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.
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All right, you guys on the line, I've got Jeff Deist.
He is the president of the Ludwig von Mises Institute.
That's mises.org, where they keep the Austrian school economists.
Welcome back to the show, Jeff.
How are you, sir?
Scott, I'm doing great.
How are you?
I'm doing all right.
Really appreciate you joining us today, and I thought this was a really insightful piece that you wrote here at mises.org, what governors can do, and you're comparing the clampdown in some states to the lack of a clampdown in others, and, well, you know me, I'm as libertarian as the next guy, the next guy being you, and I'm not for a government doing anything to anyone really ever, pretty much.
I've got my own people on lockdown, but that's my business, and I'm not really sure what my public policy position would be if I had one at all.
My bias, of course, is against government action of all kind, but then again, I'm biased against my biases because I don't want to be wrong, so instead, I just don't know what I think, but I'm curious to know what you think.
Well, it's interesting.
I think first and foremost, governors ought to realize that they're on their own here.
The federal government is barely functioning, from what I can tell.
It does its bad things, but in terms of policy, so-called, or politics, this is just a complete you know what, and so they're on their own.
That's right.
The feds basically have guidance, but they're not even really trying to claim the power to enforce it at this point.
Well, they also can't print money.
It's not an easy time to sell debt if you're a state, and you can't print money, so all of the various states are probably going to need a fed bailout of their unemployment facilities because for whatever reason, unemployment insurance has to be handled at the state level in this country, and so that's where you go file, and we've already seen huge problems in the state of Florida where the online forms aren't working correctly, or some people can't get them to work because maybe there's too much traffic or whatever, and so they're going out physically to the unemployment offices and standing in line close to each other and all that sort of thing.
So this unemployment tsunami is going to be just absolutely unmanageable, and so I would suggest that an entrepreneurial governor out there who wants to take a different approach, you know, this is the time, and we've seen some little glimpses of daylight, Scott, with some of these Western governors, and there are states in the US where the number of people per square mile is below 10 on average.
So obviously the situation there in the middle of nowhere in Wyoming is very different than it is in Brooklyn because of the density of people and the resulting transmittal or lack of transmittal of this virus.
So the idea that we're going to have one policy for 330 million people is crazy.
It's a recipe for disaster, but most importantly, it's causing everyone to be shut down, all things to be shut down, and wreaking incredible amounts of economic devastation, which we don't even, we can't even begin to fathom yet.
So I sure would like to see somebody trying something different, and if there is ever a time, I mean, look at what Gavin Newsom's been saying as governor of California, I mean, almost completely, you know, talking about California as a nation state and exporting ventilators to other states who need it and that sort of thing.
In the age of Trump, the blue states view him as an illegitimate president, and if Biden wins, maybe the red states will view him as an illegitimate president.
So that's the environment we're in.
Yeah.
Well, and I like how you say that, hey, if California's a nation state, bye guys, have fun.
And you say, hey, they've got coasts, they've got all, you know, wide and varied industries and agriculture, and there's every reason they could be a sovereign state.
Why not?
Well, look, California's got 40 million people.
It would be a medium-sized European country, and more importantly, it's got a huge GDP.
I don't believe in GDP because it's as a metric, but you can use it as a broad yardstick, I suppose.
And they produce a lot of goods and services, including ag, including tourism and entertainment in Hollywood and Silicon Valley.
It's a huge industry.
So there's absolutely no reason why California couldn't be a perfectly good nation.
And the problem, of course, is that we're all tied together under the US dollar.
So that's difficult to unwind.
We're all tied together under the US military and federal land.
That would be difficult to unwind.
But conceptually, of course, I like the idea of Gavin Newsom thinking of California this way.
And I wish, you know, some of these other governors would do the same.
They've got a huge opportunity now to lead, to be the, to lead, to do something different, to be the Sweden, to be the experimental state.
And I'm cautiously optimistic that a few of them are starting to feel the pressure of just unemployment and hardship from their citizens.
And you know, like I said before, there's different circumstances in different parts of the country.
And if we can't, if we can't accept that, then we, why have states?
Why not just say these are glorified federal counties?
Yeah, which they essentially are.
But so you make the point here, though, that, well, in most cases, but as you say, on this, the federal government really only has so much authority here beyond suggestion.
And there already are some states you kind of delineate here where you have, what, five states that are reasonably open, three that are slightly more locked down than that, but haven't gone nearly as far as, say, California or Texas.
