The Joe Rogan Experience - Joe Rogan Experience #1508 - Peter Schiff

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00:00:04.000 Boom! 0.99

00:00:04.000 Here we go. 0.99

00:00:05.000 Hello, Peter!

00:00:06.000 Joe, nice to see you again.

00:00:08.000 I like how you have the Euro-Pacific capital above your left shoulder.

00:00:14.000 Very nice.

00:00:15.000 Very wise.

00:00:16.000 Well, this is my studio in my basement here in Connecticut where I'm hunkered down.

00:00:20.000 But you know, in honor of doing your show, I poured myself a glass of scotch.

00:00:24.000 Oh, there you go.

00:00:25.000 So I have it.

00:00:26.000 And I'm sure you have something to drink, but I wanted to toast your Spotify deal.

00:00:30.000 Oh, thank you very much.

00:00:31.000 I got a bottle of my good friend Josh Barnett's Warbringer Warmaster Edition Mesquite Smoked Whiskey.

00:00:40.000 Here's to you and Spotify.

00:00:42.000 I think they're getting you cheap.

00:00:44.000 You probably could have held out for more money.

00:00:46.000 Well, you don't know how much I got.

00:00:47.000 Well, I just know what the public says.

00:00:50.000 They don't know how much I got either.

00:00:52.000 Well, good.

00:00:53.000 If you got more, I'll drink to that, too.

00:00:55.000 I'm very happy.

00:00:56.000 Spotify's awesome.

00:00:57.000 I'm very happy.

00:00:58.000 I'm happy to be with a company where they have a vested interest in my success.

00:01:02.000 Like, we're together.

00:01:04.000 That's the beauty of capitalism.

00:01:07.000 Mutually beneficial, voluntary relationships.

00:01:10.000 Yeah, there you go.

00:01:11.000 Exactly.

00:01:11.000 So, why are you in Connecticut and not Puerto Rico?

00:01:14.000 Well, you know, I live in Puerto Rico, and thanks to my appearance on your show, a lot of other people now live there too.

00:01:21.000 I just gotta tell you how many people I run into, and they say, Peter, you know, I moved here because of you.

00:01:26.000 And I say, really, how'd you hear about it?

00:01:28.000 Oh, I'm Joe Rogan.

00:01:29.000 That's amazing.

00:01:30.000 A lot of people have come down here.

00:01:31.000 But I don't think you've been to Puerto Rico?

00:01:33.000 No, I've never been to Puerto Rico.

00:01:35.000 Yeah, because you got an open invitation to come visit me.

00:01:38.000 I'll put you up.

00:01:39.000 I got a nice place on the beach for you.

00:01:41.000 What's their COVID situation like?

00:01:42.000 Hmm?

00:01:43.000 What's the COVID situation like down there?

00:01:45.000 It's hot now.

00:01:47.000 It's July, August, and so I would rather be in Connecticut.

00:01:52.000 I love the weather here in the summer into the fall, and we still maintain a house here.

00:01:58.000 The house that I lived in before we moved to Puerto Rico, so now this is more of a summer home.

00:02:03.000 And so we're here for the summer, although we may be here into the fall.

00:02:07.000 I think we will because the schools, you know, are going to be remote now.

00:02:13.000 So normally I would come back.

00:02:14.000 The schools start in mid-August in Puerto Rico.

00:02:17.000 So we would normally come back then.

00:02:19.000 But since they're going to be taking the classes online, we'll probably end up staying in Connecticut for a little longer, which I like.

00:02:26.000 But I really enjoy Puerto Rico.

00:02:28.000 It's a great place to live.

00:02:30.000 You can't beat the tax breaks, so this is going to be an important thing, especially if Biden ends up winning, which it looks highly likely that that's going to be the case.

00:02:40.000 I think a lot more people are going to be coming down there to try to escape what will be real confusion.

00:02:52.000 Well, let's get into that.

00:02:54.000 So you think that Biden has a very high likelihood of winning?

00:02:58.000 Here we are, if people come upon this in the future.

00:03:02.000 Today is the 14th of July, and we're a few months away from the election.

00:03:07.000 You feel like it looks like Biden is moving into the direction of eventually winning.

00:03:13.000 Well, I think he's already moved in that direction.

00:03:15.000 And so the question is, can Trump change that direction between now and Election Day?

00:03:21.000 And I think it's going to be very challenging.

00:03:23.000 Maybe his best opportunity is going to be the debates.

00:03:27.000 We'll see.

00:03:28.000 I don't think they're going to have them, though.

00:03:29.000 But the big problem for Trump, and I voted for Trump the first time.

00:03:36.000 And, you know, I was initially going to vote libertarian, which is something I do.

00:03:40.000 And by the way, there's a candidate, Joe Jorgensen, who you should have on your show.

00:03:44.000 I don't know if you've thought about it, but there is a woman running for president, and she will be on the ballot in every state, Joe Jorgensen from the Libertarian Party.

00:03:53.000 And so everybody who thinks there should be a woman president, I actually agree right now, and that's who we should elect.

00:03:58.000 Is that who you're voting for?

00:04:00.000 Is that who you're going to vote for?

00:04:03.000 Well, I can't vote for anybody.

00:04:04.000 I live in Puerto Rico.

00:04:05.000 But I thought Puerto Rico was a part of the United States.

00:04:08.000 Sort of.

00:04:08.000 It is.

00:04:09.000 It is part of the United States.

00:04:10.000 But you remember from the revolution, no taxation without representation.

00:04:15.000 So what happens is when you move to Puerto Rico, you no longer have to pay the federal income tax or the Obamacare tax, which is great.

00:04:24.000 But then you can't vote for...

00:04:25.000 For the president, and you don't have any member of Congress or you don't have a senator.

00:04:31.000 So being in Puerto Rico, I have no representation in Congress, and I can't vote for president.

00:04:36.000 But the tradeoff is I don't have to pay the taxes.

00:04:39.000 Wow.

00:04:40.000 So that's a good tradeoff that pretty much everybody's willing to make.

00:04:44.000 So I can't vote.

00:04:46.000 And normally I vote for the lesser of two evils anyway, and most of the time I vote for the loser.

00:04:51.000 So as far as I'm concerned, giving up my right to vote for the loser, It's not much of a sacrifice.

00:05:20.000 Voting for anybody, it doesn't really matter who you vote for in a state like Connecticut.

00:05:25.000 But as I was saying, the problem for Trump, and I was one of the few people who was in the media saying that I thought Trump had a real good shot at winning.

00:05:35.000 I didn't know it was in the bag, but I thought that he was more likely to win than lose, even though everybody thought it was a long shot.

00:05:42.000 And the reason that I thought that Trump could win is because Trump was telling the truth About how bad the economy was.

00:05:51.000 He wasn't regurgitating the lies that the Obama administration had been telling or that Wall Street had been telling about how we had a real recovery.

00:06:00.000 I knew that we had a bubble inflated by the Federal Reserve.

00:06:05.000 Where you can see the stock market at record highs and these phony unemployment numbers, I knew laid a weak economy.

00:06:13.000 And Trump knew that too.

00:06:14.000 And Trump spoke to the forgotten men and women of this bubble economy.

00:06:19.000 And his message really resonated.

00:06:21.000 About how we were a shadow of our former self, that our industrial might had decayed, we had all these big trade deficits, that the stock market was a bubble, all the numbers were fake, the real unemployment number rate wasn't 5%, but 20%,

00:06:36.000 30%, 40%, and that he was a non-politician, he was going to clean house, he was going to Drain the swamp.

00:06:44.000 He was going to put politics aside and bring a businessman's perspective to Washington.

00:06:50.000 Drain that swamp.

00:06:52.000 Eliminate the national debt.

00:06:53.000 Make America great again.

00:06:55.000 And that message resonated with a lot of people.

00:06:58.000 And a lot of those people were maybe afraid to be honest with the pollsters because they didn't want to admit that they were going to vote for this racist, misogynist or whoever the media was portraying him.

00:07:08.000 So I thought he could win.

00:07:10.000 And he did.

00:07:12.000 But here's the problem.

00:07:14.000 Now that he's been in office for three years, he didn't drain the swamp.

00:07:18.000 He made the swamp deeper, right?

00:07:21.000 He didn't get rid of the deficit.

00:07:23.000 I mean, the deficit is bigger than ever even before COVID. All he did was...

00:07:32.000 From Obama and help make it get bigger.

00:07:35.000 He became a cheerleader for the stock market.

00:07:37.000 He didn't care it was a bubble.

00:07:39.000 All of a sudden, all the government numbers that were fake under Obama were all of a sudden real, like they just came down from God on a tablet on Mount Sinai.

00:07:48.000 And he began talking about this low unemployment and this booming economy, the greatest economy in the history of the world, the greatest economy ever.

00:07:55.000 And none of that was true.

00:07:57.000 And so you have the same people who voted for Trump thinking that he would shake things up, thinking that he would throw a monkey wrench in the system and make their lives better.

00:08:05.000 And their lives aren't better.

00:08:07.000 They're worse.

00:08:08.000 People have more debt.

00:08:09.000 You know, the bubble got bigger.

00:08:11.000 The trade deficits that Donald Trump criticized are bigger now than they were before he was elected.

00:08:17.000 And obviously the deficits are much bigger even before COVID. So I just don't see how Trump convinces those swing voters, those blue-collar Reagan Democrats in the Rust Belt who decided they had nothing to lose and so they take a chance on Trump.

00:08:32.000 Why should they vote for him again?

00:08:34.000 I mean, now they may take a chance on Biden, even though, I mean, Biden doesn't represent any change from the status quo.

00:08:40.000 He's just more of the same.

00:08:42.000 But, you know, once you're the insider and Trump's now the insider, you know, he doesn't have that edge for re-election.

00:08:49.000 What do you think went wrong and why do you think Trump just made the swamp deeper?

00:08:53.000 Do you think that he was deceptive when he was running or do you think the influences once he got into office were greater than he anticipated?

00:09:01.000 What do you think happened?

00:09:03.000 Well, I have no idea.

00:09:04.000 I mean, even Ronald Reagan, right?

00:09:06.000 Ronald Reagan, when he was elected, and he was a very principled conservative, right?

00:09:10.000 Unlike Trump, you know, he really talked walk the walk, not just talk the talk.

00:09:16.000 And he was a big supporter of Barry Goldwater.

00:09:21.000 When Reagan came in, he really wanted to shrink government.

00:09:24.000 I mean, he campaigned about getting rid of the Department of Education, the Department of Energy, or I forget.

00:09:30.000 He really wanted to shrink government and cut spending.

00:09:33.000 But he was never able to do that.

00:09:35.000 He was able to cut taxes, but he wasn't able to cut spending.

00:09:39.000 Trump never really campaigned on cutting spending.

00:09:42.000 He didn't want to talk about that because he didn't want to alienate any voters.

00:09:45.000 So he just talked about cutting taxes.

00:09:47.000 And he did officially cut taxes.

00:09:51.000 But he actually raised taxes.

00:09:54.000 That is the important thing that you have to recognize, is that government spending is taxation.

00:10:01.000 And what happened to government spending under Trump, even before it went through the moon with COVID-19?

00:10:07.000 And we'll get to all the COVID stuff.

00:10:09.000 But even before then, Trump signed on to all kinds of increases in government spending.

00:10:14.000 More spending on the military, more spending welfare, huge increases in government spending.

00:10:20.000 Those are tax hikes.

00:10:24.000 Cut income taxes, but the income tax is just one way the government pays for spending.

00:10:29.000 Because all government spending has to be paid for by the public.

00:10:32.000 One way or another.

00:10:33.000 We don't get any government for free.

00:10:35.000 Everything the government does costs us money.

00:10:37.000 So every dime they spend represents taxation in some form.

00:10:42.000 And what they've been doing is they've been printing money.

00:10:47.000 And in fact, right now, the Federal Reserve is printing about 55 cents out of every federal dollar that's spent.

00:10:54.000 So more money is being printed and spent than collected in taxation.

00:10:59.000 But all that printing, all that spending that is being paid for by a printing pass, we don't get that for free.

00:11:06.000 There is a cost.

00:11:07.000 See, when the government takes our money through an income tax, they take my money that I earned and they give it to somebody else who didn't earn it.

00:11:15.000 And now that person spends the money.

00:11:16.000 But because I don't have it, I can't spend it.

00:11:18.000 I can't invest it or save it.

00:11:20.000 I don't have it anymore.

00:11:21.000 The government took it from me in taxes.

00:11:23.000 But if the government doesn't take it from me, they just print money and they hand it to somebody else who didn't earn it and didn't do any work, didn't produce any goods or provide any services.

00:11:32.000 They just got money from the government.

00:11:35.000 That still costs me because what happens is when that money is spent in the circulation, it bids up prices.

00:11:41.000 And so prices are now higher than they would have been had that new money not been printed.

00:11:46.000 And so now everything that I want to buy costs more than it otherwise would have cost.

00:11:51.000 Either the prices went up or it prevented prices from going down.

00:11:55.000 And so now my purchasing power has been diminished.

00:11:58.000 And so either the government takes your money Through an income tax or a sales tax or something, or they take your purchasing power through an inflation tax.

00:12:08.000 And so that's what Trump decided to do, to pay for government through inflation rather than taxation.

00:12:13.000 But what we know from history is that is the most expensive way to pay for government.

00:12:18.000 And in fact, it hits hardest the middle class and the poor.

00:12:22.000 Because the rich have a lot of assets, they have a lot of debt, not consumer debt like on a credit card, but where they borrow money to accumulate income-producing property, to buy companies, stocks, things like that.

00:12:36.000 And so inflation helps those people.

00:12:38.000 If you have debt to buy assets, inflation wipes out your debt.

00:12:43.000 But if you're just saving money and working for a living and getting a paycheck, The inflation tax is very heavy on you.

00:12:49.000 And that inflation tax is going to get much, much higher under Biden.

00:12:54.000 For all the talk about all these big government programs, and we'll talk about that, that he wants to pay for by taxing the rich, the rich aren't going to pay those taxes.

00:13:03.000 Most of the money is going to come from the poor and the middle class through the inflation tax.

00:13:08.000 But getting back to where I think Trump went wrong.

00:13:11.000 So Trump gets into office and he had promised to make America great again.

00:13:16.000 And the reason that America is not great is because government is too big.

00:13:20.000 When America was great, we had very, very small government.

00:13:24.000 Government was an afterthought.

00:13:27.000 On all levels, maybe state, federal, and local, maybe it was 5% of GDP. We didn't have an income tax, corporate or personal.

00:13:34.000 We didn't have Social Security.

00:13:36.000 We didn't have minimum wage or any of these laws.

00:13:39.000 We had a very, very tiny government.

00:13:41.000 And because government was tiny, the economy got very big.

00:13:44.000 We had all kinds of freedom.

00:13:46.000 And because we were free, we were very productive and the living standards were rising and we were eradicating poverty.

00:13:53.000 We were making all kinds of strides.

00:13:55.000 The greatest economy in the history of the world was produced from the freest people in the history of the world, which was the United States.

00:14:03.000 Well, Trump wanted to make America great again.

00:14:05.000 The only way to do that would be to shrink government, cut government spending and free up all those resources back into the private sector so that they can be used efficiently again.

00:14:15.000 But the problem is, how do you cut government spending when every single program has its own constituency that benefits from it?

00:14:23.000 And so once you're there, you can't cut anything unless you're willing to stand up to all the politicians and the special interest groups.

00:14:31.000 And apparently Trump wasn't willing to do that.

00:14:33.000 I mean Trump, when he got into office, became a politician.

00:14:38.000 Maybe he was one when he ran for office, but he was more concerned about getting re-elected, which is a shame because he probably won't.

00:14:45.000 He should have used the bully pulpit and used his office right away to level with the American public, to look him square in the eye and tell them that government is too big and spending needs to be cut.

00:14:58.000 Including things like Social Security and Medicare and all these sacred cows that nobody would gore. 0.97

00:15:03.000 Trump should have been the guy to do it.

00:15:05.000 He should have said the buck stops with me.

00:15:07.000 I don't care if I don't have a second term.

00:15:09.000 And he should have vetoed all of those bills that he signed.

00:15:13.000 He never should have agreed to allowing the debt ceiling to go up.

00:15:17.000 He should have enforced that.

00:15:18.000 So we now have $26.5 trillion of debt.

00:15:21.000 When he came into office, it was just under $20 trillion.

00:15:24.000 So we've already added $6.5 trillion since he became president.

00:15:28.000 I would not have allowed the debt ceiling to go up at all.

00:15:31.000 Not one nickel.

00:15:32.000 And I would have forced the government to cut government spending.

00:15:34.000 And that's what Trump should have done.

00:15:36.000 But he didn't want to do it because he was more concerned about the politics of it.

00:15:41.000 When you say I would, are you running for president?

00:15:43.000 Are you ready to do this?

00:15:44.000 I'm just saying what I would have done had I been Trump.

00:15:45.000 Are you ready to do this, Peter?

00:15:46.000 Are you ready to do this?

00:15:48.000 I'm out running.

00:15:50.000 But we need someone who understands.

00:15:52.000 It would be interesting.

00:15:52.000 I could be the first Puerto Rican president.

00:15:55.000 Did you ever watch the Sweat Hogs? 0.99

00:15:58.000 Yes, sure.

00:16:00.000 Yeah, I'm on Epstein.

00:16:02.000 I'm a Puerto Rican Jew.

00:16:03.000 Epstein played my brother in an episode of News Radio.

00:16:07.000 Really?

00:16:08.000 Yes!

00:16:08.000 He played my older brother who was a priest who beat us up.

00:16:10.000 It was fun.

00:16:11.000 Gabriel Kaplan's show.

00:16:12.000 That was the 1970s.

00:16:13.000 I could be a Puerto Rican Jew.

00:16:16.000 I can't vote for the president.

00:16:39.000 I'm the only person elected president who couldn't vote for himself.

00:16:44.000 Yeah, well, I appreciate that.

00:16:46.000 And, you know, you've got a great audience, and I'm hoping to clear up a lot of misconception out there, because I've been saying, you know, the only thing that spreads faster than the coronavirus is ignorance, you know, about economics, about finance.

00:17:00.000 And so I want to clear that up.

00:17:02.000 And, you know, a good place to get started is to really talk about the current state of the U.S. economy and where we were, right?

00:17:10.000 We're good to go.

00:17:19.000 We're good to go.

00:17:34.000 The bubble was already deflating before COVID. It started to deflate in the fourth quarter of 2019. That's when the Federal Reserve stopped hiking interest rates and then started cutting them again and started doing quantitative easing again.

00:17:48.000 And then COVID-19 came.

00:17:50.000 It was like a giant spear that put a gaping hole into a bubble that was already deflating.

00:17:55.000 Can I pause you there, Peter?

00:17:57.000 Why did that happen?

00:17:59.000 Why did that process take place before COVID-19?

00:18:02.000 Well, because again...

00:18:04.000 Trump was very critical of Janet Yellen during the Obama years, rightly so.

00:18:11.000 Because Yellen kept interest rates artificially low to make Obama look good by propping up the stock market and the real estate market with cheap money.

00:18:22.000 But doing that is what prevented a real recovery that would have benefited Main Street.

00:18:27.000 And so those are the people that Trump was tapping into.

00:18:30.000 The guys on Main Street that were getting screwed as the guys on Wall Street were being enriched by bad monetary policy.

00:18:38.000 So Trump was right to criticize Yellen.

00:18:41.000 And then he didn't want to reappoint her because supposedly he was going to reappoint somebody that would do the right thing.

00:18:47.000 But as Powell was doing the right thing, albeit too slowly, Powell started to correct the problem by raising interest rates and shrinking the balance sheet.

00:18:56.000 But when that began to impact the markets, Trump was like, oh, he started criticizing him.

00:19:01.000 We're going to fire you. 0.85

00:19:03.000 You're a terrible Fed chairman. 0.98

00:19:04.000 He was doing the right thing.

00:19:06.000 We need higher interest rates.

00:19:08.000 And unfortunately, higher interest rates means the stock market's going to go down.

00:19:12.000 I mean, that's just the reality.

00:19:14.000 The real estate market's going to go down.

00:19:15.000 We're addicted to cheap money like a drug addict is addicted to heroin.

00:19:19.000 But if you've got a guy addicted to heroin, the solution isn't more heroin so he stays high.

00:19:24.000 The solution is, okay, no more heroin, and now you're going to go through withdrawal.

00:19:29.000 So the economy started to go through withdrawal as the Fed was withdrawing that cheap money, and Trump was like, no, I don't want withdrawal.

00:19:36.000 Who's going to vote for me if everybody's hung up?

00:19:39.000 I want to party again.

00:19:40.000 I want the stock market at record highs.

00:19:43.000 And so because we did this, we never actually had a real recovery.

00:19:50.000 We just put more air into the bubble.

00:19:52.000 But when COVID started, this is important to understand.

00:19:56.000 So COVID-19 hits.

00:19:59.000 And all of a sudden, you know, and I don't even know, I've seen some of your discussions on the podcast about COVID itself and whether or not the threat is being exaggerated.

00:20:10.000 Is it really as big a health threat as a lot of people say?

00:20:14.000 And, you know, I'm not an expert there.

00:20:17.000 You know, I tend to always be suspicious.

00:20:22.000 I'm not a doctor.

00:20:26.000 I'm not an immunologist.

00:20:28.000 Let's just take them at their word that it's as bad as they say.

00:20:32.000 I just want to focus on the economics of it.

00:20:36.000 When COVID hits and people start staying home and they're not going out and people start losing their jobs and the economy starts tanking, right?

00:20:47.000 The government comes in as if it's the government's job to rescue the economy.

00:20:52.000 And the politicians say, in fact Trump himself said, oh we're at war.

00:20:56.000 I'm a wartime president.

00:20:57.000 This is like World War II. Remember that?

00:20:59.000 Remember when he said that?

00:21:01.000 Yeah, it's World War II and we have to sacrifice.

00:21:04.000 Americans have to sacrifice to beat COVID-19, the way a prior generation sacrificed to beat Nazi Germany, Imperial Japan, we have to sacrifice. 0.78

00:21:19.000 Except what we're doing now is the complete opposite of the actual sacrifice that Americans were asked to make.

00:21:32.000 We're good to go.

00:21:45.000 Not even 10% of Americans paid any income tax at all.

00:21:49.000 Fewer than 10%.

00:21:51.000 Really?

00:21:51.000 1942, there was a victory tax.

00:21:53.000 And after the victory tax, more than a third of Americans began paying income taxes.

00:21:59.000 They weren't paying any income taxes before the war.

00:22:01.000 All of a sudden they're paying income taxes and in 1942, They created the withholding tax, which Americans, you know, we pay it today, you think it was always there.

00:22:11.000 Up until 1942, nobody had any income taxes withheld from their pay.

00:22:15.000 What happened was, if you were among the few people who actually paid income taxes, you didn't write a check until April 15th of the following year.

00:22:23.000 You made no payments.

00:22:24.000 You made no quarterly payments.

00:22:25.000 You had no payroll withholding.

00:22:27.000 That started as part of the victory tax.

00:22:30.000 So, massive tax increases on Americans.

00:22:35.000 In addition to that, the US government told Americans, we need more money than this.

00:22:40.000 You need to loan us money.

00:22:42.000 And so the Treasury started selling these war bonds to the public.

00:22:47.000 And middle class Americans bought the equivalent of trillions of dollars of war bonds.

00:22:53.000 So the government taxed the middle class and borrowed from the middle class to pay for the war.

00:22:59.000 And this is in 1940. We just went through the Great Depression.

00:23:03.000 So these are Americans that just lived through a 10-year depression, the worst period in American history, yet they had enough money to loan trillions to the U.S. government and to pay much higher taxes than they were paying before.

00:23:18.000 And in addition, nobody got a bailout.

00:23:21.000 No businesses, if you ran a restaurant and nobody was coming to your restaurant because your customers were off We're now working harder to pay higher taxes.

00:23:32.000 People weren't taking vacations.

00:23:34.000 They weren't going to theaters.

