Transcript: Ron Unz on the Subprime Mortgage Crisis, The Unz Review, and the Harvard Admissions Scandal – Episode #10

Steve: Corey, our guest today is Ron Unz, an old friend of mine, who actually defies description. If asked to give a short description of Ron Unz, I feel like I couldn’t. I could start by saying that he was on track in life to be a theoretical physicist and then events intervened, but that doesn’t really do justice to his biography. What I’d like to do is start by exploring his early life a little bit, and then we’ll get into his website, unz.com, which has become in some sense a kind of leading source of alternative media on the internet, and Ron has been developing that site for some years now and we’ll talk about that. How does that sound Ron?

Ron: That sounds fine.

Steve: So you were a precocious kid, I understand, and I believe in high school you won the Westinghouse Competition.

Ron: Yeah that’s correct, that was a long time ago. That was back when it was called the Westinghouse. Since then it became the Intel, and most recently it’s some genomics company that renamed it.

Steve: Got it. Back in those days I think it was, at least for some people, it was kind of a big deal — we didn’t really know about it much in Iowa where I grew up, but I think in more developed parts of the country the Westinghouse was a big deal. And I think your project had to do with black holes, am I right?

Ron: Exactly. It was really a very speculative sort of idea, I mean it was in a sense a fairly simple one. I mean to the extent that, you know, I’d sort of read that electromagnetism was mediated by photons as a transfer particle, and to the extent that, you know, the conventional model of black holes was that photons, light were unable to exit the black hole, I just tried to, you know, argue or work out — it’s been so many years, I can’t even remember exactly what I wrote — but I just sort of presented the hypothesis that black holes could not carry an electromagnetic charge, simply because the photons, the transfer particles couldn’t exit the event horizon. Or put another way —

Steve: Interesting.

Ron: — the photons would be infinitely redshifted, or so strongly redshifted that the electromagnetic charge would not be detectable outside the black hole — which, you know, was contrary to the orthodox level of a black hole, with charge being one of the very, very few parameters retained by objects that fell into the black hole.

Steve: So at that time, at that age — I guess you must have been, I don’t know, sixteen or seventeen years old — what did you think your life was going to be like?

Ron: Well I assumed I’d go into physics, theoretical physics or possibly mathematics, in other words an academic career. And you know, it’s the sort of thing I’d always pretty much thought about doing from the time I was probably in my early teens or something like that — I’ve always been obviously very strongly interested in the sciences — and I thought I would go off to, you know, university, then get a PhD and probably become a professor somewhere. So you know, life takes twists and turns that nobody ever expects.

Steve: Right. So you followed the theoretical physics path, you were an undergraduate at Harvard, you did some graduate work at Cambridge with perhaps that was a Marshall scholarship?

Ron: Oh it was actually a Churchill, a one-year Churchill fellowship.

Steve: A Churchill. And then you ended up at Stanford University as a graduate student.

Ron: Exactly.

Steve: And at some point you made the transition from physics to finance. Could you tell us how that happened?

Ron: Sure. I mean, the funny thing about it is, later on when I got involved a little bit in politics or political campaigns, all of my friends from college were not the slightest bit surprised at that. In other words, when I was an undergraduate I used to spend a great deal of my time, you know, discussing politics and public policy with all of my friends. We would sometimes spend like an hour and a half or even two hours at the dinner table discussing things back and forth, and you know, it’s always been a strong side interest of mine. But the thing that utterly shocked and flabbergasted them was that I got involved in the business world, because I’d never had the slightest interest in anything connected with business. I’d never dreamed that I would be involved in finance or business or anything along those lines, and so that was a completely unexpected turn. What really happened was, I’d been involved in various projects, public policy projects as a graduate student while I was in my physics PhD program, and you know, it was just very frustrating that I wasn’t able to, you know, get any of those things done in the way I’d really hoped. I mean, we’d made some progress on a few things. The main project I was involved in was an effort to set up a specialized sort of high school down in Los Angeles, something along the lines of, say, Stuyvesant or Bronx High of Science in New York, but based in Los Angeles. And you know, we put together a lot of effort, we made a lot of progress, but it ended up not panning out. And so what happened was a number of my friends from college who, you know, had quite different undergraduate interests, had all majored in economics and gone off to work on Wall Street. And you know, I used to sometimes hear from them that it was a very attractive opportunity, I should take a look at it, and you know, the amount of money people could earn was a lot more than they could earn as an academic or anything along those lines. So right after my third year in the physics PhD program at Stanford, I was persuaded to take a summer job working at one of the big investment banks, the First Boston Corporation, which was one of the four bulge bracket banks at the time. And what happened was, you know, when I sort of sent in my résumé, they said — and the reason I decided to do it was just to sort of see what it was like, and I thought well, maybe after I get my PhD I’ll then go to Wall Street and work for a few years so that I can, you know, save up some money and have more flexibility down the road — but when the Wall Street people saw my PhD they just sort of stuck me in the mortgage finance department, because everybody knew that was sort of where quantitative people should go. And I’d never really had any background, you know, any interest in computer software — the last time I’d done any programming was actually back in elementary school, when we used to bubble cards in Fortran — but they sort of sat me down there, and they explained that they were trying to write these programs to analyze mortgage securities and design them. And I ended up, you know, putting in a lot of time and effort and doing a good enough job that they ended up persuading me to stay on, to take a leave of absence from the PhD program and stay on. And at that time that was late ’87, and it really seemed that Wall Street was heading towards a tremendous bubble, a collapse. And so I thought to myself well, if I went back and finished up my PhD program, there’d be no chance Wall Street would still be around [laughs], you know, in two or three years if I wanted to go back, so I might as well, you know, take this opportunity and try to earn some money and stay there. And so that’s basically what I did. And so what originally I thought would be a two or three month summer job ended up going on for five years, and I was in New York for that period of time. What actually ended up happening was the market crash came, and not long afterwards basically half the people in the department, including me, ended up being fired or laid off. There were also sort of internal politics. That was actually… some of the people I knew there were the BlackRock people who later left to set up BlackRock, they were all purged, and so they left to set up BlackRock, and I and another guy ended up setting up a software company. And basically I was out there in New York City running a very small software company for five years.

