example of that is the bipartisan coalition that is coming together around agricultural immigration reform, where you have a lot of businesses, and I dealt with these businesses in the Obama administration, who understand their reliance on an immigrant workforce to basically harvest our fields, and the need to treat those workers within the laws of our land. I think you can paint with broad brushes, but I don't think it accurately portrays what this administration or the president has said on this regard.

Eric Kaufmann: If you want to have a program to bring in temporary workers to harvest and so on and it's orderly and it prevents people from falling into the hands of coyotes. But I think if we're talking about incentivizing either asylum seeking and illegal immigration at the border, most of these claims are not going to make it, they're not going to be granted, but yet there is no mechanism for deportation and for ensuring that people who are rejected sort of leave the country. So, it is a de facto system. It's a kind of moral hazard that ... I mean, if I was in their shoes, I'd be doing the same thing. I certainly do not blame these individuals who are coming to the border. I mean, they're doing a very rational thing. But it's a bit like ... at some point there will ... the only way to sort of remove the incentive is going to actually be to have more border security and a smoother deportation regime and a quicker turnaround time on adjudication of cases.

I just don't think that you can send signals that are going to incentivize more people to come without having these other safeguards in place. And it just doesn't seem like there's a seriousness on border security in the current administration. Now, I mean, compared to the Obama administration, the Obama administration did have that seriousness. But I think the window has shifted in a way that ... compared to the Obama years, some of the things Obama did and said are no longer acceptable by party activists. I just think that's ... until that is solved, I just don't see how this cannot flare up into a bigger political issue.

Larry Bernstein: Eric, just following up on ... as immigration applies to the UK, one of the big reasons for Brexit was to limit immigration from the European Union to Britain. Brexit is now fully implemented. Have we seen a radical change in the number of new immigrants? I understand that COVID obviously reduced travel, but what is the public response to that?

Eric Kaufmann: Well, I think the numbers from Europe have gone down and in addition, the sending countries are not sending as many due to demographic maturity. And I actually don't think the EU inflow is going to be ... I think that issue's finished for good, I'd almost say. I mean, I can't say that 100%, but increasingly they have moved to other parts of the world, to non-European parts of the world.

15 But of course COVID has dampened down the immigration. But I do think this issue is going to return once COVID ... As COVID seems to be fading out and the economy comes back, foreign travel and air travel increases, I think we're going to see this issue coming back on the agenda. And I think it's actually going to threaten the conservative party more than I think ... I don't think labor is in a strong position in any case, but I think the rise of this issue is going to actually be a problem for the conservatives because a populist right ... it opens space for a populist right party to come in. Because the numbers really haven't fallen. They may become less European, but the aggregate numbers, there's no indication the Johnson government has done anything to, or will be able to do anything to reduce that. They may, actually, if they see a threat coming from the populist right, they may start to act. But yeah, that could be an issue in Britain, but it isn't one now because there's very little immigration due to COVID.

Larry Bernstein: Eric, thank you. We're going to move on to our next speaker, who is Dean Adler. Dean is the co- founder of Lubert-Adler Real Estate Fund. He has spoken at our program previously. He's going to discuss today what's happening next in real estate. Dean, please go ahead.

Dean Adler: Thank you, Larry. We're going to address the impact of the pandemic on the real estate industry, basically who thrived and who died and whether these impacts will be temporary or permanent going forward. So, let's just take a look back, we'll call it the pandemic period, March 15th, 2020 to an estimated September or 2021. At the outset of the pandemic, certain real estate segments were absolutely crushed. Brick and mortar retailers, the occupancy of people going to work in offices, hotels, travel, all closed down. And we had a closing down the restaurants, gyms, theaters, and major events.

During the first three months of this pandemic period, the real estate market entered a period of severe dislocation. There really was no transparency as to what the future looked like. The capital markets froze. The public REIT stocks dropped significantly, particularly in the hotel, retail, and office sectors.

As in other real estate downturns ... and basically real estate goes through a cycle every 10 years, 1981, 1991, 2001, 2009, and '21, certain opportunities present themselves to what we'll call the real estate opportunistic investors. In this case, the early distress opportunities included the following. Number one, recapitalizing distressed hotel owners who did not set aside capital to pay debt service and the operating expenses. And many of these hotel owners funded their money from family and friends. And when it came to calling money from these limited partners, they basically said "no más" or we're not contributing. So that was one source of what we call rescue capital opportunities.

16 Number two, many owners of assets that were just going to start the redevelopment process of taking an older building and remaking it, lost their redevelopment capital and lost their financing. So those who had capital to go in and invest in that cycle really got in at a very favorable basis. Number three, there's the Wall Street debt fund lenders, where these lenders would borrow short off a repo and make long-term loans. And when the capital markets froze, many of these lenders blew up due to leveraging their loans with repo paper. And the repo paper got marked to market, they didn't have the capital, and they had to liquidate assets at low prices.

And finally, many of the public shares of hotels, offices, and retailers were at perhaps all-time lows. Interestingly enough, despite this early period, there was not a significant amount of activity for buying distressed debt or buying foreclosed assets, as the lenders across the board provided forbearance to most borrowers and they gave moratoriums to basically allow people to wade through this period.

On the other side of the distress, there were certain segments of the real estate sector that boomed. The logistics: Amazon. I'll call a real estate boom, where basically in every major market, talking about 50, 60 markets, Amazon added up to two and a half million square feet of distribution centers. They would do about 15, we'll call it distribution centers of 150,000 square feet each, and they'd have one or two, one million square foot warehouses. So this was an area which was really booming.

Number two, you also saw a similar boom in the life science industry and the data center industry. Look at Cambridge, MIT, and look at the explosion that happened there. And the third group that benefited significantly were the grocery chains, who basically no longer had restaurants as their competition for this period. And they ended up achieving far superior returns because they were the really only source in town for food. And we'll discuss the grocery a little later.

