All right, y'all welcome to the show, it's Anti-War Radio.
I'm Scott Horton and next up on the show is Robert P. Murphy from the Ludwig von Mises Institute, mises.org for them.
His blog is consultingbyrpm.com.
He's the author of The Politically Incorrect Guide to Capitalism and The Politically Incorrect Guide to the Great Depression and The New Deal, both of which are highly recommended by myself.
Especially, you know, The Politically Incorrect Guide to Capitalism.
If you know a lefty in your life with that anti-capitalist mentality, that book can really get through to him because he really just anticipates every single argument against private property rights and free markets that somebody could ever come up with, and he just debunks them all right there in a very easy format to The Politically Incorrect Guide to Capitalism.
Welcome back to the show, Bob, how are you doing?
Thanks for having me, Scott, I'm doing well.
Well, good, good.
Very happy to have you back on the show.
I was hoping you could help me understand the Obamacare thing.
You know, first of all, like the lowdown on what it really all means, and then what's so horrible about it.
I assume that it's horrible, but I haven't really bothered to become educated enough to hate it as much as I know I need to, so please help edumacate me.
Okay, well, first, if I can be a little contrarian, I actually want to defend what CNN did.
So, I mean, I don't know if people saw, like, Jon Stewart made fun of it on Facebook, there's all kinds of stuff, because they, for like the first seven minutes after the ruling came out, CNN was reporting that the court had thrown out the individual mandate, and of course, the court had done that.
But what happened is, if you go and actually read the ruling, it says, you know, it summarizes the beginning, and then it says, held, the court, you know, keeps some parts of the measure and throws out other parts of the measure.
So that's the way they summarized it.
And then the very next thing it says is, Chief Justice Roberts writing an opinion for the majority says that this is unconstitutional under the Commerce Clause, that the federal government has no power to compel someone to buy health insurance, blah, blah, blah, because that would be an unwarranted expansion of federal power.
So if you just read that, I mean, that's open and shut.
Okay, the federal government doesn't have power to do this, and the court, the way they described it, said we're going to throw out some parts and keep some parts of this legislation.
And so, clearly, what happened is the CNN people read that and then ran to the, you know, reporters and said, okay, this is what it is, and that's when they started broadcasting.
And then it was only later in the decision that it said, oh, but even though we couldn't do it due to the Commerce Clause, if we're just going to tax you and make you buy health insurance that way, then it's fine.
So, I mean, the way we're taught that the federal government works and there's checks and balances and stuff, if the federal government doesn't have the power to do something according to the court, then they can't do it.
It's not that they're supposed to, that they don't say in fifth grade.
But then, of course, they can just tax you and make you do the thing that they don't have the power to compel you to do.
Well, you know, I saw on that particular point, I saw hysterical liberal bloggers saying, oh, no, this is a backhanded way of really limiting the government's ability to push people around under the Commerce Clause in the future.
Right.
And by the same token, some conservatives were trying to see a silver lining in it and saying, well, yeah, sure, we got Obamacare still, but at least now they said they, you know, clearly circumscribed the power of the Commerce Clause.
So, I mean, who knows?
What's that?
Where do you fall?
Anywhere on that spectrum or do you have a whole different view?
Well, I mean, on the narrow, I mean, you and I, of course, aren't lawyers, but on the narrow issue of what does the Constitution mean, I think, yeah, the federal government has been doing all kinds of crazy stuff.
You know, the Commerce Clause, it was saying that the Supreme, or that the federal government can regulate interstate commerce.
Well, no, I guess, yeah, that much, obviously, we agree on.
But I wonder whether you think this decision is going to make a difference as to how that's interpreted from now on, you know?
Yeah, yeah, I mean, it probably will on some cases, but I mean, again, they can just, they can do whatever they want.
It's like people were saying, you know, pro-lifers now should just say, oh, okay, yeah, we're not outlawing abortion, it's just your tax bill will be $10,000 higher if you have an abortion.
You know what I mean?
But no, abortion's still legal under the federal government.
It's not telling you what you can do with your body, it's just whatever, when you compute your income tax liability, you know, whatever tax bracket you're in, blah, blah, blah.
But, oh, if you happen to get an abortion...
And if you don't pay, we'll put you in jail for not paying.
Right, right.
And so, I mean, you know, liberal, conventional liberals wouldn't be happy with that, so they can, I hope, understand why.
