The Politics of Dwight Schrute

Dwight Schrute's politics are a running theme/joke on The Office. Most people simply assume he's an unreformed fascist. Rainn Wilson himself (the actor that plays Dwight) has noted that Dwight would "make a good Nazi". He loves authority and hierarchy, makes frequent references to German ancestors who fought in the second World War (subtly hinting they weren't fighting for us), and even muses that he would be a good prison guard at a Japanese prison camp. Oh ya, and he delivered one of Mussolini's speeches to a sales conference once (in his defense he didn't realize it was a Mussolini speech - although he was a natural).

I was recently thinking, though, that rather than a fascist Dwight could have also been a shoe-in for the Democratic Party presidential nomination circa 1892/1896 as a traditional American populist. Late nineteenth and early twentieth century American populism has been on my mind lately because of a project I'm working on this winter for the Encyclopedia of Populism that I mentioned in an earlier post, and I recently put these two together.

Here's the scene - Michael Scott (aka Steve Carell, the manager of The Office) is at Dunder Mifflin headquarters in New York fully expecting to get a new job at corporate. So before he leaves, he appoints Dwight as the new manager. Dwight is reorganizing how things are done at the office, and delivers this message to his co-workers, which reflects three of the major planks of the Populist Party:

1. An increase in the money supply (Schrute bucks)

2. Restrictions on immigration and suspicion of ethnic diversity, and

3. Lectures on vocational/industrial/agricultural topics for adult education (in this video he only mentions a sort of vocational/industrial theme to the lecture, but in later scenes that actually feature his lecture, he gets into agricultural issues as well.


People normally just note and laugh about "Schrute bucks" in this episode - but I think the other stuff is interesting as well, particularly the educational component. The lectures and adult education organized by the Populists influenced the development of the land grant college system and the cooperative extension system. It was part of a tradition going back to Jeffersonian republicanism that considered mass education as the real key to true democracy and the end of aristocracy in America.

More on what the NYT called the "intellectual ballast" of the Tea Party

Xenophon kindly shares a Reason.com article where they get as hysterical as Jeff Tucker. It must be very tense to always be in combat mode.

Interestingly enough, Lew Rockwell at Mises.org explicitly makes the argument that Jeff Tucker attributes to the New York Times - namely, that the Tea Party has a weak intellectual foundation and that it's going to betray the "party of liberty" (whoever that is... Lew doesn't say but I'm pretty sure I'm not invited to that party).

So we have the New York Times informing people about the treatises and books motivating the Tea Party and Lew Rockwell suggesting the intellectual underpinnings of the Tea Party are weak, and yet Steve Horwitz and Jeff Tucker and Reason.com are going after the New York Times... why? Because the Times said that Bastiat was outdated for worrying about beggars and vagabonds getting the vote? This is quite strange - these people are itching to fight. It's like the recent Krugman articles on war. Even when people agree with him they still write something up insisting he said something he never said, because disputing Krugman (or the New York Times, or [fill in the blank]) is so ingrained for them.

My feeling on the Tea Party? Look - it's a big diverse group. Many are very well educated. Many are somewhat educated, but reading some pretty good stuff like Bastiat and Hayek. It would of course be nice if they read other stuff too - but five years ago a lot of them probably weren't reading any of this stuff. I agree with Lew that it's largely a populist movement and not a libertarian movement, and I'm shocked at how many libertarians have embraced a populist political force. That might be the most disappointing thing of all. I've had differences with libertarians (obviously), but the one nice thing about libertarians is that they usually don't go off the populist deep end. The embrace of the Tea Party makes me worry a little more about that than I used to. I think the Tea Party will eventually fizzle out - I don't think it's a game changer in any long-term sense. But it will be important in the next several years. And when it does fizzle out, maybe I won't pull out my hair over some of their historical and constitutional revisionism. I think it's a genuine movement, it's a well-intentioned movement. It could only be a dangerous movement if some malign force within it sparks something, but there's nothing about the movement now that's particularly worrisome. And ultimately it's just as political as any other movement we've ever seen (which is another odd thing - to see people argue that it somehow transcends politics... the need to explicitly make that argument is a sure sign that it's not true).

