Casey Mulligan joins Allison Schrager to discuss his time on President Trump’s Council of Economic Advisers and the administration’s record on issues such as health care, the economy, immigration, and more. Mulligan’s new book is You’re Hired!: Untold Successes and Failures of a Populist President.

Audio Transcript

Brian Anderson: Welcome back to the 10 Blocks podcast, this is Brian Anderson, the editor of City Journal.

Coming up on the show today, we have a terrific conversation between two contributors and friends of the magazine: Allison Schrager, my colleague here at the Manhattan Institute, and her guest for the interview, economist Casey Mulligan.

Casey is a professor of economics at the University of Chicago, where’s taught for many years. But he took a break from his academic career to work for the Trump Administration, serving as Chief Economist of the White House Council of Economic Advisers from 2018 to 2019. 

He has a new book about his time in the White House called, You’re Hired!: Untold Successes and Failures of a Populist President. With the election coming up next week, we thought this would be an excellent time to invite Casey on the podcast.

But before we get started, just a couple of announcements:

First—we want to invite our listeners to check out the Manhattan Institute’s virtual Civil Society Awards, happening this Thursday, October 29 at 5:00pm Eastern. We’ll hear from five outstanding nonprofits and their leaders, and it should be a great event. If you miss it, you can find it on the Manhattan Institute YouTube channel, where you can find all our recent events.

Second—subscribers to the magazine will be happy to know that the Autumn Issue is hot off the press, and should be arriving in your mailbox any day now. Some of them are already available online, but you can check out the full line-up of essays on the City Journal website.

That’s it for me. And now, for our conversation between Allison Schrager and Casey Mulligan.

Allison Schrager: Hi. I'm Allison Schrager. I'm a senior fellow here at the Manhattan Institute. Today I'm delighted to be joined by Casey Mulligan, the Kenneth C. Griffin professor of Economics at the University of Chicago, who has just written a book I really enjoyed reading and wholeheartedly recommends, called You're Hired, that is a bit of a memoir about his time in the Trump White House. Riffing off a John Cochrane review, what really, I thought, made this book special is... You know, every book that seems to come out of the Trump White House is just about palace intrigue, not entirely credible, but this is just a dispassionate description of what went on and to think about it, how an economist would see it, and how to understand a lot of Trump's policies from an economic perspective. I really enjoyed it and we're lucky we're going to discuss it here with Casey today. Thank you so much for being here.

Casey Mulligan: It's my pleasure. It's a favorite topic of mine.

Allison Schrager: Well, I really enjoyed reading the book and have actually recommended it to several people because I think as an outsider you don't really understand what's happening at all. You feel like the information you're getting isn't always credible. This was, honestly said, the most insight I've had to the last four years, if anything I've read. So I really enjoyed it and have recommended it to several people already.

To get started, you had a line in there that turned out to be important for a lot of reasons, but also just struck me personally. There's a reoccurring theme throughout this book that you read all the documents. You read all the legislation. You read every page of the budget. You said that's in part because you don't rely on research assistants. Which made me sad because I used to be a research assistant more than 20 years ago, and this actually gave me the start of my entire career. So as I said, I mourn for future generations who didn't have that opportunity. But let's talk about some of the things you uncovered actually doing instead a lot of your own grunt work yourself, about this whole revelation you had that Medicare for All, that plan did in fact include eliminating private health insurance.

Casey Mulligan: You give me a lot of credit. In my class I liked to show like a stack of all the regulations or some really intimidating reading list from government. I was reminded, there's an equilibrium here. You're thinking from the point of view of reader, "Wow, there's so much to read. I won't have time to do it." Remember, somebody has to write what's read, and there aren't that many original thoughts coming out of Washington. So when you've read a few, reading the rest is very efficient because they're just cutting and pasting, a lot of cutting and pasting going on in Washington.

