#1508 - Peter Schiff

[0] three two one boom here we go hello peter joe good to see you again i like how you have i like how you have the europe pacific capital above your left shoulder very nice very wise well this this is my studio in my basement here in connecticut where i'm hunkered down but you know in honor of doing your show i poured myself a glass of scotch oh so i have it oh i feel like i'm sure you have something to drink, but I wanted to toast your Spotify deal.

[1] Oh, thank you very much.

[2] I got a bottle of my good friend, Josh Barnett's Warbringer Warmaster Edition Mistake smoked whiskey.

[3] So I'll have a little bit of...

[4] But here's to you and Spotify.

[5] I think they're getting it cheap.

[6] You probably could have held out for more money.

[7] Well, you don't know how much I got.

[8] Well, I just know what the public says.

[9] All right.

[10] They don't know how much I got either.

[11] But thank you very much.

[12] If you got more, I'll drink to that too.

[13] I'm very happy.

[14] Spotify's awesome.

[15] I'm very happy.

[16] I'm just, I'm happy to be with a company where they have a vested interest in my success.

[17] Like we're together, you know, whereas, beauty of capitalism, yeah, right?

[18] Mutually beneficial, voluntary relationships.

[19] Yeah, there you go, exactly.

[20] So why are you in Connecticut and not Puerto Rico?

[21] 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.

[22] I just got to tell you how many people I run into and they say, Peter, you know, I moved here because of you.

[23] I said, really, how'd you hear about it?

[24] Oh, I'm Joe Rogan.

[25] That's amazing.

[26] A lot of people have come down here.

[27] But I don't know, I don't think you've been to Puerto Rico or have you.

[28] I've never been to Puerto Rico.

[29] Yeah, I guess you got an open invitation to come visit me. I'll put you up.

[30] I got, I got a nice place on the beach for you.

[31] What's their COVID situation like?

[32] What's the COVID situation like down there?

[33] This is, it's hot now.

[34] It's, you know, it's July, August.

[35] And so I would rather be in Connecticut.

[36] I love the weather here in the summer into the fall.

[37] And we still maintain a house here, you know, the house that I lived in before we moved to Puerto Rico.

[38] So now this is more of a summer home.

[39] And so we're here for the summer, although we may be here into the fall.

[40] I think we will because the schools, you know, are going to be remote now.

[41] So normally I would come back to school start in mid -August in Puerto Rico.

[42] So we would normally come back then.

[43] 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.

[44] But I really enjoy Puerto Rico.

[45] It's a great place to live.

[46] You can't beat the tax breaks.

[47] So, you know, 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.

[48] I think a lot more people are going to be coming down there to try to escape what will be real confiscatory levels of taxation.

[49] So, you know, people can look into it.

[50] But, yeah, I mean, it's a real great place to be.

[51] Well, let's get into that.

[52] So you think that Biden has a very high likelihood of winning.

[53] Here we are.

[54] Let's just if people come upon this in the future.

[55] Today is the 14th, 14th of July.

[56] And we're a few months away from the election.

[57] You feel like it looks like Biden is moving into the direction of eventually winning.

[58] I think he's already moved in that direction.

[59] And so the question is, can Trump change that direction between now an election day?

[60] And I think it's going to be very challenging.

[61] maybe his best opportunity is going to be the debates we'll see i don't think they're going to have them though but the big problem for for trump and you know i i voted for trump um the first time and you know i was initially going to vote libertarian which is something i do and by the way there's a there's a candidate joe jorgensen who you should have on your show i don't know if you 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 and so So everybody who thinks there should be a woman president, I actually agree right now, and that's who we should elect.

[62] Is that who you're going to vote for?

[63] Is that who you're going to vote for?

[64] Well, I can't vote for anybody.

[65] I live in Puerto Rico.

[66] But I thought Puerto Rico was a part of the United States, sort of.

[67] It is.

[68] It is part of the United States.

[69] But you remember from the revolution, no taxation without representation.

[70] 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.

[71] But then you can't vote for the president and you don't have any member of Congress or you don't have a senator.

[72] So being in Puerto Rico, I have no representation in Congress and I can't vote for president.

[73] But the tradeoff is I don't have to pay the taxes.

[74] Wow.

[75] So that's a good tradeoff that I'm, you know, pretty much everybody is willing to make.

[76] So I can't vote.

[77] And normally I vote for the lesser of two evils anyway.

[78] And most of the time I vote for the loser.

[79] So as far as I'm concerned, giving up my right to vote for the loser is not much of a sacrifice.

[80] But, you know, if I could vote, I would still be living in Connecticut, and it would be a total waste of my vote to vote for Trump because he has no chance of winning Connecticut.

[81] So I would vote for Jorgensen, even though I know she can't win, I would rather at least give her a vote of support because I wouldn't be wasting my vote because, you know, it doesn't matter.

[82] Connecticut is going to go for Biden in a big way.

[83] And so it's, you know, voting for anybody, it doesn't really matter who you vote for in the state like Connecticut.

[84] 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.

[85] I didn't know it was in the bad, but I thought that he was more likely to win than lose, you know, even though everybody thought it was a long shot.

[86] And the reason that I thought that Trump could win is because Trump was telling the truth.

[87] about how bad the economy was.

[88] 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.

[89] I knew that we had a bubble inflated by the Federal Reserve and that beneath that bubble where you can see the stock market at record highs and these phony unemployment numbers, I knew laid a weak economy.

[90] And Trump knew that too.

[91] And Trump spoke to the forgotten men and women of this bubble economy.

[92] And his message really resonated about how we were, you know, 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.

[93] The real unemployment number rate wasn't 5%, but 20%, 30%, 40%, and that he was a non -politician, he was going to clean house, he was going to drain the swamp, he was going to put politics aside and bring a businessman's perspective to Washington, drain that swamp, eliminate the national debt, right, make America great again.

[94] And that message resonated with a lot of people.

[95] 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.

[96] So I thought he could win.

[97] And he did.

[98] But here's the problem.

[99] now that he's been in office for three years he didn't drain the swap he made the swamp deeper right he didn't make get rid of the deficit i mean the deficit is bigger than ever even before covid all he did was you know nurture the bubble that he inherited from from Obama and helped make it get bigger he became a cheerleader for the stock market he didn't care it was a bubble all of a sudden all the government numbers that were fake under Obama were all of a sudden all the sudden in real like they just came down from from god on a tablet on my sinai 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 and none of that was true 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 and their lives aren't better they're worse people have more debt You know, the bubble got bigger.

[100] The trade deficits that Donald Trump criticized are bigger now than they were before he was elected.

[101] And obviously, the deficits are much bigger, even before COVID.

[102] 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.

[103] And so they take a chance on Trump.

[104] Why should they vote for him again?

[105] I mean, now they may take a chance on Biden, even though, I mean, Biden doesn't represent any change from the same.

[106] status quo.

[107] He's just more of the same.

[108] 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.

[109] What do you think went wrong and why do you think Trump just made the swamp deeper?

[110] 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?

[111] What do you think happened?

[112] Well, I have no idea.

[113] I mean, I mean, even Ronald Reagan, right?

[114] Ronald Reagan, when he was elected, and he was a very principled conservative, right?

[115] Unlike Trump, you know, he was, he really talked, walk to walk, not just talk to talk.

[116] And he was a big supporter of Barry Goldwater who didn't make it, you know, when he ran against Lyndon Johnson.

[117] But when Reagan came in, he really wanted to shrink government.

[118] I mean, he campaigned about getting rid of the Department of Education, the Department of Energy, or I forget he really wanted to shrink government and cut spending.

[119] But he was never able to do that, right?

[120] He was able to cut taxes.

[121] He wasn't able to cut spending.

[122] Trump never really campaigned on cutting spending.

[123] He didn't want to talk about that because he didn't want to alienate any voters.

[124] So he just talked about cutting taxes.

[125] And he did, you know, officially cut taxes.

[126] But he actually raised taxes.

[127] That is the important thing that you have to recognize is that government spending is taxation.

[128] And what happened to government spending under Trump, even before it went through the moon with COVID -19?

[129] get to all the COVID stuff.

[130] But even before then, Trump signed on to all kinds of increases in government spending.

[131] More spending on the military, more spending, welfare, huge increases in government spending.

[132] Those are tax hikes.

[133] Now, Trump cut income taxes, but the income tax is just one way the government pays for spending, because all government spending has to be paid for by the public.

[134] One way or another, we don't get any government for free.

[135] Everything the government does cost us money.

[136] So every dime they spend represents taxation in some form.

[137] And what they've been doing is they've been printing money.

[138] The Federal Reserve prints money.

[139] And in fact, right now, the Federal Reserve is printing about 55 cents out of every federal dollar that's spent.

[140] So more money is being printed and spent than collected in taxation.

[141] But all that printing, all that spending that is being paid for by a printing pass, we don't get that for free.

[142] There is a cost.

[143] 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.

[144] And now that person spends the money, but because I don't have it, I can't spend it, I can't invest it or save it.

[145] I don't have it anymore.

[146] The government took it from me in taxes.

[147] 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.

[148] They just, you know, got money from the government.

[149] that still costs me because what happens is when that money is spent in the circulation, it bids up prices.

[150] And so prices are now higher than they would have been had that new money not been printed.

[151] And so now everything that I want to buy costs more than it otherwise would have cost.

[152] Either the prices went up or it prevented prices from going down.

[153] And so now my purchasing power has been diminished.

[154] 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.

[155] And so that's what Trump decided to do to pay for government through inflation rather than taxation.

[156] But what we know from history is that is the most expensive way to pay for government.

[157] And in fact, it hits hardest the middle class and the poor, right?

[158] Because the rich have a lot of assets.

[159] They have a lot of debt where they 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.

[160] And so inflation helps those people, right?

[161] If you have debt to buy assets, inflation wipes out your debt.

[162] But if you're just saving money and working for a living and getting a paycheck, the inflation tax is very heavy on you.

[163] And that inflation tax is going to get much, much higher under Biden.

[164] 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.

[165] Most of the money is going to come from the poor and the middle class through the inflation tax.

[166] But getting back to where I think Trump went wrong.

[167] So Trump gets into office and he had promised to make America great again.

[168] And the reason that America is not great is because government is too big.

[169] When America was great, right, we had very, very small government.

[170] government was an afterthought right on all levels maybe state federal and local maybe it was 5 % of GDP we didn't have an income tax corporate or personal we didn't have social security we didn't have all you know minimum wage or any of these any of these laws we had a very very tiny government because government was tiny the economy got very big we had all kinds of freedom and because we were free we were very productive and the living standards were rising and we were eradicating poverty we were making all kinds of strides, 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.

[171] Well, Trump wanted to make America great again.

[172] 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.

[173] But the problem is, how do you cut government spending when every single program has its own constituency that benefits from it.

[174] 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.

[175] And apparently Trump wasn't willing to do that.

[176] I mean, Trump, when he got into office, became a politician.

[177] Or maybe he was one when he ran for office, but he was more concerned about getting reelected, which is a shame because he probably won't.

[178] He should have used the bully pulpit and used his office right away to level with the American public to look them square in the eye and tell them that government is too big and spending needs to be cut, including things like Social Security and Medicare and all these sacred cows that nobody would gore.

[179] Trump should have been the guy to do it.

[180] He should have said the buck stops with me. I don't care if I don't have a second term.

[181] And he should have vetoed all of those bills that he signed.

[182] He never should have agreed to allowing the debt ceiling to go up.

[183] He should have enforced that debt.

[184] So we now have 26 .5 trillion of debt.

[185] right when he came into office it was just under 20 trillion so we've already added six and a half trillion since he became president i would not have allowed the debt ceiling to go up at all not one nickel and i would have forced the government to cut government spending and that's what trump should have done and you know but but he didn't want to do it because he was more concerned about the politics of it when you say i would are you running for president are you ready to do this i'm just saying what i would have done are you ready to do this peter are you ready to do this i'm not running but we need someone who understands i can be the first portarican president i'd be it did you ever watch the sweathawks yes sure yeah i'm on epstein i'm a i'm a porto rican jew epstein played my brother in an episode of news radio really yes he played my older brother who was a priest who beat us up yeah gabriel kaplan's show that was the 19th but yeah i'm i can be a puerto rican jew yes you know i can't vote right i can't vote for the president but I can run.

[186] In fact, I can be the only person elected president who couldn't vote for himself.

[187] That's hilarious.

[188] Now, I'm so glad you're on here today because you have a unique ability to illuminate all these areas of finance and taxing and Wall Street that most people just simply don't have the understanding or the knowledge to lay out for the lay person like myself.

[189] When you look...

[190] I appreciate that.

[191] And you know, you've got a great audience.

[192] And I'm hoping to clear up a lot of misconception out there.

[193] Because I've been saying, you know, the only thing that spreads faster than the coronavirus is ignorance, you know, about economics, about finance.

[194] And so I want to clear that up.

[195] And, you know, a good place to get started is to really talk about the current state of the U .S. economy.

[196] And where we were, right, leading up to COVID -19, because, you know, Donald Trump is out there claiming that we had this great economy, right, that just got screwed up by COVID -19.

[197] We had to shut it down.

[198] But we didn't.

[199] we had an enormous bubble.

[200] There was nothing great about it other than the size of the bubble.

[201] And the reason that it collapsed so quickly was because what happened was COVID -19 was a pin that tricked that bubble.

[202] In fact, the bubble was already deflating before COVID.

[203] It started to deflate in the fourth quarter of 2019.

[204] That's when the Federal Reserve stopped hiking interest rates and then started cutting them again and started doing quantitative easing again.

[205] And then COVID -19 came.

[206] It was like a giant spear that put a gaping hole into a bubble that was already deflating.

[207] Can I pause you there, Peter?

[208] Can I pause you there?

[209] Why did that happen?

[210] Why did that process take place before COVID -19?

[211] Well, because, again, Trump was very critical of Janet Yellen during the Obama years.

[212] Rightly so.

[213] 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.

[214] But doing that is what prevented a real recovery that would have benefited Main Street.

[215] And so those are the people that Trump was tapping into.

[216] The guys on Main Street that were getting screwed as the guys on Wall Street were being enriched by bad monetary policy.

[217] So Fed was, Trump was right to criticize Yellen.