So that's sort of looking back on this last year. Going forward, the impact of this pandemic has potentially altered how we will work, how we're going to live, and how we're going to play, shop, and travel, all in one category, in the future. So, let's address each of these four categories. Number one, work. The pandemic highlighted the success of online connectivity, connectivity from remote locations. This going forward has raised two questions. How will people work in the future? What will be their office needs and space requirements? And number two, where will they work? We believe at Lubert-Adler, that the urban office buildings will change moderately and must adapt and there will continue to be exodus from big city gateway markets ... will continue albeit not as dramatic as people may think.

So let's first address office space. Office space will become more of a sense of place where team members can come up and meet and collaborate and want to come to the office because

17 they want to personally see someone. And at the same time, the office space is going to have to be more flexible because there will be a number of workers who can work remotely or don't have to be in five days a week. And this space has to accommodate a much more flexible workforce. I think you're going to see a lot more activity where people come in three to four days a week, not five to six, and a space need to accommodate that.

In addition, I think there's been a heightened awareness for healthy buildings. And for the last 30 years, we've always talked about making healthy office buildings, but it never really resonated. I think it resonates now. I think having fresh air, right air infiltration system, sustainable materials, and outdoor space, will separate those ... what I'll call the Class A buildings and the next tier buildings.

Certainly, I think firms will consider more than ever to move divisions to lower cost markets. It's not just because the cheaper office rent, it's because their employees can't afford housing in San Francisco, in New York, in Boston, and Washington. It's not equal across the board. So I think you're going to see more and more firms take divisions and they'll move from those divisions ... particularly with the accelerated technology and connectivity, there'll be able to move them from the gateway markets, San Francisco, New York, and Boston, to what I'll call the emerging markets with lower costs of living, better services, which include Austin, Miami, Charlotte, Dallas, Salt Lake, among others.

For the investors, who invest in office, I think it's a real tough slog above ahead. We were oversupplied pre pandemic plus the WeWorks of the world sucked up space based on future demand. That will not be there. I think that you will see, in particular in places like New York, rents are going to flatten out but expenses are going to rise. Think about the services that are going to need to be provided. And the vacancies will rise. And buildings such as the B buildings, which were sort of older, 1980s buildings, I believe will get crushed and will need alternative uses. And we'll have real markdowns on valuations.

Let's move on to living. And living I'm going to call multifamily rentals and single-family homes. Number one, the urban apartments were initially impacted significantly by the pandemic because why would you rent an apartment when you're not working in town? But just recently, you're now gathering steam where these apartments are going to be released as people anticipate going back to work. And we expect this to rebound, although it may take a few years to rebound and it's going to be at flat rents. There's no reason why rents would escalate.

Number two, the suburban single-family market, both from a sales and rentals, soar with bidding wars again. I think look for this to continue, but I think the real hot ... what I'll call the hot area is going to be the inner ring suburbs. I think you're going to see a lot of the millennials move out, not all the way to ... into real McMansions way out. I think they're going to go for these inner ring suburbs and I think they're going to come alive again.

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And finally, when we look to build an apartment building, a retrofit, there's going to be new relevant amenities. Number one, you got to promote fresh ... You're not going to promote just the rooftop bar and all the living spaces. You're going to emphasize fresh air. You're going to emphasize indoor, outdoor space. You're going to emphasize in your room, we'll have superior at home connectivity in case you stay home. Or in each building, we'll have Zoom rooms. Not like the old cheesy business offices you see in most of these facilities, real Zoom rooms, so you can stay home and work.

And then also the whole marketing program is going to change. I think this pandemic has really highlighted how social media is really the premier area of marketing and advertisement. Interesting enough, apartment landlords are very old school, lazy, and they're going to have to really adapt to meet ... to really figure out how to market and connect with their customers via social media.

Let's finally talk about play, shop, and travel. On the shop side, brick and mortar retail is a falling knife, and actually accelerated during the pandemic. One reason just simply was ... I'll give you an example of grocery, which never really was impacted by online, but during the pandemic, customers who never ordered online were forced to do so. And guess what? They liked it. Groups like Amazon Instacart, Door Dash Delivery boomed. And they left many carcasses behind. I think you're going to see traditional brick and mortar continue to be crushed. We started with 1200 malls a few hundred years ago. I think we'll be down to 200, from 1200 to 200. And unfortunately look at urban Main Streets, look at urban main streets, look at Madison Avenue, look at Walnut Street in Philadelphia. You could have 30, 40% vacancies. On the one hand, you could say it's because the rents were so high. On the other hand, you've got to ask yourself if these retailers are moving up, who's moving in? What type of retailers, because not many brick and mortar retailers are even being created today? What are the ramifications if our first floors of our urban areas are 50% vacant? May have a real impact.

Finally, hospitality, select-service with low overhead will come back first. The drive to resorts is thriving because people want to go somewhere and they don't want to get in the airplane. Business and group hotels are several years away, and the international comeback, that's going to be the longest to recovery. Interesting, all the hospitality markets are going to come back. The one who's hurt the most in New York.

You may see 20 to 25% closed hotels not only due to no business, because the high union labor cost. If you're a full-service hotel in New York, you got really, really tough labor issues. In sum, the pandemic had a significant impact to real estate, owners must adjust to the changes with the pandemic and look at this both as an adjustment, but an opportunity. If they adapt, my belief, real estate is still a very attractive asset class because it has the ability to generate very strong current yields in a world with little to no yield.

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Larry Bernstein: Dean, thank you. I want to start with some of your last comments, particularly about Madison Avenue. Having lived on the corner of 63rd between Fifth and Madison for a decade, what I noticed was a complete turnover in retail on that street. For example, on the corner of 59th and Madison, there was a Crate & Barrel that had been on that corner for decades, and it obviously made no sense at current rents for Crate & Barrel to be on Madison Avenue. That was closed, and a number of very high-end retail shops went in. I think what you're saying is that those retail shops that went in aren't going to be able to afford those rents, and then your point was who's going to go in there. Do you imagine a world where the Crate & Barrels of the world will return to Madison Avenue, or do you think rents will come down-

Dean Adler: Yeah, well, it's interesting, I think. Look, New York may be a little exception because you have so much density in people that there'll be occupants there, but here's an interesting: Before, many retails had to be on Madison Avenue because it was the way they marketed. They needed a presence there. I think with the pressure of e-commerce and how people are connected to the brand, having a permanent location on Madison Avenue may not be as critical as it was before. I think most retailers, very interesting, used to benefit by adding stores. That's how their value was enhanced on Wall Street. They showed the growth through new stores.