What I realized around the financial crisis and the aftermath of that, that there was increasingly cutting and pasting from Marx. Things like profits are evil, profits are morally wrong, profits are theft from employees and from customers. That's-

Allison Schrager: In legislation?

Casey Mulligan: This is in legislation. Medicare for All.

Allison Schrager: Really?

Casey Mulligan: In the House version says it the most explicitly, that it is our moral imperative to eliminate profit from the healthcare sector.

Allison Schrager: The whole of the sector? Even pharmaceuticals and things like that, risky businesses?

Casey Mulligan: You have to ask the others who wrote it, what they have in mind. But it was not targeted at health insurance, for example. In fact, the Medicare for All, it eliminates private health insurance, consistent with its directive to eliminate profit, also consistent with single-payer, you can't have a single anything unless you're going to have entry barriers to the second and the third. But it also requires all health providers to become non-profit, so no profit allowed.

Allison Schrager: What's extraordinary is you uncovered this, and no one believed you at first.

Casey Mulligan: Right. There are a lot of people with political experience, I wasn't one of them. Their reaction, when I told them that was, "No, politicians wrote that. People running for election wrote that. That's not a way to win elections, to say that you're going to take away the product from a 180 million people." So they were doing the theory rather than the reading. I had one encounter like that, and then I printed it, that particular page prohibiting private health insurance, put it in my suit coat pocket, and I kept it there for the next time. Well, there were many times subsequent when people wouldn't believe it. It started with the guy with the office next to me, to the chairman of the CEA, to others in the White House, to the speech writers, Stephen Miller. As this information disseminated there was doubting Thomasses every step of the way, and I had the paper there for them to touch and believe.

Allison Schrager: I guess that was good preparation for... Because when Trump did say it publicly, he was called a liar.

Casey Mulligan: Yes. Not just a liar, the CNN White House correspondent said that that op-ed where he featured this point, that was the biggest set of presidential lies in history, in the history of all the presidency. They didn't read it, of course. I mean nobody read this. Medicare for All is not new. The listeners may have only started hearing of it when Bernie Sanders was running for president, but Medicare for All in the version that I've described, prohibiting private health insurance, goes back to 2005 or so. It's about 15 years old. Didn't get a lot of readership or many votes, even, or sponsors, until the last four years or so. Then most of the Democrats are sponsors or cosponsors of that in Congress.

Allison Schrager: And now very openly and without any fear of political repercussions, say it means eliminating private health insurance.

Casey Mulligan: Well, they didn't advertise that part. They said single-payer, so you would think, if you did a little logic, you'd say, "Okay. Well, if there's just one payer, there must be a prohibition on the second one."

It's not unlike the excitement about socialism we had in the earlier 20th century, that there were fantasies about how things worked in other countries. Cuba was supposed to be a paradise, and the Soviet Union was supposed to be a paradise. And they weren't. But Americans aren't there, they had not seen it, so you can maybe fool them. It's the same thing about the single-payer that Bernie Sanders planned, that so many have signed on to. It's not like a plan in any other country. First of all, most of those countries that had so-called single-payer plans backed off and allowed private health insurance. None of them have free healthcare at the point of service, in the sense that all you do is show your card and you get it. No, you have to pay something in Sweden when you go to the doctor or you have a hospital visit. It's the same exercise, fantasizing about what's going on on the other side of the ocean and the miracles that they have, and we should have them too.

Allison Schrager: I used to live in the UK and it's not single-payer because they do have private health insurance if people want to opt-in to it. But I always tell people, it's like you saw what... Like the average American would not put up with what people put up with with the NHS. The wait times, the non-private hospital rooms, I think people have a fantasy that they're going to get the same quality care for free.

Casey Mulligan: Yeah. And it is a fantasy. This is well known in history, the best way to make... What's the saying? The best way to starve people, is to make food free. The quality and the quantity is going to be lacking if you make it free. Other countries don't really do that. Actually, UK would be the closest, even though it does not share a lot of the problems of Bernie's plan, but UK would be one of the closest to Bernie's plan.