[218] And then he didn't want to reappoint her because supposedly he was going to reappoint somebody that would do the right thing.

[219] 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.

[220] But when that began to impact the markets, Trump was like, oh, he started criticizing him.

[221] You know, we're going to fire you, you're a terrible Fed chairman.

[222] He was doing the right thing.

[223] We need higher interest rates.

[224] And unfortunately, higher interest rates means the stock market's going to go down.

[225] I mean, that's just the reality.

[226] The real estate market's going to go down.

[227] you know we're addicted to cheap money like a drug addict is addicted to heroin but if you've got a guy addicted to heroin the solution isn't more heroin so he stays high the solution is okay no more heroin and now you're going to go through withdrawal 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 i don't want withdrawal who's going to vote for me if they're you know everybody's hung up i want to party again I want the stock market at record highs.

[228] And so, you know, but so because we did this, we never actually had a real recovery.

[229] We just, you know, put more air into the bubble.

[230] But, you know, when COVID started, this is important to understand.

[231] So COVID -19 hits.

[232] And all of a sudden, you know, and I don't even know, I've seen some of your discussions on, on the podcast about COVID itself.

[233] And whether or not the threat is being exaggerated.

[234] Is it really as big a health threat as a lot of people say?

[235] And, you know, I'm not an expert there.

[236] You know, I tend to always be suspicious of government.

[237] And I kind of think it's being exaggerated like most stuff.

[238] But I'm not a doctor.

[239] I'm not an immunologist.

[240] And so, you know, let's just take them at their word that it's as bad as they say.

[241] I just want to focus on the economics of it.

[242] But so when COVID hits and people, you know, people start, you know, and they're not going out and, you know, and the people start losing their jobs and the economy starts tanking, right?

[243] The government comes in as if it's the government's job to rescue the economy.

[244] And the politicians say, in fact, Trump himself said, oh, we're at war.

[245] I'm a wartime president.

[246] This is like World War II.

[247] Remember that?

[248] Remember what he said that?

[249] Yes.

[250] Yeah, it's World War II and we have to sacrifice.

[251] Americans have to sacrifice to beat COVID -19 the way, you know, a prior generation sacrifice to beat, you know, Nazi Germany, Imperial Japan.

[252] We have to sacrifice.

[253] Except what we're doing now is the complete opposite of the actual sacrifice that Americans were asked to make during World War II.

[254] Right.

[255] Apart from the fact that 16 million young men went off to war and risked their lives, apart from that sacrifice, the people that didn't go off to war, they actually sacrificed, right?

[256] So because 1941, when the war started, not even 10 % of Americans paid any income tax at all, fewer than 10%.

[257] Really?

[258] In 1942, there was a victory tax.

[259] And after the victory tax, more than a third of Americans began paying income taxes.

[260] They weren't paying any income taxes before the war.

[261] All of a sudden, they're paying income taxes.

[262] And in 1942, they created the withholding tax, which Americans, you know, pay it today, you think it was always there.

[263] Up until 1942, nobody had any income taxes withheld from their pay.

[264] 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.

[265] You made no payments.

[266] You made no quarterly payments.

[267] You had no payroll withholding.

[268] That started as part of the victory tax.

[269] So massive tax increases on Americans.

[270] In addition to that, the U .S. government told Americans, we need more money than this.

[271] You need to loan us money.

[272] And so the treasury started selling these war bonds to the public.

[273] And middle class Americans bought the equivalent of trillions of dollars of war bonds.

[274] So the government taxed the middle class and borrowed from the middle class to pay for the war.

[275] And this is in 1940.

[276] We just went through the Great Depression.

[277] So these are Americans that just lived through a 10 -year depression.

[278] The war 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.

[279] In addition, nobody got a bailout.

[280] No businesses, if you ran a restaurant and nobody was coming to your restaurant because your customers were off fighting a war and the ones that weren't fighting a war were now working harder to pay higher taxes, you know, and people weren't taking vacations, they weren't going to theaters, they weren't staying in hotels.

[281] but none of these small business owners got one nickel from the U .S. government.

[282] The government didn't loan money to anybody, didn't bail anybody out.

[283] What are we doing now?

[284] The opposite.

[285] The government is cutting people's taxes.

[286] The government is loaning.

[287] Hold on.

[288] Wasn't that, but that's a different time, right?

[289] This is a time of a united country that it's facing a global threat from a tyrannical German Nazi regime.

[290] It's a different situation than dealing with a virus.

[291] Well, no. Well, first of all, it's Trump and other people that made the comparison to World War II.

[292] I understand that.

[293] This was a global threat.

[294] This was a real war.

[295] This was actually worse.

[296] Believe me. COVID -19 is not as bad as having a world war.

[297] Not even close.

[298] I would much rather fight a disease than to fight Hitler and Japan.

[299] I mean, this is not as bad as what people had to deal with in the 40s.

[300] Would you agree with that?

[301] Of course.

[302] Yeah, of course.

[303] Okay.

[304] But the concept.

[305] is the same.

[306] Government had to spend a lot of money fighting this war.

[307] And where did it get the money?

[308] It had to get it from the people.

[309] Right.

[310] And if people were, you know, disrupted, a lot of people lost money because of World War II.

[311] It wasn't their fault.

[312] 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.

[313] Let me, can I pause you for a second?

[314] Do you think that, first of all, we had to do something to stop the spread of COVID -19.

[315] Do you think...

[316] I agree.

[317] I agree.

[318] But hold on.

[319] But the government didn't have to bail anybody out.

[320] We have a problem.

[321] We have to deal.

[322] We have to deal with our issues.

[323] Peter.

[324] Peter.

[325] We have a problem listening to each other.

[326] Let me explain it to the people that are listening.

[327] We're on Skype.

[328] And unfortunately, when you talk and I talk, we can't kind of hear each other.

[329] And you're not wearing headphones.

[330] So it's weird.

[331] Well, I got a earpiece.

[332] Okay.

[333] But there's a little bit of a delay.

[334] so just let me it's 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 when you have a situation like COVID -19 and these medical experts say hey we've got to do something we've got to shut down most of what we do we've got to shut down a lot of businesses we've got to shut down schools and make things remotely 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.

[335] This is a very unique situation, and this is not like any situation we've ever faced in my lifetime.

[336] 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?

[337] Like, what could have been done?

[338] Yeah, well, first of all, you have to remember that the government doesn't have any money, right?

[339] The government only has money it takes from the people.

[340] one way or another, right, Grover Cleveland, who is a president in the late 19th century, he was quoted, he had a good quote, he said, while the people must support the government, the government should never support the people.

[341] And so I agree, let's say we have to shut down the economy temporarily, right?

[342] People should have enough savings to weather the storm.

[343] Businesses should have enough savings to weather the storm like they did in 1940.

[344] Average Americans had lots of money.

[345] in the bank.

[346] They weren't loaded up with debt.

[347] They didn't have credit card debt.

[348] They didn't have student loans.

[349] They didn't have car loans.

[350] They were solvent.

[351] Even after a Great Depression, they were solvent.

[352] We lived in a bubble economy.

[353] Everybody was paycheck to paycheck.

[354] Nobody had anything.

[355] Businesses couldn't survive if their revenue stopped.

[356] Workers couldn't pay their rent if they didn't get their salary.

[357] That's not right.

[358] That's part of the bubble.

[359] right so the fact that we were so ill prepared for a rainy day is because we had no rainy day fund we should have been able to deal with this on our own right now we're not getting a free me from the government but we're at now we we basically locked down somewhere around march we're four and a half months in or four months in now that's a long rainy day four months is a third of a year.

[360] There's very few human beings that have enough money to last four months.

[361] 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.

[362] That's a long fucking time.

[363] Right.

[364] 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.

[365] 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...

[366] Well, first of all, first of all, a lot of the businesses should have failed even before.

[367] I mean, the Fed has been keeping a lot of businesses afloat that should have failed years ago.

[368] Hold on.

[369] Let's talk about...

[370] And maybe COVID would have been the final nail in their coffins, and now they've got another lifeline.

[371] But these businesses are damaging the economy.

[372] See, businesses that are not profitable in a free market should shut down.

[373] Okay.

[374] Because they're squattering resources.

[375] Can I pause you?

[376] Let's talk about my business.

[377] I'm in the business of comedy.

[378] 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.

[379] L .A. is not allowing any of that.

[380] And they haven't since march the comedy store which is my home has been shut down since march all these clubs have been shut down all across the country through no fault of their own it's not like i know that it doesn't it doesn't matter that it's not their fault i understand that but it's not like they've done anything wrong it's the state of california if the state of california is going to order businesses shut down and then the state of california wants to provide some kind of relief, let California do it and let California impose higher taxes on whoever they think should fund it.

[381] We can't just use the Federal Reserve as a piggy bank.

[382] The Federal Reserve cure is going to do more damage than the coronavirus disease.

[383] 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.

[384] Right now, every state is like, oh, let's shut everything down and the federal government is going to bail everybody out.

[385] 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.

[386] Oh, we don't care if we shut down businesses because they're going to get these PPP grants from the government.

[387] But if the federal government let every state know, look, you make a decision.

[388] You handle this the way you want and you pay for it, right?

[389] So you do a cost benefit analysis because thinking that everything is free, that is the problem.

[390] I understand.

[391] We are doing so much damage to the economy.

[392] People have no idea.

[393] We are going to get such a massive economic collapse, far worse than what I thought was coming, you know, when I did your show last few times.

[394] This is going to be much worse.

[395] We are compounding the mistakes of the past with much bigger mistakes.

[396] 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.

[397] I agree.

[398] When we run out of stuff.

[399] Can I pause you?

[400] Yeah.

[401] Last time you were on, you were predicting the bubble.

[402] of commercial real estate and a lot of other issues what what do you think is different about that situation now and how much does that compound what we're dealing with currently well obviously the coronavirus has made you know that the problem worse for commercial real estate i mean commercial real estate is going to get killed for so many reasons it's devastating i think before covid but COVID, again, just accelerated the process.

[403] But obviously, if you are a retailer, you know, no one's coming into your store, your restaurant, if you got a gym, if you got a movie theater, so you're not collecting any rent, so you want to default.

[404] 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.

[405] 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.

[406] I mean, I got some people that come into the office, but I got a lot of people working from home.

[407] And so a lot of companies are thinking, hey, I don't need all this commercial space.

[408] I don't need this big in office anymore because more of my people are working from home.

[409] So now you have pressure on the rents.

[410] And that was already happening.

[411] You know, you had we work that blew up and they had, you know, they had, you know, rented all this space that was now, you know, on the market for sub lease.

[412] But all this was inflated by the Fed, keeping interest rates artificially low to prop up these bubbles, made that real estate bubble.

[413] very, very big.

[414] And so now it's going to be far more disruptive when it popped.

[415] But it's got to pop.

[416] You know, trying to prevent bubbles from deflating by trying to blow more air into them just makes it worse.

[417] 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.

[418] I understand.

[419] So it's essentially like a pull -off the Band -Aid situation.

[420] And we have to have a healing moment you have to let things collapse that need to collapse that should have been done a long time ago because of mismanagement 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 yes the free market never would have screwed us screwed us up this much it was government interference in the free market that's why you know capitalism gets a bad name 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 in Zucati Park because you had all these young protesters who were blaming Wall Street for the bailouts and for the financial crisis.

[421] And I was saying, no, it's not Wall Street that took the bailouts, blamed the government for providing the bailouts, for making them available, blame the Federal Reserve for funding all this and inflating the bubble.

[422] Yes.

[423] 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?

[424] You think I could do that?

[425] You think I could walk into a crowd of hundreds of people and take the opposite position and walk out of there?

[426] They would beat you to death.

[427] They would beat you to death 100%.

[428] Yeah.

[429] So, I mean, it really shows you the loss of civility in just, you know, 10 years.

[430] Well, it's not just a loss of civility.

[431] It's a loss of opportunity and the loss of a faith in the system and the future if we stay on the same path.

[432] That's part of the problem.

[433] 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.

[434] And that's where young people today...

[435] 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, you know, was real strong.

[436] They could afford to pay for World War II and to provide for their own families, you know, 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.

[437] But we had the capacity to pay it back back then.

[438] That was the point.

[439] The debt went way down.

[440] 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.

[441] We don't have that capacity now.

[442] I mean, the debt's never going to go down.

[443] The debt's going to keep on rising and rising and rising until the dollar implodes.

[444] See, that is the real crisis that we're headed for.

[445] It's going to be a collapse in the value of the dollar.

[446] Because right now we're printing money, right?

[447] And the government is sending it out, and people are able to buy stuff with it, right?

[448] But that's going to come to an end because the world is no longer going to accept U .S. dollars as the reserve currency.

[449] 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.

[450] 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.

[451] But producing goods requires capital, it requires labor, it requires land, it requires real resources.

[452] But we get all the stuff for free.

[453] We just create money, and here you go, and they send us stuff.

[454] And then to make it even better for us, they take the money that we send them to paper and they loan it right back to us at very low rates of interest.

[455] They buy our bonds.

[456] They buy our mortgage -backed securities.

[457] So Americans get to spend all this borrowed money that they didn't save.

[458] We get to consume all this stuff that we didn't produce.

[459] And so we have an artificially elevated standard of living.

[460] We live beyond our means.

[461] 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 QE infinity.

[462] zero percent interest rates in perpetuity, and then they're not going to want the dollar anymore.

[463] And then the dollar is going to crash, and we're not going to be able to import anything anymore.

[464] And the only things we're going to be able to buy is this stuff we make ourselves, except we don't make much stuff anymore.

[465] So prices are going to go through the roof.

[466] That is the real economic consequences.

[467] And so it's not going to matter that the government sends you a stimulus check if you can't buy anything with it.

[468] Because the government can't create purchasing power.

[469] They can print all the money they want, but none of that printed money adds any purpose.

[470] purchasing power.

[471] They don't grow any food.

[472] They don't produce any products.

[473] Nothing.

[474] They just print money.

[475] Right.

[476] But there is, if the government gives money to people, they will be able to buy things and people still are making things.

[477] But now, but when the dollars value collapses, see, you can't keep printing trillions and trillions of dollars and expect the dollars not to lose purchasing power.

[478] Right.

[479] Right.