So can you talk about those different examples and what it is that they're doing different already?
Well, some of them have virtually no lockdowns in place of individuals or businesses.
And some have, like where I live in Alabama, you know, so-called non-essential businesses are supposed to be home.
But the Alabama directive or order, however you want to think about it, that the governor wrote up has three or four or five pages of exceptions to all this for all kinds of things like supply stores and plumbing stores and hardware stores and obviously food and liquor stores, gun stores, because we're in the South, they had kept gun stores open, all kinds of things.
And so the exceptions start to swallow the rule.
So in effect, we're still able to be out and about in Alabama and several of us come into the Mises Institute every day.
So there's different varying degrees of lockdown in place, but, you know, more importantly, I think is that the feds, not only are they not coming to save you.
There's not that much they can do.
There are only three or four million employees total and they aren't all cops with badges.
A lot of them are just people sitting in front of computers.
So as a matter of, you know, it's not about authority.
Obviously the federal government is so wildly outside of its constitutional authority or moral authority or however you want to view it.
But so it's not about authority, it's about enforcement.
So if we think about that at the, you know, states vis-a-vis the feds, we ought to think about that with us vis-a-vis our states.
So if we were to have just sort of a mass day of openness or we were to have some sort of protests or we were to just say on May 1st, we're all going to work, there's not that much they could do about it because there's just not enough employees to point guns at all of us.
Now the catch in all this is that they've closed schools.
And so for a lot of people, the schools are basically the babysitter and if their kids are home, they can't go to work.
But you know, as in so many other situations, as with so many other laws, we tend to think government's bigger and more powerful than it is.
And if we all just sort of shrugged our shoulders and said enough, we could do something.
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All right, well, so my sister's a nurse and she actually has a really good friend that's an epidemiologist who I kept trying to interview, but they won't let him do the show.
Instead, I'm talking with my friends, none of whom are germologists at all, but we're all doing our best with this.
Earlier today, I spoke with David Stockman and he crunched the numbers and says, ah, the whole thing's a bunch of hooey.
But then I talked with my buddy Dan Lazar, who writes for us at antiwar.com, and he's saying, oh my God, lockdown is the only thing that's saving us.
If we send everybody back to work, you're going to have huge spikes of people getting very sick, and yeah, even though most working age people don't die of it, some of them do, and even being sick with this thing is pretty bad for those who do come down with the symptoms, especially the respiratory symptoms here.
Being on a ventilator's not a lot of fun, and so how do we know?
I saw a funny tweet that Libertarians said, central planning doesn't work, and then the answer is, oh yeah, well what's your central plan then?
And then the answer is, well we don't really have one, but is every man for himself?
And just figure it out, even though you might be infecting innocent people unintentionally, might not even know you're sick, and you could infect everybody at work, and then one or two of them die, and I don't know if that counts as aggression or what, but it seems like we don't really know the answer, right?
Well that's true of the common flu too.
That's true of any potentially communicable disease when you're out and about.
I mean, the question becomes who makes this decision for us?
So I think you could argue coherently that a million U.S. deaths, even if they were directly attributable to coronavirus, which is not so easy to attribute, by the way, would not justify Great Depression Part Two.
So other people might say, oh no, no, Jeff, even 10,000 deaths, we ought to all be locked down and have no businesses open.
Okay, well, I don't know what to say to that other than one size fits all isn't working here very well, and I don't understand why there is this sudden rush to Trump to say, give us this national rule, this national directive.
I mean, I think states can do what they want to do on their own without him, and of course, there's all kinds of politics involved in this.
People are breaking down along political lenses in terms of how they view this thing.
But look, if you're even going to use the term rule of law, which is a sickening joke, but if you're even going to use it, I mean, as Judge Napolitano says, that would mean you would have to have some sort of trial or hearing before you took away someone's liberty to go out and go to work, let's say, or their ability to leave their home.
You'd have to have some sort of trial or hearing, you'd have to show some imminent harm or danger posed by the person.
In other words, you could prove they were infected, let's say, and all of this would require an individualized, personalized showing.
Well, we can't have due process of law and shut down millions and millions of people.
It's just not practicable.
So I think you'd just have to let people go out and do what they think is right for themselves.
But in a world where there was actual liability, I think you would find that business owners and employers and schools were taking great pains to make sure that their premises were scrubbed down and that they were testing, checking temperatures at the door or requiring people to show test results before admission or whatever it might be.
