Jeffrey Tucker: $6 Trillion Created Unprecedented Inflation, All to Feed the ‘Lockdown Machine’

“While we slept—while we thought the world was just fine—what was actually happening was a tremendous distortion of the production structures.”

I sit down with Jeffrey Tucker, senior economics columnist for The Epoch Times and founder and president of The Brownstone Institute.

Tucker says labor supply problems are approaching catastrophic levels with historically low worker-to-population ratios, despite what the Biden administration says.

“We just lost millions of workers. They just disappeared,” says Tucker. “Savings rates are rock bottom, credit cards super high, people are taking on second and third jobs, and Washington’s calling this ‘job creation’?”

Tucker and I discuss how pandemic mitigation measures made no measurable difference in health outcomes and caused an economic disaster, in which America’s institutional systems have now become a closed world of industrial privilege.

“The settled ideological systems of 2019 and the previous 50 years don’t really serve as very good prisms to understand the present world,” Tucker says.

We also discuss the Federal Reserve, interest rates, the labor market, and the incentives driving the long-term impacts of COVID interventions.

“The slogan ‘Go woke, go broke’ is really coming to life,” says Tucker.

FULL TRANSCRIPT

Jan Jekielek:
Jeffrey Tucker, so good to have you back on American Thought Leaders.

Jeffrey Tucker:
It’s a pleasure to be here, Jan. Thank you.

Mr. Jekielek:
Jeffrey, I want to highlight to folks that you have a column at the Epoch Times five days a week now as our senior economics columnist, which has taught me incredible amounts in this field, which isn’t my specialty. You have this incredible ability to simplify these extremely big things that are happening today, like for example, inflation. We know there was incredible spending that happened over the last few years. You would expect inflation, but we’re told all sorts of different things. Thankfully, we have Jeffrey Tucker to help us understand this whole reality.

Mr. Tucker:
Right. I began to think of the Federal Reserve as sort of the CDC for money. In a way they’re doing just as bad a job at managing the nation’s money stock as the CDC did in managing the pathogen. They always pretend as if they’re in control of everything, but it turns out they’re not. After the pandemic hit and the lockdowns began, Congress began to spend lots of money, and the treasury created the debt, and the Federal Reserve stepped up and bought the debt and created more than $6 trillion over two years to feed this machine.

Mr. Jekielek:
What does $6 trillion look like? It’s really big.

Mr. Tucker:
Yes. I don’t know. I’d have to just stack it up to the moon or something. I don’t know, it’s a lot of money. We’ve never seen inflation of that sort. What I mean by that, in this case of inflation, is money creation at that rate? It peaked at 26 per cent per annum. That’s how much money they are creating to feed this lockdown machine. It was just an astonishing thing.

There’s no way it ever could have happened without the power of the Federal Reserve to do this. If you have a money printer in the basement, you can fund anything. And that’s what they did. I just don’t know if they didn’t anticipate that this was going to cause a problem or not. They did something very similar in 2008 with the financial crisis, where they created a lot of money.

They called it quantitative easing. But in that case, they incentivized the banks not to lend out the money, because they were paying a higher rate of interest to hold the money at the Fed than the markets would bear in the lending markets. The money stayed basically in cold storage, so it didn’t cause inflation.

In the case of 2020 and 2021, they did the opposite. They just rained it down on the population. Those were weird times. You would just wake up one morning and the Department of Treasury had given you several thousand dollars. It was just next-level crazy. And of course, all this new money they created became very hot on the street and fueled prices.

The price increases began in January when Biden took office. In those days, they said, “This is just transitory. This is just leftover, and it will be gone in no time, you’ll see.” Here we are, and over two years we’ve seen a 16 per cent increase in the price level overall. But of course, it’s migrated from sector to sector. One day it’s eggs, and the next day it’s lumber. Then suddenly, energy costs are down, then they’re up again, and it keeps moving around.

Every month, these numbers are coming out, and the reports are always optimistic. “It seems as if inflation is cooling. It’s moderating, it’s calming down, it’s being eradicated. We’re getting rid of it.” But this has gone on for 24 months. The CPI and PPI, which is Consumer Price Index and the Producer Price Index, which is actually a very dangerous number, just came in just for the December numbers.

The numbers were terrible. We’re starting to see a re-acceleration of inflation, and yet the national media is not really talking about it. They just pretend as if it’s still on its way to the decline. I don’t know what the purpose of lying like this is. To calm down the population? To keep people from developing a high inflation expectation? Something. But one of my jobs for the Epoch Times is to look at the data and tell an honest story about it so that we don’t just keep living these illusions.

Mr. Jekielek:
Jeffrey, you’ve just described inflation as almost like a whole bunch of different things.

Mr. Tucker:
Yes.

Mr. Jekielek:
We know that printing money creates inflation, and most people are aware of this. But what is it?

Mr. Tucker:
Yes.

Mr. Jekielek:
What is it?

Mr. Tucker:
It’s not that complicated. It’s a force that drives up prices because of the devaluation. Now, it’s really important for people to understand the following thing. People get very confused. When we talk about inflation, we mean the value of the dollar in terms of its purchasing power of goods and services. That is different from its purchasing power in terms of other currencies.

On one hand, you can have a strong dollar in terms of all the other currencies in the world, because they’re always trading against each other, at the same time that it’s being devalued in terms of goods and services. That’s where we are. This confuses people. You’ll see two headlines. “The dollar’s strong.” “The dollar’s weak.” Which is it? It’s strong in terms of other currencies. It’s not strong in terms of your ability to buy things and services with it.

Mr. Jekielek:
This is the thing, most people are noticing that various goods have increased in price.

Mr. Tucker:
Yes.

Mr. Jekielek:
You’re describing some sort of hyperinflation based on these two indicators. What does that mean?