[480] Because paper money, all that does is that allows us to divvy up what we produce right you have all these americans now who used to be working doing something right they were helping to produce a product they were providing a service and now they're just at home collecting a check right so they're getting money for nothing they didn't put anything into the pot can i pause you want to take out of the pot with their money well there's nothing in the pot right so now the prices of everything in that pot have to go up because there's no there's no extra stuff there's just more buying peter what's been i'm sorry as an economic exercise expert what would you have done differently if you could have advised this government and we were let's let's go back to march when everything was shutting down what would you have have advised differently again first of all i would allow i would allow the states to be responsible for their own policy so you you you decide what you want to do in your own state as far as you know what you what businesses you want to close you know what what you want to do and and you pay for and if you think that certain businesses or individuals need to get money, then the state will provide it based on local taxpayers.

[481] 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.

[482] It's a drag on the economy.

[483] It's the government taking resources away from the private sector where they would be used efficiently and squatter them in the public sector.

[484] I understand.

[485] Can I pause you for a second there?

[486] It's a burden.

[487] Can I pause you?

[488] I would have lighten the burden.

[489] What would you have, when you say lighten the burden, what would you have cut?

[490] When you think about all the different aspects of the government that are essential, things that need to be in place.

[491] What would you have cut?

[492] Most of the government money is transfer payments, where the government takes money from one person and gives it to somebody else.

[493] I mean, the government shouldn't be doing that.

[494] That's not why we have a government in America.

[495] Government is here to secure our rights.

[496] Can you explain that?

[497] protect our property not steal it can you explain that what do you mean by transfer payments well that's when the government takes money from one person through taxation and just hands it to somebody else or now through inflation the government just prints money and gives it to people that it thinks needs it but what do that's not but government but let's look at the ppp okay let's let's look at that or the cares act right okay look at all the damage that the cares act did to to the economy so first of all let's look at the payroll protection plan that everybody wants to brag about right what a complete fraud this was i said from day one this would be a assessed pool of fraud you know we found out last week that there were 600 approximately hedge funds private equity funds asset management companies that got ppp loans and they're not even loans because you don't have to pay them back so it's free money right and i could have gotten one of those loans if i wanted to i just didn't want to lie to qualify can you stop right there can you Can you stop right there?

[498] 600 firms did.

[499] Can you stop right there?

[500] Most people don't know that these hedge funds got this money.

[501] Most people think this money went out to American businesses to keep these businesses from collapsing because we need restaurants.

[502] We need, you know, movie theaters and all these, all these various American businesses that we assume this money went to prevent from collapsing.

[503] Explain that, please.

[504] Yeah.

[505] Well, you didn't have to, all you had to do is apply.

[506] And according to the small business administration, as long as the money you asked for was less than $2 million, they didn't ask any question.

[507] Because in theory, you are supposed to need the money, right?

[508] You are supposed to have some disruption.

[509] Like if you ran a restaurant and your restaurant is shut down, you don't have any revenue.

[510] There's nobody eating in your restaurant.

[511] So you have no money coming in.

[512] So how do you pay your waiters?

[513] How do you pay your busboys?

[514] You have no money.

[515] So the government was like, oh, we'll give you some money as long as you don't fire.

[516] your workers will give you some money to pay your workers.

[517] But a company like mine, right, my, I have two or three companies that I could have taken money from, and I didn't.

[518] But you look at my, like my asset management company, your Pacific asset management.

[519] I'm making more money now than I was before COVID.

[520] And I assume that that's the case with most firms that are in my industry.

[521] Can you explain how that's possible?

[522] Because our revenue was never shut down.

[523] How is that possible?

[524] How are you making more money?

[525] Because all I do is charge fees to manage people's.

[526] money.

[527] I didn't stop managing their money because of COVID.

[528] I mean, we just keep on managing it, and we keep on billing for our feeds.

[529] We bill every quarter.

[530] We weren't even shut down.

[531] Even in Puerto Rico, where they were shutting down everything, I mean, I was considered an essential business, financial services.

[532] So, you know, people can come to my office, even though I let a lot of them work from home.

[533] And remember, all of our customers, they talk to us on the phone.

[534] So when I want to talk to a customer, the customer doesn't drive down to my office, you know, they just call me on the phone.

[535] And so there's no physical contact.

[536] So there isn't any disruption.

[537] All of the revenues that the hedge funds were getting, that the asset management companies, all that revenue continued unabated.

[538] Not a single job was in jeopardy, right?

[539] All these companies that got government money.

[540] See, the government wants to pretend that these loans saved jobs.

[541] They didn't save these jobs.

[542] These jobs were never in jeopardy of being lost.

[543] So all that happened is that it's a windfall.

[544] The asset management companies, the hedge funds, they got extra money from the government to make their profits even bigger.

[545] On top of the fact that the Federal Reserve printed all this money, which inflated asset prices, we charged fees on those assets.

[546] And so as the Fed inflates assets, Wall Street has inflated fees.

[547] We make more money.

[548] It was a double bailout for a lot of these Wall Street firms.

[549] So that was one of the frauds.

[550] But even in the case where the government is actually giving companies, giving money to companies that need it, right, that otherwise would have fired their workers.

[551] Look, we don't know, you know, what the future demand for restaurants and bars and theaters is going to be.

[552] I personally believe that demand is going to be diminished for a long time.

[553] It's not just a temporary thing.

[554] I don't think it's going to come back to the way it was, especially since the way it was was a bubble.

[555] See, that's what people don't get.

[556] They say, we want to go back to the way it was before COVID.

[557] We can't.

[558] reflate that bubble.

[559] We have to start spending less.

[560] We have to save more.

[561] And that means we can't go out as often.

[562] We need to build up our savings again because we've depleted it.

[563] So there's going to be less demand for restaurants.

[564] There's going to be less demand for a lot of things.

[565] We have to let these companies downsize.

[566] Look at the airlines.

[567] Americans are going to be flying less.

[568] There's no question of my mind that domestic air travel is going to be down for many, many years, even after COVID is cured.

[569] So the airlines have to shrink.

[570] They have to lay people off.

[571] They have to be profitable.

[572] They have to effectively utilize resources.

[573] So to the extent that the government prevents businesses from laying off workers that really should be laid off, they ultimately compromise the viability of those businesses.

[574] And in the long run, they may end up putting people out of business that would have stayed in business.

[575] Maybe somebody had 100 employees and maybe they could have downsized to 30 employees and at least those 30 employees would have a job, but instead they keep those employees on the payroll for long enough to the point where the whole company has to go out of business and now everybody loses their job.

[576] 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?

[577] Well, that's the problem with government programs.

[578] There's always fraud.

[579] Look, whenever the government is giving out free, money.

[580] People try to qualify for it.

[581] 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.

[582] I mean, people worked at home that used to work in the office, but you had to basically testify or certify that the money was necessary to support the ongoing operations of your business, which for most of these firms, it wasn't.

[583] And you also had to say that you had no other source of capital, which again, people were lying.

[584] But the government basically said if you asked for less than $2 million, we're going to look the other way.

[585] We're not going to vet these loans.

[586] But hold on.

[587] Hold on.

[588] Did they actually say that?

[589] Did they actually say that?

[590] They're non -recourse.

[591] There's no collateral.

[592] So a lot of businesses that were going to fail anyway and that we're going to lay off all their workers took the money.

[593] They're still going to lay off all their workers.

[594] But now they're not going to have to pay the money back because they're going to bankrupt their business and once your business is bankrupt even though you fire all your workers you're under no obligation to repay the loan okay did they actually say that if you ask for less than two million dollars we're going to look the other way like where are you taking this from well what what it says is we'll assume that you're filing an honest claim right because they're saying that if you if you ask for more than two million dollars we're going to vet the claim and we're going to take a look at your situation but it's set on the small business administration that we'll just assume you're being honest, right?

[595] So if you ask for less than $2 million, we'll assume you're being honest.

[596] Well, the minute they say it, ah, shit, I'm going to lie.

[597] That's the problem.

[598] So many people lie.

[599] Whenever the government has a program, it gets abused.

[600] That's part of the problem with government spending, right?

[601] Everybody tries to qualify.

[602] Just like the unemployment benefits, this crazy deal with the enhanced unemployment benefits.

[603] 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.

[604] Now, you create that kind of incentive.

[605] 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.

[606] 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.

[607] I mean, you're not working because you enjoy what you're doing.

[608] You're working because you need the money.

[609] You need to pay the bills.

[610] well if you can make the same amount of money or more without working i mean who's not going to go for that 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 and of course you know there's more than just working you have to get up early in the morning you got to fight traffic you know you you know you got other expenses maybe you got to you know put your kids in daycare you know you got to you know laundry you know dry clean your clothes women women can spend an hour in the morning doing their hair doing makeup they don't get paid for that but they got to do all that you know and add all that to commute time i mean so there's a big cost of working and then of course you give up all your leisure when you're at work you can't have fun the government now has create a situation where people are getting paid to have fun so i mean how do you end that what politician is now going to take this away i understand what you're saying about that and i do agree with that and that was very shocking to me that uh people that i know who have friends that are on unemployment don't want the economy to reopen because they would lose money.

[611] And I was like, my God, what a conundrum.

[612] You can't get people to work.

[613] Hold on, please.

[614] Why can you work?

[615] I get more money not working.

[616] Hold on, please.

[617] Peter, Peter, Peter, Peter, hold on, please.

[618] They get cash.

[619] They want to pretend they're unemployed.

[620] Peter.

[621] They can keep getting those benefits.

[622] And then they take a job under the table for cash.

[623] Hold on, please.

[624] I believe that.

[625] But that doesn't make sense with hedge funds.

[626] With hedge funds, if you're talking, we're talking about small businesses does a hedge fund qualify as a small business and we're talking about them receiving ppp and as long as it's under two million dollars is no questions asked if they can't demonstrate a loss of income how are they receiving this money and what should have been done differently look i look as soon as i heard about the program i went online and i doubt and i you know i got the application just to you know to see what it was you don't have to prove anything all you have to do is you have to have fewer than 500 employees, which is pretty much everybody.

[627] I mean, most of us in this business don't have 500 employees.

[628] And then what you did is you just listed your payroll, right?

[629] And they gave you three months of your payroll.

[630] So whatever you pay, all your workers, right?

[631] And it was cap.

[632] So if you had some people that were making a million dollars a year, they wouldn't cover the whole thing, right?

[633] It was like, I forget what the limit was, maybe 100 grand a year or something like that.

[634] But what they did is you could take all of your payroll for all your employees and then take three months worth of it.

[635] And the government said, we will give you a loan, no questions asked, for three months of your payroll.

[636] And as long as you don't fire more than a certain percentage of those people, you never have to pay the money back.

[637] So it didn't say anything about proving that you actually needed it, proving that your revenue went down.

[638] So the government opened up an opportunity for all sorts of people.

[639] I mean, I could have had a few hundred thousand dollars if I wanted it.

[640] All I had to do is lie and claim I needed the money.

[641] 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.

[642] So, I mean, people can say I'm a hypocrite because I'm living in Puerto Rico.

[643] But I'm not committing fraud.

[644] I'm being honest.

[645] Anybody that wants to pay less taxes is free to move to Puerto Rico.

[646] But I didn't want to commit fraud.

[647] I didn't want to sign a document and attest to the fact that I needed the money.

[648] money when I knew I didn't.

[649] And what business owner needs the money like that?

[650] I mean, if you're managing other people's money for a living and you can't handle, you know, a downturn in your business, then what business do you have managing people's money?

[651] If you can't even manage your own.

[652] I can't believe that anything under 500 employees is a small business.

[653] That seems like a, that seems like a regular business.

[654] Like what the fuck world are we living in where 500 employees or less is a small business that seems like you know business yeah well they're not well believe me they're not like big corporations that have thousands and thousands and they're also there was other criteria like how many locations you can have i can't remember all of it but you know a lot of the people that applied were just self -employed people yeah you know so and so they were businesses of one and so they got to you know they got their own uh a pay but you didn't have to prove because a lot of people's businesses were not disrupted because if you didn't work with the public in a public setting.

[655] If you just sat at a desk and worked on a computer and a telephone, your business wasn't disrupted.

[656] So why do you need any government money?

[657] Yeah.

[658] Kudos to you.

[659] Even if you needed the money, the federal government shouldn't supply it by printing money.

[660] People don't realize how much damage we have done to this economy.

[661] The U .S. government, the Federal Reserve, is doing far more damage than COVID -19.

[662] That's what people don't get.

[663] We're going to reap the world wind for what the government is sewing well kudos to you for not taking that money i really appreciate that giving your understanding of what's legal and not legal and the fact you're willing to move all the way to porto rico to avoid federal income taxes kudos to you i didn't only do it for the taxes i know lifestyle and all that kind of stuff too i mean the taxes make it make it uh make it affordable i understand there are other reasons to i was going to move the florida i mean i was going to go down there.

[664] And so I ended up going to Puerto Rico.

[665] Listen to me. Fuck Florida.

[666] Saw that shit off and sell it to the Russians.

[667] I'm happy that you didn't take that money.

[668] I really am.

[669] But I really I want to understand what would have been the best maneuver.

[670] If the federal government had like, let's imagine that you and Trump were besties.

[671] And he's like, hey, Peter Schiff, what should I do?

[672] What should I do.

[673] We're going to have to do something.

[674] We have this COVID -19 situation.

[675] We're going to 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.

[676] We really didn't understand what the consequences of this virus were.

[677] What do you think they should have done differently?

[678] Yeah.

[679] Well, again, first of all, we have to acknowledge how weak the economy was before COVID, right that we didn't have a great economy that the economy was a mess that people were broke right everybody was living paycheck to paycheck everybody was levered up can i stop me there can i stop you there yeah but we have to recognize the fact that we it was pouring out and we had nothing saved for a rainy day yes so we need to acknowledge the fact and we have to understand why were we so broke can i why was everybody so levered up in the first place right this is so frustrated and do these things with a delay.

[680] I'm so sorry.

[681] 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.

[682] What's wrong with that narrative?

[683] Well, I said, that's a lie.

[684] You know, that's one of the things that frustrates me about Trump is pretending the economy was great.

[685] Because somehow he thinks that because he's president, the economy should be great.

[686] I mean, that might be his own ego.

[687] Hey, I'm the president.

[688] So we must have a great economy.