New Project: Monetary History, Populism, and Technological Unemployment

I just got the paperwork through for a new project I'll be working on this fall - I'll be writing short articles for an upcoming volume on American populism. I'll be reading this stuff, so it may show up in my posting too.

There will be heavy emphasis on the late nineteenth century populist movement, but all varieties of populism will be covered - from the colonial period to the modern Tea Party movement.

I'm writing on five topics:

1. The International Monetary Conference

2. "Coin's Financial School"

3. The National Monetary Commission

4. The Quantity Theory of Money, and

5. Technological Unemployment

Working on this will help to fill in my understanding of American monetary history from the 1860s or so to the creation of the Federal Reserve. The first three are going to be fairly historical pieces. I should be able to be more creative with the last two. In my piece on the Quantity Theory of Money I want to relate basic monetary mechanics to the shifting relationship between monetary policy and populism over time. Basic quantity theory arguments were of course originally used to support accomodative monetary policy, and now the same arguments are often used to oppose it in populist circles. I don't think I'll be able to get in too much detail on why that shift occurred, but I think it will be important to note it, especially because I don't think these issues will be on the radar of a lot of the other contributors.

I'll have a lot of room to play with the Technological Unemployment article. The point, for me, is that as a local phenomenon technological unemployment has been very real for certain populations, and it has tied together populist thought from the Luddites to modern concerns with "deindustrialization" in the Reagan years. But we repeatedly find and conclude that it is not a substantial global phenomenon. The total benefits seem to outweigh the total costs pretty decisively. The question is, as a polity how do we sort out the very real costs involved with technological development.

This is a picture I liked from Coin's Financial School:

Populism, Banking, and Why I like Ben Bernanke

Political pundits will point fingers in all sorts of directions when it comes to the recession. Many Democrats will tell you Obama saved the day with forceful stimulus. Republicans, of course, will suggest that things look like they might be bottoming out despite the stimulus (we only spent a small percent of it, don't you know?) rather than because of it. I find this differential blame and credit interesting, since most economists cite someone entirely different for - if not ending the recession, at least preventing a second Great Depression (and before we're done this may still be considered a depression, just not a "great" one). That man is Ben Bernanke, chairman of the Federal Reserve Board since 2006. Jack Welch has even gone as far as calling Bernanke a "national hero" for what he's been up to since last summer.

I won't go into detail here about what Bernanke did that people are so impressed with. I'll leave it at this: he did the opposite of what conservative and liberal economists alike said turned the stock market crash of 1929 into the Great Depression of 1931/32 - he expanded the money supply considerably in the early stages of the crisis.

What I would rather talk about is who Bernanke is as a person, and why that's very important, given the historical reaction to "banking" and central banking in particular in the United States. Banks have been given a bad reputation by Federalists ("Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good" - John Adams), Democratic-Republicans ("I believe that banking institutions are more dangerous to our liberties than standing armies" - Thomas Jefferson), and Jacksonian Democrats ("The bank, Mr. Van Buren, is trying to kill me, but I will kill it" - Andrew Jackson). Over time, of course, many politicians eventually came around to the Hamiltonian conclusion that a national or central bank to manage the money supply wasn't necessarily a bad thing; that it could do a great deal of good. Even James Madison, a contemporary of Hamilton and early opponent of central banking and bankers in general, relented and gave us our second national bank. But the early - and broad - opposition of the founders to banking interests stuck.

Ever since then, populist sentiment in America has been intimately tied to a general opposition to banking. William Jennings Bryan (pictured right), perhaps the most famous populist leader, was outspoken in his opposition to a central bank. What is ironic about Bryan's opposition is that he was also a strong advocate of what we would now call "expansionary monetary policy". He historically declared to his opposition that "you will not crucify mankind on a cross of gold" - an electrifying denunciation of the gold standard and "tight money" in general, which prevented farmers and factory workers from getting access to credit.

