Robert Murphy, author of The Politically Incorrect Guide to Capitalism, discusses the inevitability of severe inflation due to the increase in the money supply, the speculation that a new world reserve currency will replace the U.S. dollar, and takes live questions from listeners to the show.
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I got a cutout on my jelly, it takes sugar to make it sweet.
I'm gonna steal all your jelly, baby, and rob you of your meat.
I got duration blues, blue as I can be.
All right, everybody.
Anti-war radio chaos in Austin.
That's Lewis Jordan singing about how much she just loves all the economic prosperity brought about by World War II.
Oh, wait.
Huh.
I'm not sure.
I got a little cognitive dissonance there.
I'm not sure how to work that out.
We'll see.
I got Robert Murphy on the phone.
He's from the Ludwig von Mises Institute.
He's got a website called consultingbyrpm.com.
Oh, I think I hope I got that right.
It's called Free Advice.consultingbyrpm.com.
Free Advice and Scholar at the Mises Institute, author of The Politically Incorrect Guide to Capitalism, regular guest on this show.
Welcome back.
Thanks for having me, Scott.
Thanks very much for joining us on the show today.
I got some rash and blues, or at least I'm anticipating them.
I guess maybe we're still a couple of steps before we get to that point.
I don't know how far we are.
The inflation numbers just came out yesterday, and they're up again, I think, 0.4% over January.
So for the year, it's like 4.3% annualized rate of consumer price inflation, and that's what the government's reporting.
So I think the real numbers are higher.
Wow.
So the price inflation is already happening across the board from the new money?
Yeah, as Bernanke comes out and says we need to spend another trillion dollars because we're afraid of deflation, your listeners need to realize right now, since the beginning of this calendar year, prices have risen at a 4.3% annualized rate.
All above the Fed's so-called target comfort zone of the expected desired inflation.
Yeah, I keep finding myself couching my arguments with, I don't know, all things being equal is never the case.
There could be pressure on prices in other ways, in other parts of markets and whatever.
It's a complex system, and just because Austrian theory explains that inflation is the expansion of the money supply, that doesn't necessarily mean that we'll have some sort of hyperinflation straight out of the textbook, because you never know what's going to happen.
And yet, it's just like the bubbles in the first place.
There could have been other circumstances that would have countered the bubbles from being created somehow or something, but they weren't.
And I guess it doesn't look like there's any exigent circumstances that are going to prevent the Federal Reserve from completely destroying the American currency.
Right, and I mean, I understand that this sounds like crazy talk to some people, and probably not your listeners, but to the mainstream people who like to talk about, oh, they're planning a new currency.
I mean, it's not a conspiracy theory.
There are open discussions by high-ranking officials from governments around the world talking quite calmly about, what are we going to do down the road?
Do we need to transition away from this dollar-based world system?
And so they're talking about replacing the U.S. dollar with some sort of global dollar, a single currency for the world.
Right, I mean, they're not saying, oh, I guess we need to go back to the classical gold standard.
You're right.
Really, they're just trying to – I think what's happened is that the U.S. really screwed up, and now the rest of the world is saying, okay, you got to run the gang for a while.
Now we're going to share the power.
Right.
Well, I guess how would that work?
Because it would all – if there was – I heard the talk about it, I read in the Telegraph, the super currency and all this, and yet it would basically ultimately just be backed by the U.S. taxpayer like it is now, right?
To be honest, I haven't really fully read all the different proposals, so I don't know exactly what they have in mind.
But, yeah, I imagine it would be some sort of quasi – maybe they would target a bunch of commodities or something, and that would be the initial sort of reassurance that people would get on board.
And then, yeah, probably ultimately backed up by major governments, probably the Federal Reserve and other central banks too, would ultimately put their credibility on the line to get everyone to agree to this thing.
Well, I used to worry a lot more about things like that, and really what I've learned – one of the valuable things I've learned from my study of libertarianism is that there's just no way it can work, and that, in fact, the same reasons why the current system didn't work is the same reason why some kind of global currency would be even worse, right?
Right, exactly, and that's what's funny too about these – we can have arguments about whether prices would rise or fall, and you're right, there's always offsetting factors, and I thought price inflation was going to kick in sooner than even now, and so I was surprised how long it took.
But in terms of my overall long run, do I think prices are going to go through the roof?
Yes, I do, because even with these offsetting factors, Bernanke's just going to use them.
So if he thinks, oh, actually, I have a margin of another $2 trillion that I'm allowed to print before we get super price inflation, well, then I fully expect him to print that $2 trillion.
Why would he hold back just on principle?
If he thought he could get away with it, why wouldn't he give hundreds more billions to powerful bankers and so forth if that wouldn't make prices go through the roof?
So whatever slack there is, whatever margin of error we have because the world's rushing to dollars, Bernanke's going to use that and then start afresh and say, okay, now the choice is do I print a little bit more and we get 8% price inflation, or, you know, that's the idea.
Yeah, so any exigent circumstance, he's just going to take advantage of that and use it up immediately so it won't serve to counterbalance what he's doing.
Right, and I think we've already passed that point.
Like I said, you never want to take a two-month interval as definitive and things like this, but like I said, the inflation rate is already, I think, basically double what the Fed says its own targeted desired level of comfortable inflation is, and yet they're still warning the public about deflation, even though inflation is well above what they say they want it to be in the long run.
Well, you know, I've known about this housing bubble all along from my minimal education, basically keeping up with what Ron Paul says and Mark Thornton and yourself, and I've seen this thing come in like the slowest motion, most disastrous train wreck basically this whole time, and I guess if I have to guess about how it's going to be in the future, according to my pretty minimal education about these things, as the price inflation on the store shelves gets high, people are going to get angry at the store owners because they don't really know why the prices are going up.
Government will like to agree with them that, yeah, it's greedy people who are charging more is your problem, that it's nothing that they did.
Why are they going to admit their fault?
And then the pressure there will be used possibly to create price controls, but then the effect of that becomes really quickly that if it costs $25 for a loaf of bread on the store shelf and that's the limit, but it costs $35 to get a loaf of bread baked and sent to the store, then it's just not going to be baked and sent to the store at all.
Then you're really going to have riots, and then you're dealing with severe internal instability, that kind of thing.
Are you looking at this same slow motion train wreck I'm looking at?
Yeah, and it's funny you put it that way.
I hadn't really thought of it, but you're right.
I mean, it's really, it was back, for me, I was even late to the game.
I initially, I have to admit, I thought Peter Schiff was, I didn't think he was crazy, but I thought he was wrong early on, and then I realized the error of my ways.