[689] But we don't.

[690] It's the same economy he inherited from Obama only more highly leveraged.

[691] And it's all the debt.

[692] It's all the corporate debt, all the individual debt, all the government debt.

[693] That's why we're so ill prepared for any crisis, whether it's COVID -19 or anything else.

[694] We were broke before this happened.

[695] I said, it's raining out and we've got no rated day fund.

[696] So the first thing we have to acknowledge is why was the economy so screwed up?

[697] How did it get screwed up?

[698] And that was because of the Fed, keeping interest rates too low, discouraging people from saving, rewarding people from borrowing, putting too much emphasis on the stock market and not enough on the real economy, and government spending too much money, government making us less productive by spending too much and regulating too much and subsidizing too much.

[699] So we screwed up the economy.

[700] So what we needed to recognize is, okay, we need to reverse all that, right?

[701] 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 build up our ability to deal with COVID -19.

[702] Instead, we're just printing even more money.

[703] We're juicing up the economy with even more debt.

[704] We're pushing up the NASDAQ to new highs.

[705] This is not productive.

[706] This is making the problem worse that dwarfs COVID -19.

[707] 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.

[708] We weren't prepared for any crisis.

[709] We couldn't fight World War II again like we fought in 1940.

[710] We're a shadow of a former self.

[711] We don't have the industrial might.

[712] We don't have the savings.

[713] So we don't have the tax base for the government to tap into to actually pay for a war.

[714] We just have a printing press.

[715] And we can only use that because foreigners are dumb enough to accept our money.

[716] And, you know, they're not going to be accepting it much longer.

[717] So this is bad news, right?

[718] Any way you shake it.

[719] America has a day of reckoning.

[720] And I would have rather had Trump level with the public and say, you know what?

[721] The day of reckoning is now.

[722] And yes, I know COVID -19 is bad, but we got a lot of other problems too.

[723] And we have to deal with it.

[724] we got to pay the piper right they were saying nobody has to suffer nobody has to sacrifice you know what we have to suffer we have to sacrifice 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 uh so we you know we should have you know made government smaller and look maybe we maybe we should have dealt with the crisis more like Sweden, you know, I mean, a lot of people are giving shit to Sweden, but, you know, Sweden didn't want to make that bargain.

[725] They didn't want to print all this money.

[726] They, you know, they bore their own costs.

[727] And so, they had a different approach that didn't do as much economic damage.

[728] And, you know, our economy was so screwed up.

[729] I mean, the Swedish economy is in much better shape than ours.

[730] And not because they're socialist, like Bernie Sanders thinks, because they're not, because they're actually more capitalists than we are.

[731] Sweden's more capitalist than we are?

[732] Yeah, you know, the rich pay lower percentage of taxes in Sweden than we do.

[733] You know, they don't even have an inheritance tax.

[734] There's no estate tax in Sweden.

[735] Really?

[736] Zero.

[737] No, yeah.

[738] I would have never guessed that.

[739] Sweden, Sweden became a very rich country because they were a capitalist country.

[740] And once they became very rich, they experimented with socialism, which was an unfortunate experiment because there's no reason to experiment with socialism, because every time it's tried it's failed but they decided to try it and of course it failed and so they had to start rolling it back once they saw all the damage that the welfare state in sweden was creating so they started dialing it back and and you know they've gone a long way they haven't eradicated it completely uh but you know 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 the confiscatory levels of taxation i mean look what joe Biden wants to do with the income tax, the corporate tax and the personal tax.

[741] 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, I forget the exact amount, but corporations are taxed twice, right?

[742] They're taxed when they earn the money, and then when they distribute it to the owners.

[743] So you have to add up both rates.

[744] But then he also wants to apply so security taxes to those dividends, not just the Medicare taxes.

[745] So he basically wants to take the corporate, the effective corporate tax rate up from about 40 % where it is now to about 60%.

[746] That's where he wants it, you know, which is a huge increase or 70%.

[747] I forget the one, it's a, it's a massive number.

[748] And it really is fascism because the government ends up owning all these businesses.

[749] Because if you take more than half of the income of a business, I mean, you basically own that business.

[750] I mean, it's your business.

[751] You're getting more than half the income.

[752] So the government is really nationalizing these corporations from taxation.

[753] But it's not the corporations.

[754] It's the individual shareholder.

[755] They're the ones that own the business.

[756] That's a very important way to look at it.

[757] The way you look at it there where half of the income is going to someone else.

[758] And I wanted to stop you for a second, but I wanted to hear that right.

[759] rant, there's a connection that people make from, it's, they connect socialism to empathy, socialism to kindness, socialism to people that are less greedy, socialism to people that are more interested in, in a community.

[760] This is, and this is coming from a person like myself who has no economic, 86 % of what I know about the economic world is from you.

[761] So I'm an idiot, all right?

[762] I listen to people who are experts.

[763] 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?

[764] We have the fire department.

[765] That's a socialist policy.

[766] Nobody wants a fire department to be only for people who have money.

[767] We want the fire department to be for the community.

[768] It doesn't matter if you have zero dollars.

[769] If your house is on fire, we're all going to pay for the fire department to come put it out.

[770] We all have a vested interest in keeping your house from burning down and you dying and the whole community from burning.

[771] right we have these certain agreements well there's a big difference between i understand but hold on a second you're right you're 100 % right but it's the idea behind it that comes from idealistic people and i'm putting myself in this category i am often naive and idealistic but also ruthless in my assessment of human character it's a big contradiction because i think there's a lot of people that really could do more than they're doing and they know they could and they want to make excuses and it's part of the reason why throughout history they've left people behind 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 got to carry me bro I'm like Bob we're both walking come on man Bob's not supposed to make it he's not supposed to make it we want him to make it but we don't want our kids to die we don't want our mom to starve we got to keep going Bob you lazy fuck come on bro there's always been people like Bob and it's part of the problem with humans.

[772] So I'm a contradiction.

[773] But hold on a second.

[774] The best way to take care of that.

[775] I understand, but I'm going to give you, but that's what attracts people to socialist ideas.

[776] It's just that they're nice, that they want everybody to do better.

[777] Socialist, socialist ideas are very appealing.

[778] I mean, I get that.

[779] And that's why they're very popular with young people who don't know any better.

[780] They don't have enough life experience.

[781] But this is the bridge.

[782] Peter Schiff, this is the bridge, because a guy like you who really understands economics can talk to a guy.

[783] like me and we can explain it to everybody because otherwise we just have and i i'm definitely not arguing with you but your argument versus people who disagree with these argument you have this but there's a there's an opportunity to make this bridge and for us to understand each other i'm hoping i think so i'm here to make that bridge and i appreciate i want to help people evolve from being socialist to being capitalist because capitalists aren't mean yes 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.

[784] It isn't the part of the problem with your fire department.

[785] Isn't the part of the problem?

[786] When you have a local fire department, right, that fire department is there to put out any fire at any house, right?

[787] So everybody in the community benefits from having a fire department.

[788] It's not there just for one person.

[789] It's for everybody in the community.

[790] We're talking about where the government takes money specifically from one person and gives it to somebody else for their specific benefit because they think they need it for whatever problem, whoever reason they need the money.

[791] Agreed.

[792] This would be like Bob wanting money from you.

[793] Our lazy friend Bob we're talking about.

[794] I am all in favor of private charity.

[795] I'm all in favor of people voluntarily helping out their fellow man. And Americans will do that.

[796] I mean, we didn't do that.

[797] We did that a lot more in the past when the government didn't take so much of our income and taxes.

[798] We had a lot more money.

[799] Like I mentioned Grover Cleveland.

[800] 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.

[801] And Grover Cleveland vetoed the bill because he said, look, there's nothing in the Constitution that allows the government to give money to people just because they need.

[802] need it.

[803] I mean, this is not right.

[804] We can't take money from the taxpayers and just give it to somebody because we feel they're in need.

[805] And so he vetoed that bill.

[806] 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.

[807] That's a great thing.

[808] When you give your own money at a charitable giving, that is great.

[809] That is noble.

[810] Yes.

[811] But when you steal money from somebody else and give that money, there's no nobility in that.

[812] That's theft.

[813] I don't care what you do with the money after you steal it.

[814] Stealing is wrong.

[815] I see what you're saying.

[816] I like what you're saying.

[817] Is there an opportunity where these two things can merge, 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.

[818] So if there's certain charities that you really feel strongly about, like cancer research.

[819] The people who are likely to give the most to charity are wealthier people because they have more discretionary income.

[820] And if you have a lot of wealthy people who are paying 40, 50 percent taxes, and I was doing that.

[821] I was paying about half of my money in taxes before I moved to Puerto Rico, right?

[822] I didn't have any special tax breaks.

[823] I paid about almost half my money in taxes.

[824] So because half the money went to the government, I had a lot less money that I could be charitable with.

[825] I mean, I had all the money I needed to take care of myself.

[826] 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.

[827] And the other benefit of when you allow more private sector charity, private sector charities are much more efficient because they really care about the people they're trying to help.

[828] Governments don't give a damn.

[829] When you have a government program, that program exists to benefit the bureaucracy of the program.

[830] So they squander the money.

[831] And the last thing they want to do is end poverty because then there's no longer a need for their program.

[832] They want to perpetuate dependency.

[833] You know, if you go back to the great society in the 1960s, if you look at the declining poverty rates in the 1940s, 1950s, leading up to the 1960s when we have the, you know, all the civil rights and all this big war in.

[834] poverty.

[835] We were beating poverty.

[836] We were kicking poverty's butt.

[837] Poverty rates were really falling in this country until the government declared war on poverty.

[838] And then poverty won.

[839] That is the problem.

[840] The government created poverty.

[841] They didn't eliminate it.

[842] Well, what should they have done differently?

[843] They should have allowed free market capitalism to keep lifting people out of poverty.

[844] Look, the reason people are poor is because they're not earning enough money.

[845] Well, how do people earn more money.

[846] They become more productive.

[847] How do you get more productive?

[848] You acquire skills and you have capital.

[849] Your employer provides you with capital that makes your labor more productive.

[850] And because you're more productive, you can earn more money.

[851] And that lifts you out of poverty.

[852] So it's free market capitalism that lifts people out of poverty.

[853] And so the smaller the government is, the more capitalism we have.

[854] The more wealth we can create, the more employment opportunities we can create government just gets in a way can i pause you for a second so you what you're saying is there's an opportunity to be compassionate without like the demand for you being compassionate by the federal government and if people have to spend less money on the government there's opportunities for them to donate more money to charities and this this would be like a better this would be a better way of managing our money and our charity and all these things Yes.

[855] It's much more efficient, voluntary giving.

[856] Look, when people give money voluntarily their own money, they don't want it to be squandered.

[857] They don't want it to be wasted.

[858] 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, how much of it is used in bureaucracy and how much goes to the recipients.

[859] Isn't that shocking?

[860] And you can say, hey, we're going to take 10 cents to run the charity.

[861] And actually 90 cents is going to go to the people that we're trying to help.

[862] Right.

[863] But isn't it?

[864] In the government, it's the other way around.

[865] They take in a dollar and only 10 cents actually goes to the people that need the money.

[866] The rest of it is absorbed in the bureaucracy.

[867] There's no incentive to be efficient.

[868] Charities have to be efficient or nobody will give them money.

[869] Government has no incentive to be efficient because they take your money.

[870] There's no voluntary interaction there.

[871] They take your money from you and so they can be as inefficient as possible.

[872] But then the private charity wants to help people out so they no longer need the charity.

[873] the government wants to keep people impoverished so they're in constant need of the charity because that way they can get their vote the government knows if they steal money from peter and pay paul that they'll always get paul's vote and that's what they're concerned about they want to keep people entrapped in poverty so that they'll be reliable votes is that is that what they want or do they just want to maintain this system that they have control over because if they just released everything to the public sector like if they they or the private sector if they but if they I just release, but if they, everything, from policing to the water purification, everything they do.

[874] If they just went, instead of the government handling everything, they just allowed it to the private sector, how would we manage whether or not they were doing the good of the people overall?

[875] Like, that's what everybody's worried about.

[876] What everybody's worried about is big business, assuming this monopolistic, gigantic monolith that crushes everything before it and pollutes the rivers.

[877] that's what we're worried about so the idea of the government stepping in for businesses to keep business from only growing and not growing with concern for the consequences of all the other people around it that's where everybody gets real suspicious right when you agree and and and and they shouldn't be and this is something that always kind of bothers me that uh people just attribute sinister motives to private businessmen yet they think politicians are angels and just there to do the lord's work I mean, there's just as many greedy people who go into politics as who go into business.

[878] In fact, probably more.

[879] But there's a big difference.

[880] See, I have protection because if a greedy person goes into private business, his greed can only help me. Right?

[881] Because the way a business grows and gets bigger is by selling more products and services.

[882] Well, why would I buy those products and services?

[883] I have to like them.

[884] I have to think they're better than the products or services that some other businesses is offering.

[885] me, and I have to value those goods and services more than the money I'm voluntarily exchanging to get them.

[886] 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.

[887] And if they don't make me happy, if they can't satisfy my disease, I don't buy their products.

[888] Agreed.

[889] They have to win me over.

[890] They have to woo me and seduce me to get my business.

[891] 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.

[892] On the other hand, you take a greedy person and you give them the power of government, they can make my life miserable.

[893] They don't have to get me to voluntarily do anything.

[894] They just take my money by brute force and they just do to me whatever they want.

[895] So where you have to fear greed and power is when it's in government where it can actually harm you.

[896] Okay.

[897] Not in the private sector.

[898] I can help you.

[899] I agree.

[900] So someone's going to say, well, what if there's a criminal?

[901] What if somebody is stealing my money?

[902] Yes, they're violating the law.

[903] And we need government to protect me from thieves.

[904] 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. It doesn't hurt me. It only helps me. 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 but it doesn't mean that capitalism in of itself is a demonic thing a bad thing it's a good thing no and you think we're doing now but all the wall street bailouts that's not capitalism right the banks that were over leveraged in 2008 should have been allowed to fail investors should have lost money none of this is capitalism bailing out companies that should fail is not capitalism do you think it's corruption do you think it's a crime like when when you say it's not capitalism then what is it well i mean you can call it statism a crony capitalism fascism so i mean there's a lot of ways you can describe it corporatism but it's not free enterprise it's not capitalism failure is an important part of capitalism right because if you look at the science of economics what is economics about it's about how do you satisfy unlimited human desires unlimited demand, with limited resources, right?