Steve: So I want to ask you a little bit more about your software company, which I think was called Wall Street Analytics. But before I get into that, I want to ask you about two possibly apocryphal stories that I’ve heard over the years from this period of time when you were just leaving Stanford and going to Wall Street. So one was that in order to get interviews on Wall Street you put on your résumé your IQ, which had once been measured at 214. Is that a true story?

Ron: That’s a true story. [laughs]

Steve: And did it work? Did someone, did anyone tell you hey, we interviewed you, Ron, not because of your Harvard chops but because your IQ is 214?

Ron: Well, I was never told that explicitly, but I think it probably contributed to my getting in the door. Remember, back then, that was long before quants became so significant on Wall Street, and there’d been virtually no quantitative people without a sort of computer science or business background who had been hired. In fact, I think that I was really one of the very, very first people the First Boston Corporation had ever looked at with that type of background — you know, somebody who hadn’t already spent a year or two in computer science or in the business world — so you know, it wouldn’t surprise me if that sort of, you know, at least got me an interview or something like that.

Steve: Yes, that was definitely the very beginning of the quant wave. I remember, actually around that time, I think I was graduating from Caltech and interviewing with a few places and being offered a job, but at that time there were almost no physics and math people on Wall Street.

Ron: Exactly.

Steve: The second possibly apocryphal story that I want to ask you about is a lunch you had with Feynman at Caltech, in which I don’t know what exactly you discussed, maybe it had to do with black holes or maybe your grand unified theory, but maybe you can say something about that.

Ron: Oh sure. Well you know, I always regarded Richard Feynman as like, you know, a god, I mean probably the greatest theoretical physicist of the second half of the 20th century. And you know, a couple of times I actually went down to Caltech — somebody I knew knew him or something like that, and knew of my sort of, you know, tremendous admiration for him, and so, you know, got me an introduction. I don’t recall — actually, maybe I did have lunch with him one time or, you know, a brief lunch or something like that, but I remember I did meet him briefly on a couple of occasions. And in fact it was funny, I think I actually mentioned, you know, that question of — let’s see, I’m just trying to remember… Right, I think what had happened was, I had actually written up that black hole electromagnetism issue. You know, when I produced the sort of outline of the idea for a high school science project, it was done on a very primitive and crude level. But then the year I spent at Cambridge after, you know, after graduating college, I ended up actually writing it into a somewhat more formal approach, where I argued that if there were, for example, certain unorthodox curvature terms in the Lagrangian — in other words, if the Ricci tensor were coupled to the electromagnetic field, it looked like in effect you’d have an effective mass for the photon being produced, which, you know, would possibly cause the electromagnetism not to be detected outside a black hole. And so I sort of, you know, I actually got it published in Physics — it was either… no, it was Physical Review… To be honest, I don’t know how correct or interesting a paper it was, but I sort of worked out certain things, including the impact on the inflationary universe hypothesis and a few things like that. And I think I mentioned it very briefly to Professor Feynman when I sort of, you know, was introduced to him or sort of asked him his opinion of it, and he immediately came out with some very interesting sort of implications and suggestions regarding it that I hadn’t considered. And to be honest, that was over 30 years ago and I can’t remember exactly what, you know, arguments he made, but you know, they certainly impressed me at the time. So yeah, I might have met him once for lunch, but I know I met him on a couple of occasions, but you know, it was just fairly brief meetings.

 Steve: So back to Wall Street Analytics. And the reason I know a little bit about the firm is that a couple of people, friends of mine from physics, worked there, I believe.

Ron: Oh really? Oh God, it’s a small world.

Steve: It’s a small world. So at Wall Street Analytics were you focused mainly on modeling mortgage risk?

Ron: Yeah, it was basically mortgage securities. It wasn’t so much modeling mortgage risk but building software — convenient, easy-to-use, sophisticated software — for designing the mortgage securities, and then running them under a variety of different possible scenarios. In other words, the way I always used to describe it to people is that, you know, personally at the time I was always very skeptical of the ability to predict what would happen to these different securities in the future — in other words, you know, because it seemed to me there was no way of really predicting what prepayment… The value of these mortgage securities, as we found out during the meltdown, was enormously impacted by default rates, prepayment rates, interest rates, and it always seemed to me there was absolutely no way to really effectively predict those things. So the system basically I had built, originally myself and other people, you know, when I brought them on board after relocating to California — they sort of enhanced it or, you know, added extra features or that sort of thing — the whole thing about the system was, one way of looking at it, it was a very deterministic system, more like an incredibly advanced form of a spreadsheet that would allow people, for example, to run specific scenarios, and then under those specific scenarios, determine the value of the securities involved while producing securities that were extremely complex, and slicing and dicing the cash flows in all sorts of different, highly complex ways — because many of those securities were getting extremely intricate and extremely complex — and doing that in a sufficiently user-friendly way that the designers of the securities could produce these incredibly complicated securities in a matter of minutes rather than a matter of hours, which was what a lot of the existing Wall Street programs were requiring, even sometimes a matter of days. So you know, when I would be in effect going out on a sales call and showing the system to people, I mean, they were very impressed by how easily you could modify the securities, how easily you could explore different scenarios, but I always told them very honestly that, you know, it seems to me that there’s no way to really predict what will happen to interest rates, your default rates, or any of those other things. So you know, I would say well, you run this scenario, that security’s worth a great deal of money, while if you run this other scenario it’s totally worthless, and it just isn’t clear to me how you can really predict what would happen. And they would always then respond oh no, we have a research department, we pay them millions of dollars a year and they predict what will happen to default rates and interest rates and prepayment rates. So you know, you don’t worry about that — I mean, basically you give us the software that lets us model these scenarios. Our research department will give us the inputs to run or, you know, that type of thing. And so I said well, I wonder about that but, you know, it’s sort of your business. So the way to think of it is — and that’s another metaphor I always provided people — we were sort of in the munitions business. We would go to these different firms and sell the munitions just like during wartime. Munitions vendors would sometimes sell bombs and explosives to all these people. And you know, how to use it is not really our business, and you know, they could use it in a dangerous and destructive way, which ultimate ended up happening. But I mean, we were really just producing, you know, high quality software that would let people analyze the securities in all sorts of complex ways. And you know, at the time, I mean there were a number of blow ups that happened on Wall Street during the time I was there — there were probably at least two or three of them — where there would be a massive crash, the firms would lay off huge numbers of people, with the first of those cases happening, you know, just a few months after I arrived full time. And you know, then every time the firms would build up again, other firms would make profits in the same way, and then finally in 2008, you know, the mother of all crashes took place. And you know, if you look at it today, some of the firms on Wall Street have gone back to doing the same sort of thing with leveraged loans, which, you know, I have very significant doubts about. But you know, I was just in the software business, which is a little bit more honest than trying to predict interest rates or default rates or all those other things.