Mr. Tucker:
It’s not quite hyperinflation yet, but the point is, it’s re-accelerating. It’s not getting better. Now, this is despite the Federal Reserve. This is what I was alluding to earlier about the Fed’s pretense of being able to manage this stuff.

When the inflation began, they said, “We better do something about this, so let’s raise interest rates,” and they broke a 15-year pattern of zero-interest rates, and began to raise them as a way of sucking money out of the economy, like sponging up the spill, essentially. That’s what raising rates was trying to do.

And sure enough, that has reduced the quantity of money substantially, but nowhere near enough to cover what they did over the previous three years in terms of money printing and money creation. We’re nowhere near solving the problem.

So, $6 trillion of new money was created. That’s got to wash through the economy. It’s got to become endemic, to use the language of viruses here, it’s got to become endemic. The prices have to adjust up, they have to. And it doesn’t matter what the Fed does now.

Now, the reduction in money supply is probably creating conditions that are going to lead to a recession of sorts. We’re starting to see the effects of that right now, and we can talk about what that means. But they actually don’t have the power to spare us the consequences of their previous actions. That has become endemic in the economy.

The price increases we’ve experienced over the last two years, we’re stuck with. We are stuck with the existing price levels, the lower purchasing power of the dollar, lower real incomes which have been declining for 20 successive months, and our ability to buy goods and services at the same price. We’re stuck with that change. But it’s getting worse right now.

This is despite what the Federal Reserve’s doing. The interest rate increases that they’ve pursued over the last year are historic. We’ve never seen the Federal Reserve policy turn so dramatically. That’s having a profound effect on the structures of production in the industrial sector right now, but it’s not actually fixing the inflation problem.

There’s another factor that people don’t talk about, and it’s very interesting. Lots of people talk about the money supply. Not enough people talk about the money supply, but some people do. What hardly anybody talks about is the so-called velocity. Now, velocity is the pace at which people are spending the money. Velocity is a major factor in driving the inflation rate. If you have no velocity to the money, it doesn’t matter how much you print.

Mr. Jekielek:
It just means people are hanging onto it.

Mr. Tucker:
Yes, it just means it’s been stuffed in the mattresses and it’s not going to drive prices higher. It only starts to drive prices higher when people slit open the mattresses, take the money out, and start spending it. The rate at which money changes hands is called velocity. Much lower velocity levels with higher money creation will not have as big an impact on prices.

But if you have a money supply that’s being reduced as you have right now, and at the same time velocity is going up, you’re still going to have inflation. Do you see what’s happening? So, it doesn’t matter that the Fed is pulling money out of the economy through higher interest rates, and fixing up the balance sheet of the Federal Reserve, and all the things they’re doing to fix what they did over the previous two to three years, because the velocity of spending is going up.

If you look at the velocity charts, they fell off a cliff with the pandemic, as typically happens in a crisis. People get scared and they hold onto the money. But as we’ve come out of the pandemic lockdowns, and people are starting to relax, they’re starting to spend more. And then, of course, you have to spend more, because the money’s worth less, which speaks to another issue.

You can’t trust the retail sales data, by the way. It’s never adjusted for inflation, which is preposterous, but another subject. But now you see the velocity rising, and that’s making moot the efforts of the Federal Reserve to reduce the money supply in terms of its effect on inflation. So now, you have velocity of money driving inflation forward.

Now, what can the Fed do about velocity? Nothing. They can’t do anything about it because that’s a reflection of human volition. That’s the thing we choose to do. The Federal Reserve can’t affect that. Once again, you have this kind of pretense of power, or a pretense of knowledge on the part of the Fed, and a kind of a fake belief that they can manage the system.

They can’t. They’ve completely lost control of the system. They just can’t do it. They pretend to be these all-wise managers. “Don’t worry about it. We’ve got inflation under control. We’ll manage our way out of this pandemic. We’ll soft-land the economy.” No, they can’t do any of those things.

Mr. Jekielek:
What happened to that $6 trillion?

Mr. Tucker:
A lot of it went to all the programs that they spent the money on where Congress was authorizing new spending, a trillion here, a trillion there at PPP, loans for this, and direct stimulus payments to businesses and individuals. The spending by Congress is just completely out of control, and we’ve said this for generations, but we didn’t know how out of control it really was until the last couple of years. It’s just been beyond belief.

So, it’s debt. The new money is financing the debt, and the debt is created by virtue of the government’s spending. It’s all waste, and it’s not helping us recover. If anything, it’s doing the opposite. And it’s ruining our standards of living.

Mr. Jekielek:
What do you mean by that exactly? They stopped the economy, or they slowed it dramatically. The idea was this was supposed to be a stopgap for that.

Mr. Tucker:
People really do need to test the reality they’re experiencing against common sense. When you shut down an entire economy, that’s usually a bad idea. It’s not usually associated with being more prosperous than you’ve ever been. But that’s actually what happened.

We saw real incomes soaring during the lockdowns, and so savings rates went through the roof, and people didn’t even have to go to work. What a wonderful world. A person would say, “We’re getting more prosperous, and I don’t even have to go to work? The government is dropping thousands of dollars into my bank account, and I’m able to save things, pay off my student loans, and pay off my debts. This is a wonderful world.”

It was all too good to be true, of course. And so, everything has reversed in the meantime. Savings rates went higher than 30 per cent at the height of the lockdowns. Now, they’re down to historic lows. I don’t even think we’re approaching 2 per cent in personal savings rates right now. It’s just a disaster.

Meanwhile, credit card debt is going way up. So, you see what’s happening. You’ve got people depleting their savings, spending more for less, because the inflation rate is going up. They’re starting to panic-buy and put everything on the credit card, except the credit card interest rates are going higher and higher, and eating more of their now-declining real income. If you think of a candle burning at both ends, but also getting skinnier, that’s where we are right now in terms of household finance.