Dean Adler: Now, if you're a retailer, except for the what I'll call the value retailers, the Five Belows, the TJ Maxxes, but generally, if a retail is expanding stores, they get punished because analysts are saying, "My God, you're spending money on brick and mortars. You should be spending money on e-commerce because if you don't develop a robust e-commerce program, you could be out of business." There are really no incentives for many landlords to increase their locations by brick and mortars because many don't get credit for it.

Number two, you have a lot of landlords who bought these assets at very high valuations based on high rents. It's going to take them a long time to decide to rent to a user at half the rent because if you put someone in at half the rent, they've lost their equity, they've lost their investment. I think you're going to find it's going to be the next few years you're going to have a lot, a lot of vacancies there, a lot of pop-ups.

The bigger risk is, for something like Madison Avenue, if the only retailers who could afford to go in are the value retailers, when you start putting in the TJ Maxxes and Burlington Coat and use it like that in the outlet stores, how does that impact what Madison Avenue once was? Those are the expanding retailers, and restaurants on Madison Avenue is very hard to do because it's too expensive, so it's going to be very interesting to see, but it's worrisome. We should all be worried about what's going on.

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Larry Bernstein: Using a completely different example, my parents live in Sarasota, kitty corner to Sarasota Square Mall. 25 years ago it was a brand new spectacular mall. That mall is now completely dead. I wouldn't even call it on a lifeline. There's like one store left open. But across the street are strip malls- They seem to be very successful. They seem fully rented while the big mall is dead.

Dean Adler: The grocery store service, what I'll call open center, if you say there's anything that has positive, open lifestyle centers, we could walk outside, feel you're in a park, do your daily grocery shopping services, some restaurants that have indoor/outdoor space, I believe those will thrive. Those would be the winners. But the old interior malls, except for the big fortress malls, are just not going to be there. You'll see a rebirth on lifestyle centers. They'll put some apartments in there. They'll put some office. It'll be a nice community center. I think you're going to see those continue to thrive, but on the other hand, you're going to see main street retail and the malls really have some tough times.

Larry Bernstein: Repeating this same idea, so I grew up in Glencoe, Illinois, and Northbrook Court is right down the street. It is also a terrible dying mall. Inconceivable to me 20 years ago that it ever would happen, but today, it's not on its death throws, but it's heading that way. This space is enormous. It's got thousands of parking spaces. It's got all this interior space. If you were going to buy... Let's say I could sell you Northbrook Court for a dollar and said, "What are you going to do with it?" what would you do with it?

Dean Adler: Okay, so I think it's pretty easy, actually. It's a hundred acres that was improved and then titled. You tell me where are you going to find a hundred acres in Northbrook? You can't-

Larry Bernstein: That's it.

Dean Adler: Actually, a valuable piece of land, and let's start over. I think you'll start with some apartments. I think you'd do something like what I'll call service, retail, and apartments. You create a community with some apartments, a park inside. You create your restaurants. It becomes an

21 amenity. You create some cool gym spaces. You'll create a flexible office. You'll knock down everything. There's no reason to save anything there. You'll create some townhouses, which have liquidity, maybe some single-family homes.

It really becomes a superior development site, and you're going to find that the city of Northbrook will be supportive because they can't have that dying mall sit there forever. It's a security issue. It's a crime issue, and you have the ability to bring new housing, indoor/outdoor restaurants, a grocery store. The retail becomes a more amenity retail than what I'll call real shopping centers. That's what you're going to see in the future.

Larry Bernstein: I want to switch to office. We had an HVAC specialist on the show way early in the crisis, and he was suggesting that you could redo and greatly improve an HVAC to bring in fresh air rather cheaply. He said he could do it for between $1 or $2 a square foot, and I was, frankly, in shock how cheap it was at the price. How do you think about how to reinvigorate or re-improve HVAC and create what you thought was this healthier office space for air?

Dean Adler: Well, number one, I'm not sure you could solve it on the HVAC and people will give you credit for it. I mean, you'll tell them you have this new filtered air, and most people won't realize. What you do need to do is create some outdoor space. Here's the ways to do it.

Number one, you can take some of your windows in every floor and bring them in 10 feet. Not all of them, but some of them to create balconies on every floor. You're going to need space on every single floor so your tenants, if they want to go outside and get fresh air, that sends a real message, "Here's fresh air."

Number two, you could go to your rooftops. I mean, you see these cool rooftop bars. Tell me why you're not using your rooftops to provide people in the building access to outdoor? You're going to pump up your filtered water. You're going to create some flexible space in your buildings so small tenants could come there. I think there are ways that you can reposition your office space so it's much more indoor/outdoor. I think that's critical because if you think about today, do you want to be hermetically sealed on the 17th floor? You go from a stuffed up elevator to the 17th floor, and you can't open your windows. I mean, it's depressing in today's world where people are aware of this. I think there are interesting ways to create great outdoor space and market your outdoor space for use.

Larry Bernstein: I mean, it's sort of ironic that the current B and C buildings, you can open the windows in your offices, and all of a sudden that's fantastic, so-

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Dean Adler: I think you're going to be able to take your A buildings and just think about the window glass one moving in certain areas, moving it in 10 feet, just like we've done, and we've converted old offices to apartments, and we just stuck the window out 10 feet in so we could create balconies. Now, if you could create a balcony on each floor for people to use, you can use that to market, and I think people feel good about it. Whether they use it or not is a different question, but I think they'll feel good about having that.

Larry Bernstein: I also want to expand on moving out of high rent districts, and I mean what you call Boston, New York, San Francisco and moving to Dallas, Miami, Austin, Nashville, Charlotte, et cetera. How easy is that going to be, and who's going to be driving that decision? What makes you think that it's going to be domestic? Will it be easier for them to use foreign workers if, in fact, they're moving people outside of these areas?