Steve: So your firm was acquired by Moody’s if I’m correct.

Ron: Exactly.

Steve: And what year was that?

Ron: Oh it would have been, let me think, it was actually right before the big market crash. It probably would have been right at the end of 2006, I think. It was basically December 2006 I think.

Steve: I see. And at that time Moody’s was a ratings agency that, I guess some people were claiming perhaps you could buy good ratings from Moody’s, or there was some kind of, I guess, accusation of, you know, not particularly sound practices leading up to the bubble.

Ron: Exactly, though all of that actually came out afterwards. In other words, you know, the sort of scandalous issue of Moody’s ratings happened probably six months to a year after they ended up buying our firm. In other words, as far as I know there wasn’t really much of a hint of that going on until, you know, the investigation started after the big market crash. And in fact, the ironic thing about it, you know — so basically we sold our firm at, you know, at what could be considered the top of the market to Moody’s, and you know, I was very happy with it because I was no longer really actively involved in the firm at that point. And you know, from my point of view, you know, the market was getting so ridiculous I sort of expected a market crash to take place. But the ironic thing about it is that Moody’s did extremely well out of buying our firm at the time. So you know, I was happy with the transaction. They ended up being very happy with the transaction as well, because once the market crashed, there was a tremendous market for software to analyze the portfolios of all the firms that had gotten into so much trouble. So for the next couple of years, I think, Moody’s did very, very well with our software, you know, making an awful lot of money by sort of using the software to analyze the securities of all these defaulted firms and everything like that — at least that’s what I think I heard at the time and what I read in the papers. So you know, it really worked out very well. And I certainly don’t begrudge Moody’s the fact that they, you know, bought the firm at such an opportune time for them, because, you know, from my perspective I really was quite risk-averse, you know, an awful lot of my net value was tied up in the firm. And since, you know, I always expected a market crash to take place — we’d have just been on pins and needles over the next year or two, you know, whether the whole firm would go out of business because the market went out of business. And it turned out to be the other way around, in that there was more business rather than less because of the market crash, but you know, I wouldn’t have known that at the time.

Steve: I guess you’re saying you were acquired for stock and not cash.

Ron: No, cash, cash. All cash.

Steve: Okay, but then you didn’t care so much what happened to Moody’s once the transaction was done.

Ron: Oh exactly, I was perfectly satisfied with it, and you know, again, it could be… I mean I’m sure, for example, after they acquired the firm, and the market melted down six months later or something like that, you know, I’m sure at the time they were sort of, you know, wondering whether they’d made a mistake, and it just turned out to be very, you know, successful for them down the road.

Corey: So Ron, I have a question. You’re talking about when you thought Moody’s might have gotten too close to the banks and had some impaired judgment as far as rating the bonds. Are you saying you thought that there was nothing wrong going on before 2006, or that that’s about the time that the investigators figured out that, when looking back, that’s all the evidence they had was around 2006?

Ron: As I recall, I mean 2006 was really well before the full meltdown — and you know, again, I’m trying to remember exactly the details. I was no longer actively involved in the software business and hadn’t really been for several years. I was much more involved in some other projects, and so it’s not like I was following things in tremendous detail. But I think at the time, I mean Moody’s, Fitch, and S&P were the three big rating firms that rated everything, and those had been the three firms rating all these securities going back for 20 or 30 years. So as far as I know, they weren’t really doing anything that much different at the time that they’d been doing for the previous couple of decades. And it was only after the market crash really took place and it was such a disaster, what with the meltdown and the bailout, that people really started focusing on the fact that the system had provided perverse incentives for Moody’s and the other rating agencies to sort of stamp approval on deals that they probably should not have done. The same thing was also true of the law firms. In other words, the law firms and the accounting firms also were involved in signing off on the deals. And it wasn’t quite as scandalous as the rating agencies, because the rating agencies were supposedly more intended to be, you know, responsible third-party evaluators, but you know, the same thing to some extent happened with the accounting firms, the law firms. It was a little bit like what happened with the Andersen accounting firm with Enron. In other words, Enron was such a big client, and they were paying so much money to Andersen it was considered scandalous, and Anderson ended up getting sued, you know, when Enron collapsed. So I don’t know whether Moody’s, S&P, and Fitch… I mean, everybody knew what was going on. In other words, everybody knew the firms were paying the rating agencies, and I think it only sort of came into focus when the disaster took place. In other words, if not for the meltdown, probably the whole thing would have gone on for another 10 or 20 years, and nobody really would have paid any attention to the perverse incentive structure.

Steve: Okay. So Ron, let me switch gears now and ask you about unz.com, which is probably the most well known thing that you’ve been involved with. My way of explaining it to other people is that it’s a website which entertains or publishes views from both the left and the right, but typically people who can’t have their views promulgated by the mainstream media. Is that a fair characterization?