I mean, imperfect, but what we got right now is definitely imperfect.
Well, that was something that I thought was a very important point that you made in the piece there, where, say, for example, I think you bring up reopening restaurants, but with real liability.
So employees or customers get sick in your restaurant, you don't get a no problem card for the government.
You have to answer for that in civil court, just as anything else.
You'd have to show that you took every reasonable precaution, such as spraying the tables down with bleach water every few minutes and forcing employees to wash their hands constantly and whatever else you could, masks and whatever else you could, so as to plead your own innocence later.
If anybody tries to sue you over it, and that alone could do a lot to allow businesses to open and yet to keep them as safe as possible.
Yeah, I mean, you'd have to have that liability, right?
Yeah, it sounds a little silly, but I guess it...
I don't think so.
I like it.
I thought that was very reasonable, really, you know?
Well, but here's the thing.
I guess I'm coming from the perspective of someone who thinks that this, not only the danger of the virus, the lethality, but also the transmissibility is overhyped.
And if you're not coming from that perspective, you might say, well, this just wouldn't work because the restaurant's going to have, someone's going to die at some point.
I look at places like India where public health, especially in certain areas, is not good, where people live very close together, where sanitary conditions and hygiene are not always great.
And there's only a couple hundred deaths in that vast country.
So I don't claim to know exactly what's going on, but I guess I'm just naturally inclined to sort of be a little dismissive of the hype, especially when it comes from the state.
Yeah, and especially with all the models predicting the future with bogus math problems that are all based on faulty data and are all based on which data you include in your model and what you exclude and every kind of bias.
Of course, I'm very biased against any kind of crisis, but then again, these are the same people who told us there was no crisis for months, while there very seriously was one.
And so, you know, my biases contradict each other pretty starkly here in a lot of ways.
And I try to not ever listen to my own self.
If I really think it must not be a problem, then I want to second and triple guess that if I can, you know?
I guess I would just have to say, honestly, I don't think it's a crisis.
I mean, I don't know how else to say it.
People view this differently, but I don't think it's a crisis.
Certainly not numerically.
Campbell.
I mean, when they compare it to the flu, they go, well, two years ago, we had 60,000 people die of the flu, and now they're predicting 60,000 people will die of this thing.
But that includes with the clampdown.
And the presumption is that without this lockdown, voluntary and involuntary, that it would be much worse than 60,000.
And we don't even know how far we are into the season here.
It's the whole flu season, 60,000 from two years ago, and we're just a couple of months into this thing.
And so it could be much higher than that.
How many have to die before it is a crisis, sir?
How many have to be at risk for it to be a real crisis, do you think?
Well, I don't know.
But in my view, it's not a crisis, not because it isn't nastier than the flu, both in terms of how lethal it is and how unpleasant it is, even if you survive.
I do think it is nastier than the flu.
I think we know that anecdotally, at least.
But to me, a crisis is a war, a famine.
This doesn't rise to that level.
And if we allow government to freak out and go into hyperdrive every time there's a virus, I mean, our bodies have ways of dealing with viruses, our medical systems, our entrepreneurial actors have ways of dealing with viral infections.
And I don't- When they're allowed to.
Yeah, but I think when we accept the language of crisis, then we sort of give them a leg up in the discussion from the get-go.
Because well, if it's a crisis, surely then the Constitution doesn't apply or due process doesn't apply or martial law is A-OK.
I don't know about that.
Yeah.
Well, you know, I don't think it has to necessarily be a blank check.
But then again, I think when you say, well, I don't know, give or take a million lives or this or that here compared to a Great Depression, how do you balance that?
I mean, does a Great Depression mean that a million people will die?
Or Great Depression means that a few thousand will die, but millions will be miserable?
And again, I know you're not in charge.
You're saying that's why there's not a one-size-fits-all answer for these things.
But you know, the left is saying that, oh yeah, sure, let people die just for the God of the almighty dollar or a couple of points on the Dow or something like that.
But I don't think that's what you're saying.
No, I'm saying that economics can't be neatly severed from human well-being.
There's two sides of the same coin.
And I also think Americans are perhaps not really understanding the potential degree of harm here.
We're awfully used to being fat and happy at home with our Netflix and you go to the grocery and there's 10 zillion tubes of toothpaste or whatever it was that Bernie Sanders said, deodorant, I guess, and that this just somehow magically materializes all around us every day.