00:23:35.000 They weren't staying in hotels.

00:23:37.000 But none of these small business owners got one nickel from the US government.

00:23:41.000 The government didn't loan money to anybody, didn't bail anybody out.

00:23:44.000 What are we doing now?

00:23:45.000 The opposite.

00:23:46.000 The government is cutting people's taxes.

00:23:48.000 The government is loaning.

00:23:50.000 But that's a different time, right?

00:23:53.000 This is a time of a united country that is facing a global threat from a tyrannical German Nazi regime.

00:24:02.000 It's a different situation than dealing with a virus.

00:24:06.000 Well, first of all, It's Trump and other people that made the comparison to World War II. I understand that.

00:24:13.000 This was a global threat.

00:24:15.000 This was a real war.

00:24:17.000 This was actually worse.

00:24:18.000 Believe me, COVID-19 is not as bad as having a world war. 0.93

00:24:22.000 Not even close.

00:24:22.000 I would much rather fight a disease than to fight Hitler and Japan.

00:24:28.000 I mean, this is not as bad as what people had to deal with in the 40s.

00:24:31.000 Would you agree with that?

00:24:32.000 Of course.

00:24:33.000 Yeah, of course.

00:24:34.000 Okay.

00:24:34.000 But the concept is the same.

00:24:37.000 Government had to spend a lot of money fighting this war.

00:24:41.000 And where did it get the money?

00:24:42.000 It had to get it from the people.

00:24:44.000 And if people were disrupted, a lot of people lost money because of World War II. It wasn't their fault.

00:24:50.000 If you ran a restaurant and now your customers weren't coming because they went to fight the war, it wasn't your fault that your business dried up.

00:24:58.000 Can I pause you for a second?

00:25:00.000 Do you think that, first of all, We had to do something to stop the spread of COVID-19.

00:25:10.000 I agree.

00:25:11.000 I agree.

00:25:12.000 But the government didn't have to bail anybody out.

00:25:15.000 We have a problem.

00:25:16.000 We have to deal with our issues.

00:25:18.000 Peter, we have a problem listening to each other.

00:25:20.000 Let me explain it to the people that are listening.

00:25:22.000 We're on Skype and unfortunately when you talk and I talk we can't kind of hear each other.

00:25:28.000 And you're not wearing headphones, so it's weird.

00:25:31.000 Well, I got an earpiece.

00:25:32.000 Okay, okay.

00:25:33.000 But there's a little bit of a delay, so just let me...

00:25:35.000 This is one of the reasons why I stress it's so much better to do these things in person, and I understand that it's impossible for you to do that right now.

00:25:42.000 When you have a situation like COVID-19 and these medical experts say, hey, we've got to do something.

00:25:49.000 We've got to shut down most of what we do.

00:25:54.000 We've got to shut down a lot of businesses.

00:25:56.000 We've got to shut down schools and make things remotely.

00:25:59.000 There's going to be a situation where there's going to be a lot of people that are not going to be able to work, but we want to keep these businesses alive.

00:26:07.000 This is a very unique situation.

00:26:09.000 And this is not like...

00:26:11.000 Any situation we've ever faced in my lifetime, what do you think could have been done that would have been a better solution than what the government did in terms of bailouts, in terms of telling people to stay home?

00:26:23.000 Like, what could have been done?

00:26:25.000 Yeah.

00:26:26.000 Well, first of all, you have to remember that the government doesn't have any money, right?

00:26:30.000 The government only has money it takes from the people, one way or another.

00:26:34.000 Grover Cleveland, who was the president in the late 19th century, he had a good quote, he said, while the people must support the government, the government should never support the people.

00:26:45.000 And so I agree, let's say we have to shut down the economy temporarily.

00:26:50.000 People should have enough savings to weather the storm.

00:26:55.000 Businesses should have enough savings to weather the storm, like they did in 1940. Average Americans had lots of money in the bank.

00:27:03.000 They weren't loaded up with debt.

00:27:05.000 They didn't have credit card debt.

00:27:06.000 They didn't have student loans.

00:27:07.000 They didn't have car loans.

00:27:09.000 They were solvent.

00:27:11.000 Even after a Great Depression, they were solvent.

00:27:14.000 We lived in a bubble economy.

00:27:16.000 Everybody was paycheck to paycheck.

00:27:18.000 Nobody had anything.

00:27:20.000 Businesses couldn't survive if their revenue stopped.

00:27:22.000 Workers couldn't pay their rent if they didn't get their income.

00:27:27.000 That's not right.

00:27:29.000 That's part of the bubble.

00:27:30.000 So the fact that we were so ill prepared for a rainy day is because we had no rainy day fund.

00:27:35.000 We should have been able to deal with this on our own.

00:27:38.000 Now, we're not getting a freebie from the government.

00:27:42.000 Peter, we're at now, we basically locked down somewhere around March.

00:27:50.000 We're four and a half months in, or four months in now.

00:27:54.000 That's a long, rainy day.

00:27:56.000 Four months is a third of a year.

00:27:59.000 There's very few human beings that have enough money to last four months.

00:28:04.000 I'm sure you do, and I do, but most folks out there listening don't have enough money to live and feed their families and pay their mortgage or pay their rent and pay their car payments for four months. 0.95

00:28:17.000 That's a long fucking time. 0.95

00:28:20.000 Right. 0.98

00:28:20.000 But they're going to end up suffering much more in a year or two or three as a result of the massive inflation that has been unleashed to finance all the bailouts and the stimulus. 0.98

00:28:34.000 But don't you agree that it's a good idea to do something just to keep everyone alive, just to keep businesses alive, just to keep people in their homes, just to keep...

00:28:45.000 Well, first of all...

00:28:46.000 First of all, a lot of the businesses should have failed even before.

00:28:51.000 I mean, the Fed has been keeping a lot of businesses afloat that should have failed years ago.

00:28:55.000 And maybe COVID would have been the final nail in their coffins, and now they've got another lifeline.

00:29:01.000 But these businesses are damaging the economy.

00:29:04.000 See, businesses that are not profitable in a free market should shut down.

00:29:08.000 Can I pause you?

00:29:11.000 Let's talk about my business.

00:29:12.000 I'm in the business of comedy.

00:29:13.000 Comedy clubs are suffering terribly right now because there's very few states that are allowing people to go out, wear masks, socially distance, and go to comedy clubs.

00:29:24.000 LA is not allowing any of that, and they haven't since March.

00:29:27.000 The comedy store, which is my home, has been shut down since March.

00:29:31.000 All these clubs have been shut down all across the country through no fault of their own.

00:29:36.000 It's not like these people...

00:29:37.000 Oh, I know that.

00:29:37.000 It doesn't matter that it's not their fault.

00:29:39.000 I understand that, but it's not like they've done anything wrong.

00:29:43.000 It's the state of California.

00:29:45.000 If the state of California is going to order businesses shut down, and then the state of California wants to provide some kind of economic relief, let California do it.

00:29:56.000 Let California impose higher taxes on whoever they think should fund it. 0.99

00:30:01.000 We can't just use the Federal Reserve as a piggy bank.

00:30:04.000 The Federal Reserve cure is going to do more damage than the coronavirus disease.

00:30:09.000 And I think if the states knew that they would have to bear the economic consequences of their own decision making, they would do a better cost-benefit analysis on what they shut down and how they do it.

00:30:21.000 Right now, every state is like, oh, let's shut everything down and the federal government's going to bail everybody out.

00:30:26.000 So we don't care if we put people out of work because they're going to get these enhanced benefits From the U.S. government.

00:30:31.000 Oh, we don't care if we shut down businesses because they're going to get these PPP grants from the government.

00:30:37.000 But if the federal government let every state know, look, you make a decision.

00:30:41.000 You handle this the way you want and you pay for it.

00:30:45.000 So you do a cost-benefit analysis.

00:30:47.000 Because thinking that everything is free, that is the problem.

00:30:51.000 We are doing so much damage to the economy.

00:30:54.000 People have no idea.

00:30:55.000 We are going to get such a massive economic collapse.

00:30:58.000 Far worse than what I thought was coming when I did your show the last few times.

00:31:02.000 This is going to be much worse.

00:31:03.000 We are compounding the mistakes of the past with much bigger mistakes.

00:31:07.000 I mean, if you think it's bad now with the civil unrest, it's going to get a lot worse when there's no food, when we run out of stuff.

00:31:15.000 Can I pause you?

00:31:17.000 Last time you were on, you were predicting the bubble of commercial real estate and a lot of other issues.

00:31:27.000 What do you think is different about that situation now?

00:31:31.000 And how much does that compound what we're dealing with currently?

00:31:35.000 Well, obviously, the coronavirus has made the problem worse for commercial real estate.

00:31:42.000 I mean, commercial real estate is going to get killed for so many reasons.

00:31:45.000 It was in trouble, I think, before COVID. But COVID, again, just accelerated the process.

00:31:50.000 But obviously, if you are a retailer...

00:31:54.000 You know, no one's coming into your store, your restaurant, if you got a gym, if you got a movie theater.

00:31:59.000 So you're not collecting any rent.

00:32:02.000 So you want to default.

00:32:03.000 And so now your landlord's not getting paid and he might have a mortgage and now he can't pay because he's not getting rent.

00:32:10.000 You've got all these office buildings where a lot of offices now, like my company, almost all my people are working from home now.

00:32:17.000 I mean, I got some people that come into the office, but I got a lot of people working from home.

00:32:20.000 And so a lot of companies are thinking, hey, I don't need all this commercial space.

00:32:25.000 I don't need this big office anymore because more of my people are working from home.

00:32:28.000 So now you have pressure on the rent.

00:32:31.000 So that was already happening.

00:32:32.000 You had WeWork that blew up and they had rented all this space that was now on the market for sublease.

00:32:39.000 But all this was inflated by the Fed.

00:32:42.000 Keeping interest rates artificially low to prop up these bubbles made that real estate bubble very, very big.

00:32:48.000 And so now it's going to be far more disruptive when it pops.

00:32:52.000 But it's got to pop.

00:32:53.000 You know, trying to prevent bubbles from deflating by trying to blow more air into them just makes it worse.

00:32:59.000 Maybe you delay the day of reckoning a little bit, but you make the day of reckoning much worse because now you have additional mistakes that you need to reckon with.

00:33:07.000 I understand.

00:33:07.000 So it's essentially like a pull-off-the-band-aid situation.

00:33:11.000 And we have to have a healing moment.

00:33:15.000 You have to let things collapse that need to collapse that should have been done a long time ago because of mismanagement.

00:33:25.000 Yeah, and you have to understand that we're ripping the band-aid off a wound that the government inflicted us with in the first place.

00:33:31.000 Yes.

00:33:32.000 The free market never would have screwed us up this much.

00:33:36.000 It was government interference in the free market.

00:33:39.000 That's why, you know, capitalism gets a bad name.

00:33:42.000 You know, that's why, you know, we talk about on one of these earlier podcasts about when I went to Occupy Wall Street years ago and I went down to Zuccotti Park because you had all these young protesters who were blaming Wall Street for the bailouts and for the financial crisis.

00:33:57.000 And I was saying, no, it's not Wall Street that took the bailouts.

00:34:00.000 Blame the government for providing the bailouts, for making them available.

00:34:04.000 Blame the Federal Reserve for funding all this and inflating the bubble.

00:34:08.000 Yes.

00:34:09.000 But, you know, the interesting thing, if I tried to do that today, if I tried to go to one of these protests, one of these Black Lives Matter protests or any of these, you think they'd be civil?

00:34:18.000 You think I could do that?

00:34:19.000 You think I could walk into a crowd of hundreds of people and take the opposite position and walk out of there? 0.99

00:34:24.000 They would beat you to death. 1.00

00:34:26.000 They would beat you to death, 100%.

00:34:29.000 Yeah, so I mean, it really shows you the loss of civility in just, you know, 10 years.

00:34:33.000 Well, it's not just a loss of civility, it's a loss of opportunity and the loss of faith in the system and the future if we stay on the same path.

00:34:44.000 That's part of the problem.

00:34:45.000 People don't believe that if we keep going the way we're going, that things will work out in an equitable, fair, and balanced way.

00:34:57.000 And that's where young people today...

00:34:59.000 The important point I wanted to make, though, too, when I went back to America in 1940, was to show that the American middle class was real strong.

00:35:09.000 They could afford to pay for World War II and to provide for their own families.

00:35:14.000 Because now they keep comparing World War II now because we're running up as much debt now as we ran up during World War II. But we had the capacity to pay it back back then.

00:35:25.000 That was the point.

00:35:26.000 The debt went way down.

00:35:27.000 Debt to GDP went way down in the decades after World War II because Americans had the capacity to pay back what they borrowed to fight the war.

00:35:36.000 We don't have that capacity now.

00:35:39.000 I mean, the debt's never going to go down.

00:35:40.000 The debt's going to keep on rising and rising and rising until the dollar implodes.

00:35:45.000 See, that is the real crisis that we're headed for.

00:35:48.000 It's going to be a collapse in the value of the dollar.

00:35:50.000 Because right now we're printing money.

00:35:53.000 And the government is sending it out.

00:35:55.000 And people are able to buy stuff with it.

00:35:58.000 But that's going to come to an end because the world is no longer going to accept US dollars as the reserve currency.

00:36:06.000 See, that's the unique privilege that we've enjoyed for several generations now and that we've abused to the point where we're going to lose it.

00:36:14.000 See, right now we're able to print money and we use that money we print to buy all sorts of stuff that the rest of the world produces that we didn't have to produce ourselves.

00:36:23.000 But producing goods requires capital, it requires labor, it requires land, it requires real resources.

00:36:29.000 But we get all this stuff for free.

00:36:31.000 We just create money and say, here you go, and they send us stuff.

00:36:35.000 And to make it even better for us, they take the money that we send them, the paper, and they loan it right back to us at very low rates of interest.

00:36:41.000 They buy our bonds.

00:36:42.000 They buy our mortgage-backed securities.

00:36:44.000 So Americans get to spend all this borrowed money that they didn't save.

00:36:47.000 We get to consume all this stuff that we didn't produce.

00:36:50.000 And so we have an artificially elevated standard of living.

00:36:53.000 We live beyond our means.

00:36:55.000 That's going to come to an end because foreigners are going to realize that we're never going to stop printing money, that the deficits are never going to be brought under control, that we're going to have We're not going to be able to import anything anymore. 0.98

00:37:12.000 And the only things we're going to be able to buy is the stuff we make ourselves, except we don't make much stuff anymore.

00:37:18.000 So prices are going to go through the roof.

00:37:20.000 That is the real economic consequences.

00:37:22.000 And so it's not going to matter that the government sends you a stimulus check if you can't buy anything with it.

00:37:28.000 Because the government can't create purchasing power.

00:37:30.000 They can print all the money they want, but none of that printed money adds any purchasing power.

00:37:37.000 Right, but there is, if the government gives money to people, they will be able to buy things and people still are making things.

00:37:47.000 But now, but when the dollar's value collapses, see, you can't keep printing trillions and trillions of dollars and expect the dollars not to lose purchasing power.

00:37:58.000 Because paper money, all that does is that allows us to divvy up what we produce.

00:38:05.000 You have all these Americans Peter, as an economic expert,

00:38:34.000 what would you have done differently if you could have advised this government Let's go back to March when everything was shutting down.

00:38:44.000 What would you have advised differently?

00:38:47.000 Again, first of all, I would allow the states to be responsible for their own policy.

00:38:53.000 So you decide what you want to do in your own state as far as what businesses you want to close, what you want to do, and you I think that certain businesses or individuals need to get money, then the state will provide it based on local taxpayers.

00:39:10.000 But what I would have done on the federal level is I would have dramatically cut government spending even after COVID-19 because government spending is a drain on the private sector.

00:39:22.000 It's a drag on the economy.

00:39:24.000 It's the government taking resources away from the private sector where they would be used efficiently and squander them in the public sector.

00:39:32.000 Can I pause you for a second there?

00:39:33.000 It's a burden.

00:39:34.000 Can I pause you?

00:39:35.000 I would have lightened the burden.

00:39:37.000 When you say lightened the burden, what would you have cut and how would you do that?

00:39:42.000 When you think about all the different aspects of the government that are essential, things that need to be in place, what would you have cut?

00:39:49.000 Most of the government money is transfer payments.

00:40:03.000 Can you explain that?

00:40:04.000 What do you mean by transfer payments?

00:40:07.000 Well, that's when the government takes money from one person through taxation and just hands it to somebody else, or now through inflation.

00:40:13.000 The government just prints money and gives it to people that it thinks needs it.

00:40:17.000 But let's look at the PPP or the CARES Act.

00:40:23.000 Look at all the damage We're good to go.

00:41:00.000 Can you stop right there?

00:41:01.000 Can you stop right there?

00:41:02.000 600 firms did.

00:41:03.000 Can you stop right there?

00:41:04.000 Most people don't know that these hedge funds got this money.

00:41:08.000 Most people think this money went out to American businesses to keep these businesses from collapsing because we need restaurants, we need movie theaters, and all these various American businesses that we assume this money went to prevent from collapsing.

00:41:26.000 Explain that, please.

00:41:27.000 Yeah, well, you didn't have to.

00:41:29.000 All you had to do is apply.

00:41:30.000 And according to the Small Business Administration, as long as the money you asked for was less than two million, they didn't ask any questions.

00:41:39.000 Because in theory, you are supposed to need the money, right?

00:41:43.000 You are supposed to have some disruption.

00:41:44.000 Like if you ran a restaurant and your restaurant is shut down, you don't have any revenue.

00:41:49.000 There's nobody eating in your restaurant.

00:41:50.000 So you have no money coming in.

00:41:52.000 So how do you pay your waiters?

00:41:54.000 How do you pay your busboys?

00:41:56.000 You have no money.

00:41:57.000 So the government was like, oh, we'll give you some money.

00:41:59.000 As long as you don't fire your workers, we'll give you some money to pay your workers.

00:42:03.000 But a company like mine, right?

00:42:06.000 I have two or three companies that I could have taken money from and I didn't.

00:42:09.000 But you look at my asset management company, Europe Pacific Asset Management.

00:42:13.000 I'm making more money now than I was before COVID. And I assume that that's the case with most firms that are in my industry.

00:42:21.000 Can you explain how that's possible?

00:42:22.000 Because our revenue was never shut down.

00:42:24.000 How is that possible?

00:42:25.000 How are you making more money?

00:42:26.000 Because all I do is charge fees to manage people's money.

00:42:31.000 I didn't stop managing their money because of COVID. I mean, we just keep on managing it and we keep on billing for our fees.

00:42:38.000 We bill every quarter.

00:42:39.000 We weren't even shut down.

00:42:41.000 Even in Puerto Rico, where they were shutting down everything, I mean, I was considered an essential business, financial services.

00:42:46.000 So, you know, people can come to my office, even though I let a lot of them work from home.

00:42:51.000 And remember, all...

00:42:53.000 Some of our customers, they talk to us on the phone.

00:42:55.000 So when I want to talk to a customer, the customer doesn't drive down to my office.

00:43:00.000 They just call me on the phone.

00:43:01.000 And so there's no physical contact.

00:43:04.000 So the There isn't any disruption.

00:43:07.000 All of the revenues that the hedge funds were getting, that the asset management companies, all that revenue continued unabated.

00:43:12.000 Not a single job was in jeopardy.

00:43:15.000 All these companies that got government money.

00:43:17.000 See, the government wants to pretend that these loans saved jobs.

00:43:21.000 They didn't save these jobs. 0.51

00:43:22.000 These jobs were never in jeopardy of being lost.

00:43:24.000 So all that happened is that it's a windfall.

00:43:27.000 The asset management companies and hedge funds, they got extra money from the government to make their profits even bigger on top of the fact that the Federal Reserve printed all this money which inflated asset prices.

00:43:37.000 We charge fees on those assets.

00:43:39.000 And so as the Fed inflates assets, Wall Street has inflated fees.

00:43:44.000 We make more money.

00:43:45.000 It was a double bailout for a lot of these Wall Street firms.

00:43:48.000 So that was one of the frauds.

00:43:49.000 But even in the case where the government is actually giving companies, giving money to companies that need it, that otherwise would have fired their workers.

00:43:59.000 Look, we don't know You know, what the future demand for restaurants and bars and theaters is going to be.

00:44:07.000 I personally believe that demand is going to be diminished for a long time.

00:44:11.000 It's not just a temporary thing.

00:44:12.000 I don't think it's going to come back to the way it was, especially since the way it was was a bubble.

00:44:18.000 See, that's what people don't get.

00:44:19.000 They say, we want to go back to the way it was before COVID. We can't reflate that bubble.

00:44:24.000 We have to start spending less.

00:44:26.000 We have to save more.

00:44:27.000 And that means we can't go out as often.

00:44:30.000 We need to build up our savings again because we've depleted it.

00:44:33.000 So there's going to be less demand for restaurants.

00:44:36.000 There's going to be less demand for a lot of things.

00:44:38.000 We have to let these companies downsize.

00:44:41.000 Look at the airlines.

00:44:42.000 Americans are going to be flying less.

00:44:45.000 There's no question in my mind that domestic air travel is going to be down for many, many years, even after COVID is cured.

00:44:53.000 So the airlines have to shrink.

00:44:55.000 They have to lay people off.

00:44:56.000 They have to be profitable.

00:44:58.000 They have to effectively utilize resources.

00:45:06.000 We're good to go.

00:45:30.000 Now, when you say hedge funds were able to receive PPE and you're saying that they did so while they were still earning profits and there wasn't any diminishment of their income, why were they able to receive PPP? Well,

00:45:45.000 that's the problem with government programs.

00:45:47.000 There's always fraud.

00:45:48.000 Look, whenever the government is giving out free money, people try to qualify for it.

00:45:53.000 Now, you know, you can read the fine print that I know a lot of other people could say, hey, you know, Peter had said, as long as your business was affected by COVID. And look, yes, my business was affected.

00:46:02.000 I mean, people worked at home that used to work in the office.

00:46:05.000 But you had to basically testify or certify that the money was necessary.

00:46:11.000 It's necessary to support the ongoing operations of your business, which for most of these firms, it wasn't.

00:46:17.000 And you also had to say that you had no other source of capital, which again, people were lying.

00:46:22.000 But the government basically said, if you ask for less than $2 million, we're going to look the other way.

00:46:28.000 We're not going to vet these loans.

00:46:29.000 But hold on.

00:46:30.000 Hold on.

00:46:30.000 Did they actually say that?

00:46:31.000 Did they actually say that?

00:46:33.000 They're non-recourse.

00:46:34.000 There's no collateral.

00:46:35.000 So a lot of businesses that were going to fail anyway and that were going to lay off all their workers took the money, They're still going to lay off all their workers, but now they're not going to have to pay the money back because they're going to bankrupt their business.

00:46:46.000 And once your business is bankrupt, even though you fire all your workers, you're under no obligation to repay the loan.

00:46:52.000 Okay, did they actually say that if you asked for less than $2 million, we're going to look the other way?

00:46:57.000 Where are you taking this from?

00:46:59.000 What it says is, we'll assume...

00:47:03.000 That you're filing an honest claim.

00:47:05.000 Because they're saying that if you ask for more than $2 million, we're going to vet the claim and we're going to take a look at your situation.

00:47:12.000 But it's said on the Small Business Administration that we'll just assume you're being honest.

00:47:18.000 You ask for less than two million, we'll assume you're being honest. 0.99

00:47:21.000 Well, the minute they say that, ah shit, I'm gonna lie. 1.00

00:47:23.000 That's the problem. 1.00

00:47:24.000 So many people lie.

00:47:25.000 Whenever the government has a program, it gets abused.

00:47:28.000 That's part of the problem with government spending.

00:47:31.000 Everybody tries to qualify.

00:47:33.000 Just like the unemployment benefits.

00:47:35.000 This crazy deal with the enhanced unemployment benefits.

00:47:40.000 You have a lot of people now who are being paid twice as much not to work as they were earning when they were working.

00:47:47.000 Now, you create that kind of incentive.

