All right, y'all, welcome to the Scott Horton Show.
I am the Director of the Libertarian Institute, Editorial Director of Antiwar.com, author of the book Fool's Errand, Time to End the War in Afghanistan, and I've recorded more than 5,000 interviews going back to 2003, all of which are available at scotthorton.org.
You can also sign up for the podcast fee.
The full archive is also available at youtube.com slash scotthorton show.
All right, you guys, introducing our old friend and current friend, Robert P. Murphy from the Ludwig von Mises Institute for Austrian School Economics there.
He's a senior fellow at Mises, and he is the author of Contra Krugman, Smashing the Errors of America's Most Famous Keynesian.
His other works include Chaos Theory, Lessons for the Young Economist, and Choice.
He also wrote The Politically Incorrect Guide to Capitalism and The Politically Incorrect Guide to the Great Depression and the New Deal, both of which are absolutely excellent, better than you could imagine.
Even, I would say.
Welcome back to the show, my friend.
How are you?
Thanks for having me back, Scott.
I'm doing well, thanks.
Good.
I'm happy to have you here.
I forgot to mention, also, you're co-host with Tom Woods of Contra Krugman, the podcast.
A weekly refutation of the stupid things that he writes in the New York Times.
And you also host the Bob Murphy Show at mises.org slash bobmurphyshow.
And you keep your own website at consultingbyrpm.com.
And you're a professor at Texas Tech now?
I was until last year, but I moved away.
Oh, okay.
Well, what are you now, then?
What else goes on that list at this point?
Economist at large, yeah.
Oh, at large.
Very good.
On his way to somewhere else now.
Very good.
All right.
So, here's the reason I have you on.
Oh, I've got to remember to do my disclaimer like I like to do all the time.
This is primarily an anti-war show, and I've got a lot of libertarians, but I've got a lot of liberals and conservatives and progressives and socialists and populists and nationalists and goddang who knows what all kind of people listen to this show to.
And I like to always try to explain that you don't have to agree with libertarians about any other thing.
About the warfare state, the regulatory state, the welfare state, or any other kind of state that we hate.
The police state.
You could think we're all wet on every single thing, and on our prescriptions for what should be done about every single thing, or what should not be done, or any kind of thing.
But you have to admit, the Austrians are the only ones who are really right and figured out the true cause of the boom-bust so-called business cycle that leads to these massive economic crashes every 10 or 12 years in this country.
I think we're due one right about now.
And so even though it is the Austrian school, Ludwig von Mises, who 100 years ago or so figured all this out with the theory of money and credit and all of this, you could disagree with us on every other thing, including what to do about it or any other thing, but you've got to admit that the Austrians are right about the cause of it.
But you can't admit that until you hear it.
So tell them, Bob, what's the cause of the boom-and-the-bust cycle?
Well, sure.
So yeah, I'll do it in big strokes first, Scott, and then you tell me if you want me to home in on something.
So yeah, the Austrian school, and this is what distinguishes them even from the other main U.S.-based so-called free market school, namely the Chicago school, that you talk to a Milton Friedman or somebody, and they'll think that, oh yes, capitalism has these business cycles, and maybe that's a feature of capitalism, or maybe it's because the Fed sometimes doesn't print enough money like it was in the 20s and 30s.
But the Austrian school says that, no, what causes this boom-and-bust cycle, it's not a feature inherent in capitalism.
It has to do with government intervention in the banking system, in particular in the money supply, and that when we have a boom period, what's going on is, and I'll say this in the U.S. context, the Federal Reserve is artificially pushing interest rates down.
And so you think through, okay, what does that mean?
How does the Fed cut interest rates?
Well, typically it means that the Fed creates money electronically out of thin air, if you will, and then goes and buys assets with it.
And then in the process of doing that, the people who sell the bonds or whatever to the Fed, they get checks written on the Fed, and they go deposit in their banks, and so now in a very real sense, the total amount of dollars in the financial system has just gone up by the Fed's purchases, and that tends to push down interest rates.
And so in the Austrian view, an interest rate is a price.
It has a job to do.
It really means something if the interest rate's 5% versus 1%.
And so if the interest rate was supposed to have been, whatever, 5%, and instead because of the Fed's actions, it pushes it down to 1%, that's going to screw things up.
Businesses are going to take out loans and start projects, hire workers to start building a factory or whatever that they really shouldn't have.
At the higher interest rate, everything was balanced.
Now at the lower rate, some projects are being started that really shouldn't have been because they're supposed to be unprofitable, and they would have been considered unprofitable except for this artificially low interest rate.
So the Austrian story then to explain, okay, well, what's the downside of that?
So what if we have an artificially low interest rate?
That seems like it's prosperity.
A lot of businesses are expanding and hiring.
The unemployment rate drops.
In order to bid away these scarce workers, wages go up.
Workers are getting bonuses and stuff, so everything seems great.
This is the boom period when things seem good.
But the idea is it's built on quicksand, that there really wasn't enough real savings and resources to go around to finance, to bring all these long-term projects over the finish line.
And so at some point, these problems, these imbalances start shooting through the system, and typically the way the cycle comes to an end is that the banking system and the Fed get nervous.
Maybe they see rising consumer price inflation or other warning signs, maybe asset bubbles, and so they take their foot off the gas.
They stop pumping in new money, or at least they slowed down the rate at which they pump in new money.
That makes interest rates rise.
And now at the higher rates, uh-oh, a lot of these businesses are overexpanded.
They can't get access to new funding, and so they start laying off workers.
They scale back, and then that's the tipping point.
That's when the economy tips from boom into bust.
And so that's the Austrian theory in a nutshell.
Again, it's not due to the raw forces of greed or capitalism.
It's just that the Federal Reserve in the context of the U.S. systematically sets up this unsustainable boom, and then that has to lead to a bust.
Well, let's not discount greed entirely, because the system was set up by somebody for some reason, and I'm pretty sure that was it, wasn't it?
Oh, I mean, obviously, yeah, you can say greed and the desire for power, domination, is ultimately explained in any kind of diagnosis.
But what I mean is to just merely say, oh, yeah, the reason there was the housing boom and bust is because bankers got greedy.
Well, bankers were just as greedy, you know, 10 years before the housing bubble, too.
So it's not like what changed, what made it all of a sudden that there was the boom when there wasn't and then the crash.
And I'm saying there, you know, if you look at Fed policy, that's, to me, it's pretty obvious.
So in other words, it's not just like my verbal theory.
I've done a lot of work going through the numbers and showing these moves.