[905] We have scarce resources.

[906] They're not infinite.

[907] We have so much land, labor, capital.

[908] And so we have to figure out how to organize our resources in the way to satisfy as many, you know, demands as we can.

[909] And so businesses compete with each other for those resources.

[910] And the businesses that combine them in a way that they can generate a profit, that means that they're adding value.

[911] That means that the goods they're producing are more valuable than the resources they consumed in the process of producing them.

[912] So that's a good thing.

[913] But when businesses are taking resources and their products cannot recover the cost of production, they are squandering our resources.

[914] 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.

[915] So we need companies that can't generate a profit.

[916] to go bankrupt that the profit and loss is the thermometer that tells you if you're doing the right thing if you're making a profit keep doing it because you're creating value if you're losing money then stop you're destroying value your business is making us poorer so the market is trying to function so that we can have an optimal amount of economic growth then you have the government coming in and deciding to subsidize businesses that it doesn't want to fail you know because oh we you know we might lose some votes you see there's a there's a concept about the scene and the unseen.

[917] And politicians are concerned about what you can see 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.

[918] But what you don't see are the jobs that were never created or might have got destroyed because the government misdirected capital from where the market would have put it to where the government wants it.

[919] So we destroy productive jobs in order to save non -productive jobs.

[920] That makes us poor, but the politician takes credit for the good that he supposedly does, but he doesn't get any of the blame for the bad that nobody can actually attribute to his action.

[921] 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 different things that corporations can do wrong with regard to fucking over their workers or whatever they're doing wrong.

[922] there has to be some government you can't just allow people to thrive and do whatever they want to do you have to have some sort of regulations right so who decides you can't violate people's rights but give me an example when you're saying there has to be some rules uh to protect workers from their employers like what are you talking about there in particular 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 can make it really poor and terrible.

[923] And you could say that people have the right to just leave or find something else or create a better future.

[924] That is possible.

[925] I mean, they can do that.

[926] But if something controls, but hold on saying, if something controls an enormous area.

[927] It got really big, right?

[928] Right.

[929] Not because it had some special monopoly granted to it by the government, right?

[930] It didn't get a big government subsidy.

[931] It was just commercially effective.

[932] It didn't have a law, making it illegal to compete.

[933] If this company got so big in a free market, that meant it got really big.

[934] because it was just providing the best services to its customers.

[935] But also, if it was able to employ that many people, it must have been offering those people a good deal.

[936] Otherwise, they wouldn't have taken the job, right?

[937] Because businesses compete for two things.

[938] That's not necessarily true.

[939] That's not necessarily true.

[940] Because if there was no other jobs available, if you live in a place, there would have been.

[941] There would have been some jobs originally.

[942] I mean, there's no way that there's just one business in the entire community.

[943] But if you're born into this, and you're 16 years old, you're shit out of luck and that corporation does have control over you.

[944] If you're born into it, if you're 16 years old, okay?

[945] You're in high school and you're getting your first job and the only job is at Walmart.

[946] You're working at Walmart.

[947] If that's all you have, you know, it's...

[948] Well, assuming Walmart is the only potential employer, now, I would say that that's not going to be the case.

[949] It's usually not the reason that you're not getting a job when you're 16 is probably because the minimum wage is making you unemployable.

[950] And we can get into that discussion, because I'd like to talk about minimum wage but first let's talk about um how businesses compete for workers just like they compete for customers right because i have three businesses i hire people right and i just can't pay my workers you know a you know a tiny wage uh because they're not going to work for me but don't you agree there should be a minimum wage that are in demand there's plenty of people that are bidding against me for those same workers right and so i have to pay the market rate.

[951] I can't just underpay them.

[952] They'll go work someplace else.

[953] I understand, but do you think there should be a minimum wage?

[954] No, there should be zero minimum wage.

[955] Wow.

[956] That's interesting.

[957] And we've discussed that before.

[958] I know.

[959] 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.

[960] See, the minimum wage doesn't hurt businesses.

[961] It hurts individuals that have low skills.

[962] And that's always the problem when you have people defending the minimum wage they are opposing minimum wage hikes they always say oh it's going to hurt businesses because you know it's going to increase their labor costs you know what it doesn't necessarily increase their labor costs because they don't hire as many workers right they hire skilled workers instead of unskilled workers they automate they find ways to do without workers they outsource uh they they hire people in other countries the minimum wage law hurts the most low -skilled people, and they tend to be young people, teenagers, minorities.

[963] That's who get hit the hardest.

[964] You know, before we had all these programs, you know, the black teenage unemployment rate once upon a time was actually lower than the white teenage unemployment rate.

[965] Now it's like double or triple is high.

[966] 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.

[967] I mean, basically, if you're a 16 -year -old kid, when were these laws implemented?

[968] Well, the minimum wage didn't really start until the Great Depression, right?

[969] So it started, but it didn't apply to, there were a lot of jobs that it were exempted from it.

[970] So it really started kicking in more in the 1960s, and then it really, you know, started playing, playing role.

[971] Has anybody ever tried to have no minimum wage as an experiment, like maybe a town or a city?

[972] well first of all we had no minimum wage before it was implemented and we had much lower rates of unemployment real unemployment but you look at countries that don't have the minimum wage there's not that many left anymore i mean most countries have made this mistake because the minimum wage is good politics because it sounds good right if you're for the minimum wage it sounds like you care right oh yeah we know is anybody against you know people working for low wages oh okay so it sounds good right but all you do is you destroy jobs and you destroy employment opportunities.

[973] But there are countries like Singapore, for an example, has no minimum wage, you know.

[974] But wait a minute, don't they can you?

[975] Don't they caning you?

[976] Singapore, don't they cane you if you graffiti shit?

[977] Right?

[978] I'm not sure.

[979] But I know they frown at that on that over there.

[980] That was a famous place.

[981] But we're not talking about that.

[982] I understand.

[983] I know what we're talking about minimum wage.

[984] I mean, there's other countries that have some kind of weird minimum, but it's, you know, it's not the same as ours.

[985] I feel like, I feel like 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.

[986] Have you ever seen an employer like yell at their employees or like being like one of those corporate gathering situations where someone has a lot of control over their employees?

[987] Now imagine if that guy was making all the money and he was only giving these employees a dollar an hour and making them like live in power.

[988] quit.

[989] It's not slavery.

[990] I agree with you.

[991] Most likely they would quit.

[992] If you like it, if you think it's the best alternative.

[993] Look, people quit all the time because they can get a better job.

[994] Right.

[995] 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.

[996] If nobody will pay me more, it's a free open market.

[997] There's all kinds of employers out there.

[998] And remember, you're free to work for yourself.

[999] nobody forces anybody to accept a job everybody can start their own business everybody can be self -employed right so if you don't think your boss is paying you what you're worth then quit and and start your own business i feel i completely feel where you're coming from but couldn't we just say that there's a level of paying if you make someone work 40 hours a week and they don't have enough money for food or shelter after 40 hours of week couldn't we say that maybe that is not a good level.

[1000] Like let's let's just 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.

[1001] That seems reasonable as a community.

[1002] I know what you're saying in terms, I know what you're saying from like this economic standpoint.

[1003] I know what you're saying, like let you free market capitalism, let it ride, figure out, get paid what you're worth.

[1004] and if you don't feel like you're getting paid enough, quit.

[1005] I understand what you're saying.

[1006] But wouldn't it be nice?

[1007] Let's backtrack then.

[1008] Okay.

[1009] Go ahead.

[1010] In general, right, if you don't have any skills, right, 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.

[1011] Right.

[1012] And the most you can earn is $4 an hour.

[1013] That's because, again, you're paid based on your productivity.

[1014] Businesses are there to make a profit for the owner of the business.

[1015] because that businessman is taking a lot of risk.

[1016] He's bearing the potential for losing money.

[1017] Of course.

[1018] He has to provide, you know, and so a businessman is not going to hire somebody if they're not adding value to the business.

[1019] 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.

[1020] So the only way I can hire somebody who is providing $5 worth of value is if I can pay them $4.

[1021] $4.

[1022] Then I can make a dollar for every hour he works.

[1023] The business is not there to lose money.

[1024] They're there to make money.

[1025] So let's say you're a young kid and you can only provide $5 worth of value.

[1026] And so you get a job for $4 and your employer makes a buck an hour off of you.

[1027] Chances are you don't have a family.

[1028] You're young.

[1029] You're living with your parents.

[1030] You don't have rent.

[1031] You don't have, you know, so making a little bit of money is okay.

[1032] You just need some spending money.

[1033] You go to a movies or maybe go out on a date or something.

[1034] You don't need a lot of money.

[1035] What's important is the work experience, having that job, developing some skills, getting your foot in the door, step on that first ladder of the job, 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 increased your skills to the point that you can make $50 an hour where you can afford to support a family.

[1036] 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.

[1037] All you're doing is pricing those people out of a job.

[1038] So it's really good to say it's not right if somebody is working and only making, you know, $10 an hour and they can't support a family.

[1039] it's not the employer's responsibility, it's not his fault that he's hiring somebody that doesn't have a lot of skills.

[1040] And if you impose that minimum wage, all you're doing is making it impossible for this guy to get a job.

[1041] It really, what the minimum wage law is, is it makes it illegal for you to work unless you have enough, a certain amount of productivity.

[1042] So if the minimum wage is $15 an hour, what that means is if you only have $10 an hour work of productivity, right?

[1043] you can't work, that you have to turn down every offer of employment you get.

[1044] If someone offers you $10, $12, that's illegal.

[1045] You can't accept those jobs, even if you want them, even if you think that that's the beginning of the first step on a road to higher wages in the future, the government says, no, you can't accept that.

[1046] Unless you can find somebody who will pay you $15 an hour, it is illegal for you to have a job.

[1047] And that is not good economic policy.

[1048] And it's not even compassionate 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.

[1049] I see what you're saying and that actually makes a lot more sense the way you're framing it about like if you only provide $10 worth of value to the company, why should they pay you $15?

[1050] They won't.

[1051] I agree with you.

[1052] I see what you're saying.

[1053] I see what you're saying.

[1054] You're making me think about it in a different way for sure.

[1055] 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?

[1056] Do you should be I mean, $10 worth of value is still value.

[1057] Yeah, I see what you're saying.

[1058] I mean, look, think of all these, look, I get very frustrated all the time, you know, when I make phone calls and I can't talk to a human being.

[1059] I have to talk to a computer.

[1060] Yeah.

[1061] And the reason for this is because we've priced the human beings out of the market.

[1062] Well, you know what else is interesting, Peter?

[1063] What's horrible about this for all of us is when you do do that, and, you know, you're dealing with these goddamn computers.

[1064] It's like where we're losing part of our.

[1065] connection when it comes to doing business we're doing i like if i do business with a company i like to be able to call them up i like to there's i'd love it if there's a thing when i'm when i'm doing something i'd like to make contact with the person if everything is being done through automated systems it's getting weirder and weirder for us more and more detached you remember do you remember the original back to the future movie yes remember when when he when he goes back to 195 for the first time and he sees that car pull into a gas station and like five people descend on the car and start washing the windows checking the tires doing all that stuff right what happened to all those people right because that's what gas stations were like sort of for the minimum wage destroyed all those jobs i worked in a gas station do you ever work in a gas station i never did but i look i delivered groceries i delivered pizza i worked in a shoe store i had all kinds of jobs in high school that probably kids don't have those opportunities today.

[1066] They just, they, you know, they, they can't get it.

[1067] But going back to the gas station, right?

[1068] Do you like pumping your own gas?

[1069] Um, I do because I used to, I used to work at a gas station and I know what happens when you let kids pump your fucking gas.

[1070] I don't want anybody open.

[1071] They spill it.

[1072] They fuck up.

[1073] Some weirdos got a highly flambable fluid next to a piece of your property and they get to stick it in there.

[1074] I think, look, I think if we didn't have a minimum wage, you'd have a, a lot more kids working mostly for tips.

[1075] I mean, we used to tip.

[1076] If you remember, I'm still old enough to remember tipping the guy and pump my gas.

[1077] Yes, they check your tires, the whole deal.

[1078] But you know what used to happen?

[1079] These young kids that got low -paying jobs as pump jockeys, what they would do between Philops is they would go and hang out with the mechanic who was there working on cars, and they would get a free education in auto mechanics.

[1080] And they would actually learn a trade.

[1081] Have you ever seen?

[1082] these guys, I mean, we'd have more auto mechanics to get a skill.

[1083] Some of these guys would end up, you know, opening up their own service stations.

[1084] Look, it's good to allow young people to have employment opportunities, not to price them out of the market by just by mandating a minimum wage.

[1085] I mean, the minimum wage benefits high skilled workers, unions, by eliminating competition with younger, you know, lower skilled workers.

[1086] You're forcing employers to hire high skilled people instead of a more numerous number of lower skill people that that's what happened have you ever seen the uh movie the hustler with paul newman jackie gleason yeah it's a great movie i thought i saw the remake with uh with um um what's his name um tom cruise tom cruise yeah and also with paul moon but they you know but the point my point is they're both good movies they're great movies but in the beginning of the hustler paul newman pulls into a gas station and he tells the guy check the air and tires check the oil do all this and the guy fill them up mister they go out there and they have like they they do all kinds of shit for you it's not just as simple as they pump your gas they pump your gas check your tires check your fluids they do everything but there was less people cars back then too cars were in better shape because you know every time you went into a gas station somebody made sure you had enough oil they made sure your tire pressure was good well cars are more reliable today those cars were bullshit those cars like you had to check the air you had check the tires it was bleeding oil but it's just interesting to see the difference because look they used to have look they used to have ushers in movie theaters yep i remember that show you to your seat with with with the there was the service sector has really been obliterated all these low skill look they're working on these kiosk now look they're going to get rid of all the workers anyway ultimately all these fast food restaurants there's not going to be anybody there they're all going to look like self -served gas stations yeah you're going to go in you're going to order off your smartphone and the food is going to you know come come down a shoot through some machine you know there's there's going to be nobody there i worried we're going to lose movie theaters i really worry about that movie theaters that we're going to lose movie theaters well we're probably look we lost drive -ins yeah you know that some of them are coming back but once upon a time we're coming back now because of covid people love them now it's a great idea it's a great way to be socially distant and still watch a movie with a bunch of other people yeah but look that's things evolve i mean now i mean look i've you know people have giant screen TVs now.