00:47:49.000 You have a lot of people now, the last thing they want is to go back to work because they're making so much more money not working than they were when they were working.

00:47:57.000 And most of these people, if you have a job where you're making, you know, $10, $15 an hour, $20 an hour, chances are you don't love your job.

00:48:06.000 I mean, you're not working because you enjoy what you're doing.

00:48:09.000 You're working because you need the money.

00:48:11.000 You need to pay the bills.

00:48:12.000 Well, if you can make the same amount of money or more Without working?

00:48:17.000 I mean, who's not gonna go for that?

00:48:18.000 I mean, I don't blame anybody for not wanting to work if the government is paying you more not to work than what your boss was paying you to work.

00:48:26.000 And, of course, there's more than just working.

00:48:29.000 You have to get up early in the morning.

00:48:31.000 You've got to fight traffic.

00:48:33.000 You've got other expenses.

00:48:35.000 Maybe you've got to put your kids in daycare. 0.95

00:48:39.000 You've got to dry clean your clothes.

00:48:41.000 Women can spend an hour in the morning doing their hair, doing makeup. 1.00

00:48:45.000 They don't get paid for that, but they've got to do all that and add all that to commute time. 0.89

00:48:50.000 So there's a big cost.

00:49:01.000 I understand what you're saying about that.

00:49:07.000 And I do agree with that.

00:49:08.000 And that was very shocking to me that people that I know who have friends that are on unemployment don't want the economy to reopen because they would lose money.

00:49:17.000 I know people that can't hire people.

00:49:19.000 You can't get people to work.

00:49:21.000 Why should you work?

00:49:22.000 I get more money not working.

00:49:23.000 So you know what some people do?

00:49:24.000 They work under the table.

00:49:26.000 They get cash.

00:49:27.000 They want to pretend they're unemployed so they can keep getting those benefits.

00:49:30.000 And then they take a job under the table for cash.

00:49:33.000 That's what's going on.

00:49:34.000 I believe that.

00:49:35.000 But that doesn't make sense with hedge funds.

00:49:38.000 With hedge funds, we're talking about small businesses.

00:49:43.000 Does a hedge fund qualify as a small business?

00:49:46.000 And we're talking about them receiving PPP, and as long as it's under $2 million, there's no questions asked.

00:49:53.000 If they can't demonstrate a loss of income, how are they receiving this money, and what should have been done differently?

00:49:59.000 Look, as soon as I heard about the program, I went online and I got the application, just to see what it was.

00:50:08.000 You don't have to prove anything.

00:50:10.000 All you have to do is you have to have fewer than 500 employees, which is pretty much everybody.

00:50:15.000 I mean, most of us in this business don't have 500 employees.

00:50:19.000 And then what you did is you just listed your payroll, right?

00:50:23.000 And they gave you three months of your payroll.

00:50:27.000 So whatever you pay all your workers, right?

00:50:29.000 And it was capped.

00:50:31.000 So if you had some people that were making a million dollars a year, they wouldn't cover the whole thing, right?

00:50:35.000 It was like, I forget what the limit was, maybe 100 grand a year or something like that.

00:50:40.000 But what they did is you could take all of your payroll for all your employees, And the government said, we will give you a loan, no questions asked, for three months of your payroll.

00:50:53.000 And as long as you don't fire more than a certain percentage of those people, you never have to pay the money back.

00:50:59.000 So it didn't say anything about proving that you actually needed it, proving that, you know, that your revenue went down.

00:51:05.000 So the government opened up an opportunity for all sorts of people.

00:51:09.000 I mean, I could have had a few hundred thousand dollars if I wanted it.

00:51:12.000 All I had to do is lie and claim I needed the money.

00:51:14.000 But, you know, look, as much as I don't want the government to have money, and I'm already living in Puerto Rico, so I'm not paying taxes.

00:51:22.000 So, I mean, people can say I'm a hypocrite because I'm living in Puerto Rico, but I'm not committing fraud.

00:51:28.000 I'm being honest.

00:51:29.000 Anybody that wants to pay less taxes is free to move to Puerto Rico.

00:51:33.000 But I didn't want to commit fraud.

00:51:35.000 I didn't want to sign a document and attest to the fact that I needed the money when I knew I didn't.

00:51:40.000 And what business owner needs the money like that?

00:51:43.000 I mean, if you're managing other people's money for a living and you can't handle a downturn in your business, then what business do you have managing people's money if you can't even manage your own?

00:51:53.000 I can't believe that anything under 500 employees is a small business.

00:51:58.000 That seems like a regular business. 0.98

00:52:02.000 Like, what the fuck world are we living in where 500 employees or less is a small business? 0.99

00:52:09.000 That seems like a business. 0.99

00:52:11.000 Well, believe me, they're not big corporations that have thousands and thousands.

00:52:15.000 And also, there was other criteria like how many locations you can have.

00:52:19.000 I can't remember all of it.

00:52:20.000 But a lot of the people that applied were just self-employed people.

00:52:24.000 And so they were businesses of one.

00:52:26.000 And so they got their own pay.

00:52:30.000 But you didn't have to prove because a lot of people's businesses were not disrupted.

00:52:35.000 Because if you didn't work with the public in a public setting, if you just sat at a desk and worked on a computer and a telephone, your business wasn't disrupted.

00:52:44.000 So why do you need any government money?

00:52:47.000 But the point is, even if you needed the money, the federal government shouldn't supply it by printing money.

00:52:54.000 People don't realize how much damage we have done to this economy.

00:52:58.000 The U.S. government, the Federal Reserve, is doing far more damage than COVID-19.

00:53:02.000 That's what people don't get.

00:53:04.000 We're going to reap the whirlwind for what the government is sowing.

00:53:08.000 Well, kudos to you for not taking that money.

00:53:10.000 I really appreciate that.

00:53:12.000 Giving your understanding of what's legal and not legal, and the fact that you're willing to move all the way to Puerto Rico to avoid federal income taxes.

00:53:20.000 Kudos to you.

00:53:21.000 I didn't only do it for the taxes.

00:53:23.000 I did it for lifestyle and all that kind of stuff, too.

00:53:26.000 I mean, the taxes make it affordable.

00:53:29.000 I understand.

00:53:30.000 There are other reasons to live.

00:53:31.000 I was going to move to Florida.

00:53:32.000 I was going to go down there, and so I ended up going to Puerto Rico.

00:53:36.000 Listen to me. 1.00

00:53:36.000 Fuck Florida. 1.00

00:53:37.000 Saw that shit off and sell it to the Russians. 1.00

00:53:40.000 I'm happy that you didn't take that money. 1.00

00:53:44.000 I really am.

00:53:44.000 But I really...

00:53:46.000 I want to understand what would have been the best maneuver if the federal government had...

00:53:55.000 Let's imagine that you and Trump were besties.

00:53:57.000 And he's like, hey, Peter Schiff, what should I do?

00:54:02.000 What should I do?

00:54:03.000 We're gonna have to do something.

00:54:05.000 We have this COVID-19 situation.

00:54:07.000 We're gonna have to protect the citizens of the United States from this weird, novel coronavirus that we don't really totally understand at the moment, especially in February and March.

00:54:19.000 We really didn't understand what the consequences of this virus were.

00:54:22.000 What do you think they should have done differently?

00:54:24.000 Yeah.

00:54:25.000 Well, again, first of all, we have to acknowledge how weak the economy was before COVID, right?

00:54:31.000 That we didn't have a great economy.

00:54:32.000 That the economy was a mess.

00:54:38.000 Can I stop you there?

00:54:40.000 Can I stop you there?

00:54:55.000 This is so frustrating to do these things with a delay.

00:54:58.000 I'm so sorry.

00:54:59.000 But when Trump talks about COVID, he talks about it being this interruption for this world's greatest economy, this thing that he had created during his administration.

00:55:10.000 What's wrong with that narrative?

00:55:13.000 Well, that's a lie.

00:55:14.000 You know, that's one of the things that frustrates me about Trump, is pretending the economy was great.

00:55:20.000 Because somehow he thinks that because he's president, the economy should be great.

00:55:24.000 I mean, that might be his own ego.

00:55:25.000 Hey, I'm the president, so we must have a great economy.

00:55:27.000 But we don't.

00:55:28.000 It's the same economy he inherited from Obama, only more highly leveraged.

00:55:33.000 And it's all the debt.

00:55:35.000 It's all the corporate debt, all the individual debt, all the government debt.

00:55:39.000 That's why we're so ill-prepared for Any crisis, whether it's COVID-19 or anything else, we were broke before this happened.

00:55:48.000 I said it's raining out and we've got no rainy day fund.

00:55:51.000 So the first thing we have to acknowledge is why was the economy so screwed up? 0.56

00:55:56.000 How did it get screwed up? 0.88

00:55:57.000 And that was because of the Fed keeping interest rates too low, discouraging people from saving, rewarding people from borrowing.

00:56:05.000 Putting too much emphasis on the stock market and not enough on the real economy.

00:56:10.000 And government spending too much money.

00:56:12.000 Government making us less productive by spending too much and regulating too much and subsidizing too much.

00:56:18.000 So we screwed up the economy.

00:56:20.000 So what we needed to recognize is, okay, we need to reverse all that.

00:56:24.000 And yes, now we have an extra reason to do that because now we have COVID-19, but we need to restore sound money, we need to let interest rates go up, we need to let asset prices go down, and we have to...

00:56:43.000 Instead, we're just printing even more money.

00:56:45.000 We're juicing up the economy with even more debt.

00:56:47.000 We're pushing up the Nasdaq to new highs.

00:56:50.000 This is not productive.

00:56:52.000 This is making the problem worse, that it dwarfs COVID-19.

00:56:57.000 But I agree, because of all the mistakes of the past, because of all the bad monetary and fiscal policy, we were not prepared for this crisis.

00:57:05.000 We weren't prepared for any crisis.

00:57:07.000 We couldn't fight We're a shadow of a former self.

00:57:12.000 We don't have the industrial might.

00:57:14.000 We don't have the savings.

00:57:15.000 So we don't have the tax base for the government to tap into to actually pay for a war.

00:57:20.000 We just have a printing press. 0.99

00:57:22.000 And we can only use that because foreigners are dumb enough to accept our money. 1.00

00:57:26.000 And they're not going to be accepting it much longer. 0.99

00:57:30.000 So this is bad news, right?

00:57:32.000 Any way you shake it, America has a day of reckoning.

00:57:36.000 And I would have rather had Trump level with the public and say, you know what, the day of reckoning is now.

00:57:42.000 And yes, I know COVID-19 is bad, but we got a lot of other problems too, and we have to deal with it.

00:57:49.000 We got to pay the piper, right?

00:57:52.000 They were saying, nobody has to suffer.

00:57:54.000 Nobody has to sacrifice.

00:57:55.000 You know what?

00:57:56.000 We have to suffer.

00:57:57.000 We have to sacrifice.

00:57:58.000 I'm not happy about that, but it's better than the alternative, which is kicking the can down the road again so that we have to suffer even worse, which is that's the deal with the devil that we made.

00:58:09.000 So, we should have, you know, made government smaller.

00:58:14.000 And, look, maybe we should have dealt with the crisis more like Sweden. 0.99

00:58:19.000 You know, I mean, a lot of people are giving shit to Sweden. 0.99

00:58:21.000 But, you know, Sweden didn't want to make that bargain. 0.99

00:58:24.000 They didn't want to print all this money.

00:58:26.000 They bore their own costs.

00:58:28.000 And so, they had a...

00:58:33.000 We're good to go.

00:58:58.000 I would have never guessed that.

00:59:01.000 Sweden became a very rich country because they were a capitalist country.

00:59:06.000 And once they became very rich, they experimented with socialism.

00:59:10.000 Which was an unfortunate experiment because there's no reason to experiment with socialism because every time it's tried, it's failed.

00:59:16.000 But they decided to try it and of course it failed.

00:59:19.000 And so they had to start rolling it back once they saw all the damage that the welfare state in Sweden was creating.

00:59:25.000 So they started dialing it back and they've gone a long way.

00:59:29.000 They haven't eradicated it completely.

00:59:33.000 And if you look at the tax proposals by Joe Biden, I mean, we're going to go so far above Sweden as far as the confiscatory levels of taxation.

00:59:44.000 I mean, look what Joe Biden wants to do with the income tax, the corporate tax and the personal tax.

00:59:50.000 He wants to raise the corporate tax from 21 to 28. But then he wants to raise the dividend tax from 24, where it is now, to about 40-something-ish.

01:00:06.000 I forget the exact amount.

01:00:07.000 But corporations are taxed twice, right?

01:00:10.000 They're taxed when they earn the money and then when they distribute it to the owners.

01:00:14.000 So you have to add up both rates.

01:00:16.000 But then he also wants to apply Social Security taxes to those dividends, not just the Medicare taxes.

01:00:23.000 So he basically wants to take the effective corporate tax rate up from about 40% where it is now to about 60%.

01:00:31.000 That's where he wants it.

01:00:32.000 Which is a huge increase.

01:00:35.000 It's a massive number.

01:00:37.000 And it really is fascism, because the government ends up owning all these businesses.

01:00:42.000 Because if you take More than half of the income of a business.

01:00:47.000 I mean, you basically own that business.

01:00:48.000 I mean, it's your business.

01:00:49.000 You're getting more than half the income.

01:00:51.000 So the government is really nationalizing these corporations through taxation.

01:00:56.000 But it's not the corporations.

01:00:58.000 It's the individual shareholder.

01:00:59.000 They're the ones that own the business.

01:01:01.000 That's a very important way to look at it.

01:01:03.000 The way you look at it there, where half of the income is going to someone else.

01:01:09.000 I wanted to stop you for a second, but I wanted to hear that rant. 0.98

01:01:12.000 There's...

01:01:13.000 A connection that people make, they connect socialism to empathy, socialism to kindness, socialism to people that are less greedy, socialism to people that are more interested in a community.

01:01:29.000 This is coming from a person like myself who has no economic...

01:01:34.000 86% of what I know about the economic world is from you. 1.00

01:01:38.000 So I'm an idiot, alright? 0.99

01:01:40.000 I listen to people who are experts. 0.99

01:01:42.000 But when I think of the idea of community and of helping people out, I think of the idea like, what's wrong with some socialist policies?

01:01:51.000 We have the fire department.

01:01:52.000 That's a socialist policy.

01:01:53.000 Nobody wants a fire department to be only for people who have money.

01:01:57.000 We want the fire department to be for the community.

01:01:59.000 It doesn't matter if you have zero dollars.

01:02:02.000 If your house is on fire, we're all going to pay for the fire department to come put it out.

01:02:06.000 We all have a vested interest in keeping your house from burning down and you dying and the whole community from burning.

01:02:12.000 We have these certain agreements.

01:02:13.000 There's a big difference between that type of program.

01:02:27.000 I am often naive and idealistic, but also ruthless in my assessment of human character.

01:02:34.000 It's a big contradiction.

01:02:35.000 Because I think there's a lot of people that really could do more than they're doing.

01:02:39.000 And they know they could.

01:02:40.000 And they want to make excuses.

01:02:41.000 And it's part of the reason why, throughout history, they've left people behind. 0.88

01:02:47.000 There's certain people that if you had a tribe and you had to make it over this mountain and Bob is fucking lazy and he's like, you gotta carry me, bro.

01:02:54.000 I'm like, Bob, we're both walking. 0.95

01:02:57.000 Come on, man.

01:02:57.000 Bob's not supposed to make it.

01:02:59.000 He's not supposed to make it.

01:03:00.000 We want him to make it, but we don't want our kids to die.

01:03:03.000 We don't want our mom to starve.

01:03:05.000 We gotta keep going. 1.00

01:03:06.000 Bob, you lazy fuck. 1.00

01:03:07.000 Come on, bro. 1.00

01:03:09.000 There's always been people like Bob and it's part of the problem with humans.

01:03:12.000 So I'm a contradiction.

01:03:13.000 But hold on a second.

01:03:14.000 I understand, but I'm gonna give you...

01:03:17.000 That's what attracts people to socialist ideas.

01:03:21.000 It's just that they're nice.

01:03:22.000 That they want everybody to do better.

01:03:25.000 Socialist ideas are very appealing.

01:03:28.000 I get that.

01:03:29.000 And that's why they're very popular with young people who don't know any better.

01:03:33.000 They don't have enough life experience to understand.

01:03:36.000 Peter Schiff, this is the bridge.

01:03:37.000 Because a guy like you who really understands economics can talk to a guy like me and we can explain it to everybody.

01:03:44.000 Because otherwise we just have...

01:03:46.000 I'm definitely not arguing with you, but your argument versus people who disagree with you's argument.

01:03:51.000 You have this.

01:03:52.000 But there's an opportunity to make this bridge and for us to understand each other.

01:03:56.000 That's what I'm hoping.

01:03:57.000 That's why I'm here.

01:03:58.000 To make that bridge.

01:04:00.000 I appreciate that.

01:04:01.000 I want to help people evolve.

01:04:04.000 From being socialist to being capitalist, because capitalists aren't mean.

01:04:08.000 They just understand the unintended consequences of these well-intentioned programs that the left is in favor of, but they don't understand that they actually backfire and make all the problems that they're trying to solve worse.

01:04:21.000 But just to backtrack to your fire department, when you have a local fire department, That fire department is there to put out any fire at any house.

01:04:30.000 So everybody in the community benefits from having a fire department.

01:04:34.000 It's not there just for one person.

01:04:36.000 It's for everybody in the community.

01:04:38.000 We're talking about where the government takes money specifically from one person and gives it to somebody.

01:04:51.000 Agreed.

01:04:52.000 This would be like Bob wanting money from you.

01:04:54.000 Our lazy friend Bob we were talking about.

01:04:57.000 I am all in favor of private charity.

01:05:01.000 I'm all in favor of people voluntarily helping out their fellow man.

01:05:06.000 And Americans will do that. 0.61

01:05:08.000 I mean, we did do that.

01:05:09.000 We did that a lot more in the past when the government didn't take so much of our income and taxes.

01:05:13.000 We had a lot more money.

01:05:15.000 Like, I mentioned Grover Cleveland.

01:05:16.000 When he said that quote about the government not supporting the people, there was a bill to appropriate $10,000 for some farmers in Texas who had been hit by a drought.

01:05:27.000 And Grover Cleveland vetoed the bill because he said, look, there's nothing in the Constitution that allows the government to I mean, this is not right.

01:05:37.000 We can't take money from the taxpayers and just give it to somebody because we feel they're in need.

01:05:42.000 And so he vetoed that bill.

01:05:44.000 But after he vetoed it, the farmers got more than 10 times that amount of money in private donations from individual Americans who wanted to help out.

01:05:53.000 That's a great thing.

01:05:57.000 At a charitable giving, that is great.

01:05:59.000 That is noble.

01:06:00.000 But when you steal money from somebody else and give that money, there's no nobility in that.

01:06:05.000 That's theft.

01:06:06.000 I don't care what you do with the money after you steal it.

01:06:08.000 Stealing is wrong.

01:06:09.000 I see what you're saying.

01:06:10.000 I like what you're saying.

01:06:11.000 Is there an opportunity where these two things can merge?

01:06:14.000 Where people can realize, like, hey, we need less taxes and more charitable donations, and it's both possible, and you would probably save money, and we could figure out a way to distribute that money in an equitable way that you have control over.

01:06:28.000 So if there's certain charities that you really feel strongly about, like cancer research.

01:06:34.000 The people who are likely to give the most to charity are wealthier people because they have more discretionary income.

01:06:41.000 And if you have a lot of wealthy people who are paying 40-50% taxes, and I was doing that.

01:06:47.000 I was paying about half of my money in taxes before I moved to Puerto Rico.

01:06:52.000 I didn't have any special tax breaks.

01:06:54.000 I paid about almost half my money in taxes.

01:06:56.000 So because half the money went to the government, I had a lot less money that I could be charitable with.

01:07:02.000 I mean, I had all the money I needed to take care of myself.

01:07:06.000 The money that was taken away from me by government was money that I would have invested to help grow the economy, or maybe I could have used it in direct charitable giving.

01:07:15.000 And the other benefit of when you allow more private sector charity...

01:07:22.000 Private sector charities are much more efficient because they really care about the people they're trying to help.

01:07:28.000 Governments don't give a damn.

01:07:29.000 When you have a government program, that program exists to benefit the bureaucracy of the program.

01:07:36.000 So they squander the money.

01:07:37.000 And the last thing they want to do is end poverty because then there's no longer a need for their program.

01:07:43.000 They want to perpetuate dependency.

01:07:45.000 If you go back to the Great Society in the 1960s, if you look at the declining poverty rates in the 1940s, 1950s, 1960s, leading up to the 1960s when we had all the civil rights and all this big war and poverty.

01:08:00.000 We were beating poverty. 0.96

01:08:01.000 We were kicking poverty's butt. 0.76

01:08:03.000 Poverty rates were really falling in this country until the government declared war on poverty. 0.97

01:08:08.000 And then poverty won.

01:08:09.000 That is the problem.

01:08:11.000 The government created poverty.

01:08:12.000 They didn't eliminate it.

01:08:14.000 Well, what should they have done differently?

01:08:16.000 They should have allowed free market capitalism to keep lifting people out of poverty.

01:08:21.000 Look, the reason people are poor is because they're not earning enough money.

01:08:25.000 Well, how do people earn more money?

01:08:27.000 They become more productive.

01:08:29.000 How do you get more productive?

01:08:58.000 What you're saying is there's an opportunity to be compassionate without the demand for you being compassionate by the federal government.

01:09:07.000 And if people had to spend less money on the government, there's opportunities for them to donate more money to charities.

01:09:15.000 And this would be a better way of managing our money and our charity and all these things.

01:09:25.000 Yes.

01:09:25.000 It's much more efficient, voluntary giving.

01:09:27.000 Look, when people give money voluntarily, their own money, they don't want it to be squandered.

01:09:31.000 They don't want it to be wasted.

01:09:33.000 I mean, whenever you give the charities, you always look at the charity and you want to know, hey, if I give you $1,000...

01:09:39.000 How much of it is used in bureaucracy and how much goes to the recipients?

01:09:43.000 Isn't that shocking?

01:09:44.000 And you can look at their books and you can say, hey, we're going to take 10 cents to run the charity and actually 90 cents is going to go to the people that we're trying to help.

01:09:51.000 With the government, it's the other way around.

01:09:53.000 They take in a dollar and only 10 cents actually goes to the people that need the money.

01:09:58.000 The rest of it is absorbed in the bureaucracy.

01:10:01.000 There's no incentive to be efficient.

01:10:03.000 Charities have to be efficient or nobody will give them money.

01:10:06.000 Hmm.

01:10:11.000 There's no voluntary interaction there.

01:10:12.000 They take your money from you and so they can be as inefficient as possible.

01:10:16.000 But then the private charity wants to help people out so they no longer need the charity.

01:10:22.000 The government wants to keep people impoverished so they're in constant need of the charity because that way they can get their vote.

01:10:28.000 The government knows if they steal money from Peter and pay Paul that they'll always get Paul's vote.

01:10:34.000 And that's what they're concerned about.

01:10:35.000 They want to keep people entrapped in poverty so that there'll be reliable votes. 0.72

01:10:39.000 Is that what they want, or do they just want to maintain this system that they have control over?

01:10:44.000 Because if they just released everything to the public sector, or the private sector, everything from policing to the water purification, everything they do, instead of the government handling everything,

01:11:03.000 they just allowed it to the private sector.

01:11:06.000 How would we manage whether or not they were doing the good of the people overall?

01:11:10.000 That's what everybody's worried about.

01:11:12.000 What everybody's worried about is big business assuming this monopolistic, gigantic monolith that crushes everything before it and pollutes the rivers.

01:11:20.000 That's what we're worried about.

01:11:22.000 So the idea of the government stepping in for business is to keep business from only growing and not growing with concern for the consequences of all the other people around it.

01:11:31.000 That's where everybody gets real suspicious, right?

01:11:35.000 Wouldn't you agree?

01:11:36.000 And they shouldn't be.