You know, I should say, as I'm sure you've mentioned plenty of times on your show, Scott, that a lot of people like Ron Paul and others armed with this Austrian theory of what caused the business cycle said ahead of time that this housing bubble was going to crash.
So it's not merely after the fact that we were fumbling for an explanation.
Well, and speaking of which, you know, the reason I'm so smart a lot of times is because I listen so closely to what Dr. Paul has said, and going back many years, and the reason that I knew it was a big fake housing bubble all through the 2000s was because of Ron.
I remember him explaining on the House floor and all that and arguing with realtors in my cab and every other thing.
In fact, I remember agreeing with realtors in my cab that all these dot-com kids are going to bite the dust.
There's a massive crash coming soon.
And then, of course, there was the massive crash in 1999-2000 of the NASDAQ and the stock market.
But guess what?
As Ron Paul pointed out at the time, they kept what was already really a housing bubble going.
And the entire economy didn't crash, just the Dow and the NASDAQ did.
And those companies, they paid a heavy price.
It was a huge crash at the time.
It did cause, you know, a recession, you know, to a degree.
But then that was how they made up for it.
As Paul Krugman recommended at the time, man, we better shovel even more money into housing.
He says he's being facetious.
I don't know.
You can talk about that if you want.
Or don't waste time on that if you don't want to.
So then, this is what led to the crash of 2008.
And I'll kind of end this with a question.
You can address this however all you want.
But I'm really curious now as to whether right now it's 1999 or is it 2008?
Are we about to have a massive crash?
Obviously, we're at the height of the bubble now.
You know, the stock market's crashing already because of the virus going around and all this.
But so, is this going to be another 1999-type crash where they keep the housing bubble going and going and going?
Which it's huge right now, I think, already.
Or is this going to be more like 2008 where the whole dang thing completely implodes?
Yeah, so I'll come back because that's obviously the important issue.
But just, you alluded to Paul Krugman there.
Let me just mention for your listeners who, as you say, I'm sure many anti-war people on the left would be much more sympathetic to Krugman's Keynesian framework than Ron Paul's Austrian framework.
So, on this narrow question of who's better at explaining the business cycle, you're right, Scott.
It was in this now infamous column that Krugman wrote in – oh, geez, when was it?
It was – I think it was 2002, where he says, oh, in order to deal with the economic fallout, both from the dot-com crash and then the terrorist attacks, that the Fed needs to replace the dot-com bubble with the housing bubble.
Or maybe he said boom.
He might not have said the word bubble.
So, he explicitly said it because in the Keynesian view, oh, the problem with falling asset prices is it has a negative wealth effect and then people get nervous and they don't spend as much.
In the Keynesian view, it's aggregate demand which drives the economic cycle.
And so that's the problem.
If people aren't spending enough, that's going to lead to recession.
So, how do you fix that?
Well, you get a boom going somewhere else.
Oh, it's falling in the NASDAQ.
Well, then get a boom in housing prices.
That'll make people feel wealthy and they'll go back and spend more.
And now he tried to say that he didn't mean that and you were twisting his words or something, right?
Oh, yeah.
So, Krugman had a whole evolution of ways that he was dealing with it because it was dormant for a while.
And then, of course, once the housing bubble did collapse and everything, then some right-wingers dug up that old column.
Oh, look at this.
Paul Krugman was calling for the thing that's now our destruction.
And so, yeah, he had stages of denial where in the beginning he's – I forget the order of these things, Scott, but it was like the various defenses were – he said, oh, no, I was just quoting someone else.
So, it was true.
He said something like, as so-and-so from PIMCO says, but in context, it's clear that Krugman's not holding that guy up as a moron.
He's saying, yeah, as this guy says, and that's a good point.
So, that doesn't really change it.
Elsewhere, he then at one point argued that, oh, no, no, I wasn't saying they ought to do that.
I was just giving positive analysis.
In other words, I wasn't giving a normal – but no, again, in context, it's clear.
I'm not going to bother getting into it now.
People can go look it up if they want to.
But it's clear he's saying that's what the Fed needs to do in order to save us from this thing.
You could say, well, for all we know, what Krugman went was I'm longing for there to be a recession.
But that's clearly not what his point was.
And then, yeah, at one point he said something, oh, come on.
People know I was just making a joke.
So, number one, it's like it's not funny.
But also it took you like two years after you've been defending this to remember to tell us it was a joke.
If it was a joke, wouldn't that have been the first thing you would have said?
So, no, I think that's just a bunch of stuff where he's – he could have just said, yeah, well, it got out of hand.
Well, and it really is illustrative of the thinking behind the Federal Reserve's policies themselves.
They essentially agreed with what his advice was there.
And that was the policy that they were following.
He was just assenting to what Greenspan was doing at the time, right?
Yeah, yeah, the good point.
I'm glad because I meant to say that and I forgot.
I got so riled up to talk about Krugman.
But, yeah, at the time – so as you're presenting it there, Scott, it's not that Krugman was some weird outlier.
I mean he was maybe more explicit in terms of calling it a boomer.
And, again, in fairness, he was quoting somebody else too.
But remember Greenspan was called the maestro.
And what was the reason?
It was that look at this.
Greenspan, who is – as you say, he was in charge of the Federal Reserve before Ben Bernanke at the time.
His great accomplishment ostensibly was that, oh, even in the midst of this dot-com crash and the recession that ensued – because there was technically a recession in the early 2000s – that Greenspan nonetheless kept housing prices rising.
So that was his great accomplishment.
And so then of course that's a dubious accomplishment given what we know afterward.
So to circle back to your point or your big-picture question, Scott, I mean it's – I suppose I don't know in terms of whether there's going to be a little one first and then a huge one down the road.
But what I can say is if the Austrians are even partly correct about what it was or about how the Fed policy exacerbated the housing bubble – because there are plenty of other things involved too.
And let me just mention again for the benefit of your listeners, Scott, who are more progressive rather than right-wing libertarian types, that certainly people did shady stuff in the finance sector like these liar loans and stuff like that.
I'm not discounting any of that, but it's just saying that the Federal Reserve was a necessary condition for this thing to get blown up so big.
And so like for example the Fed cut interest rates down to 1 percent from June of 2003 – as of June of 2003 and held them there for a year to June of 2004 before they started ratcheting them up.
The Federal Reserve this time around after the 2008 crash, they brought interest rates down to basically 0 percent and held them there for seven years.
So in terms of if you're just looking at the Fed's tool of interest rates, if you thought having a 1 percent interest rate in place for a year helped fuel the housing bubble, well then what they did this time around dwarfs that.
And then even more so if you look at in terms of how much money did the Fed inject into the system, the stuff they did from 2008 onward – like if you chart it on a graph, everything beforehand you can't even see it because it's all getting pushed down to the zero line because the moves after 2008 were so significant.