Ron: Exactly. In fact, the sort of mission statement I’d originally launched it with, which has continued, is it’s intended to provide convenient access to interesting, controversial, and important views that are generally excluded from the mainstream media — and, you know, that includes left, that includes right, that includes libertarian, that includes views that are simply uncharacterizable in the ideological landscape but, you know, are interesting and potentially important and you’d never see in The New York Times.

Steve: So what I often say to people who read something on unz.com and don’t like it and then attack you, what I tell them is that these are not Ron’s views. Ron is deliberately trying to create a platform where controversial views can be published, and he’s not responsible for those views. He is the person who allows these ideas out but he doesn’t necessarily stand by all of the ideas, and many of the ideas on unz.com are mutually contradictory.

Ron: Exactly, and you know, in the same way, for example, when you look at The New York Times op-ed page, you see a wide range of different views that disagree with each other. And in no way can you say that The New York Times endorses all the views on the op-ed page, because the op-ed writers disagree with each other, so it would be logically impossible. So what you could say about this website, it’s an extremely heightened version of that same notion of an op-ed page — in other words, the truth is, most of what you read on The New York Times op-ed page or in your local paper are views that may disagree with each other and be left and right, but within a fairly narrow range of respectable sentiment. Here the range has been heightened by one or two orders of magnitude, so you see very, very different views that, you know, in many cases I think are complete nonsense, but in some cases I think may certainly be correct. And the odd thing about it is that views which were considered very mainstream and respectable and almost undeniable in the elite media of one era in the United States, a generation or two later may be considered extreme and outrageous and ridiculous in another era. So that, you know, for example, if somebody basically were to look at the op-ed page of The New York Times 40 or 50 years ago, I suspect many of those opinions back then, which were the height of respectable sentiment, would be today considered so outrageous and ridiculous that they would never get into the current New York Times. So you know, there’s certainly a time factor and a social consensus factor that determines what’s outrageous and what’s not.

Steve: So I want to explore that in more depth, your ability or interest in looking back at what has been published in the past. But first let me just ask you, it’s my impression that among alternative media, unz.com is now one of the biggest players in terms of traffic numbers. Could you quantify that for us a little bit?

Ron: I’d say certainly we’re getting very close to that point. Now you know, our total traffic is not enormous by the standards of either The New York Times or even, you know, for example, BuzzFeed or something like that. We generally get about 3 million page views a month, something like that, and an enormous number of comments, since in some ways it’s more of a commenting platform than, you know, a magazine or something like that. So you know, 3 million is certainly good, and it’s very heartening that our traffic has been growing fairly rapidly over the last two or three years. And from my point of view, one astonishing thing is that just in the last few months we’ve actually started to get fairly close to the monthly traffic of The New Republic or The Nation or Foreign Policy, which are publications that go back 50 years, 100 years, and are the height of respectability and purported influence. And you know, basically… for example, according to, you know, third-party measures, something like The New Republic website now gets probably about 3.5 million views a month and we get 3 million, so you know, we’re not really that far away. Now you know, back two or three years ago they were probably getting five times our traffic or six times our traffic, so you know, the trend lines are very encouraging that way, especially because one thing I should say is our publication tends not to chase clickbait. For example, there are a lot of publications out there that have very short, listicle type articles meant to attract clicks or something like that without much substance to them. Most of the articles we publish are, you know, typically a thousand words, two thousand words, sometimes even five or six thousand words or even longer than that, so they’re much more along the lines of, for example, what a magazine like The New Republic would have published in print 20 or 30 years ago than, you know, one of these clickbait websites with pictures of frogs or something like that.

Steve: Maybe I can describe the way that your worldview has evolved as, you currently think there are lots of things in which the sort of consensus and what’s written in elite media could be completely misleading or wrong, and that that kind of misconception can persist for really long periods of time, like decades at a time. Is that a fair characterization?

Ron: Exactly. And in fact another factor — there are probably three factors that came together that shifted my, you know, view on this, because I’d always had a very sort of conventional perception of history and everything like that. The first factor probably as much as anything was the whole Iraq war WMD issue, and then also the financial meltdown — in other words, I actually published an article called “American Pravda” where I just sort of went through all of these bizarre things, where my belief in the media turned out to be entirely wrong and everything like that. So you know, that was one factor — in other words, the Iraq war certainly opened my eyes a great deal. The second factor was the internet — in other words, suddenly I had access to all of these bizarre things I never would have encountered in the past. In other words, how would I ever have known about Sydney Schanberg’s work until I stumbled across it on the internet? And so, you know, the internet suddenly provided a cornucopia of all these outlandish things — most of which I think I’m very doubtful  of the correctness of, but some of which seem to have a lot of substance behind them. But the third factor that was really more unique to me was right around 2000, 2001 I got involved in a new software project to digitize the major periodicals, opinion periodicals and magazines of America’s history and make them available in the internet — you know, for example, all the back issues of The New Republic, all the back issues of The Nation, all the back issues of The Atlantic Monthly, all of these publications. I ended up spending a great deal of time and effort on it, and there are millions of pages now, the complete archives of a couple of hundred of the most influential publications of the last 150 years in American history. And one really surprising thing I discovered just, you know, as I occasionally glanced at the table of contents or every now and then and would read an article, is the perception of the world put forth in these very establishment, very highly regarded periodicals of 50 or 100 years ago was at total variance with my impression of that time period on all sorts of issues. So in other words, you know, the fact that I’d gone to college and taken standard courses and read standard textbooks, my perception of those eras was very, very different than the perception I acquired by actually looking at the leading periodicals from that time period. I mean, again, it’s sort of… well to give you an example, part of it — just one very minor thing which is obvious but only in hindsight, and I hadn’t really thought of it at the time — when I think of the most prominent influential publications in American history going back to the beginning, I think of basically four of them — there’s The New Republic, The Nation, Atlantic, and Harper’s. They go back almost 200 years or 150 years, and that’s perfectly true, they’ve always been very influential publications. But they were four of fifty or four of a hundred, and for much of that time period they were not remotely the most influential publications in America. And the most influential publications of those prior eras in most cases went out of business so long ago that almost nobody has ever heard of them these days. I’m going to give you an example. For decades… I’d been friendly for a number of years with Nathan Glazier, who died a few years ago — you know, he was 95 and so he goes back to that prior era — and he was telling me that for decades the two most important reviews you could get for any book in America were The New York Times and the Saturday Review. Those were far and away more important than reviews in any other publication. And I’d never even heard of the Saturday Review, and when I digitized their contents — I mean, it was an incredibly influential publication for 50 or 60 years. Same thing, for example, with Forum, with Century, with all these dozens of periodicals that in their day were every bit as important as The Atlantic, and many times more important. So you know, again I’d been missing 95% of the content of those eras. And when I read the articles — again, you know, it’s sort of also the individuals you come across. Let me give you another example. Have you ever heard of somebody named John T. Flynn?