01:11:37.000 And this is something that always kind of bothers me that people just attribute sinister motives to private businessmen, yet they think politicians are angels and just there to do the Lord's work.

01:11:50.000 I mean, there's just as many greedy people who go into politics as who go into business.

01:11:55.000 In fact, probably more.

01:11:57.000 But there's a big difference.

01:11:58.000 See, I have protection It is by selling more products and services.

01:12:12.000 Well, why would I buy those products and services?

01:12:15.000 I have to like them.

01:12:16.000 I have to think they're better than the products or services that some other businesses And I have to value those goods and services more than the money I'm voluntarily exchanging to get them.

01:12:27.000 So the beauty of the free market is that you have all these businesses who may be greedy competing with one another to best satisfy my desires, my needs, to make me happy.

01:12:39.000 And if they don't make me happy, if they can't satisfy my disease, I don't buy their products.

01:12:44.000 They have to win me over.

01:12:46.000 They have So I don't have to be worried about a greedy businessman who wants to make money because he can only make money by making my life better.

01:12:57.000 On the other hand, you take a greedy person and you give them the power of government, they can make my life miserable.

01:13:03.000 They don't have to get me to voluntarily do anything.

01:13:05.000 They just take my money by brute force and they just do to me whatever they want.

01:13:10.000 So where you have to fear greed and power is when it's in government, where it can actually harm you.

01:13:16.000 Not in the private sector, where it can help you.

01:13:18.000 Now I know someone's going to say, well, what if there's a criminal?

01:13:22.000 What if somebody is stealing my money?

01:13:23.000 Yes, they're violating the law.

01:13:25.000 And we need government to protect me from thieves.

01:13:28.000 But businessmen that are honestly convincing me without fraud or deception, but are being honest and I'm buying their product, Their greed doesn't help me.

01:13:37.000 It doesn't hurt me.

01:13:39.000 It only helps me.

01:13:40.000 I think we're in agreement on a lot of this, especially what you said, that we need government to protect people from a business getting out of control and demonizing people.

01:13:49.000 But it doesn't mean that capitalism in and of itself is a demonic thing, a bad thing.

01:13:55.000 It's a good thing.

01:13:55.000 No, but what we're doing now, all the Wall Street bailouts, that's not capitalism.

01:14:02.000 The banks that were over-leveraged in 2008 should have been allowed to fail.

01:14:08.000 Investors should have lost money.

01:14:10.000 None of this is capitalism.

01:14:12.000 Bailing out companies that should fail is not capitalism.

01:14:15.000 Do you think it's corruption?

01:14:16.000 Do you think it's a crime?

01:14:18.000 When you say it's not capitalism, then what is it?

01:14:22.000 Well, I mean, you can call it statism, crony capitalism, fascism.

01:14:27.000 So, I mean, there's a lot of ways you can describe it.

01:14:29.000 Corporatism.

01:14:30.000 But it's not free enterprise.

01:14:32.000 It's not capitalism.

01:14:33.000 Failure is an important part of capitalism.

01:14:37.000 Because if you look at the science of economics, what is economics about?

01:14:41.000 It's about how do you satisfy unlimited human desires, unlimited demand, with limited resources.

01:14:49.000 We have scarce resources.

01:14:50.000 They're not infinite.

01:14:52.000 We have so much land, labor, capital, and so we have to figure out how to organize our resources in a way to satisfy as many demands as we can.

01:15:02.000 And so businesses compete with each other for those resources.

01:15:07.000 And the businesses that combine them in a way that they can generate a profit, that means that they're adding value.

01:15:14.000 That means that the goods they're producing are more valuable than the resources they consumed in the process of producing them.

01:15:21.000 So that's a good thing.

01:15:22.000 But when businesses are taking resources and their products Cannot recover the cost of production.

01:15:30.000 They are squandering our resources.

01:15:32.000 And those businesses need to fail so those resources can be freed up to be utilized more effectively by some other entrepreneur doing something else.

01:15:41.000 So we need companies that can't generate a profit to go bankrupt.

01:15:45.000 The profit and loss is the thermometer that tells you if you're doing the right thing.

01:15:51.000 If you're making a profit, keep doing it because you're creating value.

01:15:54.000 If you're losing money, then stop.

01:15:56.000 You're destroying value.

01:15:58.000 Your business is making us poorer.

01:16:00.000 So the market is trying to function so that we can have an optimal amount of economic growth.

01:16:04.000 Then you have the government coming in and deciding to subsidize businesses that it doesn't want to fail.

01:16:10.000 Because, oh, we might lose some votes.

01:16:12.000 You see, there's a concept About the seen and the unseen.

01:16:16.000 And politicians are concerned about what you can see.

01:16:19.000 Because when the politician bails out a company and they save the jobs of these workers, everybody can see that and they can take credit for the jobs they supposedly save.

01:16:29.000 But what you don't see are the jobs that were never created or might have got destroyed because the government misdirected We're good to go.

01:16:40.000 We're good to go.

01:16:54.000 Is it possible that there could be a cap on the amount of – like, we all agree that everyone – there needs to be some regulations, right, in terms of environmental impact and a bunch of – I think we're good to go.

01:17:33.000 Well, I mean, if you have a company that gets enormous, just absolutely enormous, and they control all the jobs in the region, they could really dictate how much money people get per hour, and they could make it really poor and terrible.

01:17:45.000 And you could say that people have the right to just leave or find something else or create a better future.

01:17:50.000 That is possible.

01:17:51.000 I mean, they can do that.

01:17:53.000 But if something controls...

01:17:54.000 Assuming the business in your example got really big, right?

01:17:59.000 Not because it had some special monopoly granted to it by the government, right?

01:18:03.000 It didn't get a big government subsidy.

01:18:05.000 It was just commercially effective.

01:18:05.000 The government didn't have a law making it illegal to compete.

01:18:08.000 If this company got so big in a free market...

01:18:12.000 That meant it got really big because it was just providing the best services to its customers.

01:18:19.000 But also, if it was able to employ that many people, it must have been offering those people A good deal.

01:18:25.000 Otherwise, they wouldn't have taken the job.

01:18:27.000 Right?

01:18:27.000 Because businesses compete for two things.

01:18:29.000 Hold on.

01:18:29.000 That's not necessarily true.

01:18:30.000 That's not necessarily true.

01:18:32.000 Because if there was no other jobs available, if you live in a place...

01:18:35.000 No, but there would have been.

01:18:36.000 There would have been some jobs originally.

01:18:38.000 I mean, there's no way that there's just one business in the entire community. 0.98

01:18:42.000 But if you're born into this and you're 16 years old, you're shit out of luck. 0.95

01:18:46.000 And that corporation does have control over you. 0.94

01:18:49.000 If you're born into it, if you're 16 years old, you're in high school and you're getting your first job, and the only job is at Walmart, you're working at Walmart.

01:18:56.000 If that's all you have...

01:18:58.000 Well, assuming Walmart is the only potential employer.

01:19:02.000 Now, I would say that that's not going to be the case.

01:19:05.000 It's usually not the case.

01:19:05.000 The reason that you're not getting a job when you're 16 is probably because the minimum wage is making you unemployable.

01:19:10.000 And we can get into that discussion because I'd like to talk about minimum wage.

01:19:14.000 But first, let's talk about how businesses compete for workers, just like they compete for customers, right?

01:19:21.000 Because I have three businesses.

01:19:22.000 I hire people, right?

01:19:24.000 And I just can't I'm not going to pay my workers a tiny wage because they're not going to work for me.

01:19:32.000 But don't you agree there should be a minimum wage?

01:19:37.000 There's plenty of people that are bidding against me for those same workers.

01:19:41.000 And so I have to pay the market rate.

01:19:43.000 I can't just underpay them.

01:19:45.000 They'll go work someplace else.

01:19:47.000 I understand, but do you think there should be a minimum wage?

01:19:50.000 No, there should be zero minimum wage. 0.89

01:19:52.000 Wow.

01:19:53.000 We've discussed that before.

01:19:54.000 I know.

01:19:55.000 But the reason that I don't think there should be a minimum wage is because I think individuals should be free to accept employment opportunities that they want to accept.

01:20:05.000 See, the minimum wage doesn't hurt businesses. 0.94

01:20:08.000 It hurts individuals that have low skills.

01:20:12.000 And that's always the problem.

01:20:14.000 When you have people defending the minimum wage or opposing minimum wage hikes, they always say, oh, it's going to hurt businesses because it's going to increase their labor costs.

01:20:23.000 You know what?

01:20:24.000 It doesn't necessarily increase their labor costs because they don't hire as many workers.

01:20:28.000 They hire skilled workers instead of unskilled workers.

01:20:31.000 They also They outsource.

01:20:36.000 They hire people in other countries.

01:20:38.000 The minimum wage law hurts the most low-skilled people, and they tend to be young people, teenagers, minorities.

01:20:48.000 That's who get hit the hardest.

01:20:51.000 Before we had all these programs, the black teenage unemployment rate, once upon a time, was actually lower than the white teenage unemployment rate.

01:21:00.000 Now it's like double or triple as high.

01:21:02.000 But before we had all these laws, it was actually lower because they got disproportionately impacted by the minimum wage law, which prices them out of work.

01:21:12.000 When were these laws implemented?

01:21:17.000 Well, the minimum wage didn't really start until the Great Depression.

01:21:20.000 So it started, but it didn't apply to it.

01:21:21.000 There were a lot of jobs that were exempted from it.

01:21:24.000 So it really started kicking in more in the 1960s, and then it really started playing a role.

01:21:29.000 Can I ask you this?

01:21:30.000 Has anybody ever tried to have no minimum wage as an experiment, like maybe a town or a city?

01:21:38.000 Well, first of all...

01:21:39.000 We had no minimum wage before it was implemented, and we had much lower rates of unemployment, real unemployment.

01:21:46.000 But you look at countries that don't have the minimum wage.

01:21:48.000 There's not that many left anymore.

01:21:50.000 I mean, most countries have made this mistake because the minimum wage is good politics because it sounds good, right?

01:21:55.000 If you're for the minimum wage, it sounds like you care.

01:21:58.000 Oh, yeah.

01:21:59.000 Is anybody against people working for low wages?

01:22:02.000 Oh, okay.

01:22:03.000 So it sounds good.

01:22:04.000 But all you do is you destroy jobs and you destroy employment opportunities.

01:22:08.000 But there are countries like Singapore, for an example, has no minimum wage.

01:22:13.000 But wait a minute.

01:22:14.000 Don't they cane you? 1.00

01:22:17.000 Singapore, don't they cane you if you graffiti shit? 0.99

01:22:21.000 I'm not sure, but I know they frowned on that over there. 0.99

01:22:24.000 That was a famous place.

01:22:26.000 But we're not talking about that.

01:22:27.000 I understand.

01:22:28.000 I know what we're talking about.

01:22:29.000 We're talking about minimum wage.

01:22:29.000 No, no, no.

01:22:30.000 I mean, there's other countries that have some kind of weird minimum, but it's not the same as ours.

01:22:37.000 I feel like... 0.95

01:22:39.000 There could be a minimum wage and we still hold the same values that you're talking about in terms of competition to keep people from getting fucking shitty with their employees. 0.84

01:22:48.000 Have you ever seen an employer yell at their employees or be in one of those corporate gathering situations where someone has a lot of control over their employees? 0.76

01:22:59.000 Now imagine if that guy was making all the money and he was only giving these employees a dollar an hour and making them live in poverty.

01:23:07.000 It's not slavery.

01:23:09.000 You only remain at your job if you like it, if you think it's the best alternative.

01:23:14.000 Look, people quit all the time because they can get a better job.

01:23:18.000 So by definition, if the best job I can get is the job I have, and nobody will offer to pay me more money, then I'm not underpaid.

01:23:27.000 If nobody will pay me more, it's a free open market.

01:23:30.000 There's all kinds of employers out there.

01:23:32.000 And remember, you're free to work for yourself.

01:23:35.000 Nobody forces anybody to accept a job.

01:23:37.000 Everybody can start their own business.

01:23:39.000 Everybody can be self-employed.

01:23:41.000 So if you don't think your boss is paying you what you're worth, then quit and start your own business.

01:23:47.000 I completely feel where you're coming from.

01:23:50.000 But couldn't we just say...

01:23:54.000 That there's a level of pain.

01:23:56.000 If you make someone work 40 hours a week and they don't have enough money for food or shelter after 40 hours a week, couldn't we say that maybe that is not a good level?

01:24:07.000 As a community, so everybody agrees we're all competing, but let's make it so that if someone is under your employment and it's a human being and they're doing 40 hours of work Every week, they should have enough money for food and shelter.

01:24:21.000 That seems reasonable as a community.

01:24:24.000 I know what you're saying from this economic standpoint.

01:24:28.000 I know what you're saying.

01:24:30.000 Free market capitalism, let it ride.

01:24:32.000 Figure it out.

01:24:33.000 Get paid what you're worth.

01:24:34.000 And if you don't feel like you're getting paid enough, quit.

01:24:37.000 I understand what you're saying.

01:24:39.000 But wouldn't it be nice...

01:24:40.000 Let's backtrack then.

01:24:41.000 Okay, go ahead.

01:24:42.000 In general, right?

01:24:44.000 If you don't have any skills, if the most you're able to earn at your job, and let's say there's no minimum wage, and you're just a young kid and you don't have any skills, and the most you can earn is $4 an hour, that's because, again, you're paid based on your productivity.

01:25:01.000 Businesses are there to make a profit for the owner of the business, because that businessman is taking a lot of risk, he's bearing the potential for losing money, he has to provide...

01:25:12.000 A businessman is not going to hire somebody if they're not adding value to the business.

01:25:17.000 So if somebody can add $5 of value to my business, I'm not going to pay them $7.25 an hour because I'm going to lose $2.25 for every hour that person works.

01:25:27.000 So the only way I can hire somebody who is providing $5 worth of value is if I can pay them $4.

01:25:34.000 Then I can make $1 for every hour he works.

01:25:37.000 The business is not there to lose money.

01:25:39.000 They're there to make money.

01:25:41.000 If you're a young kid and you can only provide $5 worth of value and so you get a job for $4 and your employer makes a buck an hour off of you, chances are you don't have a family, you're young, you're living with your parents, you don't have rent, you don't have, you know, so making a little bit of money is okay.

01:25:58.000 You just need some spending money to go to a movies or maybe go out on a date or something.

01:26:01.000 You don't need a lot of money.

01:26:02.000 What's important is the work experience.

01:26:05.000 Having that job, developing some skills, getting your foot in the door, step on that first ladder, the rung of the job ladder, so that by the time you're 30 and you're ready to settle down and get married and have kids, you've now Increase your skills to the point that you can make $50 an hour where you can afford to support a family.

01:26:27.000 If you try to tell a business that you need to pay somebody who has no skills and adds minimal economic value, if you have to pay that person enough so that you can support a family, nobody's going to hire that person.

01:26:41.000 All you're doing is pricing those people out of a job.

01:26:43.000 So it's really good to say it's not reasonable.

01:26:46.000 If somebody is working and only making $10 an hour and they can't support a family, it's not the employer's responsibility.

01:26:55.000 It's not his fault that he's hiring somebody that doesn't have a lot of skills.

01:26:58.000 And if you impose that minimum wage, all you're doing is making it impossible for this guy to get a job.

01:27:05.000 Really, what the minimum wage law is, is it makes it illegal for you to work unless you have a certain amount of productivity.

01:27:11.000 So if the minimum wage is $15 an hour, what that means is if you only have $10 an hour work of productivity, you can't work.

01:27:20.000 That you have to turn down every offer of employment you get.

01:27:23.000 If someone offers you $10, $12, that's illegal.

01:27:26.000 You can't accept those jobs, even if you want them.

01:27:29.000 Even if you think that that's the beginning, the first step on a road to higher wages in the future, the government says, no, you can't accept that.

01:27:37.000 Unless you can find somebody who will pay you $15 an hour, it is illegal for you to have a job.

01:27:42.000 And that is not good economic policy.

01:27:45.000 And it's not even compassionate.

01:27:46.000 Because now you've taken away all the honest ways that somebody can make a living, and they end up turning to crime a lot of times.

01:27:53.000 I see what you're saying, and that actually makes a lot more sense the way you're framing it, about if you only provide $10 worth of value to the company, why should they pay you $15?

01:28:05.000 They won't.

01:28:06.000 I agree with you.

01:28:07.000 I see what you're saying.

01:28:08.000 I see what you're saying.

01:28:08.000 You're making me think about it in a different way for sure.

01:28:11.000 I think a lot of people would say, well, if they're really only providing $10 worth of value, do you really need that person?

01:28:18.000 Well, yeah, sure.

01:28:19.000 I mean, $10 worth of value is still value.

01:28:21.000 Yeah, I see what you're saying.

01:28:23.000 Think of all these, look, I get very frustrated all the time when I make phone calls and I can't talk to a human being.

01:28:34.000 The reason for this is because we've priced the human beings out of the market.

01:28:37.000 You know what else is interesting, Peter? 0.90

01:28:40.000 What's horrible about this for all of us is when you do do that and you're dealing with these goddamn computers, it's like we're losing part of our connection when it comes to doing business. 0.53

01:28:52.000 If I do business with a company, I like to be able to call them up. 0.67

01:28:56.000 I'd love it if there's a thing when I'm doing something.

01:29:00.000 I like to make contact with the person.

01:29:02.000 If everything is being done through automated systems, it's getting weirder and weirder for us.

01:29:07.000 More and more detached.

01:29:08.000 Do you remember the original Back to the Future movie?

01:29:12.000 Yes.

01:29:12.000 Remember when he goes back to 1955 for the first time and he sees that car pull into a gas station?

01:29:20.000 We're good to go.

01:29:35.000 I never did, but look, I delivered groceries, I delivered pizza, I worked in a shoe store.

01:29:40.000 I had all kinds of jobs in high school that, you know, probably kids don't have those opportunities today.

01:29:46.000 They can't get it.

01:29:47.000 But going back to the gas station, right?

01:29:50.000 Do you like pumping your own gas? 1.00

01:29:52.000 I do, because I used to work at a gas station, and I know what happens when you let kids pump your fucking gas. 0.98

01:30:00.000 I don't want anybody open. 0.99

01:30:01.000 They spill it! 1.00

01:30:02.000 They fuck up! 1.00

01:30:03.000 Some weirdo has got a highly flammable fluid next to a piece of your property, and they get to stick it in there. 1.00

01:30:09.000 I think, look, I think if we didn't have a minimum wage, you'd have a lot more kids working, mainly for tips.

01:30:14.000 I mean, we used to tip.

01:30:15.000 If you remember, I'm still old enough to remember.

01:30:18.000 Tipping the guy, then pump my gas.

01:30:20.000 Yes, they check your tires, the whole deal.

01:30:23.000 But you know what used to happen?

01:30:24.000 These young kids that got low-paying jobs as pump jockeys, what they would do between fill-ups is they would go and hang out with a mechanic who was there working on cars, and they would get a free education in auto mechanics.

01:30:37.000 And they would actually learn a trade.

01:30:39.000 And then some of these guys, I mean, we'd have more auto mechanics that get a skill.

01:30:43.000 Some of these guys would end up opening up their own service stations.

01:30:47.000 Look, it's good to allow young people to have employment opportunities.

01:30:51.000 Not to price them out of the market by mandating a minimum wage.

01:30:56.000 I mean, the minimum wage benefits high-skilled workers, unions, by eliminating competition with younger, lower-skilled workers.

01:31:03.000 You're forcing employers to hire high-skilled people instead of a more numerous number of lower-skilled people.

01:31:10.000 That's what happened.

01:31:12.000 Have you ever seen the movie The Hustler with Paul Newman and Jackie Gleason?

01:31:17.000 Yeah, it's a great movie.

01:31:18.000 In fact, I saw the remake with...

01:31:22.000 What's his name?

01:31:23.000 Tom Cruise?

01:31:25.000 Tom Cruise, yeah.

01:31:26.000 And also with Paul Newman.

01:31:29.000 They're both good movies.

01:31:30.000 They're great movies.

01:31:31.000 But in the beginning of The Hustler, Paul Newman pulls into a gas station and he tells the guy, check the air in the tires, check the oil, do all this.

01:31:40.000 And the guy, fill them up, mister? 0.99

01:31:42.000 They go out there and they do all kinds of shit for you. 0.99

01:31:45.000 It's not just as simple as they pump your gas. 0.99

01:31:48.000 They pump your gas, check your tires, check your fluids.

01:31:50.000 They do everything.

01:31:52.000 But there was less people with cars back then too.

01:31:54.000 Cars were in better shape because every time you went into a gas station, somebody made sure you had enough oil.

01:31:59.000 They made sure your tire pressure was good.

01:32:01.000 Well, cars are more reliable today. 1.00

01:32:03.000 Those cars were bullshit. 0.99

01:32:05.000 Those cars, you had to check the air. 1.00

01:32:07.000 You had to check the tires.

01:32:08.000 It was bleeding oil.

01:32:10.000 But it's just interesting to see the difference.

01:32:12.000 Look, they used to have ushers in movie theaters.

01:32:15.000 Yep, I remember that.

01:32:16.000 They would just show you to your seat.

01:32:18.000 The service sector has really been obliterated.

01:32:21.000 All these low-skilled...

01:32:22.000 Look, they're working on these kiosks now.

01:32:24.000 Look, they're going to get rid of all the workers. 0.98

01:32:26.000 Anyway, ultimately, all these fast food restaurants, there's not going to be anybody there.

01:32:30.000 They're all going to look like self-serve gas stations.

01:32:33.000 You're going to go in, you're going to order off your smartphone, and the food is going to come down a I worry we're going to lose movie theaters.

01:32:44.000 I really worry about that.

01:32:46.000 Movie theaters?

01:32:46.000 That we're going to lose movie theaters?

01:32:48.000 Well, look, we lost drive-ins.

01:32:51.000 Some of them are coming back, but once upon a time we had all these drive-ins.

01:32:54.000 They're coming back now because of COVID. People love them now.

01:32:57.000 It's a great idea.

01:32:58.000 It's a great way to be socially distant and still watch a movie with a bunch of other people.

01:33:02.000 Yeah, but look, things evolve.

01:33:05.000 People have giant screen TVs now.

01:33:08.000 They don't cost a lot of money.

01:33:09.000 That's the beauty of capitalism.

01:33:11.000 I remember the first...

01:33:13.000 Like kind of like high def TV I ever saw.

01:33:17.000 I went into a department store, or not department, like a good guy's, one of those electronic stores.

01:33:22.000 And I remember looking at it.

01:33:23.000 I was amazed because I was like, oh, this is like looking through a window.

01:33:26.000 It was like because people don't realize how bad the pictures used to be unless you actually see an old TV, you know, one of these with the tubes compared to what we look at now.

01:33:35.000 I mean, you can't even watch one of those things.

01:33:36.000 But, you know, we didn't know how bad it was until something better came along.

01:33:40.000 But when I first saw that, I was like, oh, my God, this is incredible.

01:33:44.000 But I didn't buy it because it was ten thousand dollars.

01:33:47.000 And that was a lot of money to me back then when I was in my 20s.

01:33:50.000 A $10,000 TV, I could buy a car for that.

01:33:53.000 I wasn't going to spend that much money on a TV. Now you get those TVs for $500, $600.

01:33:58.000 And they're internet-enabled.

01:34:00.000 And they're smart.

01:34:01.000 They do all this stuff.

01:34:03.000 So now people don't need to go to the theater as often because they have good quality at home.

01:34:09.000 They've got all kinds of streaming services they can see.

01:34:11.000 And so if we're evolving...

01:34:14.000 To the point where more people are chilling at home with Netflix, then the theaters have to evolve.

01:34:20.000 And you know what?

01:34:20.000 So we can use those resources.

01:34:22.000 We can do other things.

01:34:23.000 I mean, businesses have to find other ways to make me spend my hard-earned money at their establishment.

01:34:31.000 But by the way, the example of a television set, because you hear this all the time.

01:34:35.000 I mean, it's a little bit of a tangent, but it's an important topic.