Mr. Jekielek:
This is a terrible situation.

Mr. Tucker:
It’s a disaster. I’ve written that it’s a head fake. It was like a fake prosperity that we were given during lockdowns just to make everybody believe that it was perfectly fine for the government to lock down the economy and violate everybody’s rights and interfere with our freedom of association, religious freedoms, and everything else. They said, “Don’t worry about it, because you’re getting richer than ever.”

In the blink of an eye, everything reversed the other way. All the riches that we gained over 2020 and the stimulus payments of 2021 got eaten up with inflation. Now, household finances are falling apart, Jan, they really are falling apart. Savings rates are rock-bottom, credit cards are super high, people are taking on second and third jobs, and Washington is calling this job creation?

Sort of, but is that really a good thing when you have to take a second and third job just to pay your bills around the house? The labor supply problems are approaching catastrophic levels. We have historically low worker-to-population ratios right now. We just lost millions of workers. They just disappeared. The labor participation rates are still nowhere near pre-pandemic levels. This has particularly affected women with children in the job marketplace who have just simply not gone back to work.

Labor participation rates among women where they’re raising children in the family is at 1977 levels right now. We’ve lost all of these years, nearly 50 years of what people used to call progress for women in the job marketplace. Nobody talks about it. It’s just a complete disaster. And you’ve got the Biden administration bragging about low unemployment.

Mr. Jekielek:
But the unemployment rate is at 3.4 per cent, a 50-year low. We are near record low unemployment.

Mr. Tucker:
What happened to the millions of people who were completely dropped from the labor markets? These unemployment numbers only measure the people who are actively looking for jobs. So yes, if you’re out looking for a job, you’re going to get one for sure. It may not be the job you want. Not only that, you’re probably going to have to get two jobs, even three jobs. And then, they call this good news?

This is not good. This is weak and awful. People are working themselves to the bone just to earn money, and this money is buying less and less as our rents are going up, our energy bills are going higher, our food bills are going higher.

We used to be able to say, “We have to save money. We can’t go out to eat as much.” Food at home right now is rising in price higher than food at restaurants. So, it’s not an obvious choice anymore. It’s like the world doesn’t quite make sense.

Mr. Jekielek:
I have to ask this, different states handled this whole situation quite differently.

Mr. Tucker:
Yes.

Mr. Jekielek:
There’s a kind of complex interplay between the federal contribution, and then the way the states actually closed their economies or didn’t—places like Florida as a big state, or South Dakota as a smaller one, versus some others, like New York and Michigan.

Mr. Tucker:
Yes.

Mr. Jekielek:
Is there diversity among what you described? It sounds kind of cataclysmic.

Mr. Tucker:
Yes.

Mr. Jekielek:
Is it the same across the board or is it different?

Mr. Tucker:
During the pandemic response and lockdowns, and with all the upheavals that took place, we saw people fleeing the blue states for the red states. People would say, “If I just get myself to Florida, then everything will be fine.” You will be better off for sure, especially with all the capital moving in and all the people moving in. Florida feels a lot more prosperous than Connecticut, for example. That is true.

However, there are some things you cannot run away from. We all use the same money, and we all use the same dollar. Florida is not avoiding inflation. They can’t. This is a really important lesson. This idea that you’re going to flee the chaos, you’re going to flee as civilization is falling apart, and find the right place to be and hide out and be protected is not true.

When civilization is falling apart, there is no safe place for anyone. Not even Florida is safe, not even Florida. That’s why it matters. You can’t just run away from these things. Let’s not just delude ourselves into thinking that there’s some magic way we can get away from this thing just by moving to Florida, which everybody thinks it is.

Everybody wants to be in Florida. And I get it. I visited Florida recently, and it was amazing. People were smiling and happy and in a good mood. I couldn’t believe it. You don’t see that in the northeast much anymore, so it’s a nice place to be.

But still, the economic effects of the pandemic response are boiling over and affecting everywhere, and rents are going up. The grocery store prices and everything is expensive in Florida right now, because the value of the dollar is declining. Now, it is true that some states avoided really bad economic consequences, because they didn’t lock down nearly as much.

Actually, it turns out that one of the best performing states was South Dakota, which is the only state in the country that completely ignored all the edicts from the federal government from the very beginning. They’ve had really great effects. There have been all sorts of studies done about the mitigation measures and what were the effects in two realms, in health and in economics.

What all these studies have shown is that the mitigation measures made no difference in health outcomes, nothing measurable anyway. But they caused an economic disaster on labor markets, on capital markets, on the value of the money, and on everything associated with a functioning market economy. They collapsed in the states that used the heaviest pandemic measures.

The shocking thing about this is that the planners, from the very beginning, just simply did not have any interest in talking to economists. It’s like we had a dictatorship of public health and the economists were literally, even at the White House, kept in a separate room. “We don’t want to hear from you. Don’t tell us about the stock market. We’ve got a virus we have to take care of.”

But economics is about a lot more than the stock market. It affects every aspect of our life. It really does speak to the very heart of the quality of life we live, which is also about health. All these things are tied together. You can’t just separate public health from economics. That’s a preposterous idea.

Mr. Jekielek:
This is something that your think tank, the Brownstone Institute, is trying to deal with.

Mr. Tucker:
Yes.

Mr. Jekielek:
You know, prior to the pandemic, and we’ve talked about this before, you were celebrating the American experiment. And actually, to some extent, you still are, but in a very different way.

Mr. Tucker:
Yes.

Mr. Jekielek:
So, let’s chart that.

