Home Featured Story DOUG PANCOAST



Author Doug Pancoast talks with the Opportunist’s Managing Editor Leslie Stone about his provocative new book and what he discovered about society—and himself—while writing it.

Doug Pancoast is a former financial planning professional who holds two master’s degrees, including an M.B.A. from the W.P. Carey School of Business at Arizona State University. He has lived in eight cities across the United States and two cities in foreign countries—an experience he credits with giving him exposure to people of different races, religions and political beliefs. “My background is pretty diverse geographically, racially and politically,” he explains. “I have moved around the country a great deal and lived in a lot of different states from the South to the West and also spent some time up North. My household itself was also diverse. My mom is Hispanic and a Democrat and my dad is a white Republican. I attended a school that was 70 percent African American, and now I live in Shanghai, China, where I am starting a business.”

In his recently published book, 100 Controversial Truths: About Politics and Culture in America, Pancoast compares and contrasts many of the modern-day issues the nation is facing—from problems caused by extreme liberal or conservative views to the Federal Reserve and endless quantitative easing, the “war” on drugs, gay marriage, poverty and the squeezing of the Middle Class, stereotypes, people young and old, parenting—and practically everything in between. “I think my diverse background is one of the things that gave me an advantage when I wrote this book,” says Pancoast. “Everybody will find things in my book they passionately agree with and others they reject entirely but, predominantly, I felt overwhelmed that I had something different to say from what a lot of others were saying. It’s hard to find news or information that is fair and balanced. Fox News, for example, has one interpretation and MSNBC has another. I wanted to become a voice of reason to capture contrasting sides because there are complexities of people and not just one way of looking at things. There are a few impartial journalists whom I admire. Thomas Friedman, a columnist for The New York Times, is one. He is such a good writer. Fareed Zakaria is also someone whose analysis I admire. When I read his work I think, wow, here’s someone whose writing is neither far right nor far left. That is something I wanted to achieve.” The major theme Pancoast wanted to impart through his book, he explains, is that each group is partially right on some of the issues, but wrong on others. “We must be willing to look at an issue with open minds and be honest about the real truths—even if they don’t coincide with our normal biases,” he adds.

Opportunist: Your book covers practically every issue across the board that we as a nation are facing. How long did it take you to write it?

Pancoast: The book took me four or five years and was sort of a part-time project that I started in 2009 while completing two master’s degrees. Normal people go out and have fun and I stay home and do lots of research. [Laughs] It’s my passion and I am fascinated by the problems we face in this country. Malcolm Gladwell [the English-Canadian journalist] talks about the 10,000 hours it basically takes to master something. When I think about all the time I spent researching news and politics, maybe I spent 10,000 hours on it.

Opportunist: In your book you say that you find it extremely weird to see how many people support basically everything their party or even their ideology believes. Why do you think people tend to be narrow minded?

Doug Pancoast: We have this stigma in the United States where we don’t discuss religion and politics. These are things people are passionate about but they don’t usually discuss them with people who disagree—they talk with likeminded people and never get an understanding of how the other side thinks. I moved around a lot and saw how people in other cultures live, but by and large most people tend to stay where they are born. To that degree we are kind of regionally separated and don’t get a lot of exposure to people who see things differently. Americans are also very busy and simply don’t have time to research 100 different issues.

Opportunist: Was it difficult to remain neutral on what you were writing about?

Doug Pancoast: Certainly some people will read my book and say I am biased, but I think it’s because of my exposure to so many different ideas. I know people who are only friends with Republicans or Democrats, but my whole life has been sort of this exposure to so many different kinds of people with different ideas that it’s almost impossible for me to be closed-minded. I try to be honest with myself about whether I might be biased about gun control because I grew up in Georgia and went to a middle school where I saw students get arrested with a backpack full of guns. If you grew up in Montana, for example, and you want to hunt that’s a whole different concept. I’ve been around and seen enough that it’s hard to be biased anymore.

Opportunist: Did any of your beliefs or opinions change as a result of what you learned while writing this book?

Doug Pancoast: My opinions regularly change—not necessarily 180 degrees but maybe 10 to 20 degrees. In terms of specifically as I was researching this book, I think my opinions about U.S. foreign policy in the Middle East and the relationship between banking and government definitely changed the most.