But yeah, I mean, I think in September of 2007, I was saying it was going to be the worst recession in at least 25 years, and I think I just, that was just from using Austrian business cycle theory.
I looked at how low Greenspan had pushed rates, and that was fairly unprecedented in terms of how low it pushed them and how long it kept them down there.
And so I thought, yeah, we ought to have a really serious recession because of that.
But you're right.
The thing that really clicked for me when I now am not squeamish about saying this is going to be considered the Great Depression too, and that really just happened a few days ago with this AIG bonus stuff.
Now, it's true.
It's hard in terms of libertarian property rights to assess the legal status of a company that took a bunch of taxpayer money.
So, you know, that's fine.
But, I mean, the populist outrage and what Congress is doing now with this 90% tax rate, I mean, that is not because of their devotion to the taxpayers' rights.
I mean, clearly the politicians are just trying to divert everyone's blame at them and hostility towards them by saying, hey, let's, you know, string up these guys who are making all this money on Wall Street.
I mean, what would be so much different from them saying, you know, Chuck Schumer, that clip where he's talking to the executives and saying, if you could go ahead and take your bonuses but we're just going to tax it back from you.
I mean, they could do the same thing to shut up talk radio, right?
They could say, yeah, go ahead.
You can say whatever you want.
It's a free country.
But your ad revenue we're going to tax at 90%.
Yeah, well, and that's illegal.
The Constitution, assuming that it's the law at all, Article I, Section 9, says you can't pass a bill of attainder.
If you apply law, it's got to apply equally to everybody.
Right, and there are firms representing these financial institutions that are looking at Constitution a lot to see can they challenge this AIG tax on those grounds.
Yeah, see, that's the thing, too, is it's always just a given that, well, we gave them all this money, now we get to boss them around, but that's why we were arguing you shouldn't give them the money because then you just turn the whole thing over to Congress.
Right, I mean, what's funny, too, is there's that, but then, okay, so, yeah, if the taxpayers of the government or whoever we want to say is basically the owner of AIG, then why don't they just order them to give the money back and then fire the CEO, who, by the way, was placed there, that CEO was put there by the government when they seized control of AIG.
That's not some guy who was in charge during the housing movement, the government's hand-picked man who's now going before Congress and explaining to them this is why we did these things.
So, yeah, I mean, if you do think it's the right thing to do for them to give the money back because it was taxpayer funds, and I think that probably is correct.
Like, if this went through a normal Chapter 11, I don't think those bonus payments would have gone through.
I think the human predators who took over those terms would have been renegotiated.
You know, one of my friends at the Stress blog drew up a little bar graph about this is how much the bonus is and this is how much the actual AIG bailout is.
It's ridiculous.
You know, it's one of those JPEGs that when it takes you to the page, you have to click on it again with your little magnifying glass, and before you do, it's just this tiny little sliver on the side of the page because that's how the graph, when you zoom in on the graph, the bonus is this tiny little thing at the bottom, and the actual bailout is way, way, way up high.
And it's amazing, really, how they can turn the whole thing into a big dog-and-pony show about, well, and it's a big consequence, a big part of the reason for it is because we have the Republicans on one side of all these arguments, and so it's really hard to get an actual argument into the middle of Republicans and Democrats going back and forth.
Now, listen up, everybody.
It's Bob Murphy from the Mises Institute.
He's the author of The Politically Incorrect Guide to Capitalism, a professional in the study of Austrian economics, and we're going to take your phone calls at 512-646-6446.
512-646-6446.
But I have a lot of questions of my own, so don't take up too much of my time because I've only barely got to a few of them here, but whoever you are, you're on the air with Robert Murphy there.
Yeah, this is Joe Briggs from up in Manchester, New Hampshire.
Hi, Joe.
Hi.
I got a question, just a validation.
But it seems to me like with the Iraq war that the prices of oil started to go up about when we went into Iraq, and we paid for the war, whatever, $14 billion a month or whatever, then we paid the higher cost of oil for five years or so, and then we're paying now the cost as a result of that because the people who we bought the oil from, who had all this extra money, who took that and invested it into housing, and we screwed that up now, are looking for us to pay them back for that.
So we're paying for that as well.
Am I missing something there?
How come we're the only country that's having to be liable for this?
All right, good question.
Thanks for the call, Joe.
Bob, what do you say?
Well, I'm not sure I understood the last thing you were saying at the end there.
I mean, it's true the United States government habitually puts itself on the line and promises to throw around gobs of money at any sort of problem around the world, and so that's why U.S. taxpayers end up paying for more stuff than any other set of taxpayers.
But at the same time, in terms of this housing crisis and the worldwide recession, governments around the world are going deeper into debt to fund their own so-called stimulus packages, even though the U.S. government is leaning on them to make them more spendthrift.
But, I mean, I think taxpayers around the world are getting really nailed on this one.
Well, you know, a friend of mine was saying that, and I'm not sure how much this has to do with what Joe was saying there about all the cash that was being raked in from the high oil prices, but a friend of mine was making the argument that, look, they were lowering their lending standards, which is, you can argue, a chicken-egg type thing, but when you lower your lending standards, now more people are available, so there's more demand for houses, and so that created the bubble, and why did you even need the Federal Reserve in the process anyway?
Why couldn't the exact same thing have happened with sound money?
Yeah, well, I think part of it is just that, and this is a little bit of a dumb-down, but the idea is that without extra money flowing in, yeah, if resources flowed into housing, then they would have had to come from somewhere else, and so you wouldn't have gotten this huge unsustainable bubble.
So the difference is that the resources that you could have a bubble in Beanie Babies or any other stupid thing, or houses, or something of value, but because those resources would have to come from somewhere else, and rather than thin air, as when created by the Fed and the banks, and the government with their deficit spending, then there's always the counterbalance there that prevents there from being what's really a hollow bubble.
Is that what you're saying?
Right, and I mean, I guess it could be theoretically possible, but in practice, yeah, it's in order, because what happened during the housing boom years, it wasn't merely that a bunch of speculators loaded up on houses that they were intending to flip.
It was also just the average American, and I include myself, who went deep into debt, buying all kinds of consumption goods, even if they were durable, they were still consumption goods like TVs and SUVs and things, because they were misled by their rising asset prices.
And so the point is, I don't think you could get so many millions upon millions of people overspending or overinvesting without the Fed coming in from the sidelines and pumping in a bunch of money.
If it was just the same amount of money just getting rearranged, you wouldn't have had this general euphoria.