Dean Adler: I think if you really think about what makes up an office, you have the decision-makers there in the office, and normally, they have their accounting departments and a lot of back office with the regular office with your decision makers. I think what people are coming to recognize, especially from the pandemic, is many of the back office functions do not have to be in a hundred dollars a foot space.

Then number two is think about the burden of living, if someone has an accounting job or even a finance job, and they're living in New York City, and the cost of living, for a fair paying job, they're not super high end, but fair paying job, think how much more they can get in their lives by being in a much lower cost environment not only for the office space, but how they live and how do they go to school and how to get to work. You see a lot of... Look, a lot of big firms now... Goldman Sachs got an enormous back-office presence in Salt Lake City. Enormous.

Now you see that Goldman and Blackstone are putting divisions down in Florida. I think you're going to now see that particularly because I think the connectivity on working apart shows that you can be productive. Even though you had the video conferencing before, I think Zoom has really allowed us to know that working remotely doesn't mean these people are not important.

I just think people are going to revisit what their office means to them, who needs to be there, and who doesn't. I think they're going to find there's a lot of markets. I think people would be quite attractive to live in and avoid the cost. I mean, you read about the cost in Seattle, San Francisco, New York. It's prohibitive for most people, and this allows them to stay within the company and not incur those daily costs.

23 Larry Bernstein: Well, in the 1990s, I worked at Salomon Brothers in New York, and we decided to move our operations department to Tampa, Florida. We offered everyone the chance to move, but very few people did move. We ended up hiring new people in Tampa to take on the positions at lower prices because of the unwillingness of people who generally lived in New Jersey and Staten Island weren't willing to leave their communities. Do you think that will result in movement of people, or we'll just hire different people in those new locations?

Dean Adler: I don't know exactly how that will come up, but I think for the first time in a long time, the one thing the pandemic did was force people to step back. I mean, everyone's on this treadmill, "I have to get to the office at 7:00 in the morning. Someone calls me. I'll be flying to Chicago so I can be there at the 8:00 meeting, and then I'll go to Dallas the next morning." We were on this go-go treadmill. I think you're always going to have people who are following that course, but I think a lot of people stepping back and saying... rebalancing, and they said, "Hey, I could really look at how I'm conducting my life, and I am going to be considering other vocations because it's just too tough to play the rat race in some of these big markets."

I think there's more of awareness. The answer is I don't know if they're actually going to pick up and go because they have friends, they have family, but I think you're going to find companies encouraging this more and more. I also think the stigma of not being in the home office is less today. Just the last example, if someone from your office stayed home on Friday, you didn't think they were working. If they stayed home every Friday, you would not consider them to be a rising star in your organization. There's going to be something wrong.

I think now you realize, what we've gone through in the last year, that if someone really doesn't come in Friday, doesn't come in Tuesday, they could be as productive or more productive than if they were in the office. I think the stigma of spending more time flexibly, I think you're losing some of that stigma, and I think that's a good thing.

Larry Bernstein: Dean, thank you. All right, with that, we move on to our next speaker and next group of speakers discussing labor economics. Our first speaker is Casey Mulligan. Casey is Professor of Economics at the University of Chicago. He was the former chief economist under Trump. He recently wrote an article in the Wall Street Journal called How Many Jobs Will the Stimulus Bill Kill? Casey, can you go ahead?

Casey Mulligan: Yeah. Thanks, Larry. I'm going to begin using just a few numbers to describe what's happened in the labor market because employment became somewhat ambiguous during the pandemic. Is somebody employed if they're still cashing a check but are sent home with nothing to do? I'm

24 going to speak in terms of hours worked per adult and whether that work was done remotely or in the traditional workplace.

Casey Mulligan: Work hours had dropped 25% by May 3rd of last year. As a drop, that's pretty similar to the 1930s Great Depression, but compared to the Great Depression, the bounce-back was at warp speed, no pun intended. We're not fully recovered today, but the latest data show that even before President Biden put his signature on the massive relief package, work hours are already back within 3% of pre-pandemic, so over that timeframe, we went from down 25 to down only 3. 3% is very much an average recession and less than a third the size of the recession occurred 12 years ago.

Of course, both last year's big drop and the recession that still remains, we're unequally distributed. Travel and tourism are not in a mere normal recession right now, but it's important to remember that we already had a safety net in place for many years. Even two years ago, if you lost your job, you could get unemployment to replace a significant part of your earnings. You could stay on your employer health plan or sign up for heavily subsidized Obamacare. You could even get the Earned Income Tax Credit.

These programs had flexible budgets, but expanded automatically, no congressional action required, when more people signed up. The relief package throws trillions, with a T, of dollars on top of all that. Unemployment, Obamacare, and other programs are getting much more generous, not in the sense of expanding as the economic conditions induce more people to sign up. Like I said, that's already automatic. These programs now pay a lot more per person than they did just a year ago, which will have many and are having many unintended consequences, including harming some of the people who are really in need at this time.

One unintended consequence is congestion as the large sums of money attract applicants who do not need the help. Last year, we had about 30 million applications for unemployment insurance. Try to imagine all of those people and align six-foot distance. According to Google walking directions, that's a line that could start in Cape Town, South Africa, stretch across two big continents, the Northeastern Siberia, and then come all the way back to South Africa again.

I picked Africa and Siberia not only because they have enough land to contain a line that long, but we now know that the line contained many international criminals, as you would expect when the monetary reward to standing in the line is enhanced so much by the federal government. The amount of money that criminals have taken out of the system is enough, by itself, to have been funded the entire program during the previous recession.

25 Like any recession, production and work went down. What's unprecedented and really unbelievable, and for sure, perverse, is that personal incomes went up in a big way on average. This itself has side effects. People are blowing their government checks on GameStop stock or Bitcoin. Maybe that's amusing, but what about the people spending their government checks on dangerous illegal drugs? The authors of these so-called stimulus laws seem to have no idea that they are disrupting an already disrupted real world. The economy is not a toy with some leverage that say, "Pull me to do good." The relief package puts about 40% of the unemployed in a position of earning more on benefits than they would if they had their job back, let alone accepting a new job that paid slightly less.