Opportunist: How so?

Doug Pancoast: On one hand I became much more cynical and negative about foreign policy in the Middle East. When we look back at the 1980s we see that we armed Saddam Hussein when he was fighting Iran, and we armed Afghanistan to fight Russia. And the Reagan Administration sold weapons to Iran so they could give money to the folks in Nicaragua who were fighting the Sandinistas. That’s what happened 25 years ago. What if the Obama administration got caught secretly selling weapons to Iran? The Republicans would explode. We supported a lot of bad people over there, but when I see the horrific things going on today—especially with terrorism and Syria’s civil war—it’s so awful and gruesome that it makes me wonder if maybe one of the reasons we supported these bad guys was because they kept the crazy people down and under control? I’m not saying that it’s right or wrong. I’m just wondering. It’s a dangerous and difficult situation in the Middle East. I am not anti-Muslim—I believe the majority of the people are peaceful—it’s just that region.

Opportunist: As a former financial planner, what is your take on banking and government?

Doug Pancoast: I was working in personal finance during the financial crisis, but I felt the brunt of it when the market dropped 50 percent in six months. That hadn’t happened in 70 years. It makes you look back and wonder and see the whole chain of events. Every step of the way the government and financial institutions were working together to get rich and it was very, very scary and yet people just don’t seem to care very much. My dad used to say ‘follow the money.’ When we follow the money we can see—and it’s not about pointing fingers; it’s about calling a spade a spade—that Henry Paulson was CEO of Goldman Sachs before he left to become Treasury Secretary. It turns out Goldman Sachs owned all these derivatives, known as credit default swaps, and then the government gave money to AIG and AIG used that money to pay off Goldman Sachs dollar-for-dollar. It was like one company gambling against another company. Let’s say I bet you $100 and I lost but I don’t have $100, so I have to get the money from somebody else. Goldman Sachs won the bet and AIG couldn’t pay so the federal government gave the money to AIG to pay off Goldman. That’s just a fact.

The government is putting us in a lot of jeopardy as well. It seems so extreme but we just don’t pay attention. People need to understand that our country’s financial system is like their circulatory system. If something goes bad with your blood it can kill you pretty quickly. In 2008 and 2009 we got a disease that spread throughout the system pretty quickly. Maybe I am more pessimistic than others because I understand the financial system better. The government has borrowed money for so long. Look at all the excessive debt. Who owns our debt? China owns a trillion and Japan owns a trillion. Three or four trillion is owned by the U.S. Federal Reserve. The banks and the pension funds own quite a bit. If the U.S. ever needs to restructure their debt like Europe, will pension funds and Social Security get wiped out? Or will the Fed restructure their debt (and risk insolvency)?? I don’t think so.

Look at Greece in 2011. Part of their bailout involved a private sector haircut. What that means is if you had Greek debt you took a write-down of about 75 percent. People took huge losses but the International Monetary Fund and the European Central Bank did not. They refused the haircut they forced on the private sector. Technically, the last time U.S. debt levels were this high was after World War II, but our debt was actually already high before that. We were coming off the Great Depression in the 1930s and started all these social programs, which I support within reason today. All these things to boost the economy made the national debt rise to 100 percent of GDP, and then we had the war and it went up even higher. Europe and Asia were in ruins after the war and we sold the rest of the world everything because their factories were burned and they couldn’t compete. We got our debt situation under control but we never actually lowered the actual amount of debt. We simply had so much more revenue that our debt-to-GDP ratio dropped. What’s my point? The last time debt levels were this high and we got out of our debt it was because the whole world was destroyed and we were the only game in town. What’s going to help us this time? They tell us we just need to borrow more and we will grow our way out of it, but where is the growth going to come from?

Opportunist: You talk about how Keynesian economics (typically supported by liberals) and loose monetary policy have led to asset bubbles and inflation that end up punishing the poor and lower middle class. Why is it that political parties often promote policies that end up hurting the very people they have pledged to protect?