Corey: I think so, actually. See…

Ron: You may have read my article on it.

Corey: It’s quite possible.

Ron:  That’s probably where you…

Corey: Describe who he is please.

Ron: Okay. Well, the way I put it, take for example Paul Krugman right now in the United States. I mean, for the last 20 years or so he’s probably been one of the most influential liberal columnists in America. And now people probably forget, you know — Pulitzer Prize winner, Nobel Laureate in Economics, you know, the key journalist at The New York Times op-ed page — people forget that right after he joined the Times, there was a huge effort led by Andrew Sullivan to have him purged and fired because he was hostile to Bush. And there was a huge effort which I think came fairly close to getting him fired from the Times, like in the first six months he was there. Now you know, he ended up being one of the very, very few voices on any of the op-ed pages criticizing Bush’s Iraq war at the time, very, very few — about 90%, 95% went along with it. And I remember pointing out to people that if Krugman had been fired from the Times, and let’s say, for example, the Iraq war had gone better — I mean, the Iraq war ended up being arguably the greatest geopolitical disaster in the last hundred years of American history — but if it had gone well, you know, you can imagine like 20 or 30 years later Krugman’s forgotten, and people sort of vaguely said Krugman, wasn’t he one of those Islamic terrorists or something like that? Wasn’t he involved in the attack on the World Trade Center? Vaguely something like that. John T. Flynn falls into the same category. I’d never heard of his name or very, very vaguely heard of his name. He was probably one of the most influential liberal journalists in all of America at the time, during the 1930s, also focused on economics and finance. He’d been a staffer on the Senate committee investigating the Wall Street market crash, he had a regular weekly column in The New Republic, he regularly appeared in Colliers, which was probably the equivalent of a television network back then because it had such enormous circulation and was colorful and very popular — I mean, you know, there weren’t any TV networks — so he was an incredibly influential figure. He’d been supportive of Roosevelt but then later he changed his mind, came out against Roosevelt, and he was purged along with a lot of America’s leading journalists right at the end of the 1930s, at the beginning of the 1940s. And basically Roosevelt had him fired, as far as I can tell from the evidence, and you know, had him blacklisted, so he never had another job again. And you know, basically decades later, when I vaguely heard of his name I thought, he’s always described as like, oh some extreme right winger, you know, sort of fanatic John Birch Society member. He was the most influential liberal journalist in America. So you know, the Krugman analogy of Krugman being vaguely remembered as being an Islamic terrorist supporter or something like that is not entirely ridiculous. So I had never heard him. There were all these other people I’d never heard of either, who were the most influential journalists and scholars in America, and they were all purged, I’d never heard of them. And you know, the reason I discovered them is when I was digitizing these archives, you know, the system I built aggregates things by author, aggregates things in all sorts of ways, and basically I noticed the most widely published writers of those time periods were names I’d never heard of in any of my history books or text books. So you know, it’s the sort of thing… The way I described it in joking terms to somebody a couple of times was, it’s sort of, you’re digging through the archives — and let’s say, for example, you’re a Soviet scholar in the 1970s or 1980s, you know, just sort of a Kremlin scholar, you’re digging through the archives, and you suddenly discover that Trotsky and Zinonviev and Kamenev were not Nazi agents, they were not foreign spies, they were actually Lenin’s closest collaborators. And you’d always read in your textbooks how everybody knew that they were German Nazi spies and that’s why they’d been executed. So you know, it was something just this, like, shocking to dig through these archives of these publications and discover that the most prominent names published in America’s most respectable, influential journals were people I’d never heard of in all my years. And you know, some of them I’d heard of, a few of them I’d heard of, but most of them I’d never heard of. I’ll give you an example: have you ever heard of a guy named Walter Lippmann?

 Corey: Of course.

Ron: Oh you probably have. When I was talking with my aunt who is , you know, quite a bit older than me, and I mentioned John Flynn to her, she’d never heard of him, but she said oh, is he a little bit like Walter Lippmann? And I said yeah, sort of. And when I checked through my system, I found out during that decade there had been 30 articles published in these publications by Walter Lippmann and 300 by John Flynn. I mean, John Flynn was probably a much more influential figure back then, and I’d never heard of him. My aunt, who’s 80 years old, had never heard of him. So you know, it’s just the interesting thing was, one of the few people who had heard of them was Nathan Glazer because he’s 95, and so it’s sort of like people who are that age know the world in ways that, you know, you don’t. Another example: Harry Elmer Barnes was one of the most influential historians and academics in American society. He was also purged and I’d never heard of him anywhere. So you know, I mean there were a whole series of these very, very prominent figures who’d been totally disappeared in American history, and I’d never even known that they existed. So you know, that’s probably the best example of, you know, sort of very simple surprising things because, you know, again, whether the articles published… It could be that in some points the articles published in The New Republic 80 years ago were wrong and our current articles are right, or maybe it’s the other way around, but I mean, it’s difficult to be sure about that. But one thing I can say is that of the most influential journalists of The New Republic, one of them was John T. Flynn, who nobody these days has ever heard of.