Well, it wouldn't take very long for it to not materialize all around us.
And I think when there was actual sustained hardship, people might change their tune.
Yeah.
Well, and certainly we know that, you know, whenever, I don't know the exact statistics, but when the unemployment rate goes up, the suicide rate goes up.
When the unemployment rate goes up, the number of people who are insured goes way down.
We just saw what, 10 million people lost their job or 10 million people filing for unemployment in just the last few weeks here.
That's presumably 10 million people who are no longer covered by their health insurance in the middle of a pandemic.
And so, you know, they're going to be that much worse off.
I don't know how many deaths that translates to.
But well, so let me ask you this.
Bob Higgs had taught me back in the last financial crisis that we can't really have a Great Depression in a real sense, because there's just so much real wealth here already that just can't be inflated away.
Highways and trucks and warehouses and machine tools and brains full of engineering educations and all the things that it takes to make an economy work.
And so, yeah, they can build up a hell of a bubble and it can be really, really ugly when it pops, but it can't ever really take us back to a position of, you know, true poverty across the country, just because there's already so much for new wealth to be produced with all around us.
But I mean, I'm sure that only goes to a point.
But do you agree with that or how far do you think we might be able to suck it up before things would get totally out of control?
Well, I sort of agree.
I think that's a really interesting point.
First of all, capital can be consumed and it can fall into disarray and it can fall into the hands of a population that doesn't even know how to avail itself of it.
So the idea that we have factories and roadways and distribution and all kinds of things that we didn't have during the Great Depression, I think that's true.
But again, scarcity is relative.
Poverty is relative.
I mean, if you took someone from 1600 and brought them to the year 1900, they would probably say, oh, my God, this is a post scarcity world.
You guys are you guys have nothing to worry about.
And so similarly, if you took someone from 1900 and took them to 2020, they'd probably say, oh, my God, look at this.
Look at all.
Look at these cell phones.
You know, you guys have everything.
So, you know, what what constitutes poverty and what constitutes scarcity is relative to other countries at the same time and relative to our own past.
So I'd like to think that people wouldn't be starving as they some literally were during depression.
But I don't kid myself.
We have bread lines in this country and we've had them.
They're just hidden in the form of, you know, food stamps.
So we have huge lines at the food pantries right now.
Well, and right now we have literal bread lines.
Yeah.
And so far, not bread riots, but those aren't too far behind.
Well, it's it's interesting.
There's some huge lines in Florida at unemployment offices.
So as the days get longer and as it gets warmer, as the sun comes out, I think it's going to be harder and harder to keep people in.
And I've discussed this on a couple of other shows.
You know, it's one thing when you tell this to a suburban person with a house and maybe they drive down the street to a pretty nice grocery store.
It's another thing to tell someone who lives in a crowded, cramped, not so nice, high rise tenement somewhere.
And the only escape they have is down an elevator out into a concrete jungle and maybe a little crappy convenience store on the corner or something.
Those are two different things.
Yeah.
Yeah, for sure.
Well, and, you know, so something that's been going around is they're saying, well, some of the experts, supposed experts are saying that this is going to have to last kind of indefinitely or for, you know, until vaccines are widely available in a year or 18 months or something like that.
I kind of think that that's just not serious, that even under the control of the controllers, the idea that we were sold here is, we're going to flatten the curve so the hospitals don't get overwhelmed.
But once we get down to the backside of that curve, and I guess cross your fingers for ultraviolet light and summertime humidity helping to eliminate the virus, as well, that then we'll be able to get back to work here in a month or so, six weeks max, something like that.
And then at that point, there's no going back to the clampdown again, even with a new spike.
They're going to have to come up with medicinal treatments or some other way.
And again, social distancing and all that, people have already learned the lesson.
Don't listen to the Surgeon General, wear your mask, wash your hands, all these things.
But it seems inconceivable to me, no matter what the government wants, it seems inconceivable to me that real big business would tolerate this clampdown lasting through the summer or something like that.
I mean, they've got to understand, if not as well as you, somewhere along the same lines as you, that you can't just keep people frozen in place like this.
There's going to be violence.
There's going to be real problems, and maybe more deadly than the virus spreading, if, as you're saying, especially poor people, they're locked not in a nice house, but in a small apartment, in a high-rise, in a bad neighborhood, in a place where they hardly have any money.
Maybe they didn't make enough to file income tax, so they don't even get their measly $1,200 check to help buy some canned food to survive.