So, yeah, I mean, who knows what...
Let me put it this way, I think it's very naive to assume that justice is just going to a room and say, now, let me honestly apply what I think the law is in this case, and I don't care about politics.
I think that's crazy, but I don't pretend to know all the machinations and subterfuges going on.
That's certainly a nit, though.
All right, well, so now tell me about, you know, how bad is this thing?
Because I saw, when they were creating it, it was obviously a big bait and switch for the liberal left progressive supporters, that they all wanted the, basically, Medicare for all, nationalized, single-payer type thing, and instead they got this, and astute, you know, left-leaning journalists like Greg Palast, and I forget the other guy's name at the Huffington Post, they came up with this explanation how, really, this was a very conservative, right-wing, corporatist, healthcare price-fixing scheme, had nothing to do with socialized healthcare, was, you know, healthcare fascism, in a way.
Obama as a very, very effective Republican in power.
I wonder what you think of all of that.
Help me understand exactly what this changes, I guess.
Right, so I think that I generally agree with what you just said, that this isn't, if you were a true progressive, you know, who wanted the federal government to come in and help poor people, and you didn't like the for-profit medical system, healthcare system, and you want to go towards a more European model, yeah, then I think what Obama delivered is not what you would have wanted.
It's still keeping, you know, the private industry in place, and it's basically just now forcing millions of people to buy their products from them.
And then, yeah, there's some stuff in there, like, okay, now they can't deny coverage to people with pre-existing conditions, and that's kind of a trade-off, but I think the, I mean, that's how the Obama administration got the pharmaceuticals and everybody to stop lobbying against it and to get on board and say, look, we're going to give you all these new customers.
So I think that part is right.
And on that, what I was really concerned about, in other words, if the plan all along had been to give us socialized medicine, then the Supreme Court should have thrown out the individual mandate but kept everything else, because that would have made private insurance untenable.
If, you know, private companies had to insure whoever showed up, even if they already got cancer, but healthy people were allowed to opt out and not get into the risk pool.
I mean, that just wouldn't have worked, and then, you know, all the private insurers would have gone out of business, and then people would have said, well, I guess we need the government to insure everybody.
So the fact that that's not what happened does confirm to me that this is never about so much, you know, the government taking over healthcare as it was more just, like you say, a corporatist thing of shoveling a bunch of money into the hands of a few large healthcare insurers' pockets.
Well, now, is it going to be an example, though, of the middle of the road leads to socialism, if we go a little bit further down the road here?
Because it seems like Peter Schiff was saying, I saw on this YouTube going around on Facebook, for example, that why would anybody pay a healthcare insurance premium ever again?
If the fine is much cheaper, and if the insurance company will be mandated to insure them after they get sick, well, then, that'll be it.
The system will fall apart at that point, not very far down the road now, and then we'll have to have the government as a single-payer anyway.
Yeah, I guess I would need to look at the specific numbers and everything just to see it.
I mean, because it's, yeah, it depends.
If you're just an individual person, it could go cut in one way, but I was hearing some of the numbers about the fines.
If you're well-to-do and you're in a high-tax bracket, and you've got a bunch of kids, I almost think it still would make sense for you to keep your insurance rather than pay the fine.
What about the business owners and the whole rack?
I mean, that's all mandated by law anyway, right?
That benefits include health insurance?
Yeah, right.
Yeah, I do think that a lot of people are pointing to it, and the individual mandate, that's kind of just a red herring.
The real issue is, are employers who currently offer coverage, are they going to run the numbers and just decide it's cheaper to pay the fine?
And there, I don't know, just because I don't have a large bunch of employees where I work, you know what I mean?
So I don't know exactly how those, because it's cheaper to get group coverage than it is for you just to go out and buy yourself.
How realistic is it that the government is going to force the insurance companies really to insure people who are guaranteed loss?
Right, I'm not sure.
I mean, clearly the government is just going to get more and more power as this thing falls apart, but it's hard to know, was this the conscious plan all along, or is that just going to be an unintended consequence?
Yeah, either way, stupidity or the plan, it's always the same disaster for these people.
All right, we'll be right back after this.
It's Robert P. Murphy, Mises.org.
All right, y'all, welcome back to the show.
It's Antiwar Radio.
I'm Scott Horton.
I'm talking with Bob Murphy, and I want to ask you all about the European sovereign debt crisis, this and that.