Doug Pancoast: I think it’s largely ignorance. How many people truly understand monetary policy? Unless you’ve got an economics degree how can you really know for sure? Part of me wonders if it’s more sinister than that sometimes. Who are some of these big time money donors? It’s the banks. And who is benefitting off this Q/E [quantitative easing]? It’s the banks. They profit billions of dollars. I would like to believe ignorance is the cause. I used to be more of a Democrat and never really considered myself much of a Republican and yet when I spend more time with liberals I see they just don’t know numbers. They have good values but if you do the wrong thing and give the wrong medications you kill the patient. Intentions can only get you so far.

People tend to believe that if economist Paul Krugman says everything is going to be OK and we can borrow and print money forever then it must be OK. Krugman has a Ph.D. and a Nobel Prize after all. I believe this monetary policy issue is going to be one of the top two or three defining issues of our time. I believe I am right. The American economy is still one of the strongest in the world, but if things don’t change will the American Dream be dead? Yeah, I think so. If everyone could just print their way to prosperity then we would all be rich.

Opportunist: On your blog you say that income inequality fascinates you.

Doug Pancoast: Yes. Inequality is important because wherever you find large amounts of poor people you will likely find more violence. So, if we want to rid ourselves of violence we have to either isolate all the poor people or try to figure out a way to help the poor people not be poor. More than that, I think we owe it to people on a humanitarian level to try to help others. Some people are poor due to bad luck and others are poor due to laziness or drugs. Of course there are bad poor cultures that are lazy with a sense of entitlement, but some of the most loyal and humble people you will ever meet are those who might be considered poor. Inequality is talked about a lot right now and Obama is going to make this his issue in the last leg of his presidency. Republicans for the first time in my whole life are also starting to talk about poverty, so that’s a big deal. Sen. Marco Rubio (R-Fla.) spoke just the other day about helping poor people. Inequality is a big deal because we are becoming more unequal as a society overall. The way I see it, there are two ways of dealing with this issue. One side says let’s just keep giving the man fish. The other says stop giving the man fish or he will become more dependent on the government. We need to give this man a fish so he doesn’t starve but we’ve also got to figure out a way to teach him to catch his own fish. If we don’t, we are going to continue to have serious inequality problems as a society. We used to be a society that asked ‘How am I going to make myself a good job?’ Now we say ‘Who is going to give me a good job?’ The government makes it difficult for people to hire or start a business because of all the regulations. So, I think the inequality issue is a jobs issue.

Opportunist: Has the United States become a nation divided?

Doug Pancoast: I don’t know if it’s divided 50/50. It’s probably more like 30 percent far left and 30 percent far right and the other 40 percent is divided up between those with fluctuating beliefs and those who just don’t care. Lots of people are becoming apathetic—voter turnout is very low—and some are middle of the road and then there are the radicals on the left and the right.

Opportunist: Will the country ever find middle ground?

Doug Pancoast: I honestly don’t know. Some say all this political division is new but it’s not. The United States has always been divided to some degree. Around the time of our independence we had the Federalists vs. the Anti-Federalists. Then we had the Civil War and killed each other. Everywhere in the world societies are divided. These woes are not necessarily unique to America. Here in Shanghai where I currently live we have some of the same arguments. If people are poor it’s their fault. They’re lazy. Can American citizens and politicians figure out a way to compromise? So far it doesn’t look good. I’d say that to some degree it’s very natural because life tends to be a struggle between capital owners and laborers. Business owners want workers as cheaply as possible and workers want to be paid as much as possible. If only they could agree and compromise and figure out how to split the pie more fairly. Partisanship is natural but the inability to agree and compromise is definitely dangerous.

Opportunist: What are you hoping people will get from your book?

Doug Pancoast: That it’s possible we can work together as a country. The solutions are there. We still have one of the greatest countries with innovative thinkers, but we’ve got to get everyone else on board.

Opportunist: Is there another book in your future?

Doug Pancoast: I would definitely like to write another book if people are interested. I have a theme I’d like to run with this ‘100’ title—maybe something like ‘100 Ways to Fix America’ or ‘100 Ways to Make the World a Better Place.’ I would also love to have a regular column somewhere and have a voice that people could listen to. 

Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in Florida. Follow her on Twitter at @les7989.

Follow Doug Pancoast on Twitter @DougPancoast

Doug Pancoast’s Blog - http://controversialtruths.com/blog/12

 100 Controversial Truths on Amazon - http://www.amazon.com/100-Controversial-Truths-Politics-Culture/dp/0615793223