It won't be unusual to see households not working and getting over $100,000 in benefits. Legislation does not produce the goods and services that the people out of work would have produced. Instead, the relief effort introduces additional distortions that further shrink the economic pie. I'm not saying that's unjustified, although, to me, it seems that at this point, it's likely all over the top, but what we can be sure of is that the costs of redistribution do not magically disappear merely because the redistribution might be justified with the classic equity efficiency trade-off.

Last spring, we saw unfilled positions pile up on the heels of the previous so-called stimulus. Employers were telling us that the paychecks that they could offer couldn't compete with the generous government benefits, so these were jobs not getting done, businesses not growing or getting formed in the first place, which are the costs that ultimately fall on the consumer. We may see this this afternoon that this is a big gap between how Mr. Weil and I think. In my view, there's not a fixed number of employers with a fixed number of positions. These things depend on market conditions, which are distorted by heavy-handed government policies.

Going back to the trend for unfilled positions, that upward trend went up in May and June and July. Then all of a sudden, it stops, miraculously, exactly when the last year's relief package expired. No more unfilled positions have piled up that year until January when the federal spigot got turned back on again. Even when the vaccine has done its job, I do not see how we can have our pre-pandemic economy back when so many people can make more money out of work than employed, or to put it another way, how can we get back to normal when a wide swath of businesses cannot make enough in their operations to outbid the federal benefits system?

Larry Bernstein: We're going to go straight to David Weil's presentation. David is the Dean and Professor of the Heller School for Social Policy and Management, and he is the author of a book entitled The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It. David, if you can go ahead.

26 David Weil: Thank you, Larry. What I'd like to talk about in my six minutes is about not what people often have been talking about in recent years, the future of work, but instead, talk more about the present of work, and in particular, how it has changed as a result of business and organizational restructuring that's been going on, really, for three decades but I think has been heightened or highlighted by the recent pandemic.

In particular, over the last three decades, more and more businesses have moved to what I am calling a fissured workplace, and that involves a set of organizational changes that include but are not limited to outsourcing. I think the best way to define it is to give a couple of quick examples and then step back a bit. I've often, in giving talks about the fissured workplace, use hotels as an example and the fact that when we walk into a Hilton or a Marriott, we have a set of very distinctive services, services that have, in fact, been carefully branded to attract a certain kind of business or other kind of traveler, and yet, very few of those people who work along the standards created by those well-known brands are actually the employees of those brands.

Instead, if you look at the structure employment, in most hotel properties, people work for a variety of third-party management companies, staffing agencies, franchise operations, and contractors and subcontractors. But I think we all know not many people are going to hotels, have been in the last year, and for a while longer, I suppose, and so what we've more recently all experienced are people delivering packages, food, all kinds of things to our homes because of the pandemic, and they're often delivered by companies like Amazon, DoorDash, and so on. Again, I think people make the assumption that those people coming to our doors are actually the employees of the Amazon company that we see their emblem on the side of the van or DoorDash or whoever. Again, that assumption is wrong. Those people are not the employees of those organizations.

What's similar about a hotel, a delivery service, or many other kinds of examples I can give? What's similar across them is this idea of a fissured recipe that, really, a fissured workplace consists of three kinds of features. First, they are created by lead businesses and organizations that are pursuing a very defined core competency that is, number one, to serve its customer base in a distinctive way, and number two, to obviously give investors an incentive to invest in the company, and core competency is something that capital markets have pushed for the last three decades increasingly, and to good effect to in some respects. The problem is a second feature of the fissured workplace is an equal desire by those lead companies to shed the activities that really allow it to deliver those core competencies to other organizations instead of being the direct employer of those activities.

Then finally, and very crucially, and what I think this is sometimes missed in the outsourcing discussion, those lead businesses also have to have a glue in place because if you think about

27 the first two elements, there is some tension between them. If you hire the wrong person to undertake activities, they can undermine your core competency. The fissured workplace is one where you have a glue, whether that is a glue held together by a franchise structured detailed contracting standard, increasingly platform algorithms, or other methods to make sure those different organizational entities, and the many different people who suddenly hold the employment responsibility all keep to core standards.

Now, if you think about how that structure has played out across more and more sectors of the economy, that's why use the geologic fissuring analogy, three kinds of problems arise from it. Number one, as organizations become more fissured, more complex, as responsibility for employment laws are broken apart into multiple parties, it undermines compliance, whether we're talking about compliance with basic labor standards, which the agency I ran enforced, or health and safety standards or things like discrimination and sexual harassment. That responsibility gets diffused, and we have increasing problems of compliance.

Secondly, I would argue the fissured workplace is a driver of growing earnings inequality, and there is a growing literature in the labor economics and industrial organization literature that shows more and more the drivers of increased earnings inequality is coming from differences in compensation and earnings between companies, not within companies. I think the fissured workplace, the breaking apart of activities has a lot to do with that.

Finally, and this is more recently and more evidenced by the results of the pandemic, fissured workplaces increasingly leading to an erosion of the concept of employment itself and undermining what has been a century of protective workplace legislation built around the idea of employment and replacing that with the increasing use of independent contracting where you don't have any of those protections, and that creates a crisis, I think, in our workplace system. How do we address it? Well, I would basically tee up two big buckets. One is what we tried to do in the Obama administration, I think, with some success, and that is to enforce our existing laws, mindful of these changes in the structure-

Was mindful of these changes in the structure of organizations that are regulated and really trying to make sure all the parties take their share of responsibility for our basic employment laws and not disadvantage people who don't choose certain routes versus those who are shedding those responsibilities.

But secondly, I think it does require us to rethink some fundamentals in how we do federal workplace regulation. As we have moved further and further away from the structure of securing basic rights and conditions for working people, as the economy has changed, as the organizations have changed, I think we have to think about what core set of rights do we want

28 to assure based on work not employment. And then, from there, think about how we also provide the kinds of relates and protections we've had historically to working people through other mechanisms. Thanks.