01:34:39.000 The reason that I didn't buy that $10,000 TV, it wasn't because I didn't want it, it was because I couldn't afford it, right?

01:34:46.000 But some people were rich enough to afford it, and they bought those TVs.

01:34:52.000 And because some rich people Bought those $10,000 TVs.

01:34:57.000 The companies that made them got money so that they can figure out how to make them cheaper.

01:35:02.000 And then the price came down to $5,000.

01:35:05.000 And then more people bought them.

01:35:06.000 And as more people bought them, the companies got bigger and they invested in R&D and they found out how to make them better and cheaper.

01:35:13.000 And so the free market reduces prices.

01:35:17.000 And when prices go down, we buy more stuff.

01:35:21.000 But now you have all these politicians trying to sell us a bill of goods that we need inflation.

01:35:27.000 That the Federal Reserve has to make sure that prices go up every year.

01:35:32.000 Because if prices don't go up, they say we won't buy anything.

01:35:35.000 We're all going to sit back and wait for lower prices, which is a bunch of nonsense.

01:35:40.000 People buy televisions, they buy computers, they buy cell phones.

01:35:44.000 They know that if they wait a year or two, they'll be cheaper, but they don't wait.

01:35:48.000 Because the only time you wait to buy something is if you can't afford it.

01:35:52.000 And then you wait until you can't afford it.

01:35:54.000 You know, the first cell phone.

01:35:55.000 You ever watch the movie Wall Street?

01:35:57.000 Yes, I talk about that scene all the time.

01:35:59.000 Him walking on the beach with that brick.

01:36:01.000 Yeah, money never sleeps.

01:36:03.000 Those cell phones were like, I don't know, five grand back then.

01:36:08.000 And if you made a phone call, It was like a dollar every 30 seconds.

01:36:14.000 I remember my first cell phone.

01:36:16.000 I would have to get off the phone so quickly because I didn't want to spend the money.

01:36:21.000 I would wait until the evening or the weekends to make the calls because it was too expensive to make the call during the day.

01:36:28.000 I remember those days.

01:36:30.000 Roaming.

01:36:30.000 Remember roaming?

01:36:31.000 Yeah, you get charged.

01:36:33.000 Crazy money.

01:36:34.000 I mean, you got charged extra.

01:36:35.000 Long distance.

01:36:36.000 I mean, it used to cost a lot of money to dial long distance.

01:36:39.000 Yeah, that's a good example.

01:36:40.000 I mean, there's no such thing.

01:36:40.000 I can call somebody in Asia on WhatsApp, and it's free, and I can see them.

01:36:47.000 This is the beauty of capitalism.

01:36:49.000 The free market brought the prices down, and now more people own these products.

01:36:54.000 So the government is trying to tell us that we need rising prices.

01:36:58.000 We don't.

01:36:59.000 Businesses make more money when prices go down.

01:37:02.000 Because when prices go down, their costs go down.

01:37:05.000 And what's important is not the price, but the margin.

01:37:08.000 The difference between your cost and your price.

01:37:10.000 And the lower the price, the more customers you have.

01:37:13.000 And if you sell more units, you make more money.

01:37:16.000 So this is all nonsense, but that's the beauty of capitalism.

01:37:19.000 It makes things cheaper and better.

01:37:21.000 Government makes things worse and more expensive.

01:37:24.000 Every service that the government provides you with, whether it's education or healthcare, it gets more expensive and the quality goes down.

01:37:33.000 Everything we get from private sector gets cheaper and the quality goes up.

01:37:38.000 That's why we want to limit what government does to the smallest amount of stuff.

01:37:44.000 And let the free market do everything else.

01:37:46.000 Because it's going to do it better.

01:37:48.000 I see what you're saying.

01:37:49.000 It sounds beautiful if it was that simple.

01:37:52.000 Do you think it's really possible to manage this whole country that way?

01:37:57.000 Genuinely?

01:37:58.000 Well, the problem is... 1.00

01:38:00.000 Should we have some regulations to get from being a complete asshole? 1.00

01:38:02.000 That is the problem. 1.00

01:38:03.000 Because you have these politicians that want to get votes.

01:38:07.000 And the way they get votes is they promise to steal something from one person and give it to the person who votes for them.

01:38:13.000 That's the problem.

01:38:14.000 And then in order to stay in power...

01:38:16.000 Right?

01:38:18.000 Governments basically take what amounts to bribes from businesses to basically protect them from competition or bail them out.

01:38:26.000 We've given the government too much power and you can't blame the private sector for trying to get that power to be used in its advantage because if it doesn't do that, one of its competitors will get it and it'll be used again.

01:38:40.000 It's like the government is like the mafia, right?

01:38:42.000 And people have to pay I don't know how to set them against somebody else.

01:38:50.000 You know, there's a great movie.

01:38:51.000 I might as well plug it because the sequel is coming out.

01:38:54.000 But the guys that produced it, they did a really good job.

01:38:57.000 It's the bubble movie, right?

01:38:58.000 And if you go to letusdisagree.com, you can see this movie.

01:39:03.000 But the guy that produced it, Jimmy Morrison, and I remember he came to my office and filmed me.

01:39:09.000 He started it back in like 2010 or something.

01:39:13.000 Because he wanted to talk to the people that predicted the 2008 financial crisis and get their perspective on what the government did wrong.

01:39:19.000 And so this is a whole movie about the history of how government has screwed stuff up.

01:39:24.000 Going all the way back to the Great Depression.

01:39:27.000 Because there's a lot of misinformation out there about why we had the Depression.

01:39:32.000 People say, oh, it's because we had too much capitalism.

01:39:35.000 It's not.

01:39:36.000 It's because we had too much government.

01:39:38.000 We had a depression in 1920 that nobody knows about because it ended so quickly because the government did nothing.

01:39:44.000 The reason we had a Great Depression in the 30s was because Herbert Hoover did the same type of stuff that Trump is doing.

01:39:51.000 Herbert Hoover was the first We're spending money to prime the pump to try to make it better.

01:39:59.000 We can't just sit back and allow people to lose their jobs.

01:40:02.000 And so Hoover interfered in the economy and helped create the Great Depression.

01:40:07.000 And then Roosevelt came in and just expanded on Hoover's failed programs.

01:40:12.000 And the Great Depression spanned the entire decade of the 1930s.

01:40:15.000 We didn't get out of the Depression until 1945 when we ended the Second World War and government finally started to get smaller.

01:40:22.000 But this movie goes all the way back to that, and then it goes to the housing bubble.

01:40:26.000 And so it's a great movie to really show how the government creates these problems with well-intentioned programs.

01:40:33.000 And the sequel is about to come out, which is about the next crash, which is the one that's coming.

01:40:39.000 And it's coming soon.

01:40:41.000 And because of what we just did after COVID-19, And the mood that we're in right now.

01:40:48.000 I mean, I am so terrified of what's coming in this country.

01:40:53.000 I mean, the popularity of socialism has risen so dramatically because we have discredited capitalism by preaching it and not practicing it.

01:41:03.000 All the damage that has been done in the economy in the name of capitalism has given it a black eye.

01:41:08.000 You know, there are real problems in this country, and I'm very sympathetic.

01:41:12.000 With people on the left who point out some real problems.

01:41:15.000 Now, racism isn't one of them.

01:41:17.000 Let's forget about that.

01:41:18.000 But there are a lot of problems.

01:41:20.000 They're not because of racism.

01:41:21.000 They're because of too much government.

01:41:23.000 And those problems are real.

01:41:25.000 And I want those problems solved.

01:41:27.000 But I understand that the solutions that everybody has, we're going to make them much worse.

01:41:32.000 And the way we're going to finance it, by printing money.

01:41:36.000 See, we're Tax the rich.

01:41:39.000 That's not going to work.

01:41:40.000 We've tried to tax the rich before.

01:41:42.000 In fact, people don't know this.

01:41:44.000 The only reason we have an income tax is because we were going to tax the rich in 1913. That's the only reason.

01:41:51.000 And the government told the public, if we have an income tax on Rockefeller and Carnegie and Vanderbilt, and it was only going to be like 2%, tiny, little, little, teeny tax.

01:42:00.000 The government said, we'll eliminate tariffs.

01:42:03.000 That's why we had an income tax, to get rid of tariffs.

01:42:05.000 Because tariffs were paid by the average American.

01:42:08.000 I mean, people back in 1913 were smart enough to know that consumers paid tariffs.

01:42:13.000 I mean, Donald Trump is trying to pretend that the Chinese pay his tariffs.

01:42:16.000 They don't.

01:42:18.000 Americans pay every tariff that Trump has imposed.

01:42:20.000 They're a tax on Americans. 0.96

01:42:21.000 That's what they are.

01:42:22.000 And so what Hoover said, or not Hoover, yep, what Woodrow Wilson said was, hey, Let's tax the rich with an income tax and we can eliminate these tariffs that the average people are paying.

01:42:35.000 And we made that deal.

01:42:37.000 But now, average Americans are paying income taxes at levels far higher than anything contemplated for Vanderbilt and Rockefeller and Carnegie.

01:42:48.000 So look, taxing the rich doesn't work.

01:42:51.000 And you know what?

01:42:52.000 A lot of the wealth that Bernie Sanders, and I know you had him on the show, but a lot of the wealth that his ilk wants to tax is going to be destroyed by the very taxes that they want to impose.

01:43:03.000 And they're not going to collect anywhere near the revenue that they think they're going to get.

01:43:08.000 Instead, everything is going to cost much more than they think, and they're going to have to pay for it by printing money.

01:43:13.000 And they're going to destroy the value of the currency.

01:43:15.000 If you're a person who was advising a president or a governor to How to fix an economically disabled community.

01:43:24.000 If you have a community that's always had a history of poverty and crime and drug use and gang use in these communities, what would you do?

01:43:36.000 How do you use this idea of capitalism to fix something that clearly requires some charity?

01:43:45.000 First of all, we can stop making the problem worse.

01:43:53.000 Just like the war on poverty, it's backfired.

01:43:55.000 The war on drugs is a failure.

01:43:58.000 In a free society, people have a right to consume what they want to consume.

01:44:04.000 If they want to do drugs, let them do drugs.

01:44:07.000 Even if those drugs are harmful, adults can make decisions and deal with the consequences of their decisions.

01:44:14.000 Especially the legal alternatives are just as bad.

01:44:18.000 Right.

01:44:18.000 But the problem is when you have the war on drugs and you make it a crime, now you incentivize criminal activity.

01:44:28.000 Because whenever something is illegal, it's much more expensive than it was And now you create this huge profit opportunity for criminals to come in and fill that demand.

01:44:39.000 Because people still want the drugs.

01:44:41.000 They just can't buy them legally through a reputable source.

01:44:44.000 The only way they can get them is illegally through a criminal.

01:44:47.000 So this is the best example of what we've created in Mexico.

01:44:50.000 The best example of that in Mexico, right? 0.90

01:44:53.000 And then what you do is you increase the cost of the illegal drugs.

01:44:57.000 So let's say there's a heroin addict.

01:44:59.000 And now heroin is illegal.

01:45:01.000 And so heroin is very expensive.

01:45:04.000 Well, where is this heroin addict going to get the money to buy that heroin? 0.99

01:45:07.000 He goes out and steals.

01:45:09.000 I mean, most of the robbery is committed by drug addicts because they need the money to buy their expensive heroin.

01:45:15.000 Well, if heroin were legal, it would be much cheaper and they wouldn't have to steal.

01:45:19.000 Of course, and the best example is prohibition, right?

01:45:22.000 I'm not saying that people should do heroin, but they should be free to make a decision, but they shouldn't have to rob other people to support their habit.

01:45:31.000 And when you have heroin, when it's illegal and there's all these profits, the drug guy, the pusher has an incentive to get you hooked on it.

01:45:41.000 I think maybe you should have to go get a prescription for it where the doctor can try to talk you out of it.

01:45:46.000 Hey, are you sure you want to use this stuff?

01:45:48.000 This is going to really hurt you.

01:45:49.000 Do you really want to become an addict?

01:45:51.000 Here's some movies.

01:45:52.000 Watch what happens to you.

01:45:54.000 Most people probably wouldn't necessarily make that decision if they were confronted with a lot of evidence that shows why it's a very We've got to get rid of the war on drugs, get rid of the crime in that community.

01:46:08.000 That's number one.

01:46:09.000 But then, as far as if you've got a lot of poor people, why are people poor?

01:46:15.000 They're poor because they don't have The skills or they can't earn enough money.

01:46:21.000 They're not productive enough to generate income above the poverty line.

01:46:26.000 So if you have people who are poor, the way to make them less poor is to increase their productivity.

01:46:34.000 One way, obviously, is through education when they're young.

01:46:37.000 But I don't think government education is the solution because I don't think government education is educating I want free enterprise.

01:46:53.000 I want vouchers or private schools to compete for educational dollars just the way the cell phone companies are competing.

01:47:02.000 You know, they want me to buy their cell phone instead of somebody else's.

01:47:05.000 They have to make it better and they have to make it less expensive.

01:47:08.000 So let's have schools that are competing to be the best, to offer the best education at the best value.

01:47:14.000 And we've got in these cities, we've got these poor kids trapped in these failed government schools.

01:47:19.000 They waste their time.

01:47:21.000 They learn nothing.

01:47:22.000 A lot of these kids graduate, they're not even literate.

01:47:24.000 They can't even do basic arithmetic.

01:47:28.000 But in the current state of the world right now, those people don't have any other options.

01:47:34.000 They don't have any other options because the government has taken away that option.

01:47:38.000 But what do you do for them in real time?

01:47:42.000 If you have a guy who's in a lower income family and he has a 7 year old son and that kid is going to school right now, how do you fix that right now?

01:47:52.000 If we had private schools, the kid could go there.

01:47:56.000 They couldn't afford that.

01:47:57.000 What if they couldn't afford the private schools?

01:47:59.000 For people who are really poor, private schools would give out scholarships to kids that have a lot of potential and their parents don't have the money.

01:48:07.000 But when the private sector educates kids, it's cheaper.

01:48:11.000 A lot of potential.

01:48:13.000 That bothers me.

01:48:14.000 Because what if a kid doesn't have a lot of potential?

01:48:16.000 Then he doesn't get an education because he can't afford a private school.

01:48:20.000 Not every, but let's say a kid doesn't have a lot of potential.

01:48:24.000 A certain type of education might be a waste.

01:48:27.000 That kid might be better off learning a trade.

01:48:29.000 He might be better off learning how to do something.

01:48:34.000 How would you know while the kid is seven?

01:48:36.000 If the kid's in first grade and is seven, how do you know whether or not that kid has a lot of potential?

01:48:40.000 That's crazy.

01:48:41.000 Seven is, I don't know, seven might be a little young.

01:48:43.000 How old before you pull the plug on that kid?

01:48:46.000 The tuition in first or second grade is probably going to be less than in high school.

01:48:52.000 Because in order to teach a second grader, the teacher doesn't have to know as much as the teacher needs to know to teach a tenth grader.

01:49:00.000 So you wouldn't have to pay a second grade teacher as much as a tenth grade teacher.

01:49:04.000 See, the problem in the government is everybody gets paid the same.

01:49:08.000 Whether they're a lousy teacher or a good teacher, whether they're teaching a first grader or a high school, it's just all based on seniority.

01:49:16.000 It's a crazy crackpot system that only the government could devise, and it's only because they have a captive audience.

01:49:23.000 The customers don't have a choice, and the parents aren't even involved.

01:49:28.000 If the parents were actually writing a check and paying for the education, they would make sure the kids did the homework.

01:49:34.000 They would make sure they were getting their money's work.

01:49:36.000 When you get it for free, I mean, you just take We need real education for the kids that can benefit from it.

01:49:43.000 We need to get rid of the minimum wage law and all sorts of occupational licensing laws and other things that the government does that prevent people from getting jobs or starting businesses.

01:49:54.000 The government is creating all sorts of barriers, artificial barriers, that would not exist absent government.

01:50:01.000 Right?

01:50:01.000 Like, you have a government, let's say, you know, if you want to be a florist, a lot of these states, they have licenses.

01:50:08.000 You have to get a license to sell flowers. 0.71

01:50:12.000 Why?

01:50:13.000 Why can't I just buy flowers from whoever I want?

01:50:15.000 I mean, what's the worst thing that can happen to me?

01:50:17.000 I buy flowers from a guy that doesn't know what he's doing, I get a lousy arrangement, and so I don't go back.

01:50:23.000 Does the government have to protect me from getting a bad floral arrangement?

01:50:27.000 Well, look, the free market's sorted out.

01:50:29.000 If a guy's no good, he won't have any customers.

01:50:31.000 But we make it a lot harder.

01:50:32.000 There's all kinds of regulations and rules and permits.

01:50:35.000 Just let people go into business.

01:50:38.000 I mean, poor people can start businesses if we didn't make it so expensive and so hard.

01:50:42.000 And if they can flourish in the marketplace, if they can find customers, then great.

01:50:47.000 If they're no good at what they do, they're not going to have any customers.

01:50:51.000 And you feel like this applies to everything?

01:50:54.000 This applies to all businesses all the time?

01:50:57.000 I mean, pretty much.

01:50:58.000 I mean, we don't need government.

01:51:00.000 Having these certifications.

01:51:02.000 I mean, the private sector is certainly capable.

01:51:05.000 At this point.

01:51:06.000 I mean, look.

01:51:06.000 Is it consideration social media and holding people accountable, like holding businesses accountable for their actions?

01:51:14.000 It's a different world in terms of the ability to alert consumers as to what's good and what's bad.

01:51:20.000 It's a different world when it comes to that kind of thing.

01:51:23.000 But people, especially now with the internet.

01:51:25.000 Yeah.

01:51:25.000 If a business isn't any good, it's going to get a bad reputation online.

01:51:30.000 You're going to have consumer reports that go out and rate.

01:51:33.000 Look at what happens.

01:51:35.000 Look at the banks.

01:51:36.000 The banks are completely regulated by the government.

01:51:39.000 Everybody who opens up a bank account knows that the government is guaranteeing their deposit.

01:51:45.000 That wasn't always the case.

01:51:48.000 The deposit insurance didn't start until the 1930s because of the bank failures in the Great Depression, which were minimal.

01:51:55.000 I mean, fewer than 2% of the banks actually failed.

01:51:58.000 There wasn't that much in the way.

01:51:59.000 And we had a lot of banks, way more banks than we have now.

01:52:02.000 Now we just have these massive banks.

01:52:04.000 Before the government got involved, we had a very, very competitive market.

01:52:08.000 We had lots of little banks out there.

01:52:10.000 Taking deposits, making loans to entrepreneurs, to start businesses and employ people, not funding Wall Street.

01:52:17.000 Right, but do you remember the savings and loans collapse?

01:52:20.000 For sure you do, right?

01:52:23.000 Yeah, but those banks had government guarantees.

01:52:26.000 That was the problem.

01:52:27.000 That was the problem?

01:52:29.000 Before the government guaranteed banks, before you would put your money in a bank, You would do a little research, just like you do research now before you buy a car.

01:52:40.000 You try to figure out which is the best bank for my money, which bank is the safest, which bank isn't having problem loans.

01:52:48.000 And you would consult periodicals or reviews online, not online, but you would find out where the banks were good, and you would put your money in that bank.

01:52:58.000 And now the banks We're good to go.

01:53:18.000 Today, it's very unsound.

01:53:20.000 The banks are doing all sorts of reckless things with their deposits because no one gives a damn.

01:53:25.000 Nobody cares what the bank does with their money once they deposit it because the government guarantees a deposit.

01:53:32.000 One bank is just as good as another.

01:53:34.000 I'm just going to put whatever bank is closest to me.

01:53:44.000 We have a banking system that is completely reckless.

01:53:49.000 All these banks that we bailed out in 2008 are going to fail again and they're going to need even bigger bailouts.

01:53:55.000 We have a very fragile system.

01:53:58.000 And now they say, well, we can't let one of these banks fail because it's so big.

01:54:02.000 Why is it so big?

01:54:03.000 Because the government insured their deposits and allowed them to get this big and allowed them to have access to all this cheap money from the Federal Reserve.

01:54:16.000 We don't need the government to do that.

01:54:19.000 The banks are much more reckless and much more corrupt now because of government than when we had free market forces reining them in.

01:54:26.000 Why aren't there more people saying what you're saying?

01:54:29.000 Why is this a controversy?

01:54:31.000 There are.

01:54:32.000 I mean, I'm not the only free market guy out there.

01:54:34.000 As I said, if you have Jurgensen, a libertarian candidate, she'll say some of this stuff.

01:54:39.000 No, I'm sure I could find it.

01:54:42.000 We could actually have a woman president if we vote for her. 1.00

01:54:44.000 I'm sure I could find it if I went looking for it, Peter.

01:54:46.000 What I'm saying is, why is this not...

01:54:49.000 You know, there's various discussions about how we should do things economically moving forward, right?

01:54:55.000 You hear it from a bunch of different experts.

01:54:57.000 I don't hear your perspective.

01:54:58.000 Your perspective is very ruthless and honest.

01:55:02.000 And some people would say, maybe you're not considering the people that really don't even have an opportunity to get into this system and compete.

01:55:10.000 They'll be held down.

01:55:12.000 They'll be put into this cloud.

01:55:13.000 Well, I'm not...

01:55:13.000 I'm not being ruthless.

01:55:15.000 I am being honest.

01:55:16.000 But I think I'm being fair and compassionate.

01:55:18.000 Because I understand the damage that is being done.

01:55:21.000 I understand.

01:55:22.000 And the name of these programs.

01:55:23.000 But the reason that you don't see more people like me in positions of power in government is because it's hard for people like me to get a power We're good to go.

01:55:49.000 They want to fund candidates that are going to protect the status quo.

01:55:53.000 And the same thing with people.

01:55:54.000 Look, the government has crippled so many people that they think they need a government crutch.

01:55:59.000 You know, that's an old Harry Brown quote that he ran for libertarian president.

01:56:04.000 He said the government is great at crippling you and then handing you a crutch and saying, you see, without me, you couldn't walk.

01:56:11.000 So many people have been crippled, and they think they need that government crutch.

01:56:16.000 I don't want them to be crippled. 0.96

01:56:17.000 I want them to walk on their own, to be free.

01:56:22.000 We had the 4th of July just recently, and we celebrate America.

01:56:27.000 I talked on my own podcast about what it means to be an American, and people just don't appreciate it.

01:56:35.000 What truly America was all about.

01:56:37.000 It's about freedom.

01:56:39.000 It's about liberty and individual opportunity.

01:56:42.000 It's about being left alone from government and being able to achieve all that you can achieve without anybody standing in your way, without anybody erecting a roadblock.

01:56:52.000 And we created government in America.

01:56:55.000 Government didn't create us.

01:56:56.000 We didn't have a king that gave us some privileges.

01:56:59.000 We started off as free people and we ceded some of our sovereignty to a government to secure and protect our rights.

01:57:06.000 And that's it.

01:57:07.000 And that's what made Americans rugged individuals who were not beholden or begging for government.

01:57:13.000 They took care of themselves and they took care of their neighbors if their neighbor really needed help.

01:57:19.000 It wasn't about thief.

01:57:20.000 It wasn't about trying to get free stuff from the government.

01:57:23.000 I mean, look at all these kids now.

01:57:25.000 What do they want?

01:57:25.000 Free this, free healthcare, free education, all kinds of free stuff.

01:57:30.000 Free housing, guaranteed jobs.

01:57:34.000 That's not what America was about.

01:57:36.000 All of my grandparents, all four of my grandparents came to this country broke, barely spoke any English.

01:57:43.000 Some of them were teenagers.

01:57:45.000 They came with nothing.

01:57:47.000 From poor countries. 0.72

01:57:49.000 And they came to America. 0.97

01:57:50.000 They had no welfare, no food stamps, no minimum wage.

01:57:54.000 They didn't want anything from the government.

01:57:57.000 They came to America because they could be free of government.

01:58:00.000 They left the big governments that existed in Europe to have American freedom.

01:58:05.000 Because that's what it meant to be an American.

01:58:08.000 And it was unique.