Allison Schrager: Yeah. And there people can opt-in to private health insurance if they like. It's far from outlawed. I don't think most Americans are willing to, like I said, live like that. I sometimes wonder if that stem from when they started Medicare in the 1960s, that they modeled it on what was the best health insurance at the time. It got into our heads for a long time that... or is still in our heads that whatever insurance the government offers should be the highest quality.

Casey Mulligan: Yeah. A lot of these programs were mimicking or imitating or modeled after private programs.

Allison Schrager: Sorry. We should go back to your book. I could talk to you all day about health insurance, because definitely... Speaking of, you had something interesting to say about the individual mandate. It turned out not to matter. Why is that?

Casey Mulligan: Yeah, supposedly there was a three-legged stool for Obama's healthcare system, and one of the legs being the individual mandate, that people have to be forced to buy health insurance. This is widely accepted in our profession, for example. I mean some people say that Heritage came up with the idea, which is a conservative think tank. I don't know if I want to tarnish them with that. But certainly there was support in a lot of the conservative areas for forcing people to buy health insurance. That's based on the theory, and I've got nothing against theories, but that doesn't really fit reality.

The theory emphasizes adverse selection and the idea that people won't sign up for insurance until they're sick, that sort of behavior. And that happens in the real world, but the other thing that's in the model is there's no subsidies. So Obamacare isn't like that at all. It has huge subsidies. And that's enough to get people to avoid what might otherwise be destructive behavior. You don't need a mandate on top of it. In fact, I say if somebody turns down a government subsidy, Trump ought to send them a thank-you note, or whoever's the president, because they're helping us tax payers. The individual mandate does the opposite. It's not a thank-you note, it's a punishment. So it's a lose-lose situation. The individual doesn't like to be punished and we tax payers are paying money so that their punishment is a little bit less. It doesn't make any sense.

Allison Schrager: But not everyone receives a subsidy. Are they still buying insurance too, the non-subsidized people?

Casey Mulligan: We haven't seen much change in participation. I'm not sure there were many unsubsidized in the first place, before we had the individual mandate. But in our study that we did of this in the White House, we did have some effect in that dimension, that there would be people who were paying full price who wouldn't sign up and that might be some kind of loss to the rest of the people in the insurance pool. But it's overwhelmed by the subsidy effect that we're talking about.

Casey Mulligan: Also, there's administrative costs that also get ignored in these models. When you have somebody sign up for health insurance, you got a lot of ongoing administrative costs in dealing with that person. That may be a waste if they're not particularly interested in the product.

Allison Schrager: So this turned out to be a rather, I guess, useful randomized control experiment?

Casey Mulligan: Well, I think the studies are still going on. Also, Obamacare is evolving. So I don't know if it's... It's worthy of study. I don't know how clean it will be, but it is worthy.

Allison Schrager: You hear a lot about how the Trump White House has been successful economically because a lot of regulations have been killed or eliminated. But I'm really unclear on which ones they are. Which ones were the important ones and why were they important?

Casey Mulligan: There are hundreds. I'm not sure if it's reached into the thousands yet, but certainly several hundred regulations that Trump got rid of. He's also got rid of many in the COVID area too, and I've had trouble keeping up with him. So actually which ones are more important is a very difficult question. I'm not sure anybody would know the answer to it. When I tried to deal with that, one thing I thought was, "Well, the agencies are required since Ronald Reagan to track the costs and the benefits of their regulations," or at least when they put them in to assess roughly what they might be. I thought, "Well, I could just look at the agencies' assessment, and that would allow me to identify the big ones as distinct from the small ones. There's certainly lots of regulations that are small. Some regulation might say, "Oh, this draw bridge over the Connecticut River used to open two times a day and now needs to open three times a day." There's very small regulations like that.