I mean just to give an idea, the Fed doubled what's called the monetary base in just like a few months.
So one way of saying it is the Fed pumped in more money after the fall of 2008 in a few months than the Fed had done in the whole century prior of its existence.
And now on that though, weren't they mostly just filling up a black hole of trillions of dollars worth of bad debts essentially just to make the lenders whole?
In other words, wasn't all that money essentially just canceled out once they printed it and spent it?
It was essentially crossing out numbers, denominators on a page.
And did it really increase the overall money supply that much over the long term or just long enough to bail out those bankers in question?
Okay, so I mean clearly it's not the case that the price of bread and gasoline doubled in 2009.
Like we all lived through that.
It didn't happen.
So if your question is was there some other thing going on structurally that made that massive injection of Fed money not do what it might do in other circumstances, then yes, the answer is yes because it didn't.
Normally if the Fed all of a sudden doubled the quantity of money, you'd expect there to be pretty significant price inflation and there wasn't.
But to say like is it just – did it just get swallowed up and cancel something out?
I mean I don't think so.
Like in other words, if you owe somebody a bunch of money, that doesn't reduce the number of dollars in the economy if you get what I'm saying.
So you know what I mean?
So even if they did inject the money in some way that allowed some bankers to pay off debt that they otherwise wouldn't have been able to, that there still are more dollars in existence after the fact.
Okay.
And I do still think that that has distortionary effects.
So then to this day, can you say like what is the overall money supply now compared to what it was then?
How much percent higher?
Yeah.
Well, so there's different levels of looking at it.
And so the – in terms of what's called base money, like physical currency and then commercial banks, their reserves with the Fed.
Yeah, I think that went up by like about a factor of four or something when all of a sudden – something along that ballpark, whereas broader measures didn't go up as much.
But they still did go up.
So Trump came in and I think he slashed a lot of regulations, which is stimulative for trade and for the economy.
At the same time, though, he's had all these trade wars, which tend to pressure the economy the other way.
And it seemed like we were already at the top of this bubble.
He was warning it was just the Obama bubble back when he was the candidate.
But ever since becoming the president, he tries to completely own every good statistic that's come in.
And he's clearly terrified that the bubble is going to crack before he's reelected here.
But then it looks like the coronavirus here might do it.
The stock markets are way down and trade.
I'm reading the Wall Street Journal.
They seem worried.
So I wonder if you think that this is what's going to go ahead and truly pop the bubble and cause a crash right now.
Okay, sure.
So yeah, let me just agree with you that Trump – his rhetoric is goofy.
That the unemployment statistics were all rosy and misleading during the Obama years.
And then all of a sudden Trump is taking them at face value under his administration.
So that's goofy.
And yeah, so he's obviously being – it's going to be difficult for him to try to distance himself.
So he's clearly been setting up like the Fed is the scapegoat even before the coronavirus.
Saying that Jay Powell, I don't know why they're raising rates.
They're going to strangle this recovery.
This could be the greatest – this already is the greatest economy.
Imagine how much better it would be if it weren't for the Fed giving us Edwins.
He was doing that kind of stuff.
That's a tweet where he said, who's the worst enemy of America, Chairman Powell or Chairman Xi?
Yeah.
So yeah, that stuff, that's all silly.
I will say, Scott, that I – I mean besides the fact that it's immoral and hurts people, I was also disappointed with the whole trade war stuff because I would have liked there had been a cleaner test of the income tax rate reductions.
That even a lot of free market economists who hate Trump's guts, they were sort of poo-pooing.
Like, oh yeah, these corporate income tax rates cuts, they're not going to be that big of a deal.
Whereas I actually think that they are.
I mean I would have cut other taxes first just to relieve poorer people and stuff just out of sympathy.
But in terms of my analysis of how does the economy work, I actually think those corporate rate reductions would have been very stimulative, more so than even like some other economists at other free market think tanks and whatnot.
But at the same time, he's doing all this trade war stuff.
So it's unfortunate that it allows like the populist right who are big Trump fans and who don't trust regular economists when it comes to the virtues of free trade.
So they can say, oh, look at the economy's doing all right, even though he had the trade war, so I guess you guys are idiots.
And I would say, no, actually I think it's that the economy would have done even better because of the income tax cuts.
And then the tariffs, the trade war kind of muted that.
So that's the way I would put it.
Let me just mention, Scott, in terms of just regular analysis, this isn't even Austrian, this is just standard stuff.
The so-called yield curve inverted a few times last year.
The big one that people were looking at was in I think early August of last year.
And that, at least since World War II, has always, quote, predicted a recession beginning like within 12 to 18 months, let's say.
And so because of that, I have been, you know, I've been talking to crowds saying I expected there to be an official recession beginning sometime by this summer.
And so that the coronavirus stuff, I think sometimes, you know, I can't prove this to you, Scott, but I think when there's an asset bubble and more and more people are realizing the prices on these assets, you know, they've been bid up to unsustainable levels, at some point it's got to turn around.
When there's some public event that kind of gives people permission to sell, I think that's partly what it is.
Like, if you read CNBC headline, you would think the only thing happening in world markets the last three days was people responding to coronavirus.
Well, I mean, and also that explains why it went way down and then why it went way up.
You know, when the stocks are dropping, oh, investors worried over coronavirus.
And then when they went up yesterday, oh, investors rebounding after more optimism about coronavirus.
You know, I don't think it's just they're looking at updates from the CDC or the Chinese government.
I think part of it is people are real emotional.
And so it'll give Trump an out.
If there is a big crash, he's going to blame it on the coronavirus and whatever else, Jay Powell.
But yes, to answer your question, Scott, I have thought even before the virus that the recession would begin by this summer.
And so the fact that now there's this virus that might disrupt supply chains, that would just exacerbate all the more.
What I would be upset about is if there is a big crash and then everybody says, oh, it's because of the virus.
And don't listen to the guys like Murphy because, you know, he's been chicken little for a while.
So the Fed blew up.
No, no, this has nothing to do with the Fed.
This has to do with the virus.
That's the kind of thing that I think would be annoying, where it's kind of like those of us warning about a giant acid bubble, even if we're proven correct in the sense of a big crash, that people would still say, oh, it wasn't because of what the Fed did.
It was something else.
Well, you know, it depends on just how vague you are and how non falsifiable your argument is.
There's going to be a crash at some point.
You don't have to be Austrian to say that, you know, so.
But that's true.
And of course, you could have a bubble.
And then what's the comparison?
A really bad winter that freezes all the crops in Florida, too, and California and whatever.