01:58:09.000 And we created the wealthiest society in the history of the world because of the freedom that was uniquely American.

01:58:17.000 So that's what we need to restore.

01:58:19.000 That's our birthright, is to be free.

01:58:22.000 Not to try to get the government to steal stuff from our neighbors because we think we're entitled to it.

01:58:29.000 That's a hell of a rant right there, Peter Schiff.

01:58:31.000 I tell you what, that was very good.

01:58:35.000 I see your perspective.

01:58:38.000 Wouldn't that make you be proud to know that we're a nation of free people?

01:58:43.000 Can I say that your assessment, this is what I'm seeing from you, you think that the The competition and the nature of the free market would have been better off without the intervention of the government, but you understand the government was kind of put in there to regulate things because they thought that people were going to get out of hand and they wanted to make sure that things were fair,

01:59:06.000 but then the government grew too big and became a problem with human beings in general.

01:59:10.000 And this is my perspective.

01:59:11.000 Human beings in general...

01:59:13.000 But hold on a second.

01:59:13.000 Human beings in general have a problem when they have If that power is absolute, that's where people have a problem.

01:59:30.000 Because human beings, just in general, have a problem with having absolute power over other people.

01:59:36.000 Absolute power corrupts absolutely.

01:59:38.000 That is the problem.

01:59:42.000 Yes.

01:59:43.000 And maybe term limits would help this if we could have some term limits or something like that.

01:59:47.000 Maybe you can't be in government for more than, I don't know, five or ten years and then that's it.

01:59:52.000 We need to put these people in mushrooms. 1.00

01:59:53.000 It's not a career.

01:59:54.000 But these bureaucrats get in office. 1.00

01:59:59.000 And they want to stay there.

02:00:01.000 They like it.

02:00:02.000 They enjoy the perks, the privileges.

02:00:05.000 So what they do is they go out and they try to raise money to get reelected.

02:00:08.000 So they go to somebody and they say, give me money to help me.

02:00:12.000 And it's like, well, what are you going to do for me?

02:00:13.000 What's in it for me?

02:00:14.000 All right, well, I'll give you this special tax break or I'll do something to protect you.

02:00:20.000 And so this is what happens.

02:00:21.000 So people are bribing We need to disarm the bureaucrats. 1.00

02:00:30.000 We have to take the power away from Washington.

02:00:32.000 Washington needs to live by the Constitution, which limited federal power.

02:00:37.000 Almost everything the government does today is unconstitutional, yet they do it anyway.

02:00:42.000 It's the fact that they can wield this unconstitutional power.

02:00:46.000 I'm giving you a magic wand.

02:00:48.000 Peter Schiff, if I gave you a magic wand, what do you do with it?

02:00:51.000 How do you fix things?

02:00:52.000 If I say, Peter Schiff, I love what you're saying.

02:00:55.000 If Trump pulls you into his office, Peter, love what you said, phenomenal, tremendous.

02:00:59.000 And he pulls you into the Oval Office and he says, what do I do?

02:01:03.000 How do I fix this mess?

02:01:06.000 Yeah, well, again, you know, he's not going to like the truth.

02:01:10.000 What if he did?

02:01:11.000 There's an old expression that you shoot the messenger, right?

02:01:13.000 Nobody wants to be the bearer of bad news.

02:01:15.000 Maybe he's open-minded.

02:01:17.000 Yeah, it would have been better if he did it on day one.

02:01:20.000 It would have been a lot more effective if he had told the truth rather than lied for three years and now come on, okay, I've been lying to you, now I'm going to finally level and tell it like it is.

02:01:29.000 Do you think that he's been lying?

02:01:30.000 We can't solve a problem.

02:01:31.000 Do you think he's been lying or do you think it's been a disagreement in the way you look at it versus the way they look at it?

02:01:39.000 No, I think he's been lying.

02:01:40.000 Really?

02:01:40.000 Because look, there's no way...

02:01:43.000 That Trump, as a candidate, said the real unemployment rate was 30 or 40%, and the government numbers were a lie, a fraud.

02:01:52.000 So if he actually said that, and now all of a sudden he's president, and the same exact Labor Department that was coming up with the same 5% unemployment numbers that he said was really 30 or 40, and now he says, oh, the unemployment rate is 4%.

02:02:06.000 And that's magically what it is.

02:02:09.000 He knows that he's lying.

02:02:11.000 Either he was lying as a candidate or he's lying as president.

02:02:15.000 But these statistics don't mean anything.

02:02:18.000 We don't measure unemployment the way we measured it in the past.

02:02:22.000 Because in the past, if you were unemployed...

02:02:31.000 You are still counted as being unemployed.

02:02:34.000 Now, if you've given up looking for unemployment because you don't think you can get a job, you're not in the statistics.

02:02:40.000 So, you know, you're not looking for a job.

02:02:42.000 I mean, you're unemployed, but you're not counted.

02:02:45.000 Or, this happens a lot.

02:02:47.000 Let's say somebody had a good job, and they lose that good job.

02:02:51.000 And so while they're looking for another good job, they accept a shitty part-time job, right?

02:02:56.000 They're still looking for a good job, but they're making ends meet with this crappy part-time job.

02:03:00.000 In the past, that guy would still be considered unemployed because he was still looking for a job, even though he took a part-time job to help make ends meet.

02:03:09.000 Today, if you take a part-time job, and even if it's one hour a week, and you spend the rest of the week looking for a job, you're not counted as unemployed.

02:03:18.000 So when you take the statistics from today And compare it to statistics from the 60s or 70s or 50s, you're comparing apples to oranges because back then all those people were considered unemployed.

02:03:31.000 And this is what Trump meant when he was a candidate.

02:03:34.000 If you actually measured unemployment today, the way it was measured back then, we'd have an unemployment rate well above 10%.

02:03:41.000 I don't know where it would be.

02:03:43.000 It probably wouldn't be as high as 30 or 40%, like Trump was saying as a candidate.

02:03:47.000 He was probably exaggerating that.

02:03:48.000 But his basic premise was right.

02:03:51.000 The numbers were a lie.

02:03:53.000 The same thing about the stock market.

02:03:55.000 How is it that the stock market was a bubble while he was a candidate, and then all of a sudden it wasn't a bubble now that he's president?

02:04:02.000 It's the same bubble.

02:04:04.000 He was criticizing Janet Yellen for keeping interest rates too low.

02:04:09.000 Then he criticized Powell for raising them.

02:04:12.000 And demanded that they go to zero.

02:04:13.000 In fact, he actually wants negative interest rates.

02:04:16.000 He is actually saying that rates should be negative.

02:04:19.000 When he was criticizing Yellen for having them at zero, now he thinks zero is too high.

02:04:24.000 So negative means you would get paid if you bought a loan?

02:04:27.000 If you got a loan, you'd get paid.

02:04:30.000 That's what he wants.

02:04:32.000 Where's that money coming from?

02:04:34.000 Exactly.

02:04:34.000 Donald Trump, I think one of the speeches that he gave, he's like, I don't know how this is happening, who's making these loans, but we want some of that money.

02:04:45.000 He's like, we should be able to borrow at negative rates.

02:04:47.000 Well, that means somebody has to be losing money. 0.98

02:04:50.000 Well, the only one dumb enough to lose the money is the Federal Reserve. 0.98

02:04:54.000 Well, that's the American public. 0.98

02:04:57.000 Why should the American public go deeper into debt?

02:05:03.000 We need higher interest rates.

02:05:06.000 As I said earlier, the reason that we were so ill-prepared for COVID-19, the reason that families couldn't get by without a paycheck for We're good to

02:05:38.000 go.

02:05:38.000 But this is four months.

02:05:39.000 That's a long time, Mr. Schiff.

02:05:41.000 You know what?

02:05:42.000 It's not.

02:05:42.000 But it is.

02:05:43.000 To live a normal life with a car payment and a mortgage and a Verizon bill, that's a lot of money.

02:05:49.000 But you know what?

02:05:50.000 People shouldn't have car payments. 1.00

02:05:52.000 Oh, you son of a bitch. 1.00

02:05:52.000 They should own cars that they can afford. 1.00

02:05:54.000 Buy a used car. 1.00

02:05:54.000 You son of a bitch. 1.00

02:05:55.000 But what if I get a 2020 Corvette right now? 1.00

02:05:58.000 The reason that's...

02:05:59.000 What if I can get a 2020 Corvette right now? 0.97

02:06:02.000 Look, if I'm working at fucking UPS and I'm making 60 grand a year and they go, you're qualified. 0.99

02:06:08.000 I'm like, holy shit, I'm getting a Corvette. 0.99

02:06:10.000 I'm not waiting to save up $85,000. 0.98

02:06:14.000 If we had a free market in lending, if we didn't have government guarantees and we didn't have artificially low interest rates, no bank would lend you that money.

02:06:22.000 And interest rates would be much higher for those type of consumer loans.

02:06:25.000 I'm glad they're going to lend it to me because if they lend it to me, I can get a Corvette.

02:06:28.000 The government is subsidizing these auto loans.

02:06:31.000 The government is buying these loans.

02:06:33.000 The government is making it possible for people who can't afford expensive cars to buy them.

02:06:38.000 That is not capitalism.

02:06:39.000 Explain that.

02:06:40.000 How is the government subsidizing auto loans?

02:06:41.000 If I want to buy a 2020 Corvette and I make $60,000 a year and they hook me up for some $85,000 loan, how is the government subsidizing that?

02:06:50.000 Because the government is buying those loans.

02:06:53.000 What happens is your car company doesn't actually keep the loan.

02:06:57.000 So it doesn't give a damn whether or not you actually can repay it.

02:07:00.000 Really?

02:07:00.000 So it loans you the money, right?

02:07:03.000 And now it has this loan.

02:07:04.000 And it sells it and the government buys it.

02:07:06.000 Or some government guaranteed entity buys it.

02:07:08.000 Or the Fed now buys it.

02:07:10.000 This is assuming that you don't pay it.

02:07:13.000 But the bank doesn't lose any money.

02:07:15.000 Assuming you don't pay it?

02:07:17.000 Assuming you don't pay it, but what if you do pay it?

02:07:19.000 Like if you have a loan and you pay all your payments on time, the government doesn't assume that loan, does it?

02:07:25.000 No, no, they don't know which loans are going to default and which they're going to pay.

02:07:29.000 They just buy all the loans, right?

02:07:31.000 Like, there's a lot of this stuff.

02:07:32.000 Like, you ever go to a mattress store?

02:07:36.000 The mattress store is going to say, you can buy this mattress, no payments, no interest, you know, for, you know, until 2022, 2023, right?

02:07:46.000 Yeah.

02:07:46.000 You ever see these, you know, no payments?

02:07:48.000 Sure.

02:07:49.000 You can, nothing down, walk out the store with a $1,000 mattress.

02:07:52.000 Yeah, not specifically, but I know what you're talking about.

02:07:54.000 Yeah.

02:07:55.000 Well, the reason that this is possible is because the company takes that loan and sells it on the secondary market to get the money.

02:08:05.000 It doesn't care if the person who bought the mattress can repay that loan because it's going to sell the loan as soon as it's originated and get the money.

02:08:14.000 The loan gets bought and packaged and structured and it's all securitized, but all this is being propped up by artificially low interest rates and government guarantees.

02:08:25.000 If we had higher interest rates, Consumer loans would be much more expensive than they are now.

02:08:34.000 Much more expensive.

02:08:35.000 And so most people would not borrow money to buy stuff.

02:08:38.000 They would save up their money and then they would buy stuff.

02:08:42.000 They would buy less expensive stuff.

02:08:43.000 And that's what we want.

02:08:45.000 Because we want savings going to businesses who will invest in plant and equipment to make the country more competitive.

02:08:54.000 To provide services, to create goods, to provide jobs.

02:08:58.000 We don't want to squander savings on consumption.

02:09:02.000 Because when you borrow money to buy capital equipment, The capital equipment makes you more productive, generates more income, and that income helps you liquidate your debt.

02:09:13.000 But when a consumer goes out and borrows money to buy something, they don't get an income-producing asset.

02:09:20.000 Nothing services that debt.

02:09:21.000 They have to service the debt at a future consumption.

02:09:24.000 So now, they're out of work, they can't make their car payment.

02:09:28.000 They can't make their other loan payments.

02:09:31.000 This type of bubble society never should have existed in the first place.

02:09:36.000 And it only exists because of government.

02:09:38.000 Because before government got involved, People had savings.

02:09:42.000 And it's not that the American people changed.

02:09:45.000 It's the American government changed.

02:09:47.000 And when the government changed and created all these perverse incentives, then behavior changed.

02:09:52.000 Government policy manipulated behavior.

02:09:55.000 And it made us behave badly and recklessly.

02:09:58.000 And it set us up for the fall that we're about to have.

02:10:02.000 I completely see your perspective.

02:10:04.000 However, I look at your perspective as a guy who actually understands economics and you're a mature man who's had a successful life.

02:10:12.000 I'm looking at it like if I was a 19 year old kid working at UPS and they told me I could get a Corvette.

02:10:17.000 Okay, let's do it.

02:10:19.000 That's the problem.

02:10:20.000 It is the problem, but it's not the problem.

02:10:21.000 Look what we've done.

02:10:22.000 But it's not the problem, because that kid gets a Corvette.

02:10:24.000 And his summer will be immeasurably better with that Corvette than without that Corvette.

02:10:29.000 And maybe that will propel his emotions and his future and his ambition further than he ever anticipated.

02:10:37.000 Because he had that great summer with that Corvette that he got that he shouldn't have got the loan for.

02:10:42.000 I see what you're saying.

02:10:43.000 If you were my dad, I'd be like, Dad, I know you're right.

02:10:46.000 He probably got that Corvette because he thought he'd get laid more if he had a Corvette.

02:10:48.000 Or because he's a man and he's American and he enjoys a Corvette.

02:10:54.000 It doesn't have to be negative, Peter.

02:10:56.000 I blame the kid.

02:10:56.000 I blame the system for making it possible for him to borrow the money and his parents for not teaching him better.

02:11:03.000 The problem is, I was that kid. 0.98

02:11:05.000 I was that kid and I would be like, fuck yeah, let's get that car. 0.99

02:11:10.000 It's good. 0.98

02:11:11.000 I'm willing to pay the money.

02:11:12.000 Take an example.

02:11:13.000 Let's talk about student loans.

02:11:14.000 Because right now, one of the big political issues, especially among the left, they want to forgive the student loans and they want to make college free.

02:11:23.000 That's a big thing.

02:11:24.000 We have all these students with all this debt and it's bad, which I agree.

02:11:29.000 It's a terrible situation.

02:11:31.000 But what the left doesn't want to accept is responsibility for creating the situation in the first place.

02:11:39.000 It is government's fault that all these student loans exist.

02:11:43.000 Without government, there would be no student loans.

02:11:46.000 You know, once upon a time, people didn't borrow money to go to college.

02:11:50.000 Nobody borrowed money to go to college, right?

02:11:52.000 My father went to college, and his parents were poor.

02:11:57.000 I mean, my dad said they weren't sure if They were upper-lower class or lower-middle class.

02:12:02.000 But his dad was a carpenter.

02:12:04.000 And so he went to college.

02:12:06.000 And his parents didn't have any money to send him to college.

02:12:09.000 And there were no loans.

02:12:11.000 So how did my dad go?

02:12:12.000 He got a summer job.

02:12:13.000 And he worked his way through school.

02:12:15.000 Which is what most people did.

02:12:17.000 You worked your way through school.

02:12:18.000 So here's what happened.

02:12:20.000 You know, around the 1960s, once the 18-year-olds could vote, this was a big thing, they lowered the voting age from 21 down to 28, right?

02:12:27.000 So now you have all these 18-year-olds that are about to go to college.

02:12:31.000 And so here's what the politicians said to all the 18-year-olds, the Democratic politician.

02:12:36.000 They said, you know, you shouldn't have to work.

02:12:39.000 Your summers.

02:12:40.000 You shouldn't have to have jobs while you're in school.

02:12:43.000 You should just be able to go to school and enjoy yourself.

02:12:46.000 And we're going to make it possible for you to borrow money to go to school by guaranteeing the loans.

02:12:53.000 Because normally, the bank wouldn't lend you any money because you have no credit history, you have no assets, so you're not going to be able to get a loan.

02:12:59.000 But we're going to guarantee the loan, and that way you'll be able to get the loan.

02:13:02.000 Now somebody else won't get it, some businessman won't get the loan, because we're going to make We're good to go.

02:13:11.000 We're good to go.

02:13:36.000 What year was this?

02:13:38.000 Maybe not the 60s.

02:13:39.000 I don't know the exact year.

02:13:40.000 Oh, okay.

02:13:41.000 But anyway, so then, once the colleges saw that all these kids could borrow money to go to college, well, they were like, this is great.

02:13:52.000 I'm just going to raise prices.

02:13:54.000 So all of a sudden, tuition started to go up.

02:13:56.000 I mean, for a long time, you can look back in history, college Until the 60s.

02:14:05.000 Until the government really got involved.

02:14:08.000 And so as soon as these colleges saw that the kids had access to all this money, they started jacking up prices.

02:14:16.000 And then, of course, the university started competing.

02:14:19.000 Who's got the best gymnasium? 0.92

02:14:21.000 Who's got the best housing?

02:14:23.000 All kinds of other incentives.

02:14:24.000 And then everything became bloated and they kept raising their prices.

02:14:28.000 And then, in order to get the votes of the students, the government kept raising the limits on how much loans they would guarantee.

02:14:36.000 So it became this self-perpetuating cycle where the more money the government guaranteed that the students can borrow, the more the colleges could charge in tuition.

02:14:46.000 And so tuition kept skyrocketing.

02:14:48.000 And then as tuition goes up, it's like, oh, nobody can afford to go to college.

02:14:52.000 We need more loans.

02:14:53.000 So the loans themselves became the reason that people needed the loans, because the loans were why college was so expensive.

02:15:00.000 And so now you needed a loan to go to college, but without the loan, tuition would have come down.

02:15:05.000 You see, if there were no student loans at all, and right now the government has actually taken over, they don't just guarantee student loans, they loan directly to the students.

02:15:13.000 If there were no student loans at all, if the government just said no more student loans, all of a sudden the colleges would be, oh my god, We need to cut costs.

02:15:23.000 Otherwise we'll have no customers.

02:15:24.000 Nobody can afford to go without these loans.

02:15:27.000 And they would cut costs.

02:15:29.000 They would start looking.

02:15:30.000 They would streamline their business like everybody else. 0.97

02:15:33.000 I mean, any business that could charge whatever the hell they wanted because the government could borrow the money If you had a restaurant where the government was going to guarantee to pay the bill of everybody who dined there, I mean, shit, the restaurant could charge whatever it wanted. 0.93

02:15:48.000 Oh, a hamburger's $1,000. 0.97

02:15:50.000 Oh, the government's going to pay?

02:15:51.000 Yeah, what do you care?

02:15:53.000 It's because people are paying with their own money that they've got to keep the cost down.

02:15:57.000 And this situation's been going on for so long that it's just now how they do business.

02:16:03.000 Right, but now, see, college is now so expensive...

02:16:06.000 Kids think they need government to afford it, and they don't realize that the only reason it's so expensive is because of government.

02:16:13.000 That's the Harry Brown cripple you and then give you a crutch.

02:16:17.000 You're freaking me out, Peter Schiff.

02:16:19.000 You're making college so expensive.

02:16:20.000 You're freaking me out, man.

02:16:22.000 Jesus Christ, what a mess.

02:16:23.000 But here's an easy solution.

02:16:24.000 Get rid of the loans.

02:16:25.000 Get rid of the loans.

02:16:26.000 You know, let colleges lower their tuition. 0.62

02:16:30.000 Well, that might be reality anyway.

02:16:32.000 And let people go back to what my dad did.

02:16:34.000 Work your way through college.

02:16:35.000 No big deal.

02:16:36.000 We're in this crazy situation where a lot of kids are going to have to go back to school through Zoom, even Harvard.

02:16:41.000 They're talking about having these Harvard kids do school online for $40,000 a year.

02:16:47.000 Wasn't that what you did?

02:16:48.000 Well, I know, look.

02:16:49.000 Yeah.

02:16:50.000 540?

02:16:51.000 50?

02:16:53.000 Jamie says $50,000 a year to do school online.

02:16:56.000 That's hilarious.

02:16:58.000 Education at this point is a racket.

02:17:00.000 I mean, most people will never recoup the cost of a college degree.

02:17:04.000 I mean, the colleges are out there perpetuating this myth.

02:17:10.000 Going to college is your ticket to success.

02:17:12.000 You have to go and if you don't go...

02:17:15.000 I think I mentioned in the video on your show, the podcast last time where I was down on Bourbon Street in New Orleans and I was interviewing all the people there that were working that had college degrees but were doing menial jobs.

02:17:26.000 Bartending, bouncers and strip cubs, pedicab drivers.

02:17:29.000 They all had college degrees.

02:17:30.000 Some of them had two or three degrees.

02:17:32.000 And, you know, they were doing stuff that, you know, you didn't need to go to college to do.

02:17:36.000 And so the colleges perpetuate this myth.

02:17:38.000 Look, with the internet today and the access to online classes and self-help, you can educate yourself.

02:17:45.000 You don't need to buy this overpriced certificate that says that It doesn't even prove anything now.

02:17:55.000 In fact, the government did two things.

02:17:58.000 They made a college degree very expensive, and then they made it practically worthless.

02:18:02.000 Because before the government started subsidizing college, fewer people actually went.

02:18:07.000 Because only the people that could really benefit from the degree went.

02:18:10.000 And so then if you had a college degree, it actually meant something in the marketplace.

02:18:14.000 Now, since everybody goes to school, because you get the money from the government, In the government, everybody's got a college degree.

02:18:21.000 They mean nothing.

02:18:21.000 So now you've got to get a master's degree.

02:18:23.000 You've got to get a PhD.

02:18:25.000 You're in school until you're in your 30s.

02:18:26.000 It's ridiculous that we spend so much time.

02:18:29.000 It benefits the bureaucracy.

02:18:31.000 It doesn't benefit the kids.

02:18:34.000 So this bubble, this is a gigantic bubble in higher education.

02:18:38.000 It's a bubble in lower education too.

02:18:41.000 I mean, some of America's wealthiest men, they didn't go to college.

02:18:45.000 In fact, way back when, they didn't even go to high school.

02:18:47.000 These billionaires dropped out of grammar school.

02:18:51.000 But today, with the Because one of the things that the colleges had is they had the libraries.

02:19:01.000 They had all the books.

02:19:02.000 So if you wanted to get access to these books, you needed to get into these libraries.

02:19:07.000 Well, it's all on the internet now.

02:19:09.000 They don't have a monopoly on anything.

02:19:11.000 And believe me, you see how much they charge for these books?

02:19:13.000 It's crazy.

02:19:14.000 It's such a good point.

02:19:15.000 These professors write these books and they force the kids to buy these books, paying $100 for a textbook?

02:19:21.000 Exactly. 0.97

02:19:22.000 I mean, it's ridiculous. 0.94

02:19:22.000 It is a racket. 0.94

02:19:24.000 And it's all supported by government.

02:19:26.000 And the problem is, if you come out against this educational racket, oh, you're a bad person.

02:19:32.000 You're anti-education.

02:19:33.000 I'm not a bad person.

02:19:34.000 I care about the kids who are getting ripped off, who are getting indoctrinated and not educated, and who are being saddled with a mountain of debt.

02:19:41.000 And the government says the solution is free education.

02:19:44.000 Can I throw something at you?

02:19:46.000 If you think education is expensive now, wait until you see how much more it costs when it's free.

02:19:51.000 Do you think that the current state of colleges, when we think about colleges today, we think about social justice warriors, we think about these kids growing up in this weird future where they're going to graduate online, do you think that The extreme liberal socialist bend that you see in colleges would be different if there was a free market.

02:20:16.000 Do you think people would be more realistic in terms of all universities were free market based?

02:20:22.000 Do you think people would be more realistic in terms of their expectations for other people in the future?