Mr. Tucker:
Yes thank you for asking the question. It’s a difficult thing. Before the lockdowns, I had found myself in a kind of a trap. G.K. Chesterton would describe it as the trap of being overly optimistic. I just had a very naive view towards business and technology. I wrote a book some years ago called A Beautiful Anarchy, and I joke about this. Fortunately, it’s out of print.

I’m really glad about that because in every chapter I celebrated the glories of Big Tech. I had this idea that, somehow, because now we had technologies to connect people in ways we have never connected. We can communicate, and there’s ever more information flowing, and more human connection. We were really building a kind of a utopia, gradually, because as we get more information, humanity would develop a better ability to discern the difference between truth and falsehood.

I was wrong about that, but I believed that it was somehow built into the system—more information, more communication, and then naturally utopia dawns. I’m describing it in a way that sounds preposterous now, but the point is I believed it. I had a chapter in every one of those books on all these platforms, from LinkedIn, to Twitter, to Facebook, and Instagram, and you name it.

I was convinced that they were going to birth for us a new world of freedom and emancipation from all the tyrannical structures of the past. Basically, I found myself, maybe accidentally, but de facto, a sort of techno-utopian.

When the lockdowns happened, I got really angry that my story wasn’t coming true. I didn’t like the lockdowns, and not only because they were a catastrophe for the world, but also because they disturbed me psychologically and intellectually.

It was not part of my thinking. I really thought we were better than that. We were supposed to have improved to the point that we wouldn’t do such brutal things like a medieval-style lockdown. We had gone beyond that, I believed. I just made a simple mistake in my head.

But I’ll tell you, Jan, as I think back now, I had to, myself, go through a kind of gut-wrenching psychological transformation and intellectual transformation. That’s what was happening to me. That’s why I was so shattered and upset, because I didn’t like seeing my paradigm, my Hegelian structure of history, completely shattered and thrown off course. What was I going to do with myself, now that nothing I believed was coming true?

And then, of course, these three years have been very instructive, because we’ve learned now that these big technology platforms that I once celebrated as great forces of emancipation became tools of the FBI, and the CDC, and all the ruling classes. The way that big business has played so advanced with big government and big media, and it’s just absolutely chilling. I didn’t realize that that level of integration was possible.

And yet, there it is. And it’s so tight. Sometimes it’s hard to know which is the hand and which is the glove. Sometimes big business was pushing big government to do things that they otherwise wouldn’t have done. And big media is pushing Big Tech, and so on. They have just become this big cartel. It makes it very hard for our old, simple, ideological paradigms to explain this. They all seem a little bit old-fashioned now.

The settled ideological systems of 2019 and the previous 50 years don’t really serve as very good prisms to understand the present world. So, I’ve had to adapt, I’ve had to rethink things. The companies I used to love, I now have to be suspicious of. The strict public/private binaries that used to occupy my mind as a kind of famous libertarian influencer, I’ve had to shelve, so that I could deal with the realities on the ground.

Little things like did we know that big pharma had bought so many governments in the world that they were able to manipulate policy outcomes in the way they have? Maybe a lot of people did know this. I didn’t know it, so I’ve had to adjust.

These three years have been the most intellectually exciting years of my life, because you open your eyes, and you have to come to a new understanding. You have to be ready to make new alliances and new friends, cross-disciplinary friends.

I’m sitting over here today at this Brownstone event where there are 30 of the smartest people I’ve ever been around. But ideologically, they’re all over the map. And in fact, it’s so diverse that it’s actually not very interesting to sit around talking about ideology. We don’t do it. We just talk about the big problems in the world today, and how do we get society back on track?

How do we restore human rights? How do we get society and markets functioning again? How do we get back to a world in which the Constitution seems to matter, where the laws can restrain the role of power? These are the kinds of things that I’m curious about.

But these big ideological issues that occupied so much of my life don’t seem to carry the explanatory power that I thought that they had. They just don’t. And that’s okay. It’s okay. I’m glad to change and glad to improve. But the world has changed, and we have to adapt our thinking around that if we’re honest with ourselves and if we want to make sense of the world around us.

Mr. Jekielek:
It is difficult to explain how this nexus of these different big structures all seem to be working in tandem, and enthusiastically, I might add. What is your current understanding of how this happened?

Mr. Tucker:
It seems as if there were certain people in the ruling-class structures that didn’t like the access that we were all gaining to information, the freedom of thought that was taking place, the level of communication, the end of the old media, and the way people were reading and being exposed to new ideas.

They wanted a crackdown, they wanted to stop it, and they wanted more controls. It’s interesting because when radio came along in the late 1920s and early 1930s, the very first thing the government did was create a Federal Radio Commission to govern its contents. And then, when the TV came along, they changed it to the Federal Communications Commission. And then there were three channels, and that went on for decades, and that gradually got deregulated.

But with the internet, suddenly you had this information freedom like we’ve never seen before, and some people just didn’t like that. But what happened gradually over 20 years is that it seemed as if the biggest players decided that they were going to be the owners of the whole system in cooperation with the government. And the lockdowns became that opportunity, as far as I can tell. They became that opportunity to test the coordination between the three systems, so that they could all thrive and survive and stay dominant forever.

I don’t know why I used to believe this, because it’s just simply not true, that business, always and everywhere, has an antagonistic relationship with government. That’s maybe something libertarian ideology just sort of presumes at its base. The problem is, it’s just quite often not true. Big business works very tightly with big government.

And in fact, if you go back and read the works of Milton Friedman, he said, “The worst friend of capitalism, or the biggest enemy of capitalism, is big business.” He says this in some of his writings. And boy, have we seen that. They don’t like competition, and they don’t like freedom. They like the tight relationship with the regulators. And the system’s very complex.

There’s a ruling-class structure where you can’t always tell anymore the difference between for-profit businesses, non-profit organizations, big media players, and government and administrative bureaucracies. They’re all just in a big, nasty stew, and there’s a revolving door among all of them.