Something terrible happens and, you know, there are major disruptions in the economy.
One new goes off over one city somewhere in the Midwest, something like that.
That could be enough to pop a bubble that already existed.
And that wouldn't mean that the entire crash was because of the disaster.
It would just mean that that was the thing that the straw that broke the camel's back.
And I guess there was a really one that broke the camel's back in in 2007 and eight, or it was just the interest rate.
They just kept raising the funds rate.
And finally, the thing blew up.
Well, you could see it developing.
I mean, so at first people were and this was a point to if your listeners, some of them haven't seen it.
They should go to YouTube and do Ben Bernanke was wrong.
And there's just a hilarious compilation of clips from at least back to 2006 forward where Bernanke is like he's on CNBC or he's testifying to Congress or whatever.
And at each stage he just keeps like at the beginning it was no, everything seems fine.
There's some froth in the housing markets.
And the next one was, yes, there's definitely problems in the subprime housing sector.
But we think the broader housing market that it was yet the housing sector is in trouble.
But we don't think it's going to be a recession.
And then it was, well, there's going to be a recession won't be too bad.
So at each stage.
So it did gradually unfold.
I think the thing that led to the panic in the fall of 2008, though, was a major money market mutual fund so-called broke the buck, which was an unusual thing.
So it was a brewing thing of institutions like as the repayment on mortgage-backed securities became more and more dubious as home prices were falling.
Then it was like major institutions that had issued financial things that were real complicated derivative contracts with some of these things as the collateral.
Then they started getting in trouble.
So it was sort of like a chain reaction.
But, yeah, I mean, there were a few major events that explain why did the panic break out on that day versus why not two months earlier?
But it was a gradually building thing that eventually broke.
But what's what's funny, Scott, is even many financial commentators and officials and they were still pretty optimistic, even like in August of 2008.
Right.
So one month before the outright panic broke out and everyone's saying the world's going to end unless the Fed and the Treasury come in with the bailouts.
A lot of people were signing, whether they were lying and they knew they were just trying to calm people or whether they were just delusional.
Who knows?
But it is funny how long it took before it was obvious that, OK, there's really a serious crisis here.
Well, you know, I knew right then in real time, not just over the long haul from watching Ron Paul on TV, but I was reading Lee Rockwell dot com in the summer of 2008.
And Gary North was saying that, hey, listen, I'm looking at M1, M2, M3, M whatever the hell, M16, all these numbers are way, way down.
The money supply is shrinking.
There's about to be a massive crash.
If you're in the market, get out right now.
And he was saying that all August and then the crash came in September.
Yeah.
And I again, so I got some things wrong.
I had thought price inflate like consumer price inflation was going to be worse in 2009 and 10 than it was.
So I'm not saying I'm Nostradamus, but the one thing I did think I got right.
And it wasn't just a fluke was I was looking at interest rate movements and what the Fed had been doing in October of 2007.
So 11 months before the crisis hit, I was I wrote an article for Mises.org saying, could this be the worst recession in 25 years?
You know, because I was saying the stuff the Fed has been doing the last few years in terms of distortions, what the last time they did things this badly was back in the late 70s.
And that set us up for the, you know, the really awful recession in the early 80s that had been, you know, at that point was the worst since the Great Depression.
So I was saying that that's how serious this is.
And that's why when you're asking me before, how bad is this one going to be?
Again, I don't know if there's going to be a first a little road bump and they're going to really flood the market and they'll buy some more time before they let the thing really hit.
But I'm saying that the imbalances they've built up, if that Austrian story of the housing boom and bust is even remotely true, what they've done in response to the 2008 crisis is so much worse that that means the ensuing correction, if you want to use that euphemism, is going to have to be a lot more severe than what would have happened in 2008 if they had just let nature run its course.
Yeah, it's like a sine wave, right, where as high as the bubble is, that's how low the crash is going to be, too.
Yeah, I mean, I think there's a way, yes, that that's a decent way.
But I suppose, though, just for people to understand, it's you could say, well, wait, it didn't really feel like that that prosperous after the Obama years and even right now.
And so it's kind of like that.
Yeah, it's because the economy would have been so bad after 2008 that when they're inflating and putting in a bubble on top of that, that's why it actually doesn't feel, you know, we don't feel like we're rich the way people felt really rich like in 2006.
Well, see, you're skipping ahead in the interview now, but this is why everybody's going red right now is because, well, not everybody, but a lot more people than ever before in this country.
And that's because our system is capitalism.
And if you're a liberal or progressive, then our system is libertarian, free market, wildcat, unchecked capitalism, wild capitalism.
And so look at how terrible it is.
The economy crashes every decade.
And as you just said, for everybody who's not an owner of stock in some giant conglomerate, but is just a regular wage earner, they never catch back up.
They might finally be catching back up to their standard of living from 10 years ago when you pull the rug right out from under them again, make us start all over again.
Now, I remember in the 90s, and they're like, man, we're really worried about the height of this economic bubble right now.
The economy is really overheating.
And I'm going, really?
Because we had record bankruptcies in this country right now.
Whatever, you look at the different statistics as laid out by a critic, people still were just barely recovering from the recession of 92.
They hadn't felt this bubble, and now the bubble popped.
Now they've got to start all over again.
The bubble popped again.
And people are saying, OK, well, you know what?
I guess put me on the dole, then.
If that's the way it's got to be, if that's the way our system is, elect Sanders, then.
Because if capitalism is that corrupt...
And people really do feel that way.
I honestly know real, no-fooling right-wingers who are considering voting for Sanders, just because, hey, if the economy is not going to work in a way that I can take care of myself, somebody's got to pay my loved one's medical bills if I can't, right?
Or else what?
Yeah, and you just hit on something that, for me with personal experience, that I've been healthy, fortunately.
But, yeah, just dealing with family members, doing ER visits, and just...
You're in the ER until 2 o'clock in the morning, and I keep going out and talking to the people, and it's like they forgot who you were.
And I would say as an economist, this isn't run like a business, this is crazy, something's screwy here.
But I totally understand, especially if you've got Republican congressmen assuring everyone, no, this is capitalism, you don't want socialized medicine.
I can totally see why people would say, well, if socialized medicine isn't this, then maybe that's what I want.
Right, I mean, Donald Trump said, I think it was in the State of the Union, where he goes, they want to take away the health insurance that people have that they love so much.
And I'm going, dude, you're living in a fantasy world.
People might like their doctor, they want to burn their insurance company to the ground with the people all still in it.
Yeah, and that's, so again, as an economist who's a fan of the free market, I can go through and say, oh, this isn't the free market.