Corey: But isn’t that just a function of the fact that our memories here are fairly short intellectually? I’m not sure I would describe these being purged, no one’s stopping people from reading him. But Americans don’t tend to learn a lot of history, and especially journalism tends to be what’s current that day or that week, and the knowledge of journalistic history is pretty thin.

Ron: Oh sure. Look, I’m not saying, I mean Flynn was not arrested or anything like that, it wasn’t the Soviet Union. He basically just sort of kept on writing books — and oh, I ended up reading a couple of his books which brought incredibly shocking facts to my attention about that time period that I’d never heard of in my standard history texts or anything like that. So you know, at this removal I can’t really evaluate the correctness of that, but you know, again, a huge amount of facts have been shocking. Here’s another example, something I just discovered in fact about a year ago, which was astonishing. It turns out one of the most prominent American writers on French matters, you know — New Republic, Nation, all these leading American intellectual journals — ended up living in France during the Vichy period. And I ended up reading this book on it, and it provided an entirely different framework of reality than I’d ever, you know, gotten before. And again, he was a very highly regarded person, he was friends with the American ambassador and very high-ranking American figures, and he’d been probably one of the most significant interpreters of France to, you know, the American audience. So you know, whether his perspective is right or not I can’t say, but one minor detail he put in there that stood out at the time, I read it and I thought oh that’s ridiculous, that’s crazy. You know a little bit about the history of the Second World War, don’t you? Okay, it turns out he just casually mentioned that in early 1940, everybody — he was living in Paris at the time, and you know, everybody sort of in Parisian circles who had access to the government or that sort of thing had heard that basically Britain and France were about to launch an attack on the Soviet Union. And it turns out the reason the attack didn’t take place is that the Germans conquered France before it could happen. In other words, you know, it was scheduled for, I think, like June or something 1940. I read that what had happened was at that time Russia and Germany were allies or quasi allies, and Germany’s oil was entirely coming from the Soviet Union, the Baku oil fields, so the idea was that the British and French would use their airfields in the Middle East — Iraq and Syria — to launch a massive attack on the Soviet Baku oil fields with the idea of damaging them so much that it would, you know, tremendously hurt the German war effort and everything like that. And, you know, everybody was sort of talking about it in Paris. And at the time I came across that I said boy, this really raises doubts about the credibility of this guy, because I’ve, you know, I’ve read a lot of histories of the Second World War. I’ve never heard such a ridiculous thing, and here he is just matter-of-factly saying it happened. As it turns out, just a couple of years ago a book came out basically presenting all the facts based on archival research, and it was very favorably reviewed, I think, in Foreign Policy Magazine or Foreign Affairs — you know, again a very respectable publication — and the truth of that planned attack had just been suppressed for like 70 or 80 years. I mean, it’s natural in a way because it never took place, and obviously within a year the Allies, the British and French then were allied with the Russians and, you know, it isn’t something they wanted to emphasize about the fact that they’d been on the verge of attacking the Soviet Union in a sneak attack just before the Germans conquered France. But apparently it seems to be true, based on the book that came out, the research that’s taken place, and so it was forgotten for 70 or 80 years, until suddenly somebody did archival research and came out with it… I mean, you know, it seems correct — in other words, I haven’t bought the book but I googled it, and there was a very respectable and favorable review in one of America’s leading foreign policy publications and saying oh, this is interesting that nobody had been aware of it before. And you know, again it was just discussed matter-of-factly in that forgotten book published 80 years ago but, you know, disappeared for 70 or 80 years. And you know, the ironic thing about it is obviously if Britain and France had attacked Russia at that point, it would have meant that the Allies would have lost the war because, I mean, clearly at that point then Russia would have become a much more direct ally of Germany, and the Allies would have never stood a chance. So you know, it’s just ironic how the hinge of fate played out that way. So you know, again I haven’t researched it, but I mean, it seems that it really is true and it really happened, and it was just this suppressed embarrassing fact for 70 or 80 years.

 Steve: So Ron, I want to switch topics, but before we switch topics I want to ask you the following question. If you have a skeptical guy like Corey who…

Ron:  Sure.

 Steve: …I’m joking here, but blindly trusts what the media says to him, what’s the way for him to awaken from his slumber? What things should he read, what facts should he check? How would you awaken him from his slumber?

 Ron: Okay, I think probably a reasonably good starting point is actually my article “American Pravda.” I mean it’s not that long, it’s like five or six thousand words long. I published it about a decade ago, and it just sort of goes through all these cases and issues and, you know, just sort of raises some of these shocking facts that, you know, I think are probably true. I can’t be sure about them, but you know, the fact that there are enough of them really, you know, has persuaded me. And I ended up actually more recently running a whole series of articles, “American Pravda” type articles on all sorts of other things, but I mean, that one starting article — which I published, I think it was 2012 if I recall correctly — just put these things together and actually got a very favorable mention by a writer in The Atlantic, and somebody in Forbes, and a columnist for The New York Times and everything like that. So you know, again, it’s sometimes…  The whole thing about it is that if you find one apparent hole in reality, it’s easy to persuade yourself that it isn’t really there and you’re hallucinating. But when you find 27 of them, you start to say well, you know, anybody can hallucinate one hole in reality, but 27 of them is just too many, and so then you start to think that, you know, maybe some or most of them really are true. And I mean, a lot of it again is that I’ve come across these references to books. I’ve then read the book, you know, written by in many cases a very respectable, highly regarded author. He’s presented a wealth of information that seems fairly persuasive to me. I’ve sometimes tried to look at reviews of that book by other scholars in the field, and the combination of those issues sometimes persuades me that it’s correct. And the point I should make is that of all the “conspiracy theories” floating around, I guess that like 90, 95% of them are just nonsense, they’re just all nonsense, so you have to have a very careful and critical eye in evaluating them. And I mean, some of them just seem totally ridiculous to me — in some cases you can even imagine that the proponents don’t believe them, and they’re just promoting them to like make money in advertising or something like that. But in some cases the facts really seem there — and I mean, the key point is the way we form our view of reality is through the agency of the media, the mainstream media, and when you start to acknowledge the fact that the media is often unreliable, much more unreliable than you previously recognized, it suddenly makes you much more open to these other possibilities.