[1087] They don't cost a lot of money.

[1088] That's the beauty of capitalism.

[1089] I remember the first kind of like high -deaf TV I ever saw, I went into a department store, or not the part, like a good guy is one of those electronic stores.

[1090] And I remember looking at it.

[1091] I was amazed because I was like, oh, this is like looking through a window.

[1092] 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.

[1093] I mean, you can't even watch one of those things.

[1094] But, you know, we didn't.

[1095] know how bad it was until something better came along.

[1096] But when I first saw that, I was like, oh my God, this is incredible, but I didn't buy it because it was $10 ,000.

[1097] And that was a lot of money to me back then when I was in my 20s, a $10 ,000 TV.

[1098] I could buy a car for that.

[1099] I wasn't going to spend that much money on a TV.

[1100] Now you get those TVs for $500, $600.

[1101] Yeah, it's crazy.

[1102] And they're Internet enabled and they're smart, they do all this stuff.

[1103] But so now, you know, people don't need to go to the theater as often because they have good quality at home they've got all kinds of streaming services they can see and so if the if if we're evolving to the point where more people are chilling at home with netflix then the theaters have to evolve i mean and you know what so we can use those resources we can do other things i mean businesses have to find other ways uh to make me spend my hard -earned money uh at their at their establishment you know but by the way that the example of a television set because you hear this all the time.

[1104] I mean, it's a little bit of a tangent, but it's an important topic.

[1105] You know, so the reason that I didn't buy that $10 ,000 TV, it wasn't because I didn't want it is because I couldn't afford it, right?

[1106] But some people were rich enough to afford it, and they bought those TVs.

[1107] And because some rich people bought those $10 ,000 TVs, the companies that made them got money so that they can figure out how to make them cheaper.

[1108] And then the price came down to $5 ,000.

[1109] And then more people bought them.

[1110] And as more people bought them, the companies got bigger and they invested in our R &D.

[1111] And they found out how to make them better and cheaper.

[1112] And so the free market reduces prices.

[1113] And when prices go down, we buy more stuff.

[1114] But now you have all these politicians trying to sell us a bill of goods that we need inflation, that the Federal Reserve has to make sure that prices go up every year.

[1115] Because if prices don't go up, they say we won't buy nothing.

[1116] we're all going to sit back and wait for lower prices which is a bunch of nonsense people buy televisions they buy computers they buy cell phones they know that if they wait a year or two they'll be cheaper but they don't wait because the only only time you wait to buy something is if you can't afford it and then you wait until you can't afford it you know the first cell phone you ever watch the movie wall street yes i talk about that scene all the time him walking on the beach with that brick yeah money never sleeps those cell phones those cell phones those cell phones were like, I don't know, five grand back then.

[1117] And if you made a phone call, the phone call, it was like a dollar every, every 30 seconds.

[1118] Yeah.

[1119] I remember my first cell phone.

[1120] I would like, I would have to get off the phone so quickly because I didn't want to spend the money.

[1121] Well, you know, you have people.

[1122] I would wait until the evening or the weekends to make the calls because it was too expensive to make the call, you know, during the, during the day.

[1123] I remember those days roaming.

[1124] Remember roaming?

[1125] Yeah, you get charged.

[1126] Crazy money.

[1127] I mean, you got charged extra.

[1128] Long distance.

[1129] I mean, it used to cost a lot of money to dial long distance.

[1130] Yeah, that's a good example.

[1131] I mean, there's no such thing.

[1132] I can call somebody in Asia, you know, on WhatsApp, and it's free, and I can see them.

[1133] Yeah, yeah, yeah.

[1134] This is the beauty of capitalism.

[1135] Yeah.

[1136] The free market brought the prices down, and now more people own these products.

[1137] So the government is trying to tell us that we need rising prices.

[1138] We don't.

[1139] Businesses make more money when prices go down.

[1140] Because when prices go down, their costs go down.

[1141] And what's important is not the price, but the margin, the difference between your cost and your price.

[1142] And the lower the price, the more customers you have.

[1143] And if you sell more units, you make more money.

[1144] So this is all nonsense.

[1145] But that's the beauty of capitalism.

[1146] It makes things cheaper and better.

[1147] Government makes things worse and more expensive, right?

[1148] Every service that the government provides you with, whether it's education or health care, it gets more expensive.

[1149] And the quality goes down.

[1150] everything we get from from private sector gets cheaper and the quality goes up that's why we want to limit what government does to the smallest amount of stuff and let the free market do everything else because it's going to do it better i see what you're saying it sounds beautiful if it was that simple do you do you think it's really it's really possible to manage this whole country that way do you really genuinely well we should have some regulation just to get from the way that is the problem, right?

[1151] Because you have these politicians that want to get votes.

[1152] Right.

[1153] 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.

[1154] That's the problem.

[1155] And then in order to stay in power, right, governments basically take what amounts to bribes from businesses to basically protect them from competition or bail them out.

[1156] We've given the government too much power.

[1157] 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 against like the government is like the mafia right and people have to pay protection money for the government to leave them alone and to and to kind of set them against somebody else you know there's a there's a great movie I might as well plug it because the sequel is coming out but the guys that produce it they did a really good job it's the bubble movie right And if you go to let us disagree .com, you can see this movie.

[1158] But the guy that produced Jimmy Morrison, and I remember he came in my office and filmed me. This is, he started it back in like 2010 or something because he wanted to talk to the people that predicted the 2008 financial crisis and get their perspective on what the government did wrong.

[1159] And so this is a whole movie about the history of how government has screwed stuff up.

[1160] Going all the way back to, you know, the Great Depression.

[1161] Because there's a lot of misinformation out there about why we had the depression.

[1162] People say, oh, it's because we had too much capitalism.

[1163] It's not.

[1164] It's because we had too much government.

[1165] We had a depression in 1920 that nobody knows about because it ended so quickly because the government did nothing.

[1166] The reason we had a great depression in the 30s was because Herbert Hoover did the same type of stuff that Trump is doing.

[1167] Herbert Hoover was the first big interventionist president that started spending money, to prime the pump, to try to make it better.

[1168] We can't just sit back and allow people to lose their jobs.

[1169] And so Hoover intervened in the economy and helped create the Great Depression.

[1170] And then Roosevelt came in and just expanded on Hoover's failed programs.

[1171] And the Great Depression spanned the entire decade of the 1930s.

[1172] We didn't get out of the Depression until 1945 when we ended the Second World War and government finally started to get smaller.

[1173] But this movie goes all the way back to that and then it goes to the housing bubble.

[1174] And so it's a great movie to really show how the government creates these problems with well -intentioned programs.

[1175] And the sequel is about to come out, which is about the next crash, which is the one that's coming.

[1176] And it's coming soon.

[1177] And because of what we just did after COVID -19.

[1178] And the mood that we're in right now, I mean, I am so terrified of what's coming in this country.

[1179] I mean, the popularity of socialism has risen so dramatically because we have discredited capitalism by preaching it and not practicing it.

[1180] All the damage that has been done in the economy in the name of capitalism has given it a black eye.

[1181] You know, there are real problems in this country.

[1182] And I'm very sympathetic with people on the left who point out some real problems.

[1183] Now, racism isn't one of them.

[1184] Let's forget about that.

[1185] But there are a lot of problems.

[1186] They're not because of racism.

[1187] they're because of too much government, right?

[1188] And those problems are real.

[1189] And I want those problems solved.

[1190] But I understand that the solutions that everybody has, we're going to make them much worse.

[1191] And the way we're going to finance it by printing money.

[1192] See, we can pretend that we're going to tax the rich.

[1193] That's not going to work.

[1194] You know, we've tried to tax the rich before.

[1195] In fact, people don't know this.

[1196] The only reason we have an income tax is because we were going to tax the rich in 1913.

[1197] That's the only reason.

[1198] 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 teeny tax, the government said, we'll eliminate tariffs.

[1199] That's why we had an income tax, to get rid of tariffs, because tariffs were paid by the average American.

[1200] I mean, people back in 1913 were smart enough to know that consumers paid tariffs.

[1201] I mean, Donald Trump is trying to pretend that the Chinese pay his tariffs.

[1202] They don't.

[1203] Americans pay every tariff that Trump is imposed.

[1204] There are tax on Americans.

[1205] That's what they are.

[1206] And so what Hoover said, or not Hoover, 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.

[1207] And we made that deal.

[1208] But now, average Americans are paying income taxes at levels far higher than anything contemplated for Vanderbilt and Rockefeller and Carnegie.

[1209] So look, taxing the rich doesn't work, right?

[1210] And you know what?

[1211] A lot of the wealth that Bernie Sanders said, I know you had them on the show, but a lot of the wealth that his ilk wants the tax is going to be destroyed by the very taxes that they want to impose.

[1212] And they're not going to collect anywhere near the revenue that they think they're going to get.

[1213] Instead, everything is going to cost much more than they think, and they're going to have to pay for it by printing money, and they're going to destroy the value of the currency.

[1214] If you're a person who was advising a president or a governor how to fix an economically disabled community, if you have a community that's always had a history of poverty and crime and, you know, drug use and gang use and these communities, like, what would you do?

[1215] How do you use this idea of, like, capitalism to fix something that clearly requires some charity?

[1216] It requires effort, right?

[1217] First of all, we can stop making the problem worse.

[1218] We can decriminalize drugs and end the war on drugs.

[1219] Just like the war on poverty, it's backfired.

[1220] The war on drugs is a failure, right?

[1221] People, look, in a free society, people have a right to consume what they want to consume.

[1222] Of course.

[1223] Especially when...

[1224] If they want to do drugs, let them do drugs, right?

[1225] And even if those drugs are harmful, adults can make decisions and deal with the consequences of their decisions.

[1226] especially the legal alternatives are just as bad right but the problem is when you when you have the war on drugs and you and you make it a crime now you incentivize criminal activity because whenever something is illegal it's much more expensive than it would be if it were legal and now you create this huge profit opportunity for criminals to come in and fill that demand because people still want the drugs.

[1227] They just can't buy them legally through a reputable source.

[1228] The only way they can get them is illegally through a criminal.

[1229] So this is the best example of what we've created in Mexico.

[1230] The best example of that in Mexico, right?

[1231] And then what you do is you increase the cost of the illegal drug.

[1232] So let's say there's a heroin addict.

[1233] And now heroin is illegal.

[1234] And so heroin is very expensive.

[1235] Well, where is this heroin addict going to get the money to buy that heroin?

[1236] He goes out and steals.

[1237] I mean, most of the robbery is committed by drug addicts because they need the money to buy their expensive heroin.

[1238] Well, if heroin were legal, it would be much cheaper and they wouldn't have to steal.

[1239] Of course.

[1240] And, you know, we create all these other crimes.

[1241] 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.

[1242] And, you know, and when you when you have heroin, when it's illegal, and there's all these profits, you know, the drug guy, the pusher, has an incentive to get you hooked on it.

[1243] You know, I think it should, you know, maybe you should have to go get a prescription for it where the doctor can try to talk you out of it.

[1244] Hey, are you sure you want to use this stuff?

[1245] You know, this is going to really hurt you.

[1246] I mean, you really want to become an addict.

[1247] Here's some movies.

[1248] Watch what happens to you.

[1249] You know, I mean, 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 disruptive way to live your life.

[1250] But so we've got to get rid of the war on drugs.

[1251] Get rid of the crime in that community.

[1252] you know that's number one but then as far as if you've got a lot of poor people why are people poor right they're poor because they don't have uh the skills or they can't earn enough money they're not productive enough to generate income you know above the poverty line so if you have people who are poor the way to make them less poor is to increase their productivity right One way obviously is through education when they're young, but I don't think government education is a solution because I don't think government education is educating anybody.

[1253] I think government schools are run for the benefit of the bureaucracy, of the school districts, of the teachers unions.

[1254] I want free enterprise.

[1255] I want vouchers or private schools to compete for educational dollars just the way, you know, the cell phone companies are competing.

[1256] you know they want me to buy their cell phone instead of somebody else's they have to make it better and they have to make it less expensive so let's have schools that are competing to be the best to offer the best education at the best value and we've got in these cities we've got these poor kids trapped in these failed government schools they waste their time they learn nothing a lot of these kids graduate they're not even literate I mean they can't even do basic basic arithmetic right but in the current state of the world right now but in the current state of the world right now those people don't have any other options those people they don't have any other options because the government has taken away that option but what do you what do for them in real time but what do you do for them in real time if you have a uh a guy who's in a lower income family and he has a seven -year -old son and that kid is going to school right now like how how do you fix that right now by making it open if we had if we had private schools the kid could go there they couldn't afford that right what if they couldn't afford the private schools 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.

[1257] But when the private sector educates kids, it's cheaper.

[1258] A lot of potential.

[1259] A lot of potential.

[1260] That bothers me because like what if a kid doesn't have a lot of potential?

[1261] Then he doesn't get an education because he can't afford a private school.

[1262] Not every, but let's say it, let's say a kid doesn't have a lot of potential.

[1263] A certain type of education might be a waste.

[1264] That kid might be better off learning a trade.

[1265] Hold on.

[1266] He might be better off learning how to do something, you know, learn a trade.

[1267] How would you know while the kid is seven?

[1268] If the kid's in first grade and is seven, how do you know whether or not that kid has a lot of potential?

[1269] That's crazy.

[1270] Seven is, I don't know, seven might be a little young.

[1271] How old before you pull the plug on that kid?

[1272] The tuition in first or second grade is probably going to be less than in high school.

[1273] Because in order to teach a second grader, the teacher doesn't have to know as much as a teacher needs to know to teach a 10th grader.

[1274] So you wouldn't have to pay a second grade teacher as much as a 10th grade teacher.

[1275] See, the problem, the problem in the government is everybody get paid the same, whether they're a lousy teacher or a good teacher, whether they're teaching a first grader or a high school.

[1276] It's just all based on seniority.

[1277] It's a crazy crackpot system that only the government could devise.