I thought we could do that, and I was sorely disappointed because the agency assessments, they're absurd. Whether it's incompetence or willful absurdity, probably some of both. I mean there are certainly cases where there's a regulation that they want to push through, and I saw Obama do this and I saw Trump do this in a few cases, and they low-ball the costs, way low-ball the costs so that it doesn't reach certain thresholds that would require more attention and more justification. There's a decent argument that the actual costs of regulations are negatively correlated with the costs assessed by the agencies. So that didn't work. That was a dead end.

And then I thought, "Well, Reagan also required that the agencies get comments when they put in regulations." So maybe I could look at the ones that get the most comments and that would help me pick up big ones. You'd be a little surprised if there was some massive cost coming from a regulation and nobody wrote in to complain. Most regulations get zero comments, like the draw bridge one I mentioned might have zero comments. So that really narrows the set. Then a lot of regulations only have a handful of comments. So we focused on ones that had a hundred or more, which then narrows it down to a couple of dozen.

Those regulations, a lot of them are in health, regulating the business of health, especially, things like prohibiting certain types of health insurance. Those would get a lot of comments. Regulations in telecommunications... Perhaps the most commented regulation ever was net neutrality, which was a FCC regulation. Labor Department regulations, regulating the employer-employee relationship, those would be common. A lot of regulations, and I'll have to be blunt, on behalf of trial lawyers. Trial lawyers would like disputes between employers and employees, between customers and sellers to be taken to court rather than dealt with in a more efficient way, and so there were a lot of prohibitions in the Obama years in various products put by various agencies overseeing those products prohibiting, for example, arbitration agreements. Those are the sort of regulations that get a lot of comments.

Then we looked at them, and yeah, the ones that get a lot of comments tend to be economically important in terms of having pretty large dollar effects on a per person basis and affecting a lot of people. Those are really the big pieces of regulation. There is a certain set of regulations get a lot of comments that aren't that important in the aggregate, relative to the others at least. Those tend to be hot button social issues or environmental regulations. Even a small environmental regulation, has a small restriction on what you can do on certain federal lands, may get a million comments. That could be an example. Defunding Planned Parenthood, I think that got over a million comments. I'm not sure that's important for the aggregate economy. It's certainly important to a lot of people and that's why they wrote in, but in terms of economic activity it's a fairly small thing.

Allison Schrager: Yeah. Because as you said, net neutrality had a lot of comments, but you mentioned in the book that some of the actual deregulation of the internet actually ended up with much lower prices. You also mentioned that allowing foreign drug makers of generics also really had a major effect on lowering prices.

Casey Mulligan: Yeah. A lot of the regulations that I mentioned, a simple economic model can describe them pretty well in that you have producers who want protection from competition, so they will have a barrier to entry, maybe outright prohibiting the product or making it very difficult to offer that product. And then they can overcharge the consumer when they don't have competition, that's always the constraint on consumer prices. We saw the FDA had quite a burdensome process for getting approval to manufacture a generic drug. I'm talking about drugs that have been around for a long time. They're off patent. We know their effects. It's not an advocacy or safety question, it's just, okay, it's off patent, who's allowed to manufacture it? You got to get FDA approval. You still do. I wish Trump had gotten rid of that altogether. But at least now the approval is much easier.

When Trump got there, you would see a lot of generic drugs that are only made by one manufacturer. They were able to target brand-name price for a generic product. That was ridiculous. Trump came in and he got rid of those, or way trimmed back those entry barriers. You saw the stock of some of the foreign drug companies who had gained that system crashed. The analysts knew what was going on. There was more competition, and that hurt their pseudo-monopoly position. The result is drug prices fell, not just in generics, also brand names compete against these generics. So drug prices fell in nominal terms, even more in real terms, for the first time in 46 years. This again is something that you're not going to hear. That was one of the president's campaign promises, and when he fulfills a promise, you can guarantee mum's the word in a lot of the media.