Well, now, hang on, callers, we'll get to you in just a second, but Greenspan and Bernanke are saying that it's not their fault.
All they did, or all Greenspan did, was lower, that is, the chairman of the Federal Reserve Board for 15 years or whatever, what he did was he lowered the short-term interest rates for banks loaning between each other or whatever, but that he's not the one in control of long-term interest rates and he's not the one responsible.
The Federal Reserve isn't responsible at all.
In fact, the reason there was really a bubble and overinvestment in housing is because those darn Chinese abandoned communism and they started, you know, and a lot of the rest of the third world, too, started making export economies and they built up all these savings and then they turned around and invested all that savings in America and it was excess and that's what created the bubble.
So your theory that it's the Fed's fault is all wrong, it's the Chinese' fault, and the fact that that savings wasn't created out of nothing but was created from durable goods or whatever kind of goods that they were creating, notwithstanding that that was irrelevant to the fact and still created a giant hollow bubble in housing.
Yeah, and he wrote that up in a recent Wall Street Journal op-ed and I'm going to have a response on Mises.org within the next few weeks, but let me just try to give the basics of it.
So for one thing, even on his own terms, if it really was just this genuine influx of foreign savings because the Asian nations were becoming, you know, the Internet revolution and shipping costs were down and property rights were more secure around the world and that's why you had this intensification of globalization.
Well, if that were true, then it wouldn't have been a bubble.
It just would have been an influx of new savings.
Interest rates, mortgage rates would have come down, but that would have been sustainable.
So it's not that the Asians all of a sudden started saving more and then in 2006 they stopped saving.
If that's what had happened, then maybe it would make sense to say, oh, shooting upward of housing prices and then crashing down a few years later is because the Asians sent us a bunch of money and then they took it back.
But no, the Asian savings rate is as high now or even higher than it was during the housing boom.
World savings rates continue to rise even after home prices peaked and then started crashing.
That's not really a good explanation.
And then if you look at the specifics of Greenspan when he's trying to exonerate his own record, it's going to be hard to do this over the radio because people would be best if you could see the graph, but he was basically saying if you looked at the graph of mortgage rates and then short-term rates over the last, whatever, 30 years, they move in lockstep, but that relationship broke down during the housing boom.
And so Greenspan is saying, you know, look at it.
In 2004, I started raising rates and the mortgage rates just stayed flat.
So clearly, what more could I have done?
But what he doesn't tell you is that if you take a step back and look at the whole period for like 20 years, you'll see that when the relationship broke down is when Greenspan, after the dot-com crash in 9-11, when he brought the short-term rates way down to 1%, mortgage rates stayed flat.
And so that is when the relationship broke.
So Greenspan is making it sound like it's the other way around, that he tried to raise rates and he couldn't push up mortgage rates the other way around.
He pulled short-term rates way down, and people in the mortgage market weren't stupid, and so they didn't say, oh, I guess I'm going to give a mortgage out at 1% now.
They kept the rates up at whatever they were.
And so then when he raised the rates back up in 2004, mortgage rates stayed the same because they never went down to the absurd levels that he had brought the short rate.
So he's saying I couldn't push up the rates, but he didn't leave out the fact that it's because they didn't follow him down to the suicidally low level.
And so, yeah, I mean, it's, like I said, the breakdown occurred because he pulled rates way down and the mortgage rates didn't go down there with him.
And then once he brought rates back up, the gap between the short rate and the mortgage rate was not unusual compared to the old prior history when they were moving in lockstep.
And so that's just, I can't even believe he really thinks that that exonerates him.
So I really don't take anything he says seriously at this point.
Yeah, well, and that's the whole thing, too.
Like, some of this is so stupid that they couldn't possibly really think it.
And it's all just self-serving at some point.
I got to say, like, I don't really understand how all that stuff works, but it sounds to me like Greenspan is a self-serving liar and always has been.
I saw him years and years ago explaining how whenever the working man ever gets a raise to keep up with the cost of living, that that's what causes inflation.
And so we need to do everything we can to keep real wages down.
And I thought, wow, that guy ought to spontaneously combust and go to hell, because I know that that's not true.
I know that he's the one who creates inflation.
And how dare he point the finger at the working people, the wage earners, and the lowest salary earners in this country and blame them.
Damn him for that.
But anyway, now let me ask you this, because I'm confused.
Nobody ever talks about reserve ratios, Bob Murphy.
And maybe I mis-overestimate the importance of them.
But I thought that the whole name of the game was that the government and the banks have this partnership where the banks are allowed to loan out, say, for example, $10 to everyone on deposit.
They're allowed to create new money out of nothing.
And, in fact, that they lowered the reserve ratio or raised it or whatever to, what, 42 to 1 or something like that.
And so all these banks were creating all this inflation themselves.
And it seems like everybody talks about the interest rate, but they don't talk about the fact that basically every bank in our society is a giant counterfeiting operation.
Yeah, so you're right.
That's a good point in terms of the big picture.
And if I'm right and you're right about the Fed is really not a good institution that protects our money, but precisely the opposite, when you want to know who benefits from it, if it's this horrible machine that destroys the value of the dollar, like you said, it's basically a cartel of banks.
And they are allowed to make more money because they can make more loans on a given amount of reserves than would be prudent if they weren't basically backed up by the FDIC and the Federal Reserve System itself.
And so that's, you know, before the Fed existed, there were these recurring financial panics.
When the banks would get in trouble, there would be mass runs on the banks.
And that was painful, but at least it kept them in line.
They knew they couldn't get too aggressive because then they'd get wiped out the next time there was a bank panic.
And then the government comes in, though, and says, no, no, no, don't worry, we'll take care of you.
I mean, the banks were originally the ones too big to fail back when the Fed was formed.
But in terms of the housing boom, I don't think, I would need to double-check to be sure, but I don't think they actually changed the reserve requirements on commercial banks per se.
I think what you could argue is that the investment banks and other places that were, you know, dabbling in these mortgage-backed securities, they got really over-leveraged, but they weren't directly under that regulation.
And also, what firms were doing is with these credit default swaps, they were somehow evading the capital requirement.
And so if you're a bank or some other institution, you're supposed to, you know, you have certain loans and things, you're supposed to have this margin so that just in case the unthinkable happens and your investment portfolio gets hit really hard, you've got to cushion before all of a sudden you're insolvent.
And so that's what, so that's different from reserve requirements.
That's called capital requirements.
And the way banks were sort of getting, taking on a lot more risk than they legally were supposed to be allowed to was they would offload it in terms of their own books by buying credit default swaps from AIG or whoever.