[1278] And it's only because they have a captive audience.

[1279] The people, the customers don't have a choice.

[1280] And the parents aren't even involved.

[1281] If the parents were actually writing a check and paying for the education, they would make sure the kids did the homework.

[1282] They would make sure they were getting their money's work.

[1283] When you get it for free, I mean, you just, you know, take it for granted.

[1284] So we need real education for the kids that can benefit from it.

[1285] We need to get rid of a 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.

[1286] The government is creating all sorts of barriers, artificial barriers, that would not exist absent government.

[1287] Right?

[1288] 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, you have to get a license to sell flowers.

[1289] Why?

[1290] Why can't I just buy flowers from wherever I want?

[1291] I mean, what's the worst thing that can happen to me?

[1292] I buy flowers from a guy that doesn't know what he's doing.

[1293] I get a lousy arrangement, and so I don't go back.

[1294] Does the government have to be?

[1295] protect me from getting a bad floral arrangement?

[1296] Well, look, the free market sorted out.

[1297] If a guy's no good, he won't have any customers.

[1298] But we make it a lot harder.

[1299] There's all kinds of regulations and rules and permits.

[1300] Just let people go into business.

[1301] You know, I mean, poor people can start businesses if we didn't make it so expensive and so hard.

[1302] And if they can flourish in the marketplace, if they can find customers, then great.

[1303] If they're no good at what they do, they're not going to have any customers.

[1304] And you feel like this applies to everything?

[1305] this applies to all businesses all the time I mean pretty much I mean we don't need government you know having these certifications I mean the private sector is certainly capable at this point is it is a consideration social media and holding people accountable like holding businesses accountable for their actions and like it's a different world in terms of like the ability to like alert consumers as to what's good and what's bad it's a different world when it comes to that kind of thing But people, especially now with the internet, I mean, if the business isn't any good, I mean, it's going to get a bad reputation online.

[1306] I mean, you're going to have consumer reports that go out and rate.

[1307] Look, look at what happens.

[1308] Like, look at the banks, right?

[1309] The banks are completely regulated by the government, right?

[1310] Everybody who opens up a bank account knows that the government is guaranteeing their deposit.

[1311] That wasn't always the case.

[1312] The deposit insurance didn't start until the 1930s because of the bank fair.

[1313] failures in the Great Depression, which were minimal.

[1314] I mean, fewer than 2 % of the banks actually failed.

[1315] There wasn't that much in the way.

[1316] And we had a lot of banks, way more banks than we have now.

[1317] Now we just have these massive banks.

[1318] Before the government got involved, we had a very, very competitive market.

[1319] We had lots of little banks out there, taking deposits, making loans to entrepreneurs, to start businesses and employ people, not, you know, funding Wall Street.

[1320] Right.

[1321] But you remember the savings and loans collapse?

[1322] For sure, you do, right?

[1323] Yeah, but that was, but those banks had government guarantees.

[1324] Right.

[1325] That was the problem.

[1326] That was the problem?

[1327] Right.

[1328] 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.

[1329] You try to figure out which is the best bank for my money, which bank is the safest, which bank, you know, isn't, you know, having problem loan.

[1330] And you would, you would consult, you know, periodicals or, you know, reviews online.

[1331] not online, but you would find out where the banks were good, and you would put your money in that bank.

[1332] And now the banks would have to compete on reputation, on honesty, on not being aggressive.

[1333] And they knew that if they made bad loans and they went bank and something happened, nobody would bail them out.

[1334] The government wouldn't bail them out.

[1335] Their depositors would lose money.

[1336] So we had a very sound banking system back then.

[1337] Today, it's very unsound.

[1338] The banks are doing all sorts of reckless things with their deposits because no one gives it down.

[1339] Nobody cares what the bank does with their money once they deposit it because the government guarantees a deposit.

[1340] One bank is just as good as another.

[1341] I'm just going to put it whatever bank is closest to me. And so the government has polluted the entire system.

[1342] They've taken away all the checks and balances of a free market.

[1343] And now we have a banking system that is completely, you know, a reckless.

[1344] all these banks that we bailed out in 08 are going to fail again and they're going to need even bigger bailouts.

[1345] We have a very fragile system.

[1346] And now they say, well, we can't let one of these banks fail because it's so big.

[1347] Why is it so big?

[1348] 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.

[1349] I mean, we would have a vibrant, competitive banking system if the government got out of the way.

[1350] we don't need the government to do the banks are much more reckless and much more corrupt now because of government than when we had free market forces raining them in why aren't there more people saying what you're saying why is this a controversy why is there are i mean i'm not the only free market guy out there as i said if you have a jurgensen the libertarian candidate she'll say some of this stuff no i and you know i'm sure she's a woman too we could actually have a woman president if we vote for her i'm sure i could find it if i went looking for it peter What I'm saying is, why is this not, you know, there's various discussions about how we should do things economically moving forward, right?

[1351] You hear it from a bunch of different experts.

[1352] I don't hear your perspective.

[1353] Your perspective is very ruthless and honest.

[1354] 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.

[1355] They'll be held down.

[1356] They'll be put into this cloud.

[1357] Well, I'm not, I'm not being ruthless.

[1358] So I am being honest, but I think I'm being fair and compassionate, because I understand the damage that is being done in the name of these programs.

[1359] 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 position in government because we're not beholden to a special interest.

[1360] You have so many special interests that are feeding off the public trough, right?

[1361] There's so much corporate welfare in this country right now, which is not capitalism.

[1362] So they're not going to fund candidates that want to take away their corporate welfare.

[1363] They want to fund candidates that are going to protect the status quo.

[1364] And the same thing with people.

[1365] Look, the government has crippled so many people that they think they need a government crutch.

[1366] You know, that's an old Harry Brown quote that he ran for a libertarian president.

[1367] He said the government is great at crippling you and then handing you a crutch and saying, you see, without me, you could walk.

[1368] So so many people have been crippled.

[1369] and they think they need that government crutch.

[1370] I don't want them to be crippled.

[1371] I want them to walk on their own, right, to be free.

[1372] You know, I wish, you know, we had the 4th of July just recently, and, you know, we celebrate America.

[1373] And, you know, I talked on my old podcast, you know, about what it means to being American.

[1374] And people just don't appreciate what truly America was all about, right?

[1375] It's about freedom.

[1376] It's about liberty and individual opportunity.

[1377] It's about being left alone from God.

[1378] government and being able to achieve all that you can achieve without anybody standing in your way, without anybody erecting a roadblock.

[1379] And we created government in America.

[1380] Government didn't create us.

[1381] We, you know, we didn't have a king that gave us some privileges.

[1382] We started off as free people and we seated some of our sovereignty to a government to secure and protect our rights.

[1383] And that's it.

[1384] And that's what made Americans rugged individuals, right, who were not beholden or begging from government, right?

[1385] They took care of themselves and they took care of their neighbors if their neighbor really needed help.

[1386] It wasn't about thief.

[1387] It wasn't about trying to get free stuff from the government.

[1388] I mean, look at all these kids now.

[1389] What do they want?

[1390] Free this, free health care, free education, you know, all kinds of free stuff, right?

[1391] Free housing, free guaranteed jobs.

[1392] That's not what America was about.

[1393] All of my grandparents, right, all four of my grandparents came to this country, broke.

[1394] barely spoke any english right some of them were teenagers they came with nothing from poor countries and they came to america they had no welfare no food stamps no minimum wage they didn't they didn't want anything from the government they came to america because they could be free of government they left the big governments that existed in europe to have american freedom right because that that's what it meant to be an american and it was unique and we created the wealthiest society in the history of the world because of the freedom that was uniquely American, right?

[1395] So that's what we need to restore.

[1396] That's our birthright, right, is to be free, not to try to get the government to steal stuff from our neighbors because we think we're entitled to it.

[1397] That's a hell of a rant right there, Peter Schiff.

[1398] I'll tell you what.

[1399] That was very good.

[1400] I see, but that's, I see your perspective.

[1401] Wouldn't that make you be proud to know that we're a nation of free people.

[1402] Can I say that your assessment, this is what I'm seeing from you, you think that the competition of 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, but then the government grew too big and became a problem with human beings in general.

[1403] my perspective.

[1404] Human beings in general, but hold on a second.

[1405] Human beings in general have a problem when they have power over other human beings.

[1406] And if that power is absolute, like the power of the government.

[1407] If that power is absolute, like the power of the police.

[1408] If that power is absolute, that's where people have a problem.

[1409] Because human beings, just in general, have a problem with having absolute power over other people.

[1410] And if you add that to government and business.

[1411] Absolutely.

[1412] Absolutely.

[1413] That is the problem.

[1414] And it fucks up when you have politicians, right?

[1415] And maybe term limits would help this.

[1416] If we could have some term limits or something like that, you know, maybe, you know, you can't be in government for more than, I don't know, five or ten years.

[1417] We need to put these people on mushrooms.

[1418] It's not a career.

[1419] But these bureaucrats get in office and they want to stay there.

[1420] They like it.

[1421] They enjoy the perks, the privileges.

[1422] So what they do is they go out and they try to raise money to get reelected.

[1423] So they go to somebody and they say, give me money to help me. And it's like, well, what are you going to do for me?

[1424] What's in it for me?

[1425] All right, well, I'll give you this special tax break or I'll do something to protect you or I'll hurt.

[1426] And so this is what happens.

[1427] So people are bribing politicians to use their power to benefit them or to hurt their competitors.

[1428] We need to disarm the bureaucrats.

[1429] We have to take the power away from Washington.

[1430] Washington needs to live by the Constitution, which limited federal power.

[1431] almost everything the government does today is unconstitutional yet they do it anyway yes that it's the fact that they can wield this unconstitutional power i'm giving you a magic wand these problems peter shift if i gave you a magic wand what do you do with it how do you fix things if i say peter shift i love what you're saying if trump pulls you into his office peter love what you said phenomenal tremendous and he pulls you into the oval office and he says what do i do how do i fix this mess yeah well again you know he's not going to like the truth because the public you know there's an old expression that you shoot the messenger right nobody wants to be the bearer of bad news maybe he's open -minded but yeah it would have been better if he did it on day one it would have been a lot more effective if they had told the truth rather than lied for three years and now come on okay i've been lying to you now i'm gonna i'm gonna finally level and tell like it is do you think that he's been lying solve a problem do you think he's been lying or do you think it's been a disagreement it went the way you look at it versus the way they look at it.

[1432] No, I think he's been lying because look, there's no way that Trump as a candidate said the real unemployment rate was 30 or 40 percent and the government numbers were a lie, a fraud, right?

[1433] 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%.

[1434] And now he says, oh, the unemployment rate is 4%.

[1435] and that's magically what it is he knows that he's lying either he was lying as a candidate or he's lying as president but these statistics don't mean anything we don't measure unemployment the way we measured it in the past right because in the past if you were unemployed and you were no longer looking for work because you were discouraged you were still counted as being unemployed 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.

[1436] So, you know, you're not looking for a job.

[1437] I mean, you're unemployed, but you're not counted.

[1438] Or this happens a lot.

[1439] Let's say somebody had a good job, and they lose that good job.

[1440] And so while they're looking for another good job, they accept a shitty part -time job, right?

[1441] They're still looking for a good job, but they're making ends meet with this crappy part -time job.

[1442] 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.

[1443] 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.

[1444] 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.

[1445] So if, and this was what Trump meant when he was a candidate.

[1446] if you actually measured unemployment today, the way it was measured back then, we'd have an unemployment rate well above 10%.

[1447] I don't know where it would be.

[1448] It probably wouldn't be as high as 30 or 40%, like Trump was saying as a candidate.

[1449] He was probably exaggerating that.

[1450] But his basic premise was right.

[1451] The numbers were a lie.

[1452] The same thing about the stock market.

[1453] How is it that the stock market was a bubble while he was a candidate?

[1454] And then all of a sudden it wasn't a bubble now that he's president.

[1455] It's the same bubble.

[1456] He was criticizing Janet Yellen for keeping interest rates too low.

[1457] Then he criticized Powell for raising them and demanded that they go to zero.

[1458] In fact, he actually wants negative interest rates.

[1459] He is actually saying that rates should be negative.

[1460] When he was criticizing Yellen for having them at zero, now we think zero's too high.

[1461] So negative means you would get paid if you bought a loan?

[1462] If you got a loan, you'd get paid.

[1463] That's what he wants.

[1464] But you know.

[1465] Where's that money coming from?

[1466] Exactly.

[1467] You know, Donald Trump, I think, you know, one of the speeches that he gave, he's like, you know, I don't know how this is, you know, how this is happening, you know, who's, you know, who's making these loans, but we want some of that money.

[1468] He's like, we should be able to borrow at negative rates.

[1469] Well, that means somebody has to be losing money.

[1470] Well, the only one dumb enough to lose the money is the Federal Reserve.

[1471] Well, that's the American public.

[1472] You know, why should the American public go deeper into debt, you know, so that we can basically steal money, which is what, Trump is advocating.

[1473] Look, we need higher interest rates.

[1474] 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 a few months, the reason that businesses couldn't get by without revenues is because nobody has savings.

[1475] We had savings once upon a time.

[1476] Before the government screwed up the economy, Americans saved their money.

[1477] They were self -sufficient because they weren't looking for the government to take care of them.

[1478] But we talked about this.

[1479] They saved money for their old age.

[1480] They saved money for a rainy day.

[1481] But this is four months.

[1482] That's a long time, Mr. Schiff.

[1483] It's not.

[1484] But it is to live a normal life with a car payment and a mortgage and a Verizon bill.

[1485] That's a lot of money.

[1486] But you know what?

[1487] People shouldn't have car payments.

[1488] Oh, you son of a bitch.

[1489] You son of a bitch.

[1490] But what if I can get a 2020 Corvette right now?

[1491] The reason that's...

[1492] What if I can get a 2020 Corvette right now?

[1493] Look, if I'm working.

[1494] fucking UPS and I'm making 60 grand a year and they go you're qualified I'm like holy shit I'm getting a Corvette I'm not waiting to save up 85 ,000 dollars 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 and interest rates would be much higher I'm glad they're going to lend it to me because if they lend it to me I can get a Corvette yeah the government is subsidizing these auto loans.

[1495] The government is buying these loans.

[1496] The government is making it possible for people who can't afford expensive cars to buy them.