But I totally get why this current system isn't working.
And unfortunately, a lot of its defenders are holding this up like this is USA, this is capitalism, God bless America, when clearly this system is screwed up.
Because as you say, Scott, like even people with regular jobs at major companies who have, quote, good health insurance still, I mean, they're paying, they have a huge deductible.
And it's just a real pain.
You've got to keep track of your receipts and oh, wait a minute.
And fight over major procedures and major treatments, too.
Oh, we'll give you chemotherapy for this amount of time, but no longer.
I still got the cancer, man, don't cut me off yet.
What the hell is this?
It's just like in a socialist sort of comic book nightmare description of what capitalist health care would be.
Well, as long as you have a Congress to rig the game for the capitalists, then yep, they're right.
Right.
But again, just for your listeners to try to drive home, like the car market right now, like if you went in and said, yeah, I'd like that model over there.
And they said, OK, well, you're going to buy it then.
And you said, well, how much is it?
And they said, well, we can't tell you until you buy it.
Once you buy the car and you're legally responsible for the price, then we'll inform you how much it is.
In that kind of a world, what do you think would happen to car prices and the quality of vehicles?
Like obviously the prices would be astronomical.
And that's what the health care system is.
So that's not how the car market works.
And we have a decent market system of car delivery.
It's not that the government gives everyone a car and they're a single payer there.
So I would, again, just say that it's the screwed up nature of the health care system.
That's not capitalism for you because nothing else works.
Pizza market doesn't work.
You go to see movies.
It's not like that.
You buy plane tickets.
It's not like that.
There's something screwy with health care.
And if you step back and say, where is the government involved more in health care or in the car market or in pizzas, it's clearly the government's up to its eyeballs in health care.
So to me, that's showing the flaws with government intervention.
It's arguably it's the worst of both worlds that you have tremendous government intervention, but yet they still do have private parties that can profit tremendously by jacking up prices.
And so you get the worst of both worlds, whereas I would prefer a true free market there.
And I could see other people saying, well, if it's this current system or socialized medicine, give me the latter.
I mean, I might disagree with that, but I can see why someone might plausibly argue that.
Well, and that's why Mises said, right, that the middle of the road leads to socialism.
So once you get the government involved, all they're going to do is jack up prices so high that people ask for more and more intervention until it's a final takeover of the thing.
Yeah, exactly.
And just to give it, you know, when you're talking about the cancer treatment or whatever, I mean, this isn't just after the fact, free market economists fumbling and trying to explain something.
Before the Affordable Care Act was passed, there were health care economists, you know, who had a free market slant who were warning and saying, look at what you're doing.
If you're saying that, you know, I'm a major insurance company and somebody with leukemia or something comes to me and I can't deny them a policy and I have to not only sell them a policy, but charge them the same price that I would charge someone who doesn't have cancer.
Well, clearly that person's a ticking time bomb.
They're just, you know, you're just losing money.
So as a company, what are you going to do?
You can do everything in your power to not get them to come to you.
So, for example, you'll look in your area, see who the best cancer doctors are and make sure they're out of network because you don't want cancer patients applying to your, you know, insurance company.
So stuff like, you know, again, ahead of time before it passed, free market economists were warning this kind of stuff is going to happen if you pass this legislation.
And at the same time, though, I mean, before that, the way it works is if you have cancer and your insurance company cancels on you, well, now you can't buy health insurance from any other company because you have a preexisting condition.
So you can just die now.
Screw you.
Oh, right.
So that's why people were like, man, at least Obamacare is getting me out of that.
And as you're saying, they're just digging the hole deeper in another direction, I guess.
But you can see why people went for it.
Absolutely.
Yeah.
I'm not trying to say everything was great as of 2007.
But my point being that once insurance companies did what various free market economists predicted would happen, then, you know, the average person will go, oh, see, that's what happens when you have capitalism.
This is crazy.
Why do we have markets involved in health insurance?
And it's like, well, you know, they said this was going to happen.
Again, it is a thing where there are people on record, too, saying stuff like, oh, this is just a stepping stone.
In other words, it's not a, quote, conspiracy theory for some people to be saying the point of the Affordable Care Act was just to move us further down the road to socialized medicine.
Many people would gleefully admit that and say, yeah, because the public wasn't ready for it yet.
And this was clearly a stepping stone.
But, you know, to manifest the absurdities of this crazy third-party payment system.
So there you go.
All right.
Well, so we're a little bit far off.
You don't have to be a libertarian to listen to us about the business cycle.
But so what about this?
If I just dream a genie and make every law regarding health care in America simply disappear overnight and there's nothing but the wildest of wildcat free markets in health care delivery for people, you really think that that's just going to take care of it, huh?
All the poor people and all the sick people and whatever, don't worry.
The market will figure it out.
I would certainly I mean, let me put it this way.
I think a much more reasonable, modest step would be instead of getting rid of the FDA, for example, you still have the FDA, but it just its recommendations are voluntary.
Right.
So the FDA can label products and say, in our opinion, this is safe.
Go ahead and use this.
In our opinion, this one is not safe or we haven't tested this and let people decide.
Maybe make them sign a form or something saying, I understand the FDA has not signed off on this, but my doctor thinks it's good.
So some simple steps like that to me would be tremendous.
Like right now, drug companies have to spend a billion dollars to bring a new drug to market.
So partly when you say, geez, why is this stuff so expensive?
Again, the answer isn't merely greed, because presumably the people that own pharmaceutical companies were greedy 30 years ago, too.
But part of the reason for the explosion in drug prices is the FDA has made it progressively more difficult to bring drugs to market, for example, or just medical licensure in general.
A hospital isn't going to hire Joe Schmoe to come in and be a brain surgeon.
You can have standards in place to prevent quacks from operating on people.
But I think in practice, what happens is the AMA and other organizations, they restrict the quantity of available doctors and make the price artificially high.
So, yeah, I do think a lot of government regulations make medical care unnecessarily expensive.
And also, too, just like the FDA, the food pyramid that the government put out, all that stuff keeps changing.
It turns out, oh, maybe actually pumping people full of carbohydrates isn't a great thing to do.
So a lot of this stuff—or let me put it this way, Scott.
A lot of your listeners who don't at all trust what government experts in the intelligence services say about some foreign threat and how we need to spend billions of dollars to keep us safe, and if anything, it's the exact opposite.
I would say use that logic.
It's the same crew of people who are telling you, you need us to keep you safe from quack doctors.
Trust us.
And I'm saying, no, they're making medicine way more expensive, and they're also making it worse than it otherwise would be.
Hold on just one second.
Be right back.