Corey: So Ron, how do your views differ from Chomsky’s views? Chomsky expresses many similar attitudes about the mainstream media.

Ron:  I’ll have to admit, I don’t really… I think I’ve read one of Chomsky’s books, I think it was something like Manufacturing Consent

Corey: Yeah, it was one of the later ones.

Ron: …which I think is one of his famous books, or maybe it was him or maybe it was somebody else…

Corey: No it’s him, him and Edward Herman.

Ron: …and it seemed certainly good and, you know, going down through his things I think I probably agreed with some of his points. So I don’t really know what specific things Chomsky’s focused on, but I mean, to the extent that Chomsky criticizes the reliability of the mainstream media, I think I would very much agree with him there. Now you know, once you no longer accept the reliability of the mainstream media, the question is then what you substitute in its place. And so it could be that Chomsky might accept certain people, and I might, you know, more highly weigh other people or something like that. But the bottom line is you just have to be very careful about believing what you read in The New York Times or what you see on the CBS Evening News or something like that.

Steve: Okay, we’re going to hop to another topic here because we’re running out of time. Is that okay Ron?

Ron: Sure, go right ahead.

 Steve: So you and I have been involved in, both have been critical of Harvard admissions, and going back quite a long time. So I think I probably first mentioned it on my blog, you know, early 2000s, I don’t know how long you’ve been thinking about it. As you and I both know, there was recently a trial, a lawsuit against Harvard for discrimination against Asian applicants. One of the interesting things I learned by following the trial closely was that your essay “The Myth of American Meritocracy” was what caused the president of Harvard or the dean of the undergraduate college — I think maybe it was the president — to actually ask for a study of the admissions activities at Harvard vis-à-vis Asian applicants, and the study that was done by their internal research office was actually used as evidence in trial. So I was hoping you would just talk a little bit about your interest in this subject, the article that you wrote, and the impact that it had.

Ron: Sure. Well you know, I really was very pleased the way that came out. The story about it actually is sort of interesting, in that when I was an undergraduate decades ago, I sort of was, you know, a little bit doubtful about the admissions practices but not in a significant way. And then, you know, 10 or 15 years later as time went on — I graduated in, I was class of ’83 — so you know, probably by the 1990s I’d gotten, you know, more suspicious when I’d seen some of the figures that seemed doubtful to me. And then right around I think ’94 or ’95, there was a little bit of a media flap about, you know, bias — or it might been ’92, ’91 or ’92 — there was sort of a minor media flap about Asian bias and admissions, you know, anti-Asian quotas or something like that, in a number of different universities — mostly UCLA and Berkeley, but to some extent at Harvard — and that had died down, so I really stopped paying much attention to the whole issue. And then it was actually your blog, Steve, that you know, prompted me to take a closer look at it, because I remember you’d had a couple of blog posts on dealing with Asian academic performance or something like that. And one of the issues that came out was, you know, there was a heated debate between various posters on the question of like, are Asians really that academically successful, referring to the Math Olympiad and things like that. And I just, you know, decided to check what the guy was saying. So I clicked on the Math Olympiad website, looked at the list of names, and I was astonished how overwhelmingly Asian those elite competitions were these days. And I really hadn’t closely followed Harvard admissions or East Coast admissions, but I really decided, you know, when I have some time, maybe a few months or a year, I’ll look into it more carefully. And what I found utterly astonishing — which was the graph that got into The New York Times that sort of provoked probably Harvard to do something — was that, you see, people had focused on the fact that, you know, Asian admissions had not declined, that they were steady, but people had not focused on the fact that the Asian-American population had risen enormously during that same period. So for example, to the extent that the Asian-American population had tripled or doubled during a period of 20 years including, you know, high-school age population, and to the extent that their academic performance had remained very, very strong, the fact that Harvard admissions of Asians had been static or slightly declining was a credible smoking gun. And I ended up also reading that famous book by Daniel Goldin, The Price of Admission, that won him a Pulitzer Prize on the corrupt practices of admissions, and a number of other books, and as I started looking into the subject I was astonished at how utterly corrupt the admissions process had become at all these elite universities — much, much more so than I remembered back from my time period. And I mean, some of these stories were just incredible — and again, you know, there were books by The New York Times higher education correspondent, by top education admissions officers at Ivy League schools, by Daniel Goldin who won a Pulitzer Prize, by you know, all these top people — and people had just not connected all the information together. So you know, I ended up connecting it. And then also, nobody had focused on the fact that the Asian population had increased so rapidly, while there’d been a slight decline in Asian admissions at most of the elite schools. Moreover, the fact that all of the schools had converged together to have almost exactly the same rate of Asian enrollment, which is very suspicious, I mean it’s sort of like… Let me put this way: you know, there’s the famous Jewish quota in Harvard, in the Ivy League schools from like the 1920s that, you know, everybody knows about it, it’s been thoroughly documented and everybody accepts it these days, though it was denied at the time. And if you look statistically at the enrollment rate, there’s vastly, vastly more hard evidence for an Asian quota these days than there was for a Jewish quota back then. I mean, you see basically a flat line in Asian enrollment, and it just seems very odd that even as Asian performance is increasing, as the size of the Asian applicant population has been skyrocketing, all of these Ivy League schools would converge to a very similar enrollment number from what had been very different numbers, either higher or lower, 15 or 20 years before. And that graph really got people’s attention, especially since Goldin’s book had emphasized that the only truly meritocratic admission system in America was probably Caltech — and everybody acknowledges that — and Caltech’s Asian enrollment had directly tracked the growth of the Asian-American population. So it really seemed very much like a smoking gun. And you know, when I put it out there, The New York Times actually ran a symposium on it, and it really got some very favorable attention here and there. So it’s not totally surprising that, you know, it put some pressure to Harvard to investigate the issue. And my personal feeling is that virtually nobody at the top administrative level at Harvard had been aware of these facts. In other words, it’s not that there was sort of a conspiracy where they ordered the admissions officers to have a certain rate of enrollment; it’s just that they put competing pressures on the admissions officer, saying well, you can’t have this number too high and this other number too low, and the vector sum of all those competing pressures is what generally produced, you know, what looks an awful lot like a direct quota within a point or two of whatever, 23%, for a decade. So I mean, none of it really surprised me that much, and we’ll see whether anything really happens with Harvard. But you know, that’s another example that, I mean, nobody in higher education, none of the reporters had noticed, that there was this very odd situation in admissions until I sort of looked at the data, and I was shocked when I found it myself.