Mr. Jekielek:
Absolutely.

Mr. Tucker:
A good example of this takes place in the relationship between these pharmaceutical companies and the FDA. The vaccine was funded by taxpayers, then the pharmaceutical companies who got granted the Emergency Use Authorization to manufacture them were indemnified against all damages. They’re given intellectual property protection over their inventions.

It was very funny, in the early years of the Biden administration some ideologue showed up, said, “We really need to get rid of the patents on these vaccines. This is not fair. If we just get rid of the pharmaceutical patents, then anybody can manufacture them. We can get it through the pandemic a lot faster.”

That lasted about three hours. That proposal never went anywhere. Those patents are secure. They’re indemnified, they’ve got the patents, they enjoyed all the taxpayer funding, and then they’re able to mandate a consumer base. When the consumer said, “I’m not so sure I want this shot, because I don’t think I need it,” the next thing you know, you had vaccine mandates. The whole system became a completely closed world of industrial privilege that’s utterly indefensible by any ideological or philosophical position. That was just an indefensible position.

If you look at the main players there, the former chairman of the FDA very smoothly became a board member of Pfizer, and then very smoothly became a top advisor to the pandemic response. He occupies all three of these roles. And then, he becomes a leading commentator on the nightly news about what everybody should think about the pandemic and the pandemic response. This is one guy. And now he works for a think tank in Washington.

So, this is the world in which we live, with these shady characters occupying all these different institutions. Do you see what I mean about the public/private binaries that we used to run around with in our head, our simple ideological systems? They don’t account for this kind of relationship, because it’s hard to track. It’s hard to follow the money, but it’s harder to follow the power.

Mr. Jekielek:
I’m remembering Mary Harrington, with the swarm accountability that she described. It’s not really clear who is even in charge in the end.

Mr. Tucker:
Yes. It’s just been especially frustrating, because these days, now that we’re sort of post-pandemic and post-lockdown, everybody wants some accountability. “Who did this to us, and why?” We can’t find anybody. There is not anybody willing to step up and say, “I did it. It was my decision.” You can’t find anybody who made a decision to lock down anybody, or approved any mandates, or signed off on the e-way.

Mr. Jekielek:
They were just always following the guidance.

Mr. Tucker:
Yes. They were all on committees. If you ask them individually, they’ll say, “I didn’t really want to go along with it, but everybody else in the committee supported it, so I went along with them.” This is the way everybody is.

It’s either that, a lack of unwillingness to take responsibility for anything that happened, or the Fauci defense, which was just amnesia. That’s the real pandemic in Washington today—amnesia. In his deposition, he must have said, “I can’t recall,” more than 200 times. He can’t recall anything. He doesn’t remember anything.

I wrote about this for the Epoch Times. It wasn’t just that he was trying to avoid responsibility for everything that he did. He was trying to set a model for the culture and for the American people in general, “Everybody just forget about it. If you don’t recall, then it’s like it didn’t happen at all.” That’s what they want us to do. They want us just to forget.

Mr. Jekielek:
There’s a few things I want to talk about. Let’s start with this. There is this nexus of big business, Big Tech, big pharma, big media, and you also have big education.

Mr. Tucker:
Yes.

Mr. Jekielek:
They all seem to be kind of deeply invested in the same series of ideologies.

Mr. Tucker:
Yes.

Mr. Jekielek:
One is loosely described as woke, or this critical social justice ideology, which involves critical race theory, queer theory, these different areas, and all sorts of policy associated with that. Then you have climate change, not talking about whether or not climate change exists, but policies that treat it as an emergency that needs to be dealt with bureaucratically with big incentives and big money. There is ESG [Environmental, Social, and Governance], which fits into both of these areas. Are these ideological positions driving this superstructure? Or is it the super structure that’s using these ideologies to drive its own agendas? Or is it something in-between?

Mr. Tucker:
It’s an interrelationship between the two, obviously. You’ve got these enormously bloated institutions that are way too big. They became big over the last 17 years with zero interest rates. That’s what subsidized the ballooning of the healthcare sector and the corporate sector. Big Tech became way too big because of this, and big media became way too large because of this. We lost the competitiveness that you would have in a natural market economy because of Federal Reserve policies of zero interest rates.

In fact, what that did was massively distort production structures so that education became just out of control. Think of a yield curve as the right side involving long-term, heavily capitalized and speculative ventures. And the left side of the yield curve as normal savings and everyday commercial activities. Zero per cent interest rates made it impossible to profit from the left side of the yield curve, and sent capital on a hunt for return. They found it on the far right side of the yield curve, which became Big Tech, big media, big education, big government, all these monstrosities that are out there.

That started in 2008. It was funny, because the Federal Reserve chairman at the time, Ben Bernanke, said, “I’ve got a magic solution to the financial crisis. I’ll just do this quantitative easing, and as part of that, we’re going to have zero per cent interest rates. We’re going to have the Federal Reserve paying a lot more than that to keep the deposits in the bank, and it’ll be beautiful. All the banks will be fully recapitalized, and then we’ll just go on with our lives.” And we said, “Great, okay.” And there wasn’t any inflation. There seemed to be no downside at all.

Mr. Jekielek:
But this is actually a huge subsidy. Basically that’s what you’re saying.

Mr. Tucker:
It was a massive subsidy to everybody who lived on the right side of the yield curve, which is all the beasts that took over the world during the lockdowns, probably for their own survival, really. It’s a remarkable story, really. But while we slept, while we thought the world was just fine, what was actually happening was a tremendous distortion of the production structures.