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Well, that makes sense.
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Again, that's right there in the margin at ScottHorton.org.
Hey, y'all, check it out.
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TheBumperSticker.com All right, now I want to get back to the corruption on Wall Street real quick here, too, because I think it behooves us to focus on the corruption aspect of it if for no other reason that it doesn't sound like we're trying to play it down somehow as being important to the story.
I'm not sure if you ever saw the movie Inside Job.
It's narrated by Matt Damon, of all people.
But anyway, it's all about the crash.
I actually don't remember the specifics of it, but I remember being impressed that, yes, they explained it correctly about how they had mislabeled all of these really bad mortgages as AAA-rated products and all of these things.
And the whole game was, they changed the rules so that nobody has to hold any mortgages anymore.
Everybody can sell them all to each other in all of these sophisticated type of ways so that, essentially just through fraud, they were able to build up this entire sector of housing in America that was completely unsustainable and all of that.
And it seemed like if you watched the movie, as far as I could tell, everything about the movie was completely perfect and correct.
There was nothing wrong with it at all, except that they should have had the seven minutes at the end with you explaining that it was the government that gave the banks the license to create this money in the first place, and the government's promise to be their backstop in the case of trouble, and the government dictating artificially low interest rates in the interest of these banks, that that is the root of all evil here.
They went all the way up to the root of all evil.
They followed the money all the way up until where the money came from.
And they never did ask exactly what that was.
But I was reminded of this yesterday because I was trolling Matt Taibbi's Twitter feed to see the latest about the second Russiagate hoax that they're running with now here.
And I saw where he was arguing with probably an Austrian who was, I'm not exactly sure what, the guy was making pretty good points.
But Taibbi, of course, he has written a ton about Goldman Sachs and all their corruption and how they did this.
And he is really focusing on the absolute criminal fraud that these very powerful Wall Street banks were participating in in order to rig this market.
And I don't think he's really, they're kind of talking past each other in a way, right?
Like the other guy is saying, yeah, that's true, but where'd they get the money?
And he's going, yeah, but look at the amount of corruption here.
But it just seems like, I don't know how to phrase this exactly in the form of a question.
Maybe if they weren't so corrupt, how different might it have looked?
Or just how important is it that they're never prosecuted and they're always bailed out when, fine, even if you blame Alan Greenspan for the whole thing, what about all of his co-conspirators who got away with all the bloody murder that they did get away with and that kind of thing?
It seems really important that we really should be leading in the very best on that even better than Taibbi.
You know what I mean?
STEPHAN KINSELLA Right.
So I haven't seen that Matt Damon one, but the movie The Big Short, with Steve Carell and Christian Bale, I watched it and I didn't have a problem with any of it.
It's just the sin of omission, like you're saying, that everything they documented, I thought they left out the role the Fed played.
And the other thing, too, is just to keep in mind that as a free market economist, what am I in favor of?
It's the capitalist system, the profit and loss system.
And so, yeah, part of how capitalism works is when a company makes a bad decision and they make bad investments that blow up in their face, they go out of business and they get replaced by people who are more farsighted.
So even though, yes, there was a mania and a craze, as the movie The Big Short demonstrates, there were some people who knew these housing prices are crazy, this is unsustainable, and were betting against it.
So in a genuine free market, let's suppose it were the case that the housing bubble really was largely just driven by private speculators and Fannie and Freddie were minor players and the Fed didn't do anything.
OK, fine, let's just say that's the case.
Still, after the thing blew up, all those major players, they should have been wiped out and the survivors should have been the ones who didn't make the big bets.
But that's not what happened because there were the bailouts.
For example, Goldman Sachs would have been wiped out, but they weren't because their former guy, Hank Paulson, was the Treasury Secretary in the Bush administration.
And he's the one who got down on his knee, literally, and got Pelosi to go ahead and approve the TARP bailout.
So that's not a free market thing.
At least if you're a genuine free marketeer, like guys like Glenn Beck were against or for TARP when it happened, and then later they were against the Obama bailouts.
So those guys are phony.
But I'm saying genuine principled people, libertarians who were against government intervention would be against TARP and so on.
So it's true, like you say, Scott, there were a lot of bad actors in the private sector, but the system has built in checks on that that would wash them away and punish them.
But that stuff was all systematically, or not even systematically, but selectively used by the people in power to help their buddies.
And so, as you say, that's not socialism, that's cronyism, but that's not free market capitalism.
Yeah.
All right.
So let me ask you about the wars here.
I mean, I guess even if George H.W. Bush and Bill Clinton and Bush Jr.had all been a bunch of peaceniks, we would have still had a boom and a bust this whole time.
But at the same time, it seems like these artificial periods of prosperity, as you term them, helped to disguise the cost of military expansionism around the world.
In the 1990s, when we were supposed to get our peace dividend, we didn't.
And they expanded NATO and they expanded American obligations all over the world.
They kept bombing Iraq every other day for eight years.
But they made it seem free, pretty much.
And then when the crash came, nobody made the connection that, oh, this is the cost of bombing Iraq for eight years, and expanding NATO into Eastern Europe and buying them all new F-16s and all these things.
Because who could connect that, other than a guy like you or Ron Paul or somebody like that?
And then, of course, with the Bush years, not just attacking Afghanistan, but bonus wars everywhere.
Let's do this.
Obama after that, too.
And they never have to sell war bonds.
I grew up on Bugs Bunny cartoons.
They'll be on the middle of a desert, and there's a sign that says, buy war bonds.
They don't have to sell war bonds, and they don't have to raise taxes.
They can cut taxes.
And I guess they do borrow a lot of money from Korea and China and Saudi Arabia and others.
But it seems like it's the monetary system, this loose monetary system, that is the most effective means of disguising the immediate costs of war.
And people, they're just spending time in the unemployment line staring at their shoes, and they don't realize this, your wasted time now, is the price of killing all those Arabs five years ago.
Yeah, there's a huge definite connection.
And you could even look at, I think it broke down in the 70s with the stagflation.
But in the beginning, if you're looking at the Fed's balance sheet, meaning how many assets does the Federal Reserve have, and you just look at the chart of it.
The Fed, of course, was created right before the U.S. entry into World War I.
And so you could argue whether they did that to get ahead of it or just that facilitated it.
But you can see, when did the Fed, its balance sheet expand?
It was always when the U.S. was in another war.
That's when all of a sudden it expanded.
And that's why, too, oh, yeah, prices rise during wartime, and they have to put in price controls.
It's because the Federal Reserve is creating boatloads of money.
And why?
As you say, Scott, because the government on its end, the Treasury, runs up massive deficits to pay for the war effort.