This is what I find to be so ironic about the ebb and flow of populism in America, specifically with respect to the populist position on central banking. In Jefferson and Bryan's time, the concern was that bankers were too tight-fisted, and that creating a central bank to help finance government deficits would allow private insiders to profit off of taxpayers. Today, you have the opposite concern. The Ron Pauls of the world think the opposite is true - that the Fed is creating too much money. Granted, Ron Paul's libertarianism - while not exactly the corporatism that Bryan decried - is also a far cry from populism. But it is a populist movement in it's deliberate "us vs. them", anti-establishment, pro-common man mentality. The collective memory of stagflation in the 1970s made impoverishment-by-central-bank-manipulation fear a new staple of American populism, which is why it meshes so well with libertarianism today. It is in this sense that the seemingly paradoxical blending of populism and libertarianism, while not necessarily internally consistent, is highly functional at the level of the political movement. A populist that doesn't like foreign intervention and wants to legalize marijuana is going to find the most solace and organization among the Ron Paul community (Dennis Kucinich would also give them solace, but not as much organization).

Now back to the purported enemy - the bankers.

What I like about Ben Bernanke is that in every respect he seems to be a "regular guy" banker. Certainly much of that sentiment is supported by superficial (read "tenuous") evidence, but it's something that I still believe to be true. Whoever Ben Bernanke "really is" he's clearly no Robert Rubin or Hank Paulson flying in from Citigroup or Goldman Sachs. One thing that's been truly unique about Bernanke (I mean besides the growth rate of the Fed balance sheet under his tenure) is the extent to which he has reached out to the public. Fed watchers were shocked when he appeared for a prime-time interview for 60-minutes, something that is rarely done by sitting chairman (I believe it was only ever done once before). He didn't stop there, he's taken questions from undergraduate students at Morehouse College (the only all-male historically black institution), and held a town hall meeting of his own in Kansas City, taking questions not from economists, bankers, and Congressmen, but from self-identified small business owners and mothers. He often speaks of his own humble beginnings in a small South Carolina town, and how the house he grew up in is now in foreclosure. He is also very open about what he describes as his "disgust" over the necessity of rescuing large banks at the height of the crisis. Can you imagine Greenspan expressing "disgust" at that sort of thing?

To truly get a grasp on how different this is, you have to understand the extent to which the Fed chair is a banker's banker. His job is to lend money to the money-changers, to make sure they have enough funds to stay in business from day to day. The press hangs on the Fed's every word, and global markets shift in response. Statements released from the clandestine Open Market Committee (FOMC) meetings are scrutinized like papal encyclicals. For example, after Wednesday, August 12th's meeting, reporters made headlines with the fact that the language describing the pace of economic contraction changed from "slowing" (July's statement) to "leveling out" (August's statement). Chairman Greenspan was known as "the maestro", and during the Asian financial crisis he was on the "committee to save the world". As a presidential candidate, John McCain quipped that if Greenspan ever died he would put dark sunglasses on him and prop him up like a scene out of "Weekend at Bernie's". Such is the mystery, adoration, and power surrounding the Federal Reserve Board and the Fed chair.

My approval of Bernanke isn't just an image thing, either. It would be one thing if Bernanke put a friendlier face on the secretive Fed. But he's doing more than that - he's following an expansionary policy that priveleges debtors over creditors (a la William Jennings Bryan), and staves off a potential second Great Depression (a la Milton Friedman - not John Maynard Keynes, as many mistakenly suggest). The hope is that he is pursuing these goals with a realistic understanding of the risks posed by monetary expansion; that he is striking the right balance between avoiding paranoia about moderate inflation while staying mindful of the risk of excessive inflation. Bernanke has insisted to Congress that he can strike that balance.

I wouldn't predict that it's going to be easy street from here on out, but I think it will go as well as we can hope for. Job growth will be weak for years to come, but we'll avoid a Great Depression (which was an extremely real possibility this past Fall), and we'll avoid a dip into deflation or an excessive inflationary episode as well. For this reason, I think Bernanke will easily retain the respect that he has earned from economists.

But I hope he'll also earn respect for something else - I hope he can permanently sever the often contradictory relationship between American populism and mistrust of banks. Indeed, I hope he can communicate to the public how responsible monetary and fiscal policy can be a tool of the people. Economists often worry that popular pressure will lead to unsustainable inflationary episodes, and ideologues often worry that any active monetary or fiscal policy can threaten liberty by giving an inordinate amount of power to "the state". I don't see why we have to accept either interpretation. When good, intelligent people who are aware of their (very real) limitations make these policies in consultation with the public, there is no reason why the Federal Reserve Board can't be an instrument of prosperity and liberty.