And so then they could say, well, see, these things now, you know, aren't going to fluctuate in value because they've got this credit default swap that's insuring the value of this asset right here.
And so then the regulator would say, oh, okay, well, you don't need to set aside that much in terms of a margin of your capital because you've got that credit default swap, you know, guaranteeing it.
And now that those things are called into question, you realize the whole system was a lot more fragile than the individual thought.
Right, because AIG's wealth was all invested in the same bogus, in the same bogus market.
So they didn't have the money to pay out insurance when the things started failing.
Right, right.
That's crazy.
A bunch of fraudulent criminals all invested in each other.
It seems like they would at least, knowing what they're doing, invest in solvent businesses, but I guess not.
Well, it is an interesting question when you wonder that you say, well, okay, the government or maybe the regulator should have seen that that was basically a loophole or whatever, but even so the people buying these credit default swaps, why didn't they look into it a little bit more and realize that this really isn't keeping us safe?
I mean, you know, the point of maintaining a safe portfolio is not just to appease the government regulators, also it's good business sense, you know.
Yeah, the name of the game is bailout.
They know they can do as lousy a business as they want to, and it doesn't matter because we'll always have to bail them out.
I think that was the ultimate thing.
And then also I've talked with people who actually work at some of these places and they said, you know, unless you have actually looked at a credit default swap contract, you don't realize how complicated these things are.
And it's not like a little one-page document saying, if this happens we give you $10 million.
You know, it's all sorts of contingencies and under this scenario what happens.
And so these things, and the mortgage-backed securities too, I mean, they're just very complicated.
It was assets pyramided on top of each other and then sliced and diced and sold to thousands of different people.
And so that's why a lot of this stuff festered is because the people really didn't understand it.
And since Moody's and the other rating agencies were signing off and slapping AAA on it, they said, okay, fine.
But you're right, ultimately they knew, hey, long-term capital management got bailed out, you know, in the late 90s when it blew up, and they knew that ultimately the government's surely not going to let the whole investment banking sector collapse.
They would come in and save us if it came to that.
All right, let's take a call here.
Somebody's calling in from the 248 area code.
You're on the air.
Hi, Scott, this is Ajay.
Hey, how's it going, man?
Great.
Fantastic show here.
Thank you.
You're welcome.
And, Bob, it's great to be with you.
Oh, thanks.
You're welcome.
You do some great work here.
I'm wondering about a couple things here.
One is, and you made some very great comments there, an insightful analysis on the relationship between the longer-term mortgage rates and then the rates that the Fed sets or attempts to set.
And I'm wondering, in your research, what have you found in terms of the relationship between the Fed's rates and then short-term, are there some short-term free market rates that might move at different times?
And the reason I'm asking this is I've read some analyses that suggest that the Fed actually is not the first mover on the short-term rates, that actually the free market will set rates, and then the Fed follows along behind them.
And I'm wondering, both up and down, and I'm wondering what your thoughts are regarding that, because some people suggest, well, gee, that really this whole idea about Greenspan and these other guys taking all the credit when things are going well, and, of course, that's a total falsehood and it's a fraud.
But even that might be a little bit of the emperor's new clothes kind of a situation.
I wondered what your thoughts were on that.
Yeah, okay, that's a good question.
So it's true, and in general, I like to be on the side of saying, hey, the market's stronger than the government.
But when it comes to the federal funds rate, that's the one that the press reports when it says, oh, the Fed cut rates today.
It's talking about the federal funds rate, and that is specifically, I'm saying this to the listeners who might not know, is the interest rate on overnight loans that big banks charge each other to lend reserves on deposits with the Fed.
So when there's reserve requirements, each bank needs to have a certain amount of reserves with the Fed or at its vault based on how many outstanding loans it has on its books.
And some banks get into trouble, and they need to borrow reserves from other banks who actually have a margin of error.
It's true that that rate is set by supply and demand in the market with banks bidding against each other for borrowing those reserves.
But the government can come in, and when it does open market operations, it adds reserves to the system or it sucks reserves out.
And so it would be like, for an analogy, it would be like saying the government can't control the price of apples even if the president orders a bunch of troops to go burn down a bunch of apple trees.
And so, yeah, the price of apples would still be getting set in the market, but ultimately the government would have a lot to say with it if it controlled how many apples there were.
And it's true in terms of if you look at historical movements, some interest rates seem to anticipate when the Fed cuts, like other things you'll see start to fall first.
But I think that's largely just that markets move fast, and people anticipate what the Fed's actually going to do.
And the bond markets, they see that coming before the rest of the public does, and so they jump on it.
But I think ultimately the Fed really does have the ability to, within reason, move interest rates.
All right, so somebody's calling in from the 215 area code.
You should be on the air if I did this right.
Hey, Scott.
Yeah, there you are.
How are you guys doing?
Good.
Good.
Got a question for Bob?
Yeah.
What I want to ask is my 401k, if we could talk about that, took a nasty hit, like everybody else, I'm sure.
And my question is, if you believe that the dollar is going to collapse, wouldn't you want to claim that as income and pay the penalty but get the hell out of it?
You know what I'm saying?
Yeah, what do you say, Bob?
Yeah, I know what you're saying.
It's tricky, and I'll speak in general, because I don't want to mislead people with their life savings.
But, yeah, if it were just going to be a regular inflation, I would say you'd want to try to get some of your exposure to gold or precious metal ETFs, for example.
In your 401k, what are you owning?
You can get shares of things that buy gold and other things.
But in the present environment, I don't trust that the government would let you keep that if that happened.
What do you mean, let me keep it?
So that they might come in and people start redeeming from their gold ETF, let's say.
I've seen all kinds of gold bug websites saying that all those ETFs don't actually hold all the gold that they say they have.
And, of course, the government would let them with a nod and a wink if they're selling that gold to keep the price down.
So my point is, I don't think that that's nearly as safe as if you actually have physical metal in your possession, and it's safe at your house.
Well, see, what I want to do is, I mean, if you listen to all you guys talking about how what they're doing is completely wrong, the dollar's going to collapse, why would I want to – like, I stopped contributing to my 401k because my company doesn't match anymore.
So my goal is I'm taking that money now and paying down my house.
I'm trying to get out of debt as quick as possible.
Well, that's one thing I would say, is if you have a fixed-rate mortgage, right, so one that no matter what happens with prices and interest rates, your mortgage payment is the same dollar amount every month for the next, whatever, 20 years.
Right.
You probably don't want to prepay that if you fear hyperinflation, right?