Education just got completely out of control, the healthcare sector was out of control, technology became completely consolidated, and media became entirely consolidated. They had all the resources in the world, so they kept hiring more and more people, sucking more of the labor supply over to their side. Everybody was bored out of their minds, because they didn’t have any jobs, and they were getting high incomes.

That’s when we suddenly got ESG and DEI, and the whole ruling class became captivated by all this nonsense, because we had no economic rationality in this system. There wasn’t a test, and it wasn’t being checked anymore.

Mr. Jekielek:
Accountability was gone, basically.

Mr. Tucker:
Accountability was gone because the resources were infinite. They could do whatever they wanted, and dream up every kind of crazy thing. This is where woke ideology was heavily subsidized because of this fundamental economic dislocation that was built into the system starting in 2008.

Now, it’s difficult for me to talk about this, Jan, because it sounds like there’s too many moving pieces, and it sounds like an implausible story.
Some guy in 2008 brings us zero per cent interest rates to solve an economic crisis and to recapitalize the banking system. And then, 17 years later, the whole world’s gone insane because woke ideology has taken over corporate America and education and everything.

But that is the actual story. Small changes have potentially calamitous effects down the line. All of this was going on. There’s a whole generation raised in this world that has never known anything like a rational production structure and a normal functioning market economy because of this stupid policy of the Federal Reserve—zero per cent interest rates.

But here’s what’s fascinating about this story, and it has a kind of a bittersweet end. Finally, with the pandemic response, we got, once again, quantitative easing, but this time they didn’t lock it away in the mattresses or in the cold storage or in the banks. It’s suddenly hot on the street. The effect was inflation. Now, you’ve got the Fed panicked. The only thing they can do now is reverse this long policy of zero per cent interest rates, so they started doing it. And they’re rising. They’re rising like crazy.

The consequence has been to reverse this pattern that dates all the way back to 2008, of the massive subsidies going to the right side of the yield curve. Now everything is gradually shifting to the left side of the yield curve, which is why you can go to your bank now and save money and make money at the same time. We haven’t been able to do that since 2008. You can buy a CD that earns 5, 6, and 7 per cent.

So now, you’ve got capital losing interest in the right side of the yield curve with all the speculative investments of the big media, and Big Tech and all, and the overproduction and the oversupply of labor on that side. And everything’s migrating now back to normalcy. And with that, we’re seeing a decline of interest in woke ideology and DEI and ESG and all these things, because they’re not proving profitable in this new normal world of rising interest rates.

It’s fascinating how a change in monetary policy can so profoundly affect the philosophical and cultural shape of an entire country, if not globe. That’s a remarkable thing. But it’s a good change, though, what we’re seeing. It’s not just that you can make money by saving money for the first time since 2008, but the slogan, “Go woke, go broke,” is really coming to life. That’s why you’re seeing the constant rounds of job cuts in Big Tech.

Mr. Jekielek:
Yes.

Mr. Tucker:
Every day, just observe the headlines. Mark Zuckerberg just sent out another 1,000 lay-off slips to his employees, “You’re underperforming.” We’re going to get another 10 per cent job cut at Meta, which is great. Look at the great paradigm that happened with Musk when he took over Twitter. Over a series of months, he seemed to have fired four out of five employees.

Mr. Jekielek:
Because this was my thinking. People noticed what he did, and thought, “Hey, we’re clearly bloated here.” But you’re saying there’s something much bigger going on.

Mr. Tucker:
There’s something much bigger going on. He served as a model for the entire corporate sector in this country, and even around the world. People know what’s coming. There is going to be a gradual euthanasia of the overclass in the corporate and media sector. It’s already taking place, and it’s going to get more intense, and it’s good.

Mr. Jekielek:
By euthanasia, you mean firing, right?

Mr. Tucker:
Sorry.

Mr. Jekielek:
Okay.

Mr. Tucker:
It’s funny, because John Maynard Keynes used the word euthanasia to describe the decapitalization of a certain class. So, I didn’t mean killing them, I meant decapitalization of the overclass. That’s what’s happening right now. It’s a very interesting thing to watch as it unfolds, and especially since I saw it starting to happen a year ago.

I was writing about this for the Epoch Times. These people are toast. I mean, they’re going to lose. I don’t care what your credentials are, you’re at a six-figure salary doing nothing, and Zooming at home is coming to an end sooner rather than later. I kept talking about this tremendous disturbance that’s going to happen in the labor markets. Now we’re seeing it all unfold. There’s been nothing surprising to me about it, but it’s still very interesting, and it’s fun to describe.

Mr. Jekielek:
It’s really interesting that in these last few years, there has been the revelation to much of the population of the power of these ideological positions, and how entrenched they had become in the nexus of these big structures.

Mr. Tucker:
Right.

Mr. Jekielek:
Both of these things are functioning at the same time.

Mr. Tucker:
Right.

Mr. Jekielek:
There’s actually an accelerant to the realization, “Hey, something went really wrong here.”

Mr. Tucker:
A lot of things went really wrong. We were talking about the ways in which I’ve lost my naivety over the last several years. I thought woke ideology would stay trapped in the universities among these eggheads, these tenured professors speaking nonsense to a bunch of incredulous students. But then, once they got out into the free market, they would just dispense with all this stuff and forget about it, like good students should.

That didn’t happen. It bled out of the academy and bled into all the institutions, into the corporate boardrooms, into the investment stock portfolios, into government, and into media. It became just like this spreading cancer, and it just happened so fast. And it happened because of the industrial misalignment of the corporate sector, due to the distortion of interest rates.

Mr. Jekielek:
If you keep hammering at an idea, some of us are susceptible.

Mr. Tucker:
Yes. It was remarkable to me, during the lockdown period and over the last few years, how many people bought into the whole narrative simply because they felt like it gave them some meaning to their life. It was something to believe. And who didn’t go along with it? Who were the most reliably dissident groups in this country? They all came out of religious communities, all of them.