And so normally that would cause interest rates to go through the roof as it's borrowing more and more, just like an individual who's borrowing a ton of money.
Eventually the banks or the credit card companies are going to raise your APR.
That would happen with the government, too.
But then you've got the central banks sitting in the wings, buying up all that debt, taking it off the private sector's hands.
And that, again, suppresses the interest rate.
So effectively it's a complicated system, but, I mean, really it's the same model that a medieval king or somebody would have used to debase the coinage in order to then pay the troops and debase coins to raise an army, and that causes prices around the kingdom to go up.
I mean it's the same model, but now it's more sophisticated.
And, yeah, it does have this offshoot that it causes a boom period when they're running the printing press to pay for the war expenditures, but then eventually when they tighten up, then the crash comes.
Mosley, that's the problem with the whole Milton Friedman Chicago School approach, right?
Which I know virtually nothing about, but you tell me.
The idea that, well, what we do, we target at about 2% inflation, and then the idea is that all prices, more or less, across the board, are going to go up by 2%, which, whatever.
I mean, as long as you accept the idea of a national government and its central bank and its fiscal priorities and whatever, I guess better than taxing me.
I don't know, tear the corners off of my dollar bills, but I don't have to report every dime I make and spend.
Okay, but that's not how it works, right?
You get no inflation at all here, and a massive bubble there, and then a giant crash that kills everybody.
Yeah, I think that is part of it.
And I'm sure some of us, too, in the Austrian camp were a bit sloppy in how we warned about things.
Certainly I'm guilty of that.
But, yes, for example, after the Fed started doing the so-called QE, quantitative easing programs, you didn't see the price of bread and gasoline shoot through the roof, but you did see asset prices go way up.
And so it is, you know, the economy is very complex, and you start pumping in money in one spot.
It's not necessarily the case that all prices are going to uniformly rise a certain amount.
And so just because you don't see bread going up 10% a year, that doesn't mean, oh, therefore the Fed's doing a pretty good job keeping prices tame.
That's not really what's going on at all.
The other thing, too, when you mentioned Friedman, I don't remember the exact quote, but I know that he later in his career, you know, when he was discussing the gold standard, said that, oh, the reason you wouldn't want a rigid, you know, link between your currency and gold is that would tie the authorities' hands, and so what if there's an emergency like a war, and they need to print money to, you know, fund the war effort if you had a rigid gold standard, they wouldn't be able to.
So even the defenders of, you know, expansionary monetary power are admitting that, yeah, this allows your government to wage war, which otherwise might not do.
So for those of your listeners who are skeptical of the government's war-making ability, everybody agrees, fans and foes alike, that the central bank allows the government to do more in wartime than it otherwise could.
Right.
Yeah, exactly.
That's the same argument of Krugman at the New York Times and all the guys, I forgot who exactly, but I know I've read that exact same position argued before at the National Review.
And then Ron Paul standing there saying, aha, that's the whole point, guys.
That's the reason to have a gold standard, is exactly to prevent this kind of thing.
You guys want to have a war all the time, we noticed.
Yeah.
I mean, it's funny because that's like, that'd be akin to saying, oh, the reason you can't have a really rigid First Amendment is what happens when the government, you know, there's really awful speech the government needs to prohibit.
Then how could you do, you know, that's kind of like to me what that sounds like.
Yeah, exactly.
Begging the question in the very worst way there.
So now, what about the idea of the problem of after the next massive crash here and the left half of America, American political thinkers, I guess, and partisans saying that, you know what, we told you so.
Capitalism just doesn't work, Bob.
I mean, look at the terrible disruptions.
Look at the suffering that the people at the lower end of the economic ladder, as they put it, have to go through all the time with this.
And so we need to democratize the economy, man.
We got to, we need, for every regulation Donald Trump cut, we need 10 more, apparently, to make everything fair.
Are you concerned that that narrative is going to have even more purchase after this next crash than the last one?
It seems like we're digging a pit into a worse problem here faster and faster all the time.
Yeah, that does concern me, and that's also why I'm concerned if, let's say it shakes out that it's, you know, Bernie Sanders versus Trump and that Trump gets reelected, that will clearly be spun by many as a referendum on socialism versus capitalism.
And so then, yeah, if there's a huge crash that happens two years into Trump's reelection or the year after, whatever, that's definitely going to look like, oh, the American people foolishly chose capitalism over socialism, look what it got them.
So, yeah, and I guess all I can do in my efforts is to point to the fact that, well, no, I've been warning since the QE round started, this is blowing up an asset bubble, and this is not capitalism.
And I guess that's all I can really do.
Yeah, well, and hey, it's important, you know, I mean, they tried to stick, and maybe they did get away with this to a degree, but it could have been a lot worse the way that they tried to pretend that George W. Bush had been Ron Paul and that the George W. Bush years, the only problem was no regulation, when, in fact, there were all kinds of regulations, especially the ones that say you've got to bail the bad guys out at the end when they fail.
You know, those regulations sure stayed.
And, in fact, George Bush and Ron Paul are entirely different people with two entirely different sets of policies, preferred policies there.
And there was nothing, you know, laissez-faire about the Bush years.
I think it's true, though, right, that his Justice Department and, you know, the criminal prosecutor types didn't do their job.
You can call that a lack of regulation when they're allowing people to get away with outright fraud all the time.
But that certainly is not a Ron Paulian approach either, right?
Right, but even there it's, I mean, I know you're just trying to be fair, but even there it's not that, oh, because the George W. Bush administration, I mean, they passed Sarbanes-Oxley.
That was supposed to, you remember there was like the Enron and Tyco accounting scandals?
So they passed Sarbanes-Oxley, which was supposed to completely overhaul the financial reporting thing.
So they allegedly, you know, wiped their hands clean and solved the problem once and for all of, you know, mismanagement and fraud in Wall Street in the early years of the Bush administration and how many people, the payrolls of the SEC, for example, the budget and the payroll of the SEC, you know, the Securities Exchange, I'm pretty sure that skyrocketed under the W. Bush years compared to other administrations.
So on paper, you know, the Bush administration, I mean, they did all kinds of renewable energy stuff too under the George W. Bush years.
So this idea that he's this rabid free marketeer is totally wrong besides just all the crazy, you know, taking over banks at the end of his administration.
You know, if some South American dictator had done that national review, would have called that socialism, George W. Bush doesn't.
Like, oh, well, you know, he had to do it to save capitalism.
So, I mean, so I get how left-wing critics can say these guys are a bunch of hypocrites, and that's true, but at least then, you know, be decent and say, okay, you agree, they're not actually living up to what they say, that these guys don't believe in the Constitution.