02:20:33.000 Yeah, I think so.

02:20:35.000 And I think one of the driving forces is a lot of these universities, they always want to hire professors, especially when it comes to economics or some of the political science.

02:20:44.000 They want to hire people who have worked for government.

02:20:47.000 And they want to see some of their professors go to government and then come back.

02:20:52.000 And the only economists that will get a government job are the Keynesian economists who want to pretend that government can actually help the economy.

02:21:01.000 I mean, there is no role in government for a free market economist who says, leave it alone.

02:21:06.000 Let the market function.

02:21:07.000 That guy's not going to get a government job.

02:21:10.000 The government wants to hire people that are going to justify more government spending because that's how they buy their votes.

02:21:16.000 So you get these big government Keynesian economists who go between government and academia, and they go back and forth, and so it perpetuates this cycle.

02:21:26.000 But there are—look, you can find some examples of universities that teach real economics, free market Austrian economics, but they're in the minority.

02:21:37.000 Not that many of them.

02:21:38.000 Is that a problem?

02:21:39.000 I mean, when we think about educating kids— I mean, it's a weird way of looking at it, right?

02:21:48.000 The idea that the government paying for everything, making everything more expensive is going to make more people that are dependent upon not competing and being a part of this weird system where you think you're owed things, right?

02:22:00.000 Yeah, I mean, look at AOC, right?

02:22:02.000 I mean, she was an economics major. 0.98

02:22:04.000 But look, she's completely ignorant about basic economics. 1.00

02:22:07.000 I mean, the thing is, she thinks she knows a lot. 0.98

02:22:08.000 She doesn't know anything.

02:22:10.000 It's like a lot of times when people learn economics in a university...

02:22:15.000 They end up knowing less about economics after they graduate than before they enroll.

02:22:19.000 They lose their common sense, and they get spoon-fed a bunch of nonsense, which they end up regurgitating throughout their careers.

02:22:28.000 I hear what you're saying, but hold on a second.

02:22:30.000 It's done a lot of damage.

02:22:31.000 She's 28, right?

02:22:33.000 I think what she is is an idealist.

02:22:36.000 I think she's a kind person who has this visionary perspective of how she wants the world to play out.

02:22:43.000 When she says those things, I think she's saying those things because she feels like she's a force of good.

02:22:51.000 I don't doubt that.

02:22:53.000 A lot of it could be she's just a great politician. 1.00

02:22:57.000 Yes, but I think that economics are complicated, and I think most 28-year-olds don't really understand it.

02:23:04.000 I think it's really complicated, and I think we get idealistic or ideologically based in, like, you're a left-wing, you think this way, you're right-wing, you think that way.

02:23:15.000 And we get very rigid in how we look at things, but if you want to look at what you're saying in terms of competition creates the best solution for everybody, because the most effective and viable method is the one that rises to the top, and that's the one that people support with their money if they have total freedom.

02:23:32.000 But if you have the government that steps in and dictates that you have to go this way or that way, or it has to cost this much or that much, then the government itself becomes a business.

02:23:41.000 The problem is it needs to justify its own existence by creating more and more regulations, more and more problems, more and more impediments to freedom.

02:23:53.000 Freedom of competition.

02:23:56.000 Every time the government writes a regulation or passes a law, we're less free because those regulations and those laws are limiting our freedom because they're restricting our choices.

02:24:05.000 Right, but to bring the two of us together, to bring everybody together, don't you think that maybe there's an opportunity where people can recognize, that doesn't mean you're a bad person.

02:24:15.000 You're just looking at the actual game.

02:24:17.000 And there's a lot of bullshit going on where people are pretending what's happening is different than what it is because they want to feel better about the results. 0.55

02:24:27.000 I think most of the people on the left are not bad people. 0.96

02:24:32.000 I agree.

02:24:33.000 They're motivated by good intentions.

02:24:35.000 Kindness.

02:24:36.000 They just don't understand the bad outcome.

02:24:38.000 Yes.

02:24:39.000 And this is the interesting thing, because a lot of people, of my persuasion, we look at the left and we don't think they're bad people.

02:24:47.000 We just think they're misinformed.

02:24:48.000 Are you talking about Puerto Rican Jews? 0.62

02:24:52.000 Actually think people like me are bad and evil because we don't agree with their programs. 0.97

02:24:57.000 We must be mean people.

02:24:59.000 We must be heartless people because we're against all the good that they want to do.

02:25:03.000 Okay, but stop.

02:25:04.000 You know that that's a reductionist argument.

02:25:06.000 The rational thought because they don't have those thoughts.

02:25:09.000 Right, but you know that's a reductionist argument that doesn't really make any sense, but you'll entertain it even though you know it doesn't make any sense.

02:25:15.000 The people that are really paying attention know that doesn't make any sense.

02:25:19.000 It's not that you're a heartless person.

02:25:22.000 You're not heartless at all.

02:25:22.000 You're explaining what is actually going on in terms of government subsidizing education.

02:25:28.000 You're talking about competition in terms of the free market.

02:25:33.000 None of what you're saying, just from me to you, is in any way conveying a sense that you're a heartless person.

02:25:39.000 But that is the narrative when people don't agree with what you're saying, because they have in their head an ideologically based alternative to what you're saying.

02:25:49.000 Yeah, and look, I watched the interview that you did with Jon Stewart, right?

02:25:53.000 And Jon said a lot of things that I agree with, like a lot of the problems on Wall Street and the bailouts, all that's true.

02:26:00.000 But again, what he didn't understand was that's not capitalism.

02:26:03.000 That's wrong.

02:26:04.000 That was an example of socialism.

02:26:09.000 Yes, I mean, you'd be willing to pay more taxes if it would make the problems better.

02:26:15.000 Yes.

02:26:15.000 The problem is paying more taxes is going to make the problems worse.

02:26:19.000 We're paying a lot of taxes and the government is spending even more money.

02:26:23.000 And that spending is the taxation.

02:26:25.000 Government has never spent this much money and the problems have never been bigger.

02:26:29.000 But hold on a second.

02:26:30.000 Can I pause you for a second?

02:26:32.000 Yes, I agree with you.

02:26:34.000 But can I stop you for a second?

02:26:35.000 When I'm saying that I would pay more money if I thought it would fix it in taxes, I'm not thinking of the government as its current entity that ruins everything.

02:26:46.000 I'm thinking of if I could give more of my income To taxes and it would actually make a solution.

02:26:54.000 I would be willing to do it.

02:26:56.000 I'm not saying that it would work that way.

02:26:57.000 I don't know if it would work that way.

02:26:59.000 I don't understand economics at all.

02:27:01.000 And I don't understand the government at all.

02:27:03.000 Why not cut out the middleman, right?

02:27:06.000 Because you think, hey, if I can give my money to government and maybe they do good with it.

02:27:10.000 There's no example of government doing good with money because it's not their money.

02:27:14.000 They don't give a damn.

02:27:15.000 I don't disagree with you. 0.62

02:27:16.000 I don't disagree with you.

02:27:18.000 What's stopping you, Joe Rogan, you, from giving more money directly to causes that you think are worthwhile?

02:27:26.000 You don't need the middleman.

02:27:28.000 You don't have to cut in the government on your charitable giving.

02:27:31.000 You can do it yourself.

02:27:32.000 That's true.

02:27:33.000 And you know, one of the best things that you can do for people is employ them.

02:27:37.000 Provide them with a job.

02:27:39.000 Grow your business.

02:27:40.000 So if the government taxes your money, you can't invest in growing your business. 0.98

02:27:44.000 I have a fucking manageable business. 0.98

02:27:47.000 With a skeleton crew. 0.99

02:27:48.000 And you're not going to fuck this up for me. 0.85

02:27:50.000 Alright?

02:27:50.000 I'm not making more business.

02:27:52.000 Settle down, buddy.

02:27:54.000 But you can also, Joe, you can invest.

02:27:56.000 Let's say a friend of yours came to you, right?

02:27:58.000 A good friend of yours and said, hey, Joe, I got a great idea to start this business.

02:28:02.000 And he had a business plan, and here's what I'm going to do.

02:28:06.000 And you're like, hey, I'll invest in your business.

02:28:09.000 And then all of a sudden the government takes that money in taxes.

02:28:12.000 Oh, I can't afford to make that investment in your business because the government just took the money in taxes.

02:28:17.000 So now you can't start that business.

02:28:18.000 I completely understand what you're saying.

02:28:20.000 When I was saying it, and I don't disagree with you, when I was saying it, I was saying, if I could give more money, and that money, if I didn't have to think about where to put it, if I knew that that money was going to be managed by ethical, knowledgeable wizards who know how to take care of the world's problems and they just get 5% more taxes from people that are doing well,

02:28:43.000 I'd be willing to do it.

02:28:44.000 It wasn't saying that I'd be I think it's a good idea to give more money to these people that we elect that we don't even know.

02:28:53.000 I mean, I don't know Gavin Newsom.

02:28:54.000 I make fun of him all the time.

02:28:55.000 I bet he's a nice guy.

02:28:57.000 I don't know Mayor Garcetti.

02:28:59.000 I bet he's a nice guy too. 0.99

02:29:00.000 It's a fucking impossible job! 0.99

02:29:02.000 I don't want that job! 1.00

02:29:06.000 That benevolent government doesn't exist on this planet, right?

02:29:09.000 So there's no point in saying I would be willing to give money to government if they would use it wisely.

02:29:14.000 Right, but it's like effective socialism.

02:29:16.000 It's like I'd be willing to give my 10-year-old more money if I thought he would spend it wisely.

02:29:21.000 I mean, they're not going to do that.

02:29:23.000 And to the extent that you want government to have money, it should be local government.

02:29:28.000 The close Closer to the actual source.

02:29:30.000 So if you want government to have more money, it should be your local government, your city, your county.

02:29:37.000 Don't send it to Washington, D.C. You're in California.

02:29:40.000 That's 3,000 miles away.

02:29:41.000 What the hell are they going to do about your community?

02:29:43.000 They don't know what's going on.

02:29:45.000 They're so far removed from the money they're spending.

02:29:48.000 It makes no sense to do this.

02:29:51.000 This is such a waste of money and such a waste of resources.

02:29:55.000 That's a good point.

02:29:56.000 That's something that Hunter S. Thompson had said in the 70s when he's running for sheriff in Aspen.

02:30:01.000 He said, you can affect local community, but the people in Washington, they really don't affect your day-to-day existence.

02:30:07.000 It's a myth.

02:30:09.000 The more money that you send to Washington, the less money you can send to your local government.

02:30:14.000 I mean, initially, the federal government didn't have any taxes.

02:30:17.000 I mean, and so the taxes were local.

02:30:20.000 Okay, again, Peter Schiff.

02:30:22.000 But now the government takes everything and now all the towns have to beg to get the money back and now the government has all kinds of strings.

02:30:29.000 The federal government says, if you don't do this and you don't do that, we're not going to give you highway funds.

02:30:34.000 We're not going to give you student funds.

02:30:36.000 So now the government is taking control.

02:30:38.000 The federal government is taking control of all the states.

02:30:41.000 I think?

02:30:58.000 So, essentially, it's like we need some sort of rules to get along, but you're saying that we should agree upon those rules in the free market and not have some government entity, some group of people that's no different than our own selves...

02:31:31.000 Yeah, and here's an important point that I really want to get across in this podcast.

02:31:38.000 Because, you know, we are headed, as I said, for a massive economic crisis.

02:31:42.000 I mean, what we've seen so far is nothing, right?

02:31:45.000 What happened in 2008, what's happened since COVID, this is a dress rehearsal for a much bigger show that's coming.

02:31:51.000 That's going to be much worse.

02:31:52.000 It's going to, you know, inflict a lot more pain.

02:31:55.000 And I'm not happy that this is going to happen.

02:31:56.000 If I could stop it, I would.

02:31:58.000 I'm just like watching this, you know, train wreck in slow motion.

02:32:02.000 And I can't do anything about it.

02:32:03.000 But I know what's going to happen.

02:32:05.000 It's going to be blamed on capitalism, right?

02:32:08.000 The politicians are going to say, you see what happens when you don't have enough government, when you don't have enough regulation, when you have too much greed, right?

02:32:16.000 And the public is going to buy this nonsense just the way they bought it about the financial crisis.

02:32:22.000 I was warning people for years about the housing bubble and the financial crisis.

02:32:25.000 The reason I was able to write a book and lay it out exactly the way it happened.

02:32:29.000 The reason I was doing all these lectures around the country warning people about the disaster that the Federal Reserve was creating was because I understood the economics.

02:32:37.000 I understood the mistakes that Greenspan was making, and I knew the consequences that were in store for us.

02:32:44.000 Well, the mistakes that have been made by Bernanke, by Yellen, by Powell, dwarf the ones that were made by Greenspan.

02:32:53.000 It's the same mistakes, just on a much bigger scale.

02:32:55.000 The country is in far worse shape now than it ever was at any point in the past, structurally and with all the debt.

02:33:03.000 And this crisis is going to be a currency crisis where the dollar crashes.

02:33:08.000 We're going to have massive inflation in a weak economy.

02:33:11.000 They called it stagflation when it happened in the 1970s.

02:33:14.000 The Keynesians didn't know what to do with it because it violated all their rules of economics because they don't understand economics.

02:33:20.000 Well, this is going to be much worse.

02:33:21.000 And I want to make sure that people understand where to put the blame.

02:33:26.000 It's not capitalism.

02:33:27.000 It's not freedom.

02:33:28.000 It's government.

02:33:29.000 And government is going to try to sell us on another bull of goods that the solutions The only solution is to take away the power that they have.

02:33:39.000 But I also want to make sure, and this is what I'm doing personally, I do two things, right?

02:33:44.000 I try to educate people so that they understand the economy and so they know who to blame for the problems.

02:33:52.000 But I'm also trying to make sure To spare as many people as I can from suffering the financial consequences.

02:34:01.000 I said earlier in the podcast that the government is financing these expenditures through inflation.

02:34:08.000 Inflation is a tax.

02:34:12.000 We don't feel it that much now because foreigners are subsidizing us with holding our dollars in treasuries and other instruments. 0.92

02:34:19.000 But when the dollar crashes and prices go through the roof, people are going to get wiped out by this inflation tax.

02:34:25.000 A lot of people who are retired are going to see their life savings just evaporate.

02:34:29.000 I mean, they'll still have their money, they just won't be able to buy anything with it.

02:34:32.000 And what I'm afraid too, is that we're gonna get price controls.

02:34:36.000 Because when the government starts to see prices really going up, and the public complains, just like Richard Nixon did, and although inflation was only 4%, When Tricky Dick put on wage and price controls.

02:34:47.000 But I mean, it's gonna be way higher than that this time.

02:34:50.000 But they're gonna create shortages, they're gonna create black markets, there's gonna be blackouts, food shortages, there'll be riots.

02:34:56.000 You think the riots are bad now?

02:34:57.000 Wait till you see how much worse they're gonna get.

02:34:59.000 Right now people are getting placated by all these checks that the government is sending out.

02:35:04.000 But when the checks bounce because they don't buy anything, that's when you're really going to see the civil unrest.

02:35:10.000 But I want to make sure that people do something.

02:35:13.000 That's what I'm doing with my clients, that they get out of their dollars to escape this inflation tax.

02:35:19.000 I want as many Americans as possible...

02:35:22.000 Not to go broke like you.

02:35:23.000 I want to make sure that you just signed a big check with Spotify.

02:35:27.000 You should have had a gold clause in that contract because it's over 10 years.

02:35:32.000 Five years from now, you're not going to get anywhere near the money you think you're going to get because that inflation is going to destroy it.

02:35:37.000 It's value.

02:35:37.000 So you've got to do something.

02:35:39.000 A lot of people...

02:35:39.000 Let me hold on a second.

02:35:40.000 Hold on a second.

02:35:41.000 Stop.

02:35:42.000 What would you have done differently and what can we do now?

02:35:46.000 What would you have done differently if you and Trump were homies and he said, hey, Peter Schiff, I'm thinking about shutting this thing down.

02:35:53.000 What do you think I should do?

02:35:55.000 What would you have done differently that would have somehow or another preserved at least a modicum of our economy?

02:36:02.000 And what would you advise they do going forward?

02:36:07.000 What would you have done differently?

02:36:08.000 I don't want to preserve the economy we had because it was a bubble.

02:36:12.000 What would you have done?

02:36:13.000 And so trying to preserve that is a mistake.

02:36:15.000 Right, but what would you have done first thing? 1.00

02:36:17.000 You know this shit's coming. 0.99

02:36:19.000 We need higher interest rates from the Federal Reserve, not lower interest rates. 1.00

02:36:24.000 We don't need any more money printing, and we need the government to cut spending.

02:36:27.000 Okay, but a disease is coming.

02:36:29.000 A disease is coming, Peter Schiff.

02:36:31.000 We've got to shut down the world, or we're going to kill people.

02:36:34.000 What do we do differently than what we did?

02:36:38.000 Well, again, first of all, I think we would have handled our response to the disease better if we actually realized the cost of what we were doing.

02:36:47.000 I think that we've acted so cavalierly because we believe we're getting all this government for free.

02:36:53.000 We believe it's okay for people to stay at home and watch Netflix and receive government checks.

02:36:58.000 We don't understand the greater damage.

02:37:01.000 See, what we're doing now, this monetary policy, this fiscal policy, is going to impose far more harm on average Americans than the coronavirus ever could have.

02:37:11.000 So we have to get that, that our cure is so much worse than the disease ever could have been.

02:37:17.000 We've got to understand that concept.

02:37:20.000 And we've got to understand the concept that we had a bubble.

02:37:24.000 We need to let it deflate.

02:37:25.000 That is the best thing you can do with a bubble.

02:37:28.000 Don't try to blow more air into it.

02:37:29.000 Okay, okay.

02:37:30.000 Hold on, hold on, hold on.

02:37:31.000 Let me take this from this alternative perspective.

02:37:35.000 The problem with what you're saying is that people, if the government didn't step in and ensure that some money went out so people could provide basic needs and necessities, people were going to die.

02:37:47.000 Because they were going to have to go to work.

02:37:48.000 Well, they weren't going to die.

02:37:49.000 Well, that's what we were thinking.

02:37:50.000 But, Peter, that's what we thought in March.

02:37:53.000 We did think that in March.

02:37:57.000 Let local communities take care of it.

02:38:00.000 Did you not think we were going to die in March?

02:38:03.000 Did you not think we were going to die?

02:38:04.000 Do you not think a certain percentage of people you knew were going to die?

02:38:09.000 Well, there's always a certain percentage of people who get the flu who died.

02:38:13.000 Obviously, I knew from the beginning that the people who were dying were the people who were 80 years old or higher who were dying from all sorts of things.

02:38:21.000 I mean, that's when we start dying.

02:38:23.000 I mean, not many of us live much further than 80. That's about life expectancy.

02:38:26.000 That's not necessarily true, though.

02:38:28.000 I know I have a good friend that almost died.

02:38:30.000 My friend Michael Yeo, who's a comedian who's been on this podcast, who's very healthy.

02:38:33.000 He almost died from it.

02:38:35.000 But how does the Federal Reserve printing money save somebody's life?

02:38:39.000 I'm not saying it does.

02:38:40.000 What I'm saying is when it happened, what I'm saying is when the pandemic occurred, we were all scared.

02:38:47.000 So if you're sitting here saying they should have done this, in a way at least, it's an unfair version of Monday night quarterbacking or Monday morning quarterbacking because we didn't really know what this disease was. 0.94

02:38:59.000 In March, I was fucking scared of it. 0.91

02:39:01.000 I was really nervous. 0.97

02:39:03.000 That's not what I'm trying to do.

02:39:05.000 My point, Joe, is that our economy was such a disaster before COVID that we were vulnerable to anything that came out of left field.

02:39:13.000 Any problem.

02:39:14.000 See, this is another financial crisis.

02:39:16.000 It's like the 08 financial crisis.

02:39:18.000 Why is this a financial crisis?

02:39:20.000 In 2008, the reason it was a financial crisis was because real estate prices went down.

02:39:26.000 Because they were a bubble, create a By the Federal Reserve, Fannie Mae, Freddie Mac, Moral Hazard.

02:39:31.000 I mean, I wrote a book, I would lecture for years and years about the housing bubble and how the government nurtured it, right?

02:39:36.000 And so, because we had this housing bubble, once real estate prices went down, people who borrowed money Didn't pay back their loans.

02:39:45.000 They no longer had any incentive to make the payments because their house was worth less than their mortgage.

02:39:51.000 They just mailed in the keys.

02:39:52.000 They called it jingle mail.

02:39:53.000 So now the banks were in trouble because the loans went bad.

02:39:57.000 And now Wall Street had packaged up these loans into pools of subprime securities.

02:40:03.000 I made some money shorting those back in the day and some other people did too because we recognized what was going to happen.

02:40:10.000 But the crisis started when people defaulted on their loans.

02:40:14.000 Well, what's happening now?

02:40:16.000 Way more people can't pay their loans than in 2008. It's not just people with mortgages that can't pay.

02:40:27.000 We have a corporate debt bubble in addition to a consumer debt bubble.

02:40:32.000 We have record credit card debt, record auto loan debt, record student loan debt, record corporate debt, record government debt.

02:40:40.000 Everybody is loaded up with debt and now nobody can pay.

02:40:43.000 It's all a financial crisis. 0.86

02:40:45.000 But again, the only reason that this economy is so screwed up is because government policy screwed it up.

02:40:52.000 And the solution isn't to increase that. 0.84

02:40:55.000 Just like I said earlier, if you have a drug addict, the solution isn't more drugs, bigger doses of drugs to try to keep the guy high. 0.98

02:41:04.000 Because eventually, you can kill him. 0.95

02:41:06.000 You can overdose. 1.00

02:41:08.000 And that's where we are now.

02:41:09.000 The amount of monetary stimulus that the Fed has now crammed into this economy is a monetary overdose.

02:41:15.000 They are going to kill the economy.

02:41:17.000 Peter, I see where you're coming from when it comes to the 2008 loan crisis.

02:41:21.000 That makes a lot of sense.

02:41:22.000 But the difference between this and that is these people didn't make any poor decisions.

02:41:26.000 They're just thrust into this crazy world where there's a disease that forces businesses to shut down.

02:41:31.000 But this is my perception.

02:41:33.000 As a community of people, shouldn't there be a way, at least the government does its best at organizing people to donate money that could go and help people that are in this situation?

02:41:46.000 People would organize themselves!

02:41:49.000 Do you think they would?

02:41:50.000 There would be private charities.

02:41:52.000 Nobody would starve.

02:41:53.000 And nobody was starving in America.

02:41:55.000 Before all these government anti-poverty programs, when poverty was on the decline, nobody was starving.

02:42:01.000 Right, but hold on a second when starving.

02:42:03.000 People right now are in the...

02:42:05.000 They're in real peril.

02:42:07.000 They're in...

02:42:08.000 They could lose their house.

02:42:09.000 They could lose their car.

02:42:10.000 They could lose their education. 0.93

02:42:11.000 There's a lot of weird shit going on right now that's through no fault of their own because businesses are shut down. 0.94

02:42:17.000 This is why I disagree that it's the same sort of situation that happened in 2008. For sure, what you're saying makes sense in terms of economics, about the foundation of our economic country. 0.95

02:42:29.000 The way the economy was was fucked up already. 0.95

02:42:32.000 That makes sense. 0.95

02:42:33.000 But the same thing happened in the Great Depression.

02:42:36.000 People, through no fault of their own, people were unemployed, but the government didn't come in and bail them out.

02:42:41.000 During the Depression, Roosevelt initially got some relief.

02:42:44.000 That was the first time we had welfare.

02:42:46.000 They called it relief.

02:42:47.000 It wasn't a lot of money.

02:42:48.000 There were no bailouts for businesses, really, cash bailouts like we have.

02:42:52.000 Now look, if the government stayed out of this, let the free market, let landlords and tenants work it out among themselves.

02:43:00.000 The landlords know they can't evict.

02:43:01.000 Because there's no other tenants.