Larry Bernstein: This will be a panel of Casey and David together. I'm going to start with you, David. In your book, you open with a discussion about Ronald Coase, and I had a chance to reread his essay entitled The Firm. And Coase asked the following question... Coase was a Nobel prize winning economist from the University of Chicago, and Coase said, "Why do we have a firm at all? Why do we have employees? It's because of transaction costs. It's very challenging to renegotiate work contracts on a daily basis to get different work. Wouldn't it be great if people just worked indefinitely for a firm, and then we could sort of internalize those transaction costs?" But I think what we've noticed is that transaction costs in our society have been declining remarkably over the last century. And that's why these organizations are fissuring. With the declining transaction costs, the janitor doesn't have to work for you. As a matter of fact, lots of people don't have to work for you. Even the human resources department doesn't have to work for the company. People can specialize in that. Normally government and economists, in particular, are excited about declines in transaction costs leading to new opportunities. Why do you find the decline in transaction costs, which undermines the necessities of firms, to be problematic for the workers themselves?

David Weil: That's a great question, Larry. And putting it in a Coaseian framework certainly is something I think a lot about as an economist, as you say. There's no question that the transaction costs are driving these changes as they have driven changes historically, which led to Coase's original whole article which was an observation about that. I think the problem that I try to really highlight in the book and in my own work subsequently, and then a lot of other work, is that on one hand, the transaction costs do allow one to shift activities to other organizations, but what remains is a very steadfast and in fact, increasing control over the outcome still by those lead companies. So that it isn't as if these other entities are acting as independent players who are buying and selling their activities through the functions of normal market activities, but they're still being very much in an operational way controlled by the lead company that dictates these things because of its own core competencies and needs.

And I think I do use the hotel as an example often because Hilton hotel in its basic franchising agreements has incredible detail about everything that goes on in that hotel in terms of how you're greeted at the front desk, how many pillows are in every room, how often different areas of the hotel are serviced. All of those things are still dictated by a lead company and the issue that I'm trying to bring to the table, and I think that we have to make sure our laws,

29 particularly our workplace laws respect, is that with that kind of level of control and integration, we have always assigned a level of responsibility that you're a player and that you have to think about your continuing role in that respect.

That's what we have missed. That's what we've evolved away from so that we have companies that in so many ways dictate everything about work, but that at the end of the day, they say, "Oh, but they're not our employees anymore. We don't have those responsibilities." That's what I'm trying to highlight as problematic. And it gets also to the whole reason we regulate labor markets in the first place because there are concerns about the ability of workers to protect their own interests in a world where the labor market is inherently an unbalanced a market interaction between workers and employees. I don't view it as a negation of Coase or saying we shouldn't allow these things to evolve. I'm saying we have to have our workplace responsibilities evolve with them.

Larry Bernstein: I'm going to come at this in two ways. And I see your idea of control. I want to put that aside just for a second, but I'll come back, I promise. Let's use Starbucks as an example of a firm. What's interesting about Starbucks is it doesn't have any coffee farms. It doesn't have any timber firms where they make cups. They probably don't make the machines that make the coffee. They didn't develop the real estate where the site is. They didn't build the counters. They came up with ideas of what they would want a particular store to look like. They may or may not have trained the employees who work there, and they may or not have a human resources department or if ADP handles their paychecks. Why should we care that Starbucks uses so many third-party subcontractors in the process of selling us a cup of coffee?

David Weil: Well, I think in your example, you jumped a rail in several of your respects. I mean, I agree with you. We have never regulated, or we've regulated in a very limited fashion in terms of labor market and workplace regulations, things like suppliers of physical goods, the counters, the coffee beans, and et cetera, although Starbucks has incredible control over the quality of the coffee beans that come in and out of its companies and for good reason. Where I think it jumped the rails was saying about human resource and training and those function. Starbucks makes a huge investment in it because it's central to its business model. And there's nothing wrong with that. I mean, I taught for almost two decades in a business school and in finance economics department.

I know the value of saying I have a set of core competencies and experiences I want to deliver to my customers. And Starbucks is a great example of a company has thought long and hard about that how it trains its baristas, the kind of experience they want people to have so they stay and spend money. That's where by doing so, you are getting into a different game. It's something pretty basic to our workplace regulations. You are owning a large part of those

30 functions and, therefore, responsibilities for all the things we regulate in the workplace because of your interest in those particular aspects. And that's what I think delineates the different examples that you gave for that.

Larry Bernstein: Maybe the example of training was a bad one because they probably keep that one internally. But let's use another example from your book where you said that the janitor used to work for Starbucks, and now the janitor works for a third-party janitorial firm. And what you noticed was that historically janitors get more pay in industries or companies that have higher compensation per employee than they would otherwise. And what the subcontractor does is it pays their janitors pretty uniformly across all firms. Why do you find that problematic? Why should we encourage janitors who work for high-paying firms to get paid more versus janitors that work for low-paying firms to earn less?

David Weil: Sure. And I think the justification or this is an observation of a larger shift that has occurred in the economy that I just want to note, and I'm concerned about it because I'm concerned about income inequality, and that has had a profound impact on the structure of earnings in the economy. And this goes to a lot of great work that's been done by a whole set of different teams, labor economists who have been looking at what really accounts for the growing gap, growing earnings inequality in our economy. And what many of those studies by people like Nick Bloom, David Otter, Larry Katz have shown is that earnings inequality is being driven by one group of people who happen to be linked to companies that are rising in the economy and where people are employed still directly by those companies, so it is the Google high-end engineer ascending with Google upwards. And you have another set of people attached to businesses like subcontracted franchising, like more and more of subcontracted or otherwise fissured activities in other parts of the economy that are not doing so well.