Similar story on the internet. The FCC, I think really at Google's behest, had put a lot of barriers into competing for things like online advertising and consumer data. And that had prevented internet prices from falling like they were all over the world or in Canada during the Obama years. Trump pulled that out, and prices of internet fell so much so quickly that it actually showed up in the aggregate CPI and the Federal Reserve chairwoman noted, "Wow. Something's dragging down the aggregate inflation. What is it? Oh." They dug in, just as a statistical matter, they dug in and said, "Oh, look what happened. Telecommunication prices got a lot cheaper very quickly." She never connected the dots and realized, "This is deregulation. This is not a one off, this is a trend that Trump is removing entry barriers and preventing so many producers from overcharging their consumer."

Allison Schrager: Wait. Let me understand this. So this is access to the internet, like what you pay for access, or is it-

Casey Mulligan: Yeah.

Allison Schrager: Oh. So how would-

Casey Mulligan: The service. You have typical family, even one who's not at all rich, may have three plans. They might have their home internet plan and one on mom's phone and one on dad's phone. What this deregulation did, reduced the cost of those plans by 40 bucks, not per month, but 40 bucks, and a typical plan may last two years or something like that.

Allison Schrager: So how is Google and its ad sales involved in this?

Casey Mulligan: One of the things that Obama was prohibiting would be to sell a plan on the cell phone or at home that didn't have sufficient privacy, according to Obama's standards. What that meant is that AT&T or Verizon or Comcast wasn't allowed to see your data and use it for marketing purposes. And Google loved that because Google already has your data, so they don't want anyone else to have your data. It's valuable to the companies, that's why they charged 40 dollars less for the product. AT&T at one point, before Obama did this prohibition, they were offering two plans, an enhanced privacy plan and a less privacy plan, and the less privacy plan was of course cheaper, and nobody went for the enhanced privacy plan. I think they were charging 12 dollars a month or something for the enhanced privacy and nobody wanted that. But Obama forced them to have it. Which is a typical Obama move, to prohibit the low-quality products that the people in fly-over country might want to purchase so they can use their money for other priorities.

Allison Schrager: But this seems a very important point that I never heard before, which is... Because a lot of this momentum behind antitrust now is that Google solely has access to our data, and therefore we must break it up or to some sort of antitrust. It sounds like you're saying, "Really, it's the regulations we put in place that have created this monster and we could just get rid of them instead."

Casey Mulligan: Well, we did get rid of them. In the last, let me say, year or two, your internet service providers have been allowed to use that data and resell that data. I assume that they are doing it. It certainly was reflected in the prices that they charge. So they're not a monopoly. I mean this is a standard fare at the Department of Justice, let me say, that they think they see a monopoly when there's really a lot of competition going on. I mean Microsoft was a huge joke, of course. By the time they discovered Microsoft was a monopoly, they weren't a monopoly. They were getting beaten in the ground by the competition. That's probably going to be the same thing with Google.

Allison Schrager: Do you think a lot of this deregulation was really important to what was a booming economy up until COVID?

Casey Mulligan: No doubt. I mean, I told you the story, just, about one of them that got the Federal Reserve chairwoman's attention through the effects that it had. It didn't get her attention as a legal question or as a deregulatory question, it was having such massive effects that her look at the aggregate data allowed her to see, "Wow. Something really unusual is happening here." So I don't think there's any question about that. And once you look at the types of regulations that are involved, I mean anything at the Department of Labor, every industry, I think... Is there any industry that doesn't have employees? So every industry is under the jurisdiction of the Department of Labor and regulating essentially every industry through that Department is going to have some costs that really add up in the macro level.

Allison Schrager: I mean it sounds like there have been a lot of success stories that the administration has not gotten credit for. But there also have been criticisms that, as a free market economist, must bother you, like the tariffs on steel and aluminum or restrictions on immigration. I mean do you feel like those characterizations are unfair or they're just things you wish you could have done differently?