The Hasidim in New York just went on with their lives. They still had their weddings and their funerals. They said, “We’re not going to let your crazy pandemic plans interrupt the liturgy that governs our life. Our rituals are everything to us. Our faith is everything to us.”

The Amish were the same. There appeared some reports about Mormon communities, and later, the Evangelicals, who said, “Boy, this is dumb. We’re not going to be told we can’t go to church on Easter.” It was the religious communities, along with the traditional Catholics too.

Mainline churches didn’t fare so well, but the strong believers, they were great. I suppose you could say that’s because they had a stronger sense of meaning in their heart, in their soul, and in their lives that gives them a driving purpose, and the propaganda apparatus couldn’t invade that sacred space.

But if you’ve been emptied out entirely and you don’t have any sense of purpose or meaning, you don’t know why you’re here, you don’t have anything to live for that you truly believe, then you’re vulnerable. We saw that play itself out over the last three years. I wrote about this in the Epoch Times the other day. I’m looking at this, and it’s undeniable that the people who fared best during the pandemic years were the strong believers. They fared the best.

What that tells me is if you want to protect yourself from government propaganda, from being manipulated by big media, Big Tech, and weird ideological systems that are floating all around you, you need to get faith. You need to start believing in something.

Joseph Schumpeter wrote a book called Capitalism, Socialism and Democracy in 1945. He said in that book that prosperity can be very dangerous, because it can detach us from an intellectual awareness of where the wealth comes from. It all just seems to be automatic, and we’re just entitled.

Entitled, prosperous people who have lost any connection to what makes wealth, where it comes from, or how it’s related to work and enterprise, the more detached you become from real work and the more you take it for granted, the more you’re tempted to be drawn to exotic ideologies that are actually destructive of that wealth and that prosperity.

In 1945, he predicted that capitalism was doomed because it was too successful and we were getting ever more detached from the mechanisms that made the wealth possible in the first place. That was one of the first books I revisited after the lockdowns, because I thought, “Wow, here it is. Here it is.” When you’ve got a third of the workforce that believes it’s entitled to stay home and stay safe, and still earn a very high income doing almost nothing, something has gone very, very wrong.

That couldn’t have happened 20 years ago. But by 2020, we had basically a third of the workforce that was in a position to do that. One third of the workforce was able to shove another third of the workforce in front of the virus and just use them as fodder to obtain herd immunity, and otherwise just live high in the heartlands. It was cool.

Mr. Jekielek:
And seemingly without really even acknowledging that those people existed.

Mr. Tucker:
I know. I mentioned this to you before. Every day the New York Times would give you instructions in this newspaper on how to stay home and get your meals delivered, without any awareness that somebody had to actually deliver that. And it certainly wasn’t the readers of the New York Times.

Mr. Jekielek:
We have often discussed the hope or the possibility that exists in all of these terrible things that have happened. This whole realm of the capital shifting to the little guy, is that basically what the left side of the curve is?

Mr. Tucker:
Yes.

Mr. Jekielek:
It’s a very compelling narrative for me.

Mr. Tucker:
Yes. Good.

Mr. Jekielek:
Via your, “I want to believe it, I want to believe it.” At the same time, not only have some of these ideologies been exposed, but the systemic corruption that has been metastasizing over decades and its influence, all of this has also been exposed.

Mr. Tucker:
Yes.

Mr. Jekielek:
There is this very interesting development of parallel structures. There is a kind of a renaissance amidst a very, very difficult, difficult situation.

Mr. Tucker:
Yes. Jan, for three years, I have wanted my optimism to come back, and I kept asking the question, “How am I going to get my hope back? When is the happy Jeffrey Tucker going to come back? I want to meet that guy again. I want to be that guy again.” I think it’s happening now, because I’m starting to see this renaissance take place, and it’s taking place in all sectors.

We have lost such trust in all these old institutions that so completely and utterly failed us over the last three years. The human personality says, “I’m not going to give up. I’m going to invent, I’m going to create, I’m going to live a new day. I’m going to build something new.” And we’re seeing that take place.

I’m sitting here at Brownstone, so I have communications with all these sectors; colleges, private schools, homeschool families, and the new churches that have started. The new religious communities that were disgusted that their older religious communities shut down and went along, they’re starting new ones. The demographic changes. Moving out of blue states to red states, that’s a big change for the recapitalization of Texas and Florida, relative to these other places.

The new media is coming along. The Substack revolution is something astounding to watch. We’re seeing this dramatic change. All the institutions that failed us during the pandemic period have been revealed to be untruthful and rutted, and are now being gradually replaced by all of these new institutions. You call them parallel structures, but they exist in every area of life, even with medicine now.

We’re at this conference today with all sorts of medical doctors that have started new associations to talk frankly and truthfully to people about matters of health. When’s the last time we’ve had any access to that? But it has happened in every area of life. I feel this way with Brownstone.

What are we doing here? We’re really creating interdisciplinary societies, a society of interdisciplinary truth. We’re bringing medical experts together with public health experts, lawyers, philosophers, historians, economists, and shoving them all into one room and saying, “Why don’t we figure out what’s going on?”

Mr. Jekielek:
And the odd journalist.

Mr. Tucker:
Yes, the odd journalist. We’re teaching each other and learning from each other to try to come up with new terms of engagement in the world and to contribute to the renaissance. That renaissance really is happening, and it’s a tribute to the will to survive. It’s the human personality that’s looking to the future, and saying, “We’re not going to live this way.”

The schooling aspect of this thing is so remarkable to me. And that is a story in itself. They shut down the public schools. It was a gigantic error, even from their point of view. Because the crown jewel of progressivism, the public schools, were revealed to have completely failed when they were needed most. Children were sent home, and that meant people had to leave the workforce.