I would make the observation we should be concerned about that if we're concerned about earnings inequality. It is an outgrowth of what has happened in the structure of employment, where we can no longer say, "Hey, go into the mailroom, and you'll work your way up." You're no longer in the same structure that allows the kind of upward mobility that was very beneficial decades ago. That no longer exists. I'm not saying let's bring back the clock. That's not how economic history works, but I'm saying let's recognize the repercussions of that in the economy and its consequences on growing earnings inequality that I think we have a lot of reason to be worried about.

Larry Bernstein: Casey, I want to bring you into the conversation. And before I go to your discussions about the stimulus bill, I'd like you to comment a little bit about David's comments about outsourcing.

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Casey Mulligan: Yeah, well, actually, maybe I should ask my question, which kind of reflects the angle that I'm coming at it. Isn't the story the fissured workplace that you're telling... isn't that a euphemistic way of saying small businesses are really an annoyance for regulators, to central planners? It'd be so much easier for regulators just to tell corporate McDonald's what to do. And that leave that franchising approach out in the hinterland and chase down all these franchisees and tell them what to do. And it really also serves a political purpose. It seems to me that by not having the smaller businesses, you can better have this narrative of worker versus management, which is a narrative that doesn't ring true a lot in our country because there are so many small businesses, but maybe it would in a more Marxist sense if we had big, massive employers and everyone else being workers.

David Weil: Well, as you might guess, I don't agree with that characterization. First of all, I would observe that our employment laws going back to the early 1900s and adopted by both Democrats and Republicans basically understood the fact that working people need additional protections, whether it's in the form of unemployment insurance or health and safety protections or worker compensation, the whole raft of things we've always protected. That's not about us trying to subvert labor and put capitalists and workers in opposition. It's a recognition about a set of social problems we've been grappling with as a market economy for a more than a century. I think you've got to base it in that.

Secondly, I am not talking about... I said you don't reverse economic history, but you certainly understand the structure of a market and a structure of organizations if you're trying to ultimately make sure that your laws are being enforced and that you are providing the common growing benefit or the sharing of benefit that we have done again, that are basic to our workplace laws. It's not antithetical to the belief of a growing economy to also say, "And the various parties who contribute to that growth should benefit both employers and workers." And that's what we do with our workplace policies.

Larry Bernstein: Casey, maybe a question for you on your opening six-minute presentation. You mentioned that a number of households will get a $100,000 in benefits under the stimulus plan. How do you come to that kind of a number?

Casey Mulligan: There are a variety of programs there. The first, I think, in terms of delivering the most numbers, would be unemployment. Now, people can claim unemployment... used to be, you had to have been fired or laid off, not necessarily because you broke a rule at work, but there the employer didn't want anymore. But now you can quit because maybe you're concerned

32 about COVID, and you want to stay home, and you can get unemployment that way. That typically replaces about half. It varies by state, but about half of your earnings will be replaced that way through your state program. Now, the federal government has added onto that now, $300 on top of what the state's giving you. And you can get easily into earning $1,000 a week just from that one program as an individual. Now, there's very much a norm in our families these days that mom and dad potentially can work. And it means mom and dad can potentially each be getting $1,000 from unemployment. And that's the unemployment program.

Then you have Obamacare. It depends on the size of your family and some other factors. But, you could easily be getting over $10,000 from Obamacare. The child tax credits, which are $3,000 per child. That, of course, depends on number of kids you have, but that can add up as well. And then there's the so-called stimulus checks that are just going to people, adults, and children in the household. So those are things that can really add up, even in an average state, like I think in the article we discussed Kansas. And then it can get much bigger in some of the more generous states, like... I think we used Massachusetts as an example.

Larry Bernstein: Generally, when we come out of recessions when jobs become available, there's a rush to work. I think what you're saying is that with all these benefits, individuals will be reticent about giving up these benefits relative to the employment incomes that they can receive. You mentioned that 40% will get more on benefits than they would have earned if they gone back to work. We're currently, I think, it was like we're 10 million jobs down from February of last year. Assuming everyone got vaccinated instantaneously tomorrow, do you think we would head back to full employment quickly? Or would we have to wait for the stimulus program to pass its course for people to go back to work? And maybe as a final question, we have these black markets where people can go back to work, but not admit it. Do you think that what will happen is that people will work under the table so they can both get the benefits from the government and earn some income tax-free on the side?

Casey Mulligan: Yeah, we're not down 10 million jobs, actually. One thing I follow is the Dallas Federal Reserve's high-frequency jobs report. So, it comes out more often and more quickly than the one done by the labor department. It's designed entirely to mimic the labor department. It's done a good job of doing it, but it comes out more often. And we just saw the numbers for the first week of March, which was before Biden signed it, and we're down 3%. As I said, putting it in jobs is a little tricky because people are on furlough and stuff like that. But in terms of hours that adults are doing work, we're down 3%, which would be something more like four or five million putting it in jobs terms. From there, where we were the first week of March, before the Stimulus was signed.

33 Larry Bernstein: Could you explain that just for a second? When you look at the, I don't know, the establishment survey, and you look year over year, and you see it down 10 million, and you see hours worked basically 34.5 consistently across the year. What does it mean that you're only seeing it down 3%? What's driving that differential between what you would see in the Bureau of Labor Statistics report?

Casey Mulligan: Well, this Dallas survey takes a little more effort to figure out, are you actually at work working, maybe not necessarily at your physical workplace, because the pandemic made this much, much bigger distinction. There was not a big distinction before. So they're a little more careful to track that part. So another way you could call it is, how many people are employed and working as opposed to employed and not working? Employed meaning you get the direct deposit in your checking accounts, but working means you're actually doing something. And that's one reason I look at the hours. It's not so much that hours per week have changed. People have gone from a 38-hour week to a 32. That hasn't really changed, but it's this distinction between what does it mean to be employed? Does it mean working or getting a paycheck?

Larry Bernstein: That's a COVID phenomenon. Is that what that means?