Casey Mulligan: Well, let me take the immigration first. President Trump's immigration plan is nothing like how it's characterized, and how he approached it is nothing like how it's characterized. He asked us, together with Jared and Stephen Miller, to put together an immigration plan that could be called the Trump Immigration Plan, that ideally he'd present to Congress and they would edit it a little bit and pass it. Of course Nancy Pelosi came, so that's not happening. But that was our assignment.

Casey Mulligan: Rich Burkhauser did a lot of the work on this. My only two cents I put in, when Rich first started, I said, "Rich. Gary Becker's book, The Radical Proposal for Immigration Reform, there should be a fee." And then Rich and the others kind of laughed at me, "Oh, Casey, you're new to Washington. We don't talk about that kind of thing. We're not going to charge a fee for citizenship." I said, "Fine." Rich went to his meetings and ddd his work. And he did some good work, I'll tell you about it in a minute. And then what I hear back from one of the first meetings, the president says, "Hey, citizenship is one of the most precious things we have to offer. We should be charging for it." He got no coaching from us on that. He rediscovered the price system. Now, he's a good politician, so he knew not to put that in a draft bill to Senator Pelosi, but he understood how it worked.

Rich took a very empirical approach, among other things. He said, "Let's put together what are other countries doing and how's it going?" I think the president's eye was caught by a couple of approaches, Canada and Australia. I think one reason they caught his eyes, because they're kind of essentially planned version of what Gary Becker said. Those two countries emphasize the economic contribution. They have a point system. Under Becker's system, people who would buy citizenship are the ones who have the most to gain by coming here. Canada and Australia use a points system that is in a rough way measure what's your economic contribution of coming into the country. So Trump's plan is a point system plan. It's his plan, but it was developed by CEA and Jared and Stephen Miller. I always hear people say, "Well, Stephen Miller never wanted anything like that." Whatever, that's what came out of the policy process. More immigrants who are high-skill and have economic contribution and, by subtraction, I guess, less emphasis on family-type migration.

Allison Schrager: Yeah, I think there's definitely a good economic case for more highly-skilled migration and less family migration. It's like 70% of our permanent immigrants are family migrants. So why in the short term are we cutting H-1B visas, which right now is our main portal for highly-skilled immigration?

Casey Mulligan: That happened after I left. I can give you a little bit more theoretical answer, just connecting the dots from what I understand on how this White House operates. The president's always asking the question when dealing with a foreign country or dealing with an industry, "How much are we giving them and what are we getting for it?" That question could be asked towards some of these industries that are getting special access to immigrants. One of the top ones would be my own industry, the higher education industry. So for years, and we continue because of the pushback that we gave, we continue to enjoy relative to other industries special access to foreigners. Figure yourself from Trump's position, what is he getting from my industry? Not much. My industry uniformly hated the man.

Allison Schrager: Well, is that true? I mean when I was in grad school, a majority of my class was foreigners who came on a student visa and then later got an H-1B. I mean I think because they were the top tier talent from around the world, I think having them as my peer group made me a better economist, probably made all of us better economists.

Casey Mulligan: I agree with that, totally. The foreign students, I treasure them. They're my coauthors and my friends, the best man at my wedding. I treasure them. But the access that we had to those people, other industries don't enjoy that. If you are a farmer, you couldn't do that. I mean you have to do it illegally. Even in Trump's immigration plan with the point system gave extra points to education industry. I mean one of the way somebody could get points would be interacting with our university system. So instead of the government charging the fee that Gary Becker recommended, that kind of approach, and again, it's what Canada and Australia have, allows the universities to charge the fee. I mean that could be built into the tuition process. That's a special favor. I'm not in favor of special favors, except for my own industry, so amen. Let's continue to bring in foreign students et cetera.

Allison Schrager: What about the tariffs? I mean you point out in the book that in fact every administration does some version of this, but do you think that on that Trump was more of a pro-free trade president than he gets credit for?