They don't actually care about big deficits unless it's a Republican who has the deficits under his name.
Right.
Well, and that's the whole thing, right?
This is the name of our dilemma right here.
It's easy to understand why any, and I mean broadly defined, anyone on the left or anyone on the right would see the other side as way worse.
I must be this because I definitely am not that.
And they can go like that all day.
They can go like that for the rest of their lives and not realize that there's a better way to look at it even than that, you know.
Right, and I tell like my buddies, you know, in terms of libertarians who tend to be more right-wing, and I realize the whole left-right thing, there's problems with that dichotomy, to not fall in the same trap.
Like, in other words, don't just define the left as progressive as Paul Krugman and Dianne Feinstein or something.
Like, no, look at Glenn Greenwald or something.
I mean, look at principled people.
Don't just assume that some hack represents any progressive.
I've noticed, too, like with the reaction, like there are a lot of self-described libertarian economists who work at, you know, D.C.-type think tanks, you know, that they look down their noses at Brexit, for example.
And so I realize this is only something that's come to me in the last couple of years, really, is that there are a group, you know, on the left and the right, like sort of policy wonks, who they're just more, they're for the establishment.
They kind of like the existing order.
And, oh, yeah, maybe certain wars were a little bit misplaced, and maybe we shouldn't have bombed right there so much.
But they're basically, they like the current system.
Whereas, you know, guys like you and me, of course, are horrified by the current system, and Caitlin Johnstone as well, and, you know, her solution would be different from mine.
But to me, that seems to be a big part of the divide.
It's not so much whether you're a libertarian or a neoliberal or whatever.
It's just this huge group of policy wonks who live comfortably right now in the current system, and they don't want anyone to rock the boat too much.
Right.
Yeah, and it's, you know, it's the neoliberals and the neoconservatives.
The neoliberals, that's essentially their quasi-free market, you know, pro-business, not necessarily capitalism, but pro-capitalist-type policies.
And the neocons are the- The World Bank will come in, and we'll fix your country.
That kind of thing, where obviously, like, somebody with me, I don't think the World Bank should exist.
Right.
But yeah, there'll be a lot of free market or market-oriented economists.
Oh, yeah, the World Bank come in and tell you to cut your tariff rates and, you know, privatize some of your state-owned enterprises, which is, to me, no, that's government intervention, and then it's not going to work, and it's going to discredit pro-capitalist reform.
Right, so this is exactly where we are right now, right, is after 30 years of Clintons and Bushes and the neoliberal, neoconservative, centrist, corrupt, you know, imperial system, that it's being roundly rejected everywhere.
And it's taking all of- a lot of globalism with it, even the good parts of just global trade expansion without the government.
You know, people are turning rightward and nationalist all over the world in reaction to, first, just the violence of the wars, then the economic catastrophe that brought the whole world down with it back in 2008, and then all the refugee crises in this hemisphere and the other from the interventions, American government interventions all over the place, and people are just completely reacting against it.
But again, back just focusing on our country, people are really abandoning liberalism for what they're calling democratic socialism, and they're abandoning conservatism for right-wing populism.
They're moving further to the right and the left, and this is supposed to be our moment to replace these so-called moderates who are actually these crazy, terrible extremists who've ruined everything, as we should be the real moderates, you know, in a Walter Block- Walter Moderate Block sense.
And we have the real answers, freedom.
We shouldn't- people don't need to be moving further to the left and further to the right.
We need to just be decentralizing power and repealing all these interventions that are, you know, causing so much stress in our society and turning people against each other so badly.
And I don't know that our movement is doing a very good job of that, really, of making sure that our voice is heard loud enough as the real alternative.
If you want to talk about a third way or whatever, we don't mean this Bill Clinton, you know, mixed economy, participatory fascism.
We mean real freedom, like in the Declaration of Independence kind of a thing, and this should be our time right now to make it clear.
And things could get a lot worse as people keep moving further left and further right.
They could snap back against each other in uglier and uglier ways when, hey, guess what?
Doesn't have to be this way at all.
Never did.
Yeah, I think you're right, and I think part of what happened is the- at least my colleagues in terms- and I probably include myself too- that in terms of academic types who are economists and are very free market oriented, that when people on the left really see how hard it is for the average person, especially someone who doesn't have a 9-to-5 job, to get health care, especially if they have, like you say, some preexisting condition, and if they read a list of a bunch of free market economists, they feel like you guys don't get it.
And so that's why, yeah, I'm going to go for democratic socialists.
And then people on the right too, they see, oh, there used to be a bunch of great manufacturing jobs.
Everybody gets laid off.
This town's a ghost town now.
And you guys on the right are talking about the benefits of outsourcing and stuff and the virtues of, look at how great this is for shareholders.
They just say, you guys don't get it.
So that's why they're going to vote for Trump or whatever.
So I do understand that, yeah, even though the solutions I think are bad that are being offered by these things, I understand that at least it seems like somebody like Bernie Sanders or Trump is identifying the problems that a lot of libertarian types perhaps have not been doing a good enough job as to showing, oh, yeah, we realize something's screwy here, but look, it's this government intervention that's ultimately responsible.
Or going the other way, saying, yeah, this is something that the solutions being proposed are going to just make worse.
So don't fall for the siren song.
Yep.
Well, so there's your marching orders, everybody.
Do better teaching the world about economics.
It really matters a lot, especially now.
And you know what?
Here's a great place to start.
And by the way, for people who lean left, who made it this far especially, I'd ask you to look at the Politically Incorrect Guide to Capitalism and the Politically Incorrect Guide to the Great Depression and the New Deal.
They're both really great.
And look, I went to government school, and I read especially the, well, they're both so wonderful, but just on the question of the Politically Incorrect Guide to Capitalism there, I was reading it with every left-wing objection I could possibly muster in mind, and Bob answers all of them.
It's just really great.
You'll really learn a lot from it if you have an open mind to take a look at that.
And of course, I think this is really the key to economic understanding in America.
We don't have time to do it all now at the end of the interview, Bob, but what really happened with the Great Depression?
What really caused it?
And why the solution worked so poorly?
And that is in the Politically Incorrect Guide to the Great Depression and the New Deal.
And then, of course, as I said, the man wrote all this other stuff.
Contra Krugman is his latest, and then he also has Chaos Theory, Lessons for the Young Economist, and Choice, Cooperation, Enterprise, and Human Action.
And that is The Layman's Guide to Human Action by Ludwig von Mises.
I think I should probably get that.
Thank you very much, Bob.
Appreciate it.
Thanks for having me, Scott, and thanks for all you do.