Steve: Not only did all of these reporters miss the story other than Dan Goldin for twenty-plus years; during the coverage of the Harvard trial I was corresponding with some of the most prominent journalists, for example at The New York Times, on the trial, and I pointed out a number of statistical facts which were pretty devastating for Harvard’s case. But none of these journalists would acknowledge, you know, those points and certainly didn’t address them in any of their articles. So I have to say, my confidence in the media could not be lower at this point.

Ron: Exactly. And I mean, the other point I made which shocked a lot of people and actually got quite a lot of attention — it was tweeted out by a big leftist cable news journalist — was that, you know, Harvard and most of these other elite schools had really become gigantic hedge funds, with some sort of little college attached off to one side for tax reasons. I mean, I’ll give you an example. At the time I wrote my article, a couple of years earlier the four fund managers at Harvard, just four individuals who were involved in running Harvard’s endowment, they together earned more money than all the professors at Harvard combined, which is astonishing. And because Harvard had invested in mortgage securities and derivatives, Harvard actually almost went bankrupt. Harvard came within a whisker of going bankrupt — if not for the bailout, you know, the financial bailout, Harvard would have gone bankrupt. And you know, as I joked at the time, maybe Bill Gates would have bought it and renamed it, you know, Microsoft University East or something like that. I mean, it’s just funny, because you have all these professors who one day would show up in their classes of physics and, you know, ancient history, and see a sign “closed due to bankruptcy.” [laughter]

Steve: They definitely had a cash flow situation, because they had expanded the science campus in Allston just as the bubble burst.

Ron: Exactly. And the other ironic thing is, occasionally they used to come out here to sort of try to get some money from me, you know, whatever, endowment people or donor-relations people. And I would always tell them you know, I’ve the warmest possible feelings towards Harvard, you know — great university, I had a great time there, I really respect it. But I mean, Harvard has more money than I do, Harvard has more money than Bill Gates does — or not Bill Gates, but I mean, more money than the Google founders. And so it’s the sort of thing where, you know, I really like Google, and their software is great and it’s wonderful, but you know, if the CEO of Google dropped me a note saying can you donate some money to me personally, I would probably say no, because he has more money than I do. And the ironic thing, which also we pointed out during, you know, our effort for the Board of Overseers — which again I worked out at the time, and it shocked everybody when I published it — is that Harvard could abolish all undergraduate tuition, and nobody would even know that anything had happened financially. I mean, Harvard’s investment earnings were so enormously large compared to their tuition revenue, that it would have been like the equivalent of paperclip money for them to abolish all undergraduate tuition. And so, I mean, the whole fact that Harvard charges tuition makes absolutely no sense. I mean, it’s sort of like if, you know, if Bill Gates tried to swindle, you know, bargain people into paying less for a sandwich or something like that. I mean, it just makes no sense. So you know, there are all these bizarre things. And I mean, the truth is, the question of Harvard’s endowment and even Harvard’s admissions practices are very objective, clear facts. In other words, it’s not that anybody can dispute them — I mean, it’s public information, you can just look at the numbers and see what they are. And the fact that the media, you know, either never noticed it, and then once it came out they never really emphasized it or heavily reported it, again, you know, raises doubts about the reliability of the media on issues that, you know, are very, you know, objectively correct.

Steve: For our listeners I just want to clarify, I think you mentioned our quixotic attempt to run for the Board of Overseers of Harvard. So there was a slate which included you and me and Ralph Nader and some others. And I think you had figured out that it didn’t take very many votes — we could get onto the ballot by petition, and it wouldn’t take that many votes to actually get us onto the Board of Overseers. However, after they defeated us the corporation has, I think, amended its rules, right, so this the trick that we tried is no longer possible.

Ron:  Exactly. I mean, what happened was I sort of discovered a backdoor, in that nobody had ever tried putting together a slate, a complete slate like that. There’d actually been the South Africa slate 20 or 25 years ago…

Steve: Which Barack Obama was on.

 Ron: …exactly, to divest from South Africa, but you know, nobody had tried anything like that since then. And so I found a backdoor to their fortress where, you know… The way I sort of put it is that, I mean, we were running on the two issues of abolishing undergraduate tuition and having much greater transparency in the admissions process; and if we’d won, the story would have been so astonishing, I honestly think Harvard then would have abolished tuition. I mean, the dollars involved are so trivial to Harvard they probably would have done it. And then if Harvard abolished tuition, probably Yale, Princeton, and Stanford would have followed, and it would have just swept like dominos across the country. So it was a clever idea, you know, finding a backdoor to the Board of Overseers. But as you said, I think they raised the number of signatures you need by factor of five or a factor of ten to make sure that they sealed that backdoor with concrete.

Steve: All right. Well, we’re way over our usual length of time for this podcast. I want to thank you for being our guest, Ron, and we hope to have you back someday.

Ron: Hey, that sounds great.

Corey: This has been a pleasure Ron, thanks so much for your time.

Ron: Oh, great talking with you.

Steve: Okay, thanks a lot Ron.

Ron: Okay. Hey, thank you. Bye.