Casey Mulligan: Well, he's not ideologue. It's not like he has an ideology that trade is terrible and therefore we need to get rid of it or it's great and we need to have more of it. So I can't pin him ideologically. I can only look at what he does and what did he do different from previous presidents. I think one thing he did different is, by accident or on purpose, he's focused on some of the big pieces, some of the tariffs or quotas that are the most egregious, that have been there forever. One of them is the chicken tax. It's a 25% tariff on foreign-made pickup trucks. As a result, we have zero foreign-made pickup trucks. Mexico counts as a domestic-made. That's a terrible wasteful policy. It's been around my entire lifetime.

Allison Schrager: I've seen Toyota pickup trucks. Are they made here? Is that why?

Casey Mulligan: Yeah.

Allison Schrager: Okay.

Casey Mulligan: He has talked about reducing that tax. I don't know that it's happened. I'm not totally up to date. The talks that I had heard about was with Korea, that they would be allowed to make pickup trucks for our market that would not be fully subject to that tax. I would much rather see some increases in tariffs from zero to a small number, while decreasing these massive tariffs, than keeping the zero tariffs down at zero and not doing anything about these terrible big tariffs that have been around forever. I mean it's the convexity of dead-weight cost principle that I'm using here, a very general principle, and I think applies well.

The other thing that he's done different is more to use tariffs rather than quotas. We ought to appreciate that. I mean a quota gives the money to the foreign companies and a tariff gives the money to our treasury. I totally understand why an American politician might better serve his constituents by getting the money for the treasury rather than the foreign companies. Some of the people, CEA people from Reagan's era, told me how Japanese companies, back then it was Japan and not China that was the adversary, if you want to call it that, the Japanese companies would come into the White House and say, "Please put a quota on our imports, that way we can charge more." And Reagan gave it to them. Trump hasn't really done that. He's done tariffs instead. And that's why he got a trade war and Reagan didn't, because the foreign companies are upset by what Trump is doing while they very much embraced what Reagan did. But it was protectionism either way.

Allison Schrager: We only have 10 minutes left, so I just want to ask one question that was one of the more surprising parts of the book, is when you describe the president's Twitter strategy, and that there's actually a strategy, I think, much deeper than people realize. You talk about when GDP growth was higher than expected, how there was even discussion exaggerating it so the media had to report it correctly. I always saw Trump as a brilliant tactician more than a strategy guy. Do you think that's me underestimating him when it comes to his communication strategy?

Casey Mulligan: No doubt. He is consistently underestimated and he likes it that way. He may be upset that I'm even telling how it really works, because he much prefers the image of him in his bathrobe just tapping out every tweet with his own thumbs. That's not at all what happens. If you look on his Twitter account, every single tweet is from Twitter by iPhone. I never saw an iPhone. I never saw any iPhone in the Oval Office. I never saw any electronic device in the Oval Office other than Dan Scavino's laptop. I saw Dan Scavino do tweets from that laptop. I don't know how it ends up on Twitter indicated as Twitter for iPhone, that's not how my laptop works, but anyway. There's a reason why they're spoofing those tweets to make it look like for iPhone. That's the image that they want. That helps maximize their reach.

I think the deeper organizing principle here that helps you understand this and much more is the populist. He's a populist president. The insiders, the elite, they hate him. The data very clearly show this. He got his support from fly-over country. If you're coming from that direction, what are you going to do? You need a communication channel that does not rely on the insiders. Having a Twitter account in the first place is important. You've got to get people to tune into it. I've got a Twitter account with 2,000 followers, he's got 90 million. You've got to get the people signed up for it, and so you got to put out stuff that's entertaining in the sense of getting people signed up. So the bizarre and bombastic stuff gets people tuning in. You've got to have that if you're going to be a populist president.