That's the one thing where you're set, because, remember, hyperinflation helps debtors.
And so the price of your house is going to go up just because prices in general are going to the roof.
Right.
While your mortgage payment stays the same.
So, I mean, my point is just if you have – like, obviously, if you have credit card debt or something that's rolling over at a variable rate, you want to get that out of the way before the rates go up to 40%.
But I'm saying, like, fixed-rate things like your house or cars, instead of paying that down, maybe what you want to do is buy gold coins or silver coins.
Right, right.
So you're still saving.
You're still being smart and realizing this is an emergency, and you're being frugal.
But the point is just think about what you're doing if you fear hyperinflation.
Paying down your mortgage isn't the best thing to do with your money.
Well, see, what I'm thinking is, you know, if you believe that the dollar is going to collapse, why would I sit here and have that money tied up there?
Why not pay the penalty?
You know, claim it as income and pay the 10% penalty, but at least get some of that money back and reinvest it, you know, call up Euro-Pacific and have Peter Schiff do what he needs to do with it or something like that.
I mean, would that be beneficial, or is that...?
Again, I mean, I don't want to give specific investment advice on the radio, but...
Right, I understand.
I don't think that's a crazy idea.
Okay.
That, yeah, if you, I mean, what they're, like I said, with this recent talk about taxing, I mean, who in his right mind that has any skills would stay in the American financial sector at this point after this bonus 90% tax fiasco?
Right.
Like, anyone who has, you know, who's actually competent is going to quit these firms and go do something else.
Right.
I mean, the American financial system is just done for the next decade at this point.
At least.
So, yeah.
Wow.
So, what does that mean?
And thanks very much for the call.
Appreciate it.
All right.
See you guys.
But that last part about our financial system is done for a decade, what does that mean for unemployment?
Are we looking at serious Great Depression and internal strife type Hoovervilles everywhere and craziness here?
I don't know if it's going to be Hoovervilles, but I, yeah, I think unemployment is going to break 10% easily before this thing plays out.
And it wouldn't surprise me if it were at that level for more than a year.
And the reason I say that is, if you had asked me two years ago, come up with a master plan to destroy the American economy, I could not have been playing better than these guys are doing it.
I mean, every day they come out and just make it worse.
So, they either don't know what they're doing or they do know what they're doing and they realize, I mean, people need to remember, they think that, oh, the government's really worried about the economy getting bad.
FDR was the only president to stay in power more than two terms, and that was in the midst of the worst depression in U.S. history.
All right.
So, if the politician is smart and knows how to spin it, and especially if he can blame his predecessor for giving him the problem, he can ride this thing out.
I mean, that's great in terms of him being in charge.
Right.
And really, the worse it gets, the more he can argue that we have to create a soft landing for people.
Look at how bad this is.
And then, in the name of the soft landing, they make the depth of the landing further and further down.
Exactly.
And like you were saying much earlier in the show about people getting whipped up and mad about the merchants who are charging $10 for a loaf of bread.
I wasn't so sure that would happen.
But now, after seeing people flip out about AIG and have union protesters outside marching, and no one really batting an eye when Congress is basically writing a tax law for 70 people.
I mean, that's not really outraging people.
Yeah, they are not going to at all worry about property rights or things if gasoline goes up to $8 a gallon.
They're going to cheerlead when the government comes in and says, we're going to throw in jail anybody who jacks up the price on flashlights.
Right.
Yeah, and of course, it's all their own fault.
It's unfortunate that it seems like the fact that the Austrian school guys understood in advance and predicted all this doesn't seem to be to your credit at all.
The fact that you're predicting at least the possibility not that I know you're not.
I don't want to mischaracterize.
You're not sitting here saying this is what's going to happen.
Listen to me.
But in terms of saying, listen, this is the kind of danger that we're fooling with here and calling this out.
The fact that you're doing so really still makes not that much difference in the larger sense.
They're going to go right on and do it anyway.
And they are going to blame that guy for the gallon of gas.
And that's really the best example, better than the loaf of bread, because we see the gallon of gas thing happen whenever there's a hurricane or anything, and anybody tries to raise the price, the government immediately intervenes.
Right.
Like I think I mentioned on your show, but previous times we've talked, last summer I literally saw gas lines.
I live in Nashville, and there was just a refinery that we were tied to.
One of the hurricanes went through just for about three or four days.
We had gas lines because the attorney general said you're not allowed to raise your prices.
And so half the gas stations shut down, and the other half stayed open.
Their margins shrunk, but because they had lines out to the street, I think with that high turnover, it made sense for half the gas stations to remain open.
But the point was if you needed gas, you had to wait 20 minutes.
And I couldn't believe that happening, and I taught my students that, that that happened in the 70s when the fools didn't realize the danger of price control.
And I kind of thought we all knew that that's what happens when you do price control.
But no, we don't know that that's what happens.
It seems like all these people are a bunch of John McCains.
Oh, I lived 73 years.
I never really bothered to learn anything about economics.
All I know about is pointing targets at people and killing them and stuff like that.
None of these people know anything else, apparently.
Hey, you're on the air, Antiwar Radio with Robert Murphy.
Hey, Scott, this is Troy.
Hey, Troy, thanks for calling in.
Oh, yeah.
Hey, Bob, too.
This is actually more of a historical question, but I want to ask it because I anticipate something like this may end up happening.
This was related to something I saw in the Daily Ship, but John Chase, he was saying that— Oh, you're stealing my question, Troy.
I was saving it.
No, I'm sorry.
Go ahead.
Yeah, well, what I was going to ask was, they're saying that when FDR did his cut on— He was claiming FDR did a cut on spending in 1938, and then when he did that in 1938, that ended up leading to basically the Second Depression that happened in 1938.
And I was trying to think—I know I heard about some of what he was doing in 1938, but I couldn't remember exactly what it was.
I was thinking it was something to do with the Federal Reserve rate or the change in taxes.
So if you could just say what was going on.
Why did 1938—what recovery that was happening basically collapse?
Sure, yeah.
So just for the listeners, what happened is the U.S. economy kept getting worse every year after the stock market crash, and it bottomed out almost to the month when FDR took over in March of 1933.
And so if you're looking for typical statistics like GDP, it keeps going down, and then it turns around right when FDR takes over, and it starts going back up.
And then in 1938, though, it plummets again, and unemployment shoots up to like 19% again.
And so the question is, what happened?
And so Keynesians like Paul Krugman, who are calling for huge stimulus spending now, they say, well, what happened is FDR freaked out about the deficits he had been running, and so he cut the budget back in 1938, and that's what caused it.