Casey Mulligan: It happened right away in May that a bunch of people were sent home. Their paychecks still continued. And that's what happened. It's probably now not such a distinction, but to track the last 12 months, I really like to use those measures that are not so sensitive to these. It's kind of even a legal distinction or a semantical distinction, as opposed to the actual activities that allow us to consume and invest, which is actually working. Now, the stimulus has to run out. Now, we can say that the people who are getting the benefits aren't incentivized to go back to work, and that kind of put the blame on them, but this is a market. This is like the old thing you're in high school, and two people break up, and they say, "Did she break up with him, or he broke up with her?" They each tell a different story. But you could also say it's the employer who's are not willing to ante up to compete with these benefits. I mean, the problem is if the benefits are a wedge coming in between this pair of employer and employee getting together, and that wedge has to disappear before you can have the normal levels of employment back.

Once that happens, I think it'll happen rather quickly. But so far, they've scheduled the stimulus payments to go out to September, and if experience from 2009... is any guide, Congress is going to keep coming back and saying... what's the old saying? "The beatings will continue until the complaining stops." Until they see employment come back, they'll think we still need the

34 stimulus. So, what's going to happen, has to happen, has happened before, you're going to have to have a change of party in Congress, and a group coming in and saying, "No, we're not redoing the stimulus anymore. The pandemic is way behind us." And then you can come back to what we had before the pandemic.

Larry Bernstein: All right. This is the part of the show where I try to end on an optimistic note. COVID has been depressing in many regards, and we usually all end up very depressed. So I've tried to undermine that by requiring every speaker to come up with something optimistic, hopefully on their relevant subject. And, David, while I'm going to start with you, just to blindside you a little bit, when you think about the world of labor economics, what are you optimistic about?

David Weil: Well, I would say, I mean, I take an entirely counter view as Professor Mulligan on the stimulus. I am very optimistic about the stimulus. I think, first of all, we know there are a lot of people hurting out there. There are 10 million people who are unemployed, according to the BLS's household survey. And that's a lot more than the 5.7 million that were out of work before the pandemic. And if you look at the structure of unemployment, the long-term unemployment that's growing among some groups, it's even more worrisome. I think the stimulus makes me very optimistic. It is a very different take than the Trump tax cut and really trying to get money into the hands of the middle class and working people and people who aren't working right now, who are really struggling. I think reinvigorating our economy through getting those people assistance in the way that stimulus does bodes very well for not only the short-term recovery but in the long-term the way we do recover.

Larry Bernstein: Thank you. Casey?

Casey Mulligan: I think we've seen a lot in the market and labor markets, specifically, a lot of things that hope for optimism. I mean, the idea last March was, "We've got to shut the schools and businesses. They're not good for public health. That's where people get together and do stuff. And we have an infectious disease, which goes from person to person, so let's send them all home." And the data's starting to come out, but the companies and the schools really are amazing organizations that, yeah, they got a lot of people, but they can take some relatively painless steps to make us all healthier. And we're seeing that, for example, COVID transmits much more often in the home than it is in a workplace or a school except perhaps a meatpacking plant, but suppose you have some meatpacking households as well. And the vaccine also came from the private sector. I think the private sector and regular people have stepped up in such an amazing way. Those are going to be great people to live with going forward.

35 Larry Bernstein: Dean Adler, what are you optimistic about?

Dean Adler: Look, I think what COVID and the pandemic did was accelerated many of the trends that were already in place. And I don't believe it has really destroyed certain industries. I think it has accelerated certain trends. And there are things companies and landlords have to adapt appropriately to what occurred, and I do believe they will adapt. There's no destruction of a banking system that we went through in 2009. I think the COVID will create a soft period. It's going to take time to rebound, but I'm a firm believer that things will rebound. And I also think that US is a very entrepreneurial. Place and people are going to come up with alternatives. Many brick and mortars went out. I think you're going to see a new group creating new concepts, new innovative ways to make the streets come alive again. I think we're social beings. I think connectivity is not going away. I think maybe, perhaps, we may want it more than ever.

So COVID created a tough period. I think many institutions helped out by forbearing, trying to work through it. There were some casualties, but I think things will rebound. It may take some time, but it'll rebound, and all will be fine. And actually, I think it may put into a system that's even more efficient and more effective going forward. So, it may lead to a lot of new opportunities for new people to get into the game and do things entrepreneurial and make it happen.

Larry Bernstein: Thank you. Paul Embery, what are you optimistic about?

Paul Embery: Well, in terms of the issues that I raised at the top of the show, I can't say I'm hugely optimistic, but one thing that has heartened me is the number of people who have come to me and said that "I've read some of what you've been arguing. I've read your book, and actually, I'm a member of the labor movement, too. And I'm on the left, and I agree with quite a bit of what you say." And it seems to me that what Eric touched on actually, there is this chilling effect that if you espouse certain views, particularly if you do so from within the left itself if you talk about the politics of belonging, if you talk about, for example, challenging open borders and that kind of thing, you will be dismissed as a reactionary. You'll be dismissed as a right-winger or a bigot, and I think that has bullied people into silence.

But I'm heartened by the number of people who have said to me privately that actually, "We do need to start arguing some of this stuff. You're absolutely right." So, it tells me that the support is there. It tells me that actually, there's a silent majority out there bubbling underneath the surface who don't particularly like the direction that's been taken by the political and cultural elites in Britain and no doubt in other Western countries as well. And that tells me that the

36 battle is not lost. So, there's a mountain to climb, I think, to reconnect the working class to the political systems and make sure the working class has faith in their politicians and to end that alienation that they've suffered over so long. But I think that's a battle that can be won.

Larry Bernstein: Thank you. Okay. That ends today's session, and I want to just plug our next week's program. We're going to have Carol Spahn, who runs the Peace Corps. We'll discuss about how the Peace Corps can transform your life. We'll have Dr. David Katz from Yale to discuss nutrition and how you should plan your diet. My old friend Sudi Mariappa will be on the call. He runs risk management at PIMCO, which is the largest fixed-income investor in the world. We'll have Packy McCormick, who writes a newsletter called Bullish. And finally, we'll have Andrew Gelman. Dr. Gelman is a professor of statistics at Columbia, and he writes about the success and failures of political polling. Thank you so much for participating.

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