Then, moms and dads sat down with their kids during the pandemic lockdowns and said, “Let’s see what you’re studying in school.” They discovered what they were studying in school, and they didn’t like it at all. And so, they got active in their schools, or they decided to continue to homeschool, or they put them in private schools. We have seen the most dramatic educational upheaval.

Some researchers out of Stanford have examined what happened to the kids during the pandemic lockdowns. No matter how much they rotate the data around, they cannot account for at least 230,000 students who used to be on the roles that are no longer there. They’re gone. All right, where are they?

We don’t know, but one thing that’s easy to speculate here is that people just continued to homeschool and decided they weren’t even going to bother to report it to the local school board, because they’re fed up with the system. They’re just going to do their own thing now. I think that’s good. It’s revolutionary. This is affecting every sector of society.

Actually, these are exciting times to be alive, and it’s a time when regular people can make a difference. They can make a difference, and now they know that they must. Three years ago, lots of people didn’t know that they had to make a difference, that there was something to do, that there were new institutions to found, new civic associations, new clubs, new political activist organizations, and new industry groups. They didn’t know that they had a job.

But now they know, and they’re acting, and it’s glorious. The loss of trust can be a disastrous thing, but it can also be a good thing. If you lose trust in people that don’t deserve your trust in the first place, that’s probably good. We’re creating all of these new institutions, and it’s beautiful.

I think about the role of Brownstone in this. Just to be absolutely frank and blunt with you about this, the Washington research institutes and think tanks and nonprofits flopped. They failed us. Not some, all. They weren’t there. They couldn’t account for what was happening to the world. They shut up.

They were so risk-averse and so protective of their power, and their privilege, and their money, and their status, that they didn’t speak truthfully to us when we needed them the most. So, what do we do? We start something new, and those new things are dedicated to speaking truthfully in light of our times.

And it’s true, we’re undercapitalized. They’ve still got all the money, and we have none. But I tell you what, eventually the money is going to follow the passion. And the passion today is all on the side of those people who are trying to reconstruct what we used to call the free and civilized society. That’s where all the passion is.

Mr. Jekielek:
Yes, and even a few of these institutions have switched gears.

Mr. Tucker:
Yes, they’re trying.

Mr. Jekielek:
They’re going to try to do the same thing. So, we’ll see.

Mr. Tucker:
But the thing is, Jan, we know. We have a record now. That’s one great thing about the internet. We know who spoke out and who didn’t. We know where people were at. We know what media sources performed well during the pandemic years, and which ones flopped. We know who said what to whom and what all the think tanks said. We have complete records of all this kind of stuff.

It really matters if when you’re needed the most, you fail to step up and show courage and bravery and tell the truth. That doesn’t say good things about you as an institution. You can’t be trusted the next time. It’s just true. These new structures, these parallel structures are going to be inherently more trustworthy than that which they’re replacing.

This replacement period, how long do you think it’s going to go on? It’s going to go on for five, ten, maybe 50 years, I don’t know. But I do see the birth of a new vigor for the cause of freedom, and human rights, and a kind of a bottom-up energy that says, “This world belongs to us, and we’re not going let them take it from us and control us forever. It’s not going to work like that.”

Mr. Jekielek:
I’m hearing everything you’re saying, but another thing was revealed. As we finish up, I want to touch on this. I want to believe everything you’re saying, and I do to some extent. But what was also revealed was how incredibly powerful not just the ability to censor certain types of informations of this superstructure are, but also the ability to create the perception of consensus around certain ideas, to the point where, even today, there’s significant swaths of the population that simply don’t realize some things which are staring them in the face.

Mr. Tucker:
Yes.

Mr. Jekielek:
I don’t need to go into details, but that still exists. It might not exist on Twitter anymore, although there’s still people that are saying there’s some issues. But these structures exist. With this freedom that you’re describing, this opportunity, this connectivity, there is some kind of barrier here.

Mr. Tucker:
There is, and it’s gigantic, and it’s growing. We’ve got a real competition between freedom and control. What I’m really not trying is to not repeat the mistakes of my past where I became overly optimistic and just thinking that progress was somehow baked into the structure of the world, that it’s going to happen, and we’re just all along for the ride. I don’t believe that anymore.

But what I do believe is that, with enough passion, and conviction, and hard work, and determination, that we can make a difference. I do believe that. And I have to believe that. And actually, I’ve seen beautiful things happen over just the last 12 months. Truly, Jan, my inbox is flooded with communications from new organizations, new civic associations, and new clubs.

I don’t believe there’s any final stage to history. Maybe I used to believe that there was. I see it differently now. I see it more through the eyes of David Hume rather than Friedrich Hegel. It’s an ongoing struggle. It’s a long narrative. And freedom is never finally secure. It’s something all of us have to fight for in our lives. All of us, every generation, has to fight for it. That’s just what has to happen.

We cannot pretend to just be along for the ride anymore. That is the lesson. We all have to throw ourselves into the great battle for the good life, for human rights, for our freedoms, and for civilization. That is the task for each of us. It’s the most urgent task. It’s been the task we’ve been given. We know that now.

If you don’t know that, you haven’t been paying attention. It’s our job. It’s our job, and we’re going to do it the rest of our lives. We have to teach our children to do it too, and they have to teach their children to do it also. That’s the way you save freedom. That’s how you prolong civilization. That’s how you build and keep good societies.

Mr. Jekielek:
Jeffrey Tucker, it’s such a pleasure to have you on again.

Mr. Tucker:
Thank you, Jan, for having me.

Mr. Jekielek:
Thank you all for joining Jeffrey Tucker and me on this episode of “American Thought Leaders”. I’m your host, Jan Jekielek.

This transcript has been edited for clarity and brevity.