So that proves that the worst thing we could do right now is be fiscally responsible, like these so-called Republicans are trying to make us do, because look what happened back then.
But on the other hand, there's lots of other stuff going on.
For one thing, Hoover ran massive deficit spending right after the 29 crash, and things just kept getting worse.
So if deficit spending was supposed to be the antidote, Hoover did try that, and it didn't work.
And FDR tried it for several years.
So he was elected in 1932, and then we're talking about something he did in 1938.
So if big spending, big government was the solution, it should have taken five years into it.
And then the other thing, too, is, yeah, there was the Federal Reserve, also doubled reserve requirements right around that time, and so a lot of economists think that was like a kick to the economy when it was already down.
And also the Supreme Court upheld the National Labor Relations Board, the constitutionality of that.
And so union membership, I think something like doubled within a year, from like 1937 to 1938.
Or maybe it was strike days doubled, something like that.
But unions got a lot stronger because the Supreme Court gave its blessing to a New Deal measure that gave a lot of strength to unions.
And so there's all kinds of different things going on to explain why the economy got hit again in 1937 to 1938.
Well, now when you say that one of the things there is that they raised the reserve requirement, isn't that conceding to Krugman that the problem was that they stopped stimulating the economy with new money and they basically followed the Austrian prescription of letting the recession get, or depression in that case, get worse in order to get rid of the last of the bad investments or whatever?
Right, that's a good point.
So it's true.
Basically, it depends.
It's not really rewarding Krugman because actually it's the Chicago School economists who supposedly are real free market guys that think what happened in the 30s was that the Federal Reserve didn't inflate enough.
Right, this is what the chairman of the Fed says.
Right, exactly.
Ben Bernanke famously told Milton Friedman at one of his birthday parties that, you're right, we did it, meaning the Fed, and talking about the Great Depression.
And he said, but thanks to you, we won't do it again.
Because Milton Friedman is famous for this theory that what happened is the Fed just sat back and twiddled its thumbs in the early 30s while the money supply collapsed.
And so Friedman says, if only they had just printed up a bunch of new money and injected it in the economy, we'd be fine.
And that's exactly what Bernanke's doing now.
And that's why that monetary base figure is off the charts.
Alright, now to my question.
Are you admitting that they're right, then, in saying that raising the reserve ratio helped to make things worse in 37-38?
Oh, okay, yeah.
So, no, I don't think they're right in the big grand scheme of things.
I do think, though, that if things are chugging along and all of a sudden the government comes in and sucks half the money out of the economy, yeah, that's going to distort things.
That's going to mess things up for a while.
But in terms of, is that in the long run a bad thing?
No, I think it's good that the economy, in a sense, is addicted to fiat money.
And yeah, there's short-term withdrawal if they stop pumping in new fiat money, but the economy is better in the long run.
And if you go the other route and just keep injecting more and more, trying to stave off the disaster, all you're going to do is ensure that when the disaster does come, it's going to be even worse.
So then in 1936, then, which if you asked anybody then, that was total disaster, and that ought to have been the bottom of things.
That was an artificially stimulated economy that still needed to have bad investments shaken out of it?
Oh, totally.
I mean, part of the so-called success of Roosevelt, I mean, beyond what I just apparently can see about the Fed, you could have pushed it and said, you know, Bob, you're saying that the economy turned around on a dime once FDR came in and did the New Deal.
No, what I think happened is partly it was psychological.
The people just knew Hoover was incompetent, and so just having somebody fresh reassured people.
But also, he took the U.S. off the gold standard, and the Fed started pumping in money.
And so, yeah, I mean, all of that was completely phony.
In terms of the investment, it was still negative in terms of net investment.
In other words, the U.S. economy was consuming capital more quickly than investors were replacing it.
That still happened for one of the years after Roosevelt took office, and I don't remember exactly which one.
And over the whole period, it was very anemic.
So the point is, even though the official GDP numbers came back a little bit, it wasn't a sign of a healthy economy because the composition of what the U.S. was producing, it was mostly consumer goods.
You know, it wasn't producing in order to sustain itself.
It was basically saying, okay, how many machines do we have left?
Let's bring as many consumption goods as possible before we skip town.
I mean, I'm exaggerating, but that was basically what was happening to U.S. capital stock during the 1930s.
And so, yeah, whatever things looked like in 1936, they were not sustainable with the way things were going.
That was artificially prosperous.
And that was how bad the fundamentals were at that point, that even the awful outcome of 1936 was illusory.
All right, Troy, did you have anything else to follow up there?
No, that pretty much covered everything I was trying to get at.
Okay, great.
Thanks a lot for calling in, man.
Yeah, no problem.
Bye.
All right, folks, it's— If I could plug my book to come out at the end of April, The Politically Incorrect Guide to the Great Depression and New Deal.
Yeah, I was just about to ask you about that, actually.
And that's going to be a little bit easier read than Depression War and Cold War, I guess.
Right, that's the point.
I tried to grab all the best stuff from Bert Folsom, Bob Higgs, Jim Powell, all kinds of historians and free market economists, and just put it all in one spot in a very readable format.
So you're right.
Bob Higgs' stuff is just amazing on the Depression, but it's not light reading.
You really got to turn the music off and open the thing up and have a cup of tea or something in order to read it.
It's difficult material.
He's a good writer.
It's hard material.
And I try to dumb it down and make it easier in my book, yeah.
All right, it's Anti-War Radio.
We're taking calls from Robert P. Murphy from Free Advice Consulting by RPM.com and the Ludwig von Mises Institute, author of The Politically Incorrect Guide to Capitalism and the forthcoming Politically Incorrect Guide to the Great Depression.
Wait, is that what it's called?
Yeah, it's The Great Depression and the New Deal.
And the New Deal, yeah.
Okay, and caller, whoever you are, you're on the air.
Scott.
Yep.
Hi, this is Corky calling from New Jersey.
Hey, how's it going?
All right, how are you?
We're hanging in there, I think, so far.
I don't know.
Looks like things are going to get worse, though.
Well, I'll tell you, I was on the phone this morning with a recruiter, but I'll tell you, one thing that I saw this morning that the ninth scientific barometer of the economy was, on C-SPAN this morning, they had some guy named Bernstein on who's an advisor to Biden.
And I'll tell you, my 19-year-old son could probably do a better job being an economic advisor than this guy.
This guy was so lost and clueless, he made no sense, anything he was saying.
But the thing that was really interesting was, you could not get through this morning.