It seems like it could be exciting, but I also want to give you a chance, though, to wrap up on Obamacare, if there's, you know, important things you need to say about how this thing's going to work that folks need to be ready for.
Well, I think clearly it's going to interrupt the delivery of care, like there's going to be longer wait times and things for standard procedures, and costs are going to go up, and then that's going to be an excuse to ration care.
And the irony is, 20 years from now, when the system is really bad, people are going to say, well, we need a single payer, because clearly we tried the free market and healthcare delivery, and it doesn't work.
So that's why we need the government to step in, because obviously capitalism fails here.
Yeah, it really is that easy to see coming.
And hey, if they got away with pretending that George W. Bush was some kind of Ron Paul figure after the collapse of 2008, then why not?
They can pretend anything they want.
They can pretend that Saddam Hussein was about to take over the world.
All right, well, so what about this whole European meltdown?
There's a lot of scaremongering, but I figure, you know, the more alarmist the thing, the less true it probably is.
But how bad is it over there?
Are the American people going to be forced to give up another 16 trillion dollars or something to bail out the European states?
Well, I think it's pretty bad, and it's just comical, really, just how much they just keep, you know, injecting, whatever, 50 billion here, 70 billion there, so on.
And they just keep doing that, and then it keeps buying them shorter and shorter increments.
You know, like two years ago, when things were kind of bad over there, and they announced a major rescue package that would give them six months breathing room.
And at this point, like, sometimes it literally doesn't even last a week before the crisis seems to return.
And, you know, and the markets rally and everything.
And I guess that kind of makes sense that if you own those stocks, then on the margin, you've already priced and everything, and now you're not sure which way it's going to go.
And if they inject another 30 billion dollars, well then, yeah, that's more money in the financial sector, so the stock price pops.
But, no, I mean, you don't, in my mind, you don't fix problems by printing up money.
All that does is make the hole that much deeper and postpone the crisis so it's that much worse when it finally comes home to roost.
Whether the US will get hit by it, I mean, it doesn't need to be, and they could just put their foot down and stop bailing them out.
But I think the problem is, my concern is, Europe's going to be just awful for the next two years, and that will give artificial strength to the dollar.
And so when people like me are warning about, oh my gosh, Bernanke's really printing, running money like crazy, and the US federal government shouldn't be borrowing so much and having such high deficits, and people will say, but look, the yields on treasuries are fine, and we don't see, you know, a massive flight from the dollar, so you guys are crazy, then partly that's just going to be because Europe is so bad that everyone's fleeing the euro into the dollar.
Which is ultimately just postponing the effect and making it worse for us.
Right, that once everyone settles down, okay, and the situation in Europe is resolved one way or the other, then I think people will look over at the US and say, well, gee, they've been kind of doing the same thing that they were doing in Europe, and why would we continue to lend money to the US government at 2% when they've been running the printing press and they're having trillion dollar deficits, that's crazy.
Well, so what exactly would happen, would it be the end of the world for Greece if they just, if they didn't get bailed out, or what does that mean, the end of the euro, the whole thing unravels, or what?
Well, whether or not it would be the end of the world, I mean, that's not the, I mean, of course, being metaphorical, but yeah, I mean, it would be bad for them, but the point is, really helping, are they really avoiding the pain by doing what they're doing, that's the issue.
It's sort of like when people say, well, gee, what if they had just let, you know, what if we hadn't had TARP, and people get mad and say, oh, well, you know, Murphy, if you hadn't had TARP, then, you know, there would have been a lot of pain, and it's like, well, yeah, but the economy's been awful since then anyway, so it's not like the solution fixed anything, it's just, it may drag out over several years, so I think it's the same thing here that, yeah, Europe's going to be in a painful situation, and if somebody just left, because what would happen is investors wouldn't want to touch Greek debt anymore, and so interest rates there would skyrocket if they thought it was no longer protected by the other Euro neighbors, and so that would be the issue, and, you know, that would happen, so then the Greek government would be in a really bad situation and wouldn't be able to borrow money, so it would have to drastically slash spending, because it wouldn't be able to borrow money from outsiders, and it could only spend what it taxed, and, you know, they're not, their economy's in bad shape, so they're not getting a lot of revenue, but the point is, that's basically what is going to be foisted on them anyway, you know what I mean?