This could be a real crisis.
And there's got to be somebody other than you or me who understands that, that this can only go on so long, even if you accept the lockdown for the time being.
The time being can't be more than another four or six weeks or some kind of thing like that, right?
I sure hope so.
I think May 1st has a nice ring to it, May Day, of all things.
But yeah, I absolutely agree.
There's going to be some Irish democracy out there.
And especially, I don't know how, they can't even seem to get this $1,200 to people.
I don't understand the logistics behind this.
I understand some people file a tax return, and some people don't.
But look, if the federal government can't get $1,200 in people's hands, then how do you expect it to provide healthcare or do anything else?
It's an absolute tragedy right now.
And for a lot of people, they already had their April 1 rent due.
So that's in the rear view mirror.
And as far as I can tell, anecdotally, I haven't heard of anybody who's gotten this money.
I don't know or have not heard of a single soul.
So look, and all the money that was contained in this CARES Act is so inefficient, so badly spent.
It's so obvious.
As David Stockman points out in his book, The Great Deformation, he has a whole little write-up, four or five excellent bullet points of why the Wall Street contagion would not have spread to Main Street.
In the last crash, you mean?
In the last crash.
Whereas here, we need to have a bottom-up approach.
I mean, given all the money that was wasted in 08, bailing out huge companies, AIG, for example, I mean, it would have been far better to just pay average people's mortgages and give everybody else 10 years rent or something.
You know, however you would have done it, it would have had moral hazard from here to the end of the earth.
But still, I mean, if we're going to have moral hazard, let's have it from the bottom up.
Yeah.
And when I was talking with him this morning, he said they've given $4 trillion to big business, $600 billion to small business and regular working people.
And you know, the question I didn't get to ask him, I don't know if you know the answer to this off the top of your head, but what percentage of the economy would you call big business, corporate America, versus medium-sized and small businesses of the people out here in the world?
Do you know?
Yeah.
Well, we do know that employers under 50 employees are more than 50% of all employers.
In other words, more than half of all jobs are held by people at organizations with less than 50 employees.
So that we do know.
In other words, what a heist.
$4 trillion.
And that's only, so far, that's before they've passed the second one through the Congress.
That's just the first one through the Congress, and the rest just created by the Fed.
Well, trillion with a T doesn't mean as much as it used to.
I don't know what else to say.
Trillion here, trillion there.
Pretty soon, you're talking about real money.
Yeah.
I mean, look, I can imagine what talking to David Stockman right now is like, because that guy knows the ins and outs.
The ins and outs, the backroom deals, and he'll probably write another book about the smoky backrooms of this crash.
Yep.
And his recent articles on this are just incredible, and especially the list of all the places where the money went, as opposed to your family's pocket, in this recent deal.
I mean, you talk about boondoggles, I mean, there's just nothing like this.
It's completely incredible.
I mean, they gave $30 billion to the Department of Education.
Where's that going?
Well, there's a huge crossover audience for this now.
Writers like Nomi Prins, who has a pretty long article in The Nation about this Karis boondoggle, but from the left, a couple days ago, she's an acquaintance of mine.
So there's a huge crossover appeal, and the lessons that we learned in 08 are so fresh.
We can remember them now.
We can remember how it worked.
We can go back and look at that and say, don't do it that way this time.
But I think Congress has gotten worse since 08.
I think that the overall level of intelligence, the overall ...
I think there's fewer people who really understand money at all.
So look out below, because this one, they may not be able to reflate this one.
Yeah.
All right.
Well, listen, thanks so much for your time on the show today, Jeff, and for this great article, and for all you do at Mises, at the Institute, and at this website.
You guys have such great stuff all the time, every single day.
More articles than I can read, and I want to read them all.
And it's the best stuff around.
So thank you for that, and thank you again for being on the show today.
All right.
Thank you, Scott.
All right, you guys.
That is Jeff Deist.
He is president of the Mises Institute.
That's mises.org.
And yeah, I'm telling you, Bob Murphy and Joe Salerno, Ryan McMachen, all these guys, just unlimited list of the very best libertarian writers for you there at mises.org.
Oh, and this one is called, What the Governors Can Do.
The Scott Horton Show, Anti-War Radio, can be heard on KPFK 90.7 FM in L.A., APSradio.com, Antiwar.com, ScottHorton.org, and LibertarianInstitute.org.