And it was just amazing how many people were calling in, and everybody's pissed off.
And the other thing is, is how are these people calling in?
Most of them are home because they're not working.
But the other thing that happened today that I thought was very, very alarming was, I was just on the phone with a recruiter who's a corporate recruiter for 30 years, has worked with over 1,000, you know, he's worked with just about 60% to 70% of the Fortune 1000 companies in this country.
He says currently he's only working with three companies right now.
And the reason is, nobody's hiring, and nobody wants to hire.
Nobody wants to invest, nobody wants to take a risk because of what the government is doing.
He came from the financial services business before he became a recruiter, and he said, hey, I'm a recruiter, but you know what?
If I was in one of these companies, I wouldn't hire either.
Yeah, and it's really, I mean, it's most focused in the financial sector, but you would have to be crazy in this environment to start building a factory or to hire people and start training them and, you know, set up all their pensions and so forth.
I mean, it's a hassle to hire somebody.
You have to be in it for the long term.
And why would anybody commit any funds at this point when the politicians are just looking around for people to pick on and take 90% of their money?
Well, when I say he's worked for 60% to 70% of the Fortune 1000, I'm talking about not just the financial services business, I'm talking about manufacturing, pharmaceutical, chemicals.
Nobody's hiring.
It's just that nobody wants to spend and put any money in because of what the government's doing.
The other thing, too, is, and I talked about this on the air last week or the week before, I just thought it was an Academy Award-winning performance by that fellow from Berkshire Hathaway, the way he got on TV at 6 o'clock in the morning and said, okay, everybody, ante up, put your money in because I want to get my money out.
And that's what we have is right now we have this rush and this bear market, and you can see the thing just going up and up, and you're going to see it pop again.
And I just can't believe how many people are putting their money back in the market.
They've got to be idiots.
Yeah, it's a real dangerous game.
I know some people that are pretty savvy in general.
They're real suspicious of everything the government says.
And on their blog and so forth, they're saying that, oh, yeah, there's going to be this spike because the Fed's money pumping, but that's a very dangerous game to play to try to get in and then get out before everyone realizes, wait a minute, this is just pure inflation.
And at any moment, if there's just a rumor, like if some foreign minister of some big central bank lets something slip to reporters about how they're going to stop buying U.S. Treasury debt, I mean, any little thing like that could all of a sudden just cause a run on Treasury.
I mean, once that happens, there's going to be no going back.
I mean, there was a lady this morning on C-SPAN, they were interviewing, and she's saying how the AIG stock is going to be taken over by the government, and when the government takes it over, there's good assets there.
My question for this lady was, what makes you think the government's going to spend that money any more judiciously than they did the taxpayer money?
As far as I'm concerned, that's going to wind up as some bridge to nowhere or some pet project or more money for Halliburton in Iraq.
So it doesn't even matter if they get these assets, because they're just going to piss them away anyway.
Exactly, and what's funny, too, about people saying, oh, there's assets there, if you look at it, if you had like a, I saw there was a bar chart of AIG's quarterly losses from this last quarter in 2008, back several years, and they were big losses near the end there, but they were just dwarfed by what happened after the government took them over.
It was something like they lost $60 billion or something last quarter after the government had taken them over, and prior to that, the worst quarter was $4 billion, something like that.
So I mean, it was just an order of magnitude increase once the government took over, and I think what happened is all the AIG people said, if they got one last shot at this, and they bet the moon, and if it paid off, they could pay their government debt off, and they'd be free and clear again, and if it blew up in their face like it did, they'd say, well, we already got taken over by the government, what's the worst that could happen to us at this point?
Well, all we need is more of the same, we'll solve that, I'm sure.
Hey, thanks, Corky.
No problem, thanks.
Appreciate it.
Now, listen, here's the thing.
When we're talking about the super currency there, the new IMF currency that they're talking about to replace the dollar standard in the world, we're not at that point where the dollar's broken yet, right?
There's these, I mean, you said, you started the interview saying that, yeah, the consumer price index is showing price inflation already and what have you, but the dollar is not worthless because, as you mentioned at one point, foreign investors are looking at their own shaky currencies, and I don't know what they're doing, but they've decided that they want to invest in American debt, but then, as you alluded to just now there in the discussion with Corky on the line, at some point, on the balance sheet of these foreign governments who are holding all these T-bills, this is going to not make sense anymore, and then it's going to be a race to get rid of them first, and at that point, that's when the dollar becomes worthless, right?
That's when $10 bills become pennies.
Exactly.
And are we in danger of that happening within a year, two years?
I mean, is that the kind of fire that they're playing with, a flamethrower?
Well, yeah, I mean, just to put the news in context so people can see the connection between these things, it's no coincidence that the Fed, I think it was two days ago, announced that they were going to buy $300 billion worth of long-term U.S. Treasury debt, and that made gold prices shoot up like $50 an ounce.
I think it was the biggest one-day jump in gold prices in quite a while, but it was also the one-day biggest depreciation of the dollar against the euro since the euro started.
So the single day when the dollar fell the most against the euro was, I think, two days ago when the Fed came out and made that announcement.
And the reason they're doing that is the U.S. government is borrowing money like crazy.
The deficit, I think, is supposed to be like $1.75 trillion this fiscal year alone.
That's the deficit.
And I'm sure it's going to be much higher.
I mean, that's what they officially tell us.
So the government, even though it's true that right now U.S. Treasury bonds are considered the safest asset in the world, the U.S. government isn't just saying, oh, that's nice and patented in the back.
No, they're saying, oh, well, in that case, why don't we just borrow another trillion dollars?
And so now the Fed is coming in and having to prop up the price of those bonds.
And I think it's only a matter of time before the Fed just directly prints money to give it to the Treasury to take its bonds.
And at that point, we'll have come full circle, and the government will literally just run the printing press to cover its deficit, which up until now it's been doing that indirectly, but it hasn't come out and directly done that because most people would say, wait a minute.
But we're very close to that.
And then, so I guess there's basically like just some sort of tipping point then where the foreign governments just stop buying American Treasuries.
Right.
So you're right.
I didn't answer your question fully.
So if you're the Chinese central bank, and you're sitting on, I don't know what the latest figure is, but at least several hundred billion, it's possibly in the trillions, I can't remember, of these Treasury bonds, and that's your stockpile, that's your award chest, you have to be getting increasingly more nervous when Bernanke keeps printing money like crazy.
And because you know that ultimately it's not that the U.S. Treasury is going to default and not pay you, it's that they're going to pay you in dollars that aren't worth anything.