The other thing is, you needed broadcast even beyond Twitter, and now you need the media's help. What are you going to do? They hate you. You've got to do some kind of trade with them. His trade is they need to talk about the topic he wants to talk about, and in exchange they can call him a liar. That's pretty much the trade. So he'll start out, often would give them a number or some numbers describing what's going on in the economy, and he'll say it exactly, perfect, to the decimal point, described exactly in the right way. Media won't pay attention. And then he'll amp up the number. He'll start exaggerating them. So the drug price one, a first in 46 years, that's what he did. Nobody paid attention. So he said, "First time in 50 years," and then, "The first time in history." Until the Washington Post runs a fact check, laughing at what a liar the man is, but then they had to talk about, "Well, what's going on with prescription drug prices?" And the Washington Post had to acknowledge that, at least by some measures, they had come down for the first time in a long time. That's the trade.

Is the media unwitting participants in the trade or do they know it's going on? I don't know. You'd have to ask them. But that trade happens all the time. The same with the best policies for African Americans since Lincoln. I mean it cracks me up. You know what the fact checker's going to say, right? They're going to go through what he's done, which is their part of the deal, they have to talk about what he's done, and then they can get to the part that says, "Lyndon Johnson was even better." Mission accomplished.

Allison Schrager: Sometimes strange retweets of conspiracy theories, is that part of the intrigue, to keep you watching?

Casey Mulligan: Yeah, you've got to keep people tuned in. I don't know that he's out there, looking. First of all, he, if we got to get straight to this, this is not him in the bathroom. Dan Scavino, I don't know if Dan is out there looking for a particular conspiracy theory, but he's looking for stuff that's going to get eyeballs, eyeballs and attention. Even stuff that's politically incorrect, maybe especially stuff that's politically incorrect is going to get attention. That's essential. You can't be a populist president unless you have some way to reach the people without the media getting in the way. He's figured out a method.

Like any entrepreneur, maybe he's the Blackberry of populism and there'll be some iPhone of populism that's even better and they will take on some of the strengths of what Trump does and enhance them with some additional good ideas, probably. I'm confident that will happen. But this is where we are in the lifecycle of populism right now. He's got some new stuff. It's working. I think that helps you understand so many things that he's done and he is doing and he will do.

Allison Schrager: We only have a few minutes left. I guess two questions wrapped up into one, if Trump does win reelection, what economic policies would you like to see, and if Biden wins, what do you fear?

Casey Mulligan: The Biden fears are a little more on top of mind since we did a report. I read through Biden's agenda, and compared it to Trump's and tried to think about what's the economic impact. The regulatory agenda in general, we talked earlier about deregulation, well, there's a reason why we had a lot of regulations that needed to be removed, and I'm worried those reasons are going to be back with an added push from Biden's new political bedfellows that are more radical left, the Medicare for All crowd. Biden's not endorsing Medicare for All, but he is trying to woo those who do, the Green New Deal and those sorts of regulations. I saw a story that came across today that maybe Senator Bernie Sanders might be the secretary of labor. That's scary, that we would have a new level of interference with the employer-employee relationship that even Obama didn't aspire to. That would be my fears.

What can Trump do? Something on immigration. To have all this illegal immigration, it should be legal. Anytime that you have a law that you're not enforcing is bad news. It's bad news all around. It gets enforced against the politically weak and the politically powerful get to sidestep it. You're flirting with not having a rule of law when you're doing that. So some kind of update of our immigration system so that our immigration can go through legal channels, I think would be great. I know he aspires to something like that. The president's not a dictator, so Congress needs to change... Or the president needs to change so they can come in alignment enough to make that happen.

And there's a lot more to do on deregulation. There's still a lot of regulations. Healthcare is in the top of my mind, and it's not a trivial area. Anyway, way too many regulations and price controls in healthcare. It would be great if he could take a swipe at some of those. I think it would be a priority for him, even regardless of what I have to say. He understands the importance of a sector the size of it and what a mess it still is, even after being able to make some meaningful improvements in the last three years.

Allison Schrager: Well, it was so good to speak to you again after all these years. Thank you so much for joining us.

Casey Mulligan: Oh, my pleasure. Economics are my favorite topic.

Allison Schrager: Mine too.

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