They're going to have to drastically cut spending and live within their means if they want to stay in the Eurozone anyway, so that's not really such an awful thing, at least if they're on their own, they don't have a bunch of international bankers basically dictating their government policies to them.
Yeah, it seems like they would just go ahead, if the crisis is that bad, and I don't know if this is just Greece, so this counts for Italy and Spain and the rest of them or whatever, but if they're that far, you know, their mortgage is that far underwater or whatever, why not just walk away from it, take the, you know, massive depression as it hits, and then just try to get through that quick instead of dragging it out this way.
Dragging it out doesn't seem to be working well for them, they're not any more capable of paying it back a little bit better, I don't know what some textbook says it's supposed to look like, but I don't think it's supposed to look like this, is it?
Right, and maybe another way of putting it is, if people back when the first bailouts were contemplated, if they could have seen what the next two years was going to look like, and that they were going to have to keep upping the ante, and if they knew up front, oh, it's not just this injection of 50 billion euros or whatever, it's going to be, you know, trillions over the next few years, and we're still going to have high unemployment, and people are still going to be wondering, when are we going to get out of this worldwide recession, blah, blah, blah, I mean, I think people up front would have just said, no, forget that, let's just let things fall apart and see what happens, but there's no, you know, that solution you're presenting to us is awful, too, so I think it's that kind of issue that it's sort of like, you know, getting sucked into a quagmire in terms of a military conflict, and if people knew up front what was going to be involved, they never would have agreed to it, but yet, once you're in the middle of it, and people have already died, for some reason it seems rational, like, okay, let's just send in another 30,000 troops, and then I'll fix it, and that's kind of what's going on here.
Well, now, it seems like Federal Reserve policy, whether they're inflating or deflating, always has a lot to do with whether a president gets elected or unelected or reelected, and so I wonder, in this case, I guess you say that as long as the euro is worse, that makes the dollar artificially strong for NASA, does that mean they can just continue to use that cover to inflate, and does that mean that the re-election of the president is more likely, do you think?
Well, yes, up to a point, but what...
I mean, in other words, if Bernanke was on orders to screw Obama really bad and hand the presidency to Mitt Romney, he could do that?
Yes, yeah, for sure, he could do that.
He could just pull back everything and then we would have a major collapse, that's true.
What's weird, though, is there are lots of economists who are urging the Fed to inflate more, and I don't even just mean, like, Paul Cruden, I mean, like, otherwise ostensibly free market guys, and what's odd is that, like, the Fed's own forecasts, they say that unemployment is going to be, you know, high for the next few years and that price inflation is going to be relatively modest, in fact, below, you know, what their range is for their comfort zone, and so if you believe the textbooks that, oh, the Fed has this dual mandate and tries to balance, you know, employment against containing inflation, then since they're under inflation in terms of their forecast and their overall unemployment, they should be expanding more, you know, they should be easing more, and yet they're not.
They're saying, we're holding steady and we're just going to keep monitoring the situation.
So, in other words, if you believed in the worldview of conventional mainstream economics and that the Fed is there to help things, it does look like they're, for some reason, inexplicably standing on the sidelines, and you could be skeptical and think the Fed's trying to give the election to Romney because of that.
So, of course, I don't think so.
I think Bernanke has been doing way too much and he's just setting us up for another crash, but in terms of the conventional way you analyze Fed policy and what a lot of people are saying, they think the Fed is inexplicably admitting it should be doing more, and yet, for some reason, it's not.
That's interesting, because it seems to me like the, well, I'm really bad at electoral politics, but it just seems to me like on the base level mathematics, the people who love Obama love him no matter what he does, and nobody loves Mitt Romney, probably not even his blood relations, and so how could he, when in American politics at that level, it all comes down to the beer test.
Who would you prefer to have a mug of beer with?
Clearly, Obama wins that, right?
If only because he's an ethnic minority or something, whereas Mitt Romney, I've never had a beer with somebody like him.
Well, I don't drink beer.
Well, yeah, I mean, I probably would rather have a beer with Obama just to make a better blog post, but I think the problem is, though, too, that the economy is so bad, and you're right, that what you just said is true, but then there's also all that historical stuff about incumbents don't get re-elected if unemployment's above such and such, so there's that, too.
Yeah, we'll see.
All right, well, listen, thanks a lot for talking at me.
I learned a lot.
Thanks for having me, Scott.
That's Robert P. Murphy, author of The Politically Incorrect Guide to Capitalism.
Read that.