But they're sort of been painted into a corner because if you're the Chinese central bank, if you start unloading your holding of U.S. Treasury debt thinking, well, this isn't a good asset, I'm going to get rid of it, get it off my books, they're such a big player, and that would send such a signal that then everybody would dump it, and before they could get their money back, it'd be worthless.
And so they're kind of in this position where they don't like being where it is, but they can't get out of it without making it come true.
And at some point they're going to say this is ridiculous.
If Bernanke had just played it conservatively and only expanded the monetary base by 10% a year or something, they all would have been fine with the status quo, but he doubled the balance sheet of the Fed in like six months.
You can't just be creating trillions of dollars out of thin air like that and expect the rest of the people around the world who are stuck with these trillions in dollars assets to not do anything about it.
I mean, they're going to eventually say, okay, this is crazy, even though it's going to be painful, we have to dump this stuff.
Or what they would do is stop buying new debt and start buying gold and things like that, and then that's when the Treasury, to run its deficit, then has to turn to the Fed and say, okay, you have to print money because we don't have enough tax revenue.
Wow.
Well, it could have been Ron, but no.
All right, last call for Robert Murphy, Anti-War Radio.
You're on the air.
Okay, hey, I got for Robert Murphy and for you, Scott Horton, this is Zoe down in Texas, and I got a very important movie review for you, believe it or not, from the South by Southwest Film Festival.
There's a very, very evil, and I mean very, very evil documentary that's going to come out on HBO in August, and then it's going to have a theatrical release later.
And I want to give you a heads up on it because I want you guys to battle this thing and the perceptions that it perpetuates, and it's called Yes Men Save the World.
That's called Yes Men Save the World, and it's basically just a screed, just an attack on the notion of a free market economy in the first place.
And these guys are so mullet-headed, and all they know about the economy is what they heard from some caveman on TV.
They don't know anything, and they just poop all over the idea of a free market economy for the whole movie.
And I'm sitting there, and everyone around me is not only loving it and laughing, but saying amen and hallelujah, and they got a standing ovation at the end.
And I'm sitting there in the theater just quietly crying inside.
It was horrible, man.
I'm telling you what.
Yes Men Save the World is going to be a big, big problem for people who like freedom and understand what economics is.
I'm just going to give you all a heads up, man.
All right, well, thanks, and that's just a portent of things to come.
I mean, everybody in the whole world, Bob, except you and me, and the few dozen people listening to Chaos Radio right now, apparently think that all this is capitalism's fault, if not libertarianism itself's fault.
And I remember Sheldon Richman, I interviewed him shortly after the collapse of the stock market in September, and I said, well, you know, the Austrians have done such a great job of predicting this and explaining this, and we've got Ron Paul on TV all the time now talking about it, and it seems like, you know, maybe we'll be able to take a turn toward a more free market system and understand how we got into this mess.
And he said, don't kid yourself.
This has set us back 30 years.
People who advocate free markets, we've been set back, forget it, to the beginning, back to Adam Smith.
That's the hill we have to climb now, Bob.
Yeah, I mean, I don't know if I'm that pessimistic, but it is true.
And like I said, the fact that the public isn't batting an eye when they are raising taxes on 70 people, basically.
I mean, the bill would apply to more, but that's what the motivation was.
Or like I said, the price control last summer, and no one even understood.
No one wrote a letter to the editor of my local paper to say, by the way, this is because the attorney general threatened them.
No one even got that.
In this recent stuff, everyone just rushing to the government.
Yep, this is all the fault of capitalism and greed, and politicians are smart enough to save us.
And it's very depressing.
Well, and you know, the thing is about it, is most people in this society are not capitalists.
Most of us just work for a living, and some other guy owns the place.
And so it's pretty easy to see them as different from us, in a sense.
They're all far away, I guess, top hat wearing weirdos.
We don't hang out at their country clubs.
We don't know them.
They seem to have done this to us, right?
Right, and it's funny too.
I even hesitate to say this because I don't know the composition of your audience, but for people living in Wall Street, and if you have two income earning people, and they're both corporate executives, $250,000 isn't all that much money.
I mean, it's a lot of money to people in other states, but people are thinking, oh, these filthy rich people and everything, and it's all relative, and you're right.
People do not understand, a lot of people don't understand how business works.
And it doesn't mean that everything that business does is good, but people who don't understand how the system works are then clamoring for the government to come in and fundamentally mess with it, and then be surprised when it doesn't work out.
I mean, that's really the shame is that people don't understand.
Why are the credit markets frozen?
I don't know, do you think it has to do with the government coming in and seizing firms and bailing other firms out and changing the rules every two weeks and suspending short selling?
Gee, I wonder why the credit markets are frozen and coming in and slapping a 90% tax on people because they're unpopular.
I mean, of course the credit markets are frozen.
Why would anyone do anything at this point when the government is just like a roving tiger at this point?
Well, and that is the regime uncertainty that Robert Higgs identifies from the Great Depression era, right?
Nobody with any money knows what's going to happen, so everybody's just kind of sitting there.
Right, I mean, let's say you had a bunch of money, and gee, there's a bunch of people who want houses, and houses are really cheap.
Why don't I try to lend money to all these people who want to buy a house, and that should help the housing market?
No, I wouldn't do that, because the government's going to come in and change the loan terms on me.
You know, when the people I lend the money to can't repay me, the government's going to come in and just say, oh, well, you shouldn't have lent them that money.
You took advantage of them by letting them buy a house with your money.
You know, so, I mean, just every market, the government is coming in and doing the exact wrong thing if what it's trying to do is actually fix the problem.
But like I said before, I don't think they are trying to fix it.
I think they benefit from this.
Well, there you go.
Crisis and Leviathan.
And, wow, so it's funny to try to imagine, you know, like if the metaphor is America in a hole, and our government is the guy with the shovel.
I mean, they're determined to dig us all the way through to China before we get to daylight again here.
Well, first they're stepping back and swinging like a baseball bat and hitting us with a shovel.
Yeah.
Yeah, first give us a concussion, then dig us down to the center of the earth where we'll all burn to death.
All right.
Hey, listen, I really appreciate your time on the show today, Bob.
Thanks for having me, Scott.
All right, everybody, that's the great Bob Murphy from the Ludwig von Mises Institute.
That's mises.org.
His website is called Free Advice Consulting by rpm.com.
He's the author of The Politically Incorrect Guide to Capitalism and the forthcoming Politically Incorrect Guide to the Great Depression and the New Deal.
This is Anti-War Radio on chaos in Austin, and we'll be right back.