02:43:03.000 Let employers and employees, everything will work out in a free market.

02:43:08.000 If you let people voluntarily interact.

02:43:11.000 People aren't going to be kicked out on the street.

02:43:13.000 People aren't going to be left hungry.

02:43:14.000 The market is going to be able to solve the problems.

02:43:17.000 The government comes in and creates a whole new set of problems that are far worse.

02:43:22.000 Because the government doesn't have anything.

02:43:24.000 All it does is print money now.

02:43:27.000 It doesn't create anything.

02:43:28.000 It just prints.

02:43:30.000 It just creates money out of thin air that doesn't have any real value.

02:43:33.000 I understand what you're saying.

02:43:34.000 In the process of doing that, they destroy the value of the money that exists and they screw up the economy immeasurably.

02:43:40.000 They make the economy less productive and less efficient.

02:43:44.000 And so that means people are going to be poorer.

02:43:46.000 Government makes people poorer.

02:43:48.000 It's free market capitalism that makes them wealthier.

02:43:51.000 I understand what you're saying, but in this situation, isn't this really unique where no one can work?

02:43:57.000 We're in a situation where for months and months we have to stay locked down.

02:44:02.000 A lot of businesses are not essential or labeled essential.

02:44:05.000 Whoever gets to decide that, I mean, shouldn't that be something we vote on?

02:44:08.000 What's essential and not essential?

02:44:10.000 I mean, that seems a little crazy.

02:44:11.000 Yeah, I do think that all that government telling people what businesses can and cannot open.

02:44:17.000 Look, I disagree with a lot of these policies.

02:44:19.000 And again, I believe that governments would have acted more responsibly if they didn't think they could put the cost on the Federal Reserve, which is what everybody is doing.

02:44:26.000 I think if each state.

02:44:28.000 If anybody had to shoulder the burden of its own policies, they would have a more rational approach to COVID-19.

02:44:37.000 This was what I asked you.

02:44:37.000 Because everybody thought it was free, and we had this huge moral hazard.

02:44:40.000 Yeah, this is what I asked you in the beginning.

02:44:42.000 And now again, we created this situation.

02:44:43.000 Look, you've got all these schoolteachers. 0.53

02:44:45.000 They don't want to go back to work.

02:44:46.000 They want to get paid not to work.

02:44:48.000 We've now created a situation where so many people, oh, I'm not going to go to work.

02:44:51.000 Oh, I don't want to risk getting COVID. Just send my paycheck to my house.

02:44:55.000 Why'd you single out schoolteachers? 0.99

02:44:56.000 I mean, this is ridiculous. 0.93

02:44:57.000 Why'd you single out school teachers? 0.97

02:44:59.000 Why'd you say school teachers?

02:45:00.000 Well, because I was just, you know, the unions are, you know, they're out there saying, but it's not just school teachers, right?

02:45:05.000 There's a lot of people who want to say, I don't want to work because I don't want to get COVID. And so, you know, but meanwhile, people take a lot of risk.

02:45:12.000 I mean, maybe someone who doesn't want to go get COVID, they go out mountain biking, you know, or they go skydiving or who knows what, or they smoke cigarettes.

02:45:20.000 You know, they do all sorts of things that risk their health.

02:45:23.000 But now all of a sudden, no, no, no, I'm not going to, I don't even want to go if I have to wear a mask.

02:45:26.000 I just want to stay home.

02:45:27.000 Because we're giving people an easy way out of going to a job that they'd rather not go to.

02:45:32.000 I mean, I don't blame people for not liking their jobs.

02:45:35.000 I don't blame people for enjoying leisure.

02:45:38.000 But we can't set this situation up.

02:45:40.000 But what makes everybody think it's possible is because we don't think there's a cost to all this printing money.

02:45:46.000 It's all this modern monetary theory nonsense that we can just print money.

02:45:50.000 We can have whatever we want as long as the Federal Reserve prints the money to pay for it.

02:45:55.000 I see what you're saying.

02:45:55.000 This is a disastrous way of thinking.

02:45:58.000 I see exactly what you're saying.

02:46:00.000 And I think it's interesting because I don't think it's either or.

02:46:04.000 I think there's definitely a lot of people that are going to just never go back to work again if they get that money, if they get free money from the government.

02:46:11.000 But I also...

02:46:11.000 Hold on a second, Peter.

02:46:13.000 I also think...

02:46:14.000 It wouldn't be the worst thing in the world if we could figure out a way to get food to people and make sure they don't starve to death.

02:46:20.000 The free market will do that.

02:46:22.000 You know how cheap food is now thanks to the free market?

02:46:25.000 The government has screwed up agriculture.

02:46:28.000 We never really got to my question.

02:46:30.000 Joe, we pay farmers not to farm.

02:46:32.000 We pay farmers not to grow food to diminish the supply of food.

02:46:36.000 Do you realize that we do that?

02:46:38.000 Yeah, I've heard about that with corn subsidies.

02:46:41.000 So the goal of the Department of Agriculture is to keep food prices high.

02:46:46.000 That is the stated goal.

02:46:47.000 What they want to do is restrict farming so that less stuff is farmed so that food prices are higher.

02:46:54.000 That is what the government is actively doing.

02:46:56.000 They are pursuing a policy to make food more expensive than it otherwise would be. 0.94

02:47:01.000 What kind of asinine policy is that?

02:47:05.000 When they describe it, how do they state their business model? 0.96

02:47:10.000 How do they say it?

02:47:11.000 That's your version of it.

02:47:14.000 They're saying that they want to protect the farmers from competition or because they could have bad weather or bad crops.

02:47:21.000 They just want to keep up farm income.

02:47:24.000 Do you know where these subsidies came from?

02:47:26.000 Do you know where these subsidies came from?

02:47:29.000 Again, let's start with the New Deal. 0.55

02:47:32.000 Right, but it came from World War II when they needed food, when they needed to supply the troops.

02:47:36.000 They needed money for food.

02:47:37.000 A lot of what happened with farm subsidies, they recognized that we could get into a situation where we don't have enough food, especially if farmers go under.

02:47:47.000 So they decided to subsidize farms.

02:47:51.000 I'm not an expert on this by any stretch of the imagination, but I read a piece on it once, and the way they were describing it was like people like to look at subsidizing farms as being this frivolous thing or thing that doesn't really benefit the people, but the idea came about because they were worried about one day having a food shortage,

02:48:09.000 and this happened post-World War II. Are you aware of the origins there?

02:48:14.000 That's the nonsense that the government wants you to believe.

02:48:16.000 Look, you can go back.

02:48:17.000 We subsidize tobacco.

02:48:19.000 The government gives subsidies to tobacco farmers.

02:48:21.000 And actually, if you go back when they talked about it initially, because they say, hey, why are we subsidizing tobacco farmers?

02:48:28.000 Because why do we want to make it easier for people to smoke?

02:48:31.000 And they actually agreed that the subsidies are restricting the production of tobacco and making tobacco more expensive.

02:48:39.000 And so by subsidizing tobacco farmers, we'll actually have fewer smokers because we're making the cost of tobacco higher.

02:48:45.000 That's what government does.

02:48:47.000 Government comes in and makes the price of food higher.

02:48:50.000 That's their goal.

02:48:51.000 To make food more expensive.

02:48:53.000 That's an industry that kills people. 0.99

02:48:55.000 How heartless is that?

02:48:56.000 That's tobacco.

02:48:57.000 You're talking about an industry that knows from the jump.

02:49:01.000 But tobacco is different, man.

02:49:04.000 They know they're killing people.

02:49:05.000 No, no, it's the same.

02:49:06.000 I understand financially.

02:49:08.000 We shouldn't subsidize tobacco farmers.

02:49:10.000 But they said we're doing it because it makes tobacco more expensive.

02:49:13.000 Well, it's the same subsidy for wheat farmers.

02:49:16.000 But it wasn't originated.

02:49:18.000 The goal is to make it price higher.

02:49:20.000 Yes, but that wasn't the initial goal.

02:49:23.000 The initial goal...

02:49:24.000 Well, of course, they never say that.

02:49:26.000 They're never honest.

02:49:27.000 The government is never honest about what it's doing.

02:49:29.000 But don't you think post-World War II... The farmers want higher prices.

02:49:33.000 I understand, but don't you think that post-World War II they were seriously concerned about having food supplies so they could feed soldiers and feed people in this country if the shit hit the fan? 0.98

02:49:42.000 You think it was really all about economics? 0.98

02:49:43.000 We had so much food.

02:49:44.000 You know, Joe, one of the things they did during the Great Depression was they destroyed food.

02:49:48.000 That was like one of the big programs of FDR. What I'm saying is just propaganda.

02:49:52.000 Because we had too much of it.

02:49:53.000 So it's just propaganda.

02:49:54.000 What I'm saying is just, I got a whole, they hit me.

02:49:57.000 They hit me with their propaganda.

02:49:58.000 I'm reciting it.

02:50:01.000 People always want something from government.

02:50:03.000 Look, people who are selling a product want high prices.

02:50:06.000 Consumers, we want low prices.

02:50:08.000 But if you're selling something, you want high prices.

02:50:10.000 But competition brings prices down.

02:50:12.000 So what you do is you enlist government to help you.

02:50:15.000 And government helps you get higher prices than you can get in a free market.

02:50:18.000 So private companies have an incentive to get the support of politicians so they can make more money.

02:50:26.000 We need to take away the power of the government to grant those special privileges to any business.

02:50:33.000 There should be no subsidies for businesses.

02:50:35.000 Corporate welfare does as much damage, maybe more, than welfare for individuals.

02:50:41.000 All of this has to go, and we need a vibrant free market economy.

02:50:45.000 And hopefully, when this whole thing collapses, and it's going to collapse, and we have hyperinflation or very high inflation, and we wipe out the savings of the vast majority And we go through a really, really hard, deep economic time period.

02:51:01.000 If we could do a reboot, if we can resist the temptation to fully We can go all in on the ideology that destroyed us.

02:51:10.000 If we can go back to free market capitalism, we have a bright future.

02:51:15.000 With the tools that we have today, if we can have 19th century capitalism with 21st century technology, it's amazing what we can achieve.

02:51:23.000 I watched your interview with Andrew Yang, who's afraid of technology destroying jobs.

02:51:28.000 Technology is gonna liberate labor.

02:51:31.000 It's gonna make us richer.

02:51:32.000 People have been advancing Andy Yang's analogy probably ever since the wheel was discovered.

02:51:37.000 There's always some politician that says, oh, this new technological advancement is gonna put somebody out of work.

02:51:42.000 Yes, we want to save labor. 0.79

02:51:46.000 We want to free up labor.

02:52:00.000 I want to make sure that there are people People who don't go broke.

02:52:03.000 That's why I'm telling people, get out of your dollars.

02:52:06.000 I'm buying gold.

02:52:07.000 I've been telling people on your podcast, gold is now over $1,800 an ounce.

02:52:11.000 I think when I started coming on, it was closer to $1,000.

02:52:15.000 But I think it's going to $5,000, $10,000, $20,000.

02:52:18.000 And it's not really gold going up.

02:52:20.000 It's the dollar going down.

02:52:22.000 The dollar is going to lose its value.

02:52:23.000 This is where people are at today.

02:52:27.000 One of the concerns...

02:52:30.000 with the way our country is going is there's a lot of people that are just they're leaning towards what they feel is the right way to go where all their peers agree is the right way to go and it's going to lead to a better future but a lot of the people making these decisions don't have a lot of life experience so you got a tremendous amount of momentum for 18,

02:52:50.000 19, 20 year old people and when they hear something like free market Free market capitalism is going to fix the world.

02:52:59.000 One of the things that bothers them the most is that they associate free market capitalism with greed.

02:53:04.000 With greed and money over people.

02:53:07.000 The problem is the way they promoted themselves.

02:53:12.000 Yeah, I agree.

02:53:14.000 When someone says, I'm a libertarian, there's a lot of people that automatically say...

02:53:17.000 I think the socialists are doing a better job of selling their ideology.

02:53:21.000 Yes.

02:53:21.000 Than the capitalists.

02:53:23.000 And capitalism is getting blamed for a lot of the problems that socialism is creating.

02:53:30.000 But when people are saying, again, somebody is greedy, we're all greedy in the sense that we all want the best for ourselves and our families.

02:53:40.000 We all want to go out and make money so that we can have a We're good to go.

02:54:24.000 Peter, I agree with everything you're saying.

02:54:31.000 I agree with everything you're saying, but what I'm saying is that in the general public's view, when you say free market capitalism, they equate mean.

02:54:39.000 When you say socialism, they equate kind.

02:54:42.000 This is the problem.

02:54:43.000 There's a problem not even nearly as much as philosophy or fact or history of, like when you're talking about the free market.

02:54:52.000 But rather the way the public perceives it.

02:54:54.000 When they think of socialism they think is good and healthy and warm and loving and inclusive and they think that's the future.

02:55:02.000 I don't know what socialism has done to market themselves so well.

02:55:07.000 Whatever socialism has done to market itself so well.

02:55:09.000 There's nothing benevolent or caring about theft.

02:55:12.000 I don't care if the thief is well-intentioned.

02:55:16.000 It's immoral.

02:55:17.000 Capitalism is moral.

02:55:19.000 It's honest.

02:55:20.000 And it's what lifts people out of poverty.

02:55:22.000 You know, the world is littered with examples of socialists that have impoverished people.

02:55:28.000 And you know, there's various forms of socialism.

02:55:29.000 There's communism, there's fascism, right?

02:55:32.000 Millions and millions of people have been slaughtered in the name of this failed ideology.

02:55:37.000 Every country that has embraced it, it has impoverished everybody.

02:55:41.000 They don't share the wealth, they destroy the wealth.

02:55:43.000 They make everybody equal by impoverishing everybody.

02:55:47.000 But Peter, why is it so attractive?

02:55:48.000 The rich people under socialism are the people with political connections.

02:55:52.000 Why is it so attractive then?

02:55:56.000 Why are so many young, progressive, ideologically left-wing kids attracted to the idea of socialism?

02:56:04.000 Why is it so attractive and why is capitalism so negative to them?

02:56:10.000 Why do so many five-year-olds believe in Santa Claus?

02:56:13.000 Because you lied to them.

02:56:14.000 It's a nice idea.

02:56:15.000 Some guy comes down the chimney and gives you a bunch of presents.

02:56:19.000 Right, but you're agreeing you lie to them when you tell them about Santa Claus.

02:56:22.000 That's a willful lie.

02:56:23.000 But you don't have to tell them.

02:56:25.000 They figure it out.

02:56:26.000 No, they don't.

02:56:26.000 Eventually, the kid is old enough.

02:56:28.000 So this is what happens with socialism.

02:56:30.000 Bro, you've got to lie about Santa Claus.

02:56:32.000 When you're a young guy or a young woman, and you don't have any real-life experience, you haven't worked, you haven't had a business, you haven't been out in the real world, you live with your parents, you go to school...

02:56:42.000 And socialism sounds good.

02:56:44.000 I mean, in theory, it sounds great, but you don't have any real life experience.

02:56:47.000 By the time you're older and you've been in the real world and you've paid taxes and you've seen the consequences, you start to understand more.

02:56:55.000 And then you give up your childish beliefs.

02:56:58.000 The problem with a lot of these older socialists like Sanders, it's like a kid that never grows up.

02:57:03.000 It's like somebody who's 70 and still believes in Santa Claus.

02:57:07.000 They never figured it out.

02:57:09.000 Sanders never figured out that there's no Santa Claus.

02:57:12.000 He thinks there's Santa Claus and it's the U.S. government.

02:57:14.000 And we can get all this stuff for free if we're just nice.

02:57:17.000 I would love to lock you two together in a room and film it for like six hours.

02:57:22.000 I would debate any big socialist that you could get on your show.

02:57:28.000 I'd love to do it.

02:57:31.000 Listen, Peter, we just banged through three hours, if you can believe it or not.

02:57:36.000 No, we can keep going for another three because there's so much stuff that we could actually talk about.

02:57:41.000 No, I think, but I just want to say this before we wrap up.

02:57:43.000 I think you provide some very honest and brave insight.

02:57:48.000 You buck the trend of sugarcoating things and the way you describe your version of free market capitalism is very honest and it doesn't seem mean.

02:57:57.000 I think this is what's important about it.

02:57:59.000 There's a lot of people that think that They have this thought in their head, that's what I was trying to get across, that if you say capitalism, if you say someone who's ambitious, you equate that and success to mean.

02:58:11.000 And this is a part of the problem with the marketing strategy that's been employed by capitalism.

02:58:17.000 It's not a real strategy, but versus socialism.

02:58:20.000 Socialism has a really attractive...

02:58:22.000 Even though it has what you were saying before, it has all these deaths connected to it and no success.

02:58:26.000 It's got this really...

02:58:28.000 Maybe if we just try it one more time.

02:58:31.000 This is really attractive...

02:58:33.000 It's something that's inside of people that are compassionate.

02:58:36.000 Maybe we can try it one more time and get it right.

02:58:40.000 Yeah, and it's not my version of capitalism.

02:58:42.000 That's capitalism.

02:58:43.000 What we have now is not capitalism.

02:58:45.000 When I'm saying your version, I mean the way you describe it.

02:58:48.000 People who are mean, actual mean people, don't succeed in business.

02:58:54.000 They piss off their customers, they piss off their workers, they lose their customers, their employees quit, and they get better jobs from people who treat them fairly.

02:59:02.000 Customers go where they get a good deal.

02:59:04.000 And so I want to put my faith in individuals and the free market, not a bunch of bureaucrats.

02:59:10.000 These guys are out for themselves.

02:59:12.000 Don't think they're there to be public servants.

02:59:15.000 They're there to enrich themselves.

02:59:17.000 That's who you have to be suspicious of.

02:59:19.000 That's where greed is damaging, when you take greed and combine it with political power.

02:59:25.000 That's when it's a problem.

02:59:26.000 In a free market, it just helps me.

02:59:28.000 It's government that hurts me.

02:59:29.000 But look, I want to point out, I talk about this.

02:59:31.000 I got my own podcast, not nearly as popular as yours, but I would certainly welcome the people that listen to Rogan to go and listen to the Peter Schiff show.

02:59:40.000 I do a couple of podcasts.

02:59:42.000 You can listen to them on Schiff Radio.

02:59:44.000 You can listen to them on YouTube.

02:59:46.000 Tell people your Instagram too.

02:59:47.000 You have an Instagram?

02:59:49.000 Instagram?

02:59:49.000 What's your Instagram?

02:59:51.000 Yeah, you know, I just started Instagram.

02:59:53.000 Crazy enough, my wife was like, you got to go on Instagram. 1.00

02:59:56.000 How many people do you have on it right now?

02:59:58.000 Well, I only have a few thousand followers.

03:00:01.000 Let's see what we can do.

03:00:02.000 I've got about 250,000 Twitter followers.

03:00:06.000 They still haven't verified my account.

03:00:09.000 That's outrageous.

03:00:10.000 Whatever it is, I can't get verified.

03:00:11.000 I've got a quarter million followers.

03:00:13.000 I'll tell you exactly what it is.

03:00:14.000 It was Occupy Wall Street videos.

03:00:16.000 That's what it was. 1.00

03:00:16.000 They fucked you over. 1.00

03:00:19.000 You can watch that on my YouTube channel. 1.00

03:00:21.000 I've got about 350,000 subscribers on my YouTube channel.

03:00:25.000 I'm talking mostly economics.

03:00:27.000 I do a little politics.

03:00:28.000 I touch on some of the social issues.

03:00:29.000 I talk a lot about the markets.

03:00:32.000 And again, I think it's important.

03:00:33.000 I mean, I have an asset management business.

03:00:35.000 I'm trying to get people to get out of U.S. stocks that I think are overpriced, out of U.S. bonds.

03:00:41.000 I think we're headed for a major crash.

03:00:43.000 And unlike the crash we had in 2008 and 2000, the Fed's not going to be able to bail you out with a printing press.

03:00:49.000 It's not going to be the third time the charm.

03:00:51.000 It's going to be three strikes you're out.

03:00:52.000 So you've got to get your money out of U.S. markets.

03:00:55.000 I'm in I'm investing money around the world in countries that I think are relatively free.

03:01:01.000 They have less regulation, lower taxes, more economic freedom.

03:01:04.000 Their markets are not overpriced.

03:01:05.000 Their currencies are going to retain their value.

03:01:07.000 We're buying gold.

03:01:09.000 We're buying gold stocks.

03:01:10.000 I'm doing everything I can to preserve as much wealth as I can for Americans. 0.97

03:01:14.000 So that when the shit hits the fan, we can bring that money back and help to rebuild this country. 1.00

03:01:20.000 You're an animal. 1.00

03:01:21.000 Listen, how many people do you have on Instagram? 0.98

03:01:23.000 I want to see how many we can bump you up to.

03:01:26.000 What do you have right now?

03:01:26.000 Well, as I said, I just started it this week.

03:01:28.000 But what is it?

03:01:29.000 What's the number?

03:01:30.000 And I'm going to start putting up...

03:01:31.000 Peter Schiff is my handle.

03:01:32.000 But I want to know how many you have because I want to see how many we can get you.

03:01:37.000 Look at it.

03:01:37.000 3,000.

03:01:38.000 Jamie, what does he have?

03:01:39.000 Yeah, 35...

03:01:40.000 Jamie doesn't know.

03:01:41.000 He's going to find out momentarily.

03:01:43.000 We're going to see if we can bump it up to.

03:01:44.000 See if you can get my Twitter up to a million or my YouTube channel.

03:01:49.000 Listen, people will go everywhere, Peter Schiff.

03:01:51.000 Listen, I appreciate you.

03:01:52.000 I appreciate your honesty and your perspective, and it's always a good time talking to you.

03:01:57.000 And I appreciate you sharing your information with us, because from a real experience perspective of someone who really understands what you're talking about, I really appreciate it.

03:02:06.000 One thing I want to mention about that Occupy Wall Street.

03:02:08.000 I did that Occupy Wall Street, and I got two and a half million views on it now on my channel.

03:02:12.000 And it had millions and millions of views before I posted it.

03:02:15.000 I posted it a couple years ago, right before I went on your show, just so I can point people to it.

03:02:19.000 But even though I did that, like in 2009...

03:02:23.000 Every single day, I don't think I miss a day, I get an email from somebody, some young person from somewhere in the world, all over the world, to say that that video, that two-hour video of me addressing the occupiers, that that is what changed them and put them And they went from being total government socialist to being complete free market capitalist because they

03:02:54.000 saw that video.

03:02:55.000 And that's why I went down to Zuccotti Park.

03:02:57.000 I didn't think that I would necessarily change the minds of the occupiers.

03:03:01.000 But I knew that the video that Reason was doing would change more people's minds.

03:03:07.000 So the more people who see that.

03:03:09.000 Who look at that interaction and share it with your friends and people who look at me, listen to my podcast or look at my tweets and share them.

03:03:17.000 And we got to spread the truth because there's so many people spreading lies.

03:03:21.000 There's only me and a few other people spreading the truth.

03:03:24.000 So we need help.

03:03:25.000 We need the public to help disseminate the information that I'm putting out there.

03:03:29.000 I don't charge anybody for this information.

03:03:31.000 I don't make any money off the podcast.

03:03:34.000 I'm trying to get it out there.

03:03:35.000 Sometimes I get clients.

03:03:36.000 People become clients of mine that I make some money.

03:03:39.000 But the vast majority of the people who are listening to my content, they don't have enough money to fund an account with me.

03:03:45.000 But I'm influencing them in the way they think, and I'm helping them influence others.

03:03:51.000 Thank you.

03:03:52.000 They tune out all the nonsense.

03:03:53.000 Thank you, Peter Schiff.

03:03:55.000 Thank you.

03:03:56.000 Peter Schiff!

03:03:57.000 Thanks, Joe.

03:03:57.000 Stay hard!

03:03:58.000 Thanks for having me on.

03:04:00.000 Thanks, buddy.

The Joe Rogan Experience - July 15, 2020

Joe Rogan Experience #1508 - Peter Schiff

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