[1497] That is not capitalism.

[1498] Explain that.

[1499] How is the government subsidizing auto loans?

[1500] Like 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?

[1501] Because the government is buying those loans.

[1502] What happens is so your car company doesn't actually keep the loan.

[1503] So it doesn't give a damn whether or not you actually can repay it.

[1504] Really?

[1505] It loans you the money, right?

[1506] And now it has this loan.

[1507] And it sells it.

[1508] The government buys it or some government guaranteed entity buys it or the Fed now buys it.

[1509] This is assuming that you don't pay it.

[1510] But the bank doesn't lose any money.

[1511] Assuming you don't pay it?

[1512] Assuming you don't pay it, but if you do pay it, like if you have a loan and you pay all your payments on time, the government doesn't assume that loan, does it?

[1513] No, no. They don't know which loans are going to default and which are going to pay.

[1514] They just buy all the loans, right?

[1515] The car, like, there's a lot of this stuff.

[1516] Like, you ever go to, like, a mattress store?

[1517] The mattress store is going to say, you can buy this mattress, no payments, no interest, you know, for, you know, until 20, 22, 23, right?

[1518] Yeah.

[1519] You ever see these, you know, no payments, just go out and walk out.

[1520] You can, nothing down, walk out the store with a $1 ,000 mattress.

[1521] Yeah, not specifically, but I know what you're talking about.

[1522] Yeah.

[1523] Well, the reason that this is possible is because the company takes that loan.

[1524] and sells it on the secondary market to get the money.

[1525] And so 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.

[1526] And so the loan gets bought and package and structured and it's all on, you know, and securitized.

[1527] But all this is being propped up by artificially low interest rates and government guarantees.

[1528] If we had higher interest rates, right, and a free market, consumer loans would be much more expensive than they are now, much more expensive.

[1529] And so most people would not borrow money to buy stuff.

[1530] They would save up their money and then they would buy stuff.

[1531] They would buy less expensive stuff.

[1532] And that's what we want, because we want savings going to businesses who will invest in plant and equipment to make the country more competitive, more productive, to provide services, to create goods, to provide jobs.

[1533] we don't want to squander savings on consumption.

[1534] 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.

[1535] But when a consumer goes out and borrows money to buy something, they don't get an income -producing asset.

[1536] Nothing services that debt.

[1537] They have to service the debt at a future consumption.

[1538] So now, you know, they're out of work.

[1539] They can't make their car pay.

[1540] They can't make their, you know, the other loan payments.

[1541] This type of bubble society never should have existed in the first place.

[1542] And it only exists because of government.

[1543] Because before government got involved, people had savings.

[1544] And it's not that the American people changed.

[1545] It's the American government changed.

[1546] And when the government changed and created all these perverse incentives, then behavior changed.

[1547] Government policy manipulated behavior.

[1548] And it made us behave badly and reckless.

[1549] and it set us up for the fall that we're about to have.

[1550] I completely see your perspective.

[1551] 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.

[1552] I'm looking at it.

[1553] Like if I was a 19 -year -old kid working at UPS and they told me I can get a Corvette.

[1554] Okay, let's do it.

[1555] That's the problem.

[1556] It is the problem, but it's not the problem.

[1557] Look what we've done.

[1558] But it's not the problem because that kid gets a Corvette.

[1559] and his summer will be immeasurably better with that corvette than without that corvette.

[1560] And maybe that will propel his emotions and his future and his ambition further than he ever anticipated because he had that great summer with that corvette that he got that he shouldn't have the loan for.

[1561] I see what you're saying.

[1562] If you're my dad, I'd be like, dad, I know you're right.

[1563] Because he thought he'd get laid more if he had a corvette.

[1564] Or because he's a man and he's American and he enjoys a corvette.

[1565] It doesn't have to be negative, Peter.

[1566] I don't blame the kid.

[1567] I blame the system for making it possible for him to borrow the money and his parents for not teaching them better.

[1568] But look, the problem is, I was that kid.

[1569] I was that kid and I would be like, fuck yeah, let's get that car.

[1570] It's good.

[1571] I'm willing to pay the money.

[1572] Let's talk about student loans, right?

[1573] Because right now, one of the big political issues, especially among the left, right?

[1574] They want to forgive the student loans and they want to make college free, right?

[1575] That's like a big thing.

[1576] Like we have all these students with all this debt and it's bad, which I agree.

[1577] It's a terrible situation.

[1578] But what the left doesn't want to accept is responsibility for creating the situation in the first place.

[1579] It is government's fault that all these student loans exist.

[1580] Without government, there would be no student loans.

[1581] You know, once upon a time, people didn't borrow money to go to college.

[1582] Nobody borrowed money to go to college, right?

[1583] My father went to college and his parents were poor.

[1584] I mean, my dad said they weren't sure if they were up or lower class or lower middle class.

[1585] But, you know, his dad was a carpenter.

[1586] And so he went to college.

[1587] And his parents didn't have any money to send him to college.

[1588] And there were no loans.

[1589] So how did my dad go?

[1590] He got a summer job.

[1591] And he worked his way through school, which is what most people did.

[1592] You worked your way through school.

[1593] So here's what happened.

[1594] You know, around the 1960s, Once the 18 -year -olds could vote.

[1595] This was a big thing.

[1596] They lowered the voting age from 21 down to 28, right?

[1597] So now you have all these 18 -year -olds that are about to go to college.

[1598] And so here's what the politician said to all the 18 -year -olds.

[1599] The Democratic politician.

[1600] They said, you know, you shouldn't have to work your summers.

[1601] You shouldn't have to have jobs while you're in school.

[1602] You should just be able to go to school and enjoy yourself.

[1603] And we're going to make it possible for you to borrow money to go to school by guaranteeing the loans 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 but we're going to guarantee the loan and that way you'll be able to get the loan now somebody else won't get it, some businessman won't get the loan because we're going to make them loan it to you and now you won't have to have that summer job and then when you graduate and have a good job you'll just pay back the money and it sounded like a great deal hey I want to party now I don't want to work I'm going to have a good time and when I get my college degree and I'm making a lot more money, well, it'll be no problem to pay back the loan.

[1604] So that's how it all started.

[1605] When came in?

[1606] When was this?

[1607] And they basically created an incentive for banks to make loans to kids with no assets and no credit history.

[1608] What year was this, Peter?

[1609] What year was this?

[1610] They're not 60s.

[1611] I don't know the exact year.

[1612] Oh, okay.

[1613] But anyway, so then once the colleges saw that all these kids can borrow money to go to college.

[1614] Well, they were like, this is great.

[1615] I'm just going to raise prices.

[1616] So all of a sudden, tuition started going to go up.

[1617] I mean, for a long time, and you can look back in the history, college tuition used to be pretty stable.

[1618] It didn't go up very much until the 60s, until the government really got involved.

[1619] And so as soon as these colleges saw that the kids had access to all this money, they started jacking up prices.

[1620] And then, of course, the university started competing who's got the best gymnasium who's got the best you know howls all kinds of other incentives and then everything became bloated and they kept raising their prices and then in order to get the votes of the students the government kept raising the limits on how much loans they would guarantee 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 and so tuition kept skyrocketing and then as tuition goes up it's like oh nobody could afford to go to college we need more loans so the loans themselves became the reason that people needed the loans because the loans were why college are so expensive and so now you needed a loan to go to college but without the loan tuition would have come down 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 if there were no student loans at all.

[1621] 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.

[1622] Otherwise, we'll have no customers.

[1623] Nobody can afford to go without these loans.

[1624] And they would cut costs.

[1625] They would start looking.

[1626] They would streamline their business like everybody else.

[1627] I mean, any business that could charge whatever the hell they wanted, because the government could borrow the money, right?

[1628] If you had a restaurant where the government was going to guarantee to pay the bill of everybody who dined there.

[1629] I mean, shit, the restaurant can charge whatever it wanted.

[1630] Oh, a hamburger is $1 ,000.

[1631] Oh, the government's going to pay?

[1632] Yeah, what do you care?

[1633] You know, it's because people are paying with their own money that they've got to keep the cost out.

[1634] And this situation's been going on for so long that it's just now how they do business.

[1635] Right, but now, see, college is now so expensive.

[1636] Kids think they need government to afford it.

[1637] And they don't realize that the only reason it's so expensive.

[1638] This is because of government.

[1639] That's the Harry Brown cripple you and then give you a crutch.

[1640] You're freaking me out, Peter Schiff.

[1641] College so expensive.

[1642] You're freaking me out, man. Jesus Christ, what a mess.

[1643] But there's an easy solution.

[1644] Okay, tell me. Get rid of the loans.

[1645] Get rid of the loans.

[1646] You know, let colleges lower their tuition.

[1647] Well, that might be reality anyway.

[1648] And let people go back to what my dad did.

[1649] Work your way through college.

[1650] No big deal.

[1651] We're in this crazy situation where a lot of kids are going to have to go back to school through Zoom, even Harvard.

[1652] They're talking about having these Harvard kids do school online for $40 ,000 a year.

[1653] Wasn't that what you did?

[1654] Well, I know, look.

[1655] Five.

[1656] You're the 40?

[1657] It's more than 50?

[1658] Jamie says $50 ,000 a year to do school online.

[1659] That's hilarious.

[1660] Education at this point is a racket.

[1661] I mean, most people will never recoup the cost of a college degree.

[1662] I mean, the colleges are out there perpetuating this myth, right?

[1663] that, you know, going to college is your ticket to success.

[1664] You have to go, and if you don't go.

[1665] 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.

[1666] You know, the bartending, bouncers and strip cubs, petty cab drivers, they all had college degrees.

[1667] Some of them had two or three degrees.

[1668] And, you know, they were doing stuff that, you know, you didn't need to go to college to do.

[1669] And so the colleges perpetuate this myth.

[1670] Look, with the internet today and the access to online classes and self -help, you can educate yourself.

[1671] You don't need to buy this overpriced certificate that says that you graduated from some college to prove that you're competent.

[1672] I mean, it doesn't even prove anything now.

[1673] In fact, the government did two things.

[1674] They made a college degree very expensive and then they made it practically worthless.

[1675] Because before the government started subsidizing college, fewer people actually went.

[1676] because only the people that could really benefit from the degree went.

[1677] And so then if you had a college degree, it actually meant something in the marketplace.

[1678] Now, since everybody goes to school, because it's, you know, you get the money from the government, everybody's got a college degree.

[1679] They mean nothing.

[1680] So now you've got to get a master's degree.

[1681] You've got to get a PhD.

[1682] You're in school until you're in your 30s.

[1683] It was ridiculous that we spend so much time.

[1684] It benefits the bureaucracy.

[1685] It doesn't benefit the kids.

[1686] You know, so this bubble, this is a gigantic bubble in.

[1687] in higher education.

[1688] It's a bubble in lower education, too.

[1689] You know, I mean, some of America's wealthiest men, they didn't go to college.

[1690] You know, in fact, way back when, they didn't even go to high school.

[1691] They thought of these billionaires, you know, dropped out of grammar school.

[1692] But today, with the internet, it should be even easier for people than it ever was.

[1693] Because one of the things that the colleges had is they had the libraries, right?

[1694] They had all the books.

[1695] So if you wanted to get access to these books, you needed to get into these libraries.

[1696] Well, it's all on the internet now.

[1697] They don't have a monopoly on anything.

[1698] And believe me, you see how much they charge for these books?

[1699] It's crazy.

[1700] It's such a good point.

[1701] These professors write these books and they force the kids to buy these books, paying $100 for a textbook.

[1702] I mean, it's ridiculous.

[1703] It is a racket.

[1704] And it's all supported by government.

[1705] And the problem is, if you come out against this educational racket, oh, you're a bad person, you're anti -education.

[1706] I'm not a bad person.

[1707] I care about the kids who are getting ripped off.

[1708] who are getting indoctrated and not educated and who are being saddled with a mountain of debt.

[1709] Can I throw something at you?

[1710] The solution is free education.

[1711] Can I throw something at you?

[1712] If you think education is expensive now, wait do you see how much more it costs when it's free?

[1713] 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?

[1714] Do you think that the extreme liberal socialist bend that you see in colleges would be different if there was a free market?

[1715] Do you think people would be more realistic in terms of all universities were free market -based?

[1716] Do you think people would be more realistic in terms of their expectations for other people in the future?

[1717] And not look towards the government as being this piggy bank that they could dig into.

[1718] and pull things out.

[1719] Yeah, I think so.

[1720] 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.

[1721] They want to hire people who have worked for government.

[1722] And they want to see some of their professors go to government and then come back.

[1723] 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.

[1724] I mean, there is no role in government for a free market economist who says, leave it alone, let the market function, right?

[1725] That guy's not going to get a government job, right?

[1726] The government wants to hire people that are going to justify more government spending because that's how they buy their votes.

[1727] 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.

[1728] But there are, look, you can find some examples of universities that teach, you know, real economics, free market, Austrian economics, but they're in the minority.

[1729] Yeah, not that many of them.

[1730] Is that a problem?

[1731] I mean, when we think about educating kids, I mean, is part of, it's really a weird, it's a weird way of looking at it, right?

[1732] 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?

[1733] Yeah, I mean, look at AOC, right?

[1734] I mean, she was an economics major, but look, like, she's completely ignorant about basic economics.

[1735] I mean, the thing is she thinks she knows a lot.

[1736] She doesn't know anything.

[1737] You know, it's like a lot of times when people learn economics in a university, they end up knowing less about economics after they graduate than before they enroll.

[1738] They end up, you know, they lose their common sense.

[1739] And they get spoon fed a bunch of nonsense, which they end up, you know, regurgitating throughout their careers.

[1740] I hear what you're saying, but hold on a second.

[1741] I think when you deal, I mean, she's 28, right?

[1742] I think what she is is an idealist.

[1743] I think she's a kind person who has this visionary perspective of how she wants the world to play out.

[1744] And when she says those things, I think she's saying those things from, because she feels like she's a force of good.

[1745] Yeah, I don't, you know, I don't know, I don't doubt that.

[1746] But I mean, look, she could, hold on a second, Peter, she's just a great politician.

[1747] Yes, but I think that economics are complicated.

[1748] And I think most 28 -year -olds don't really understand it.

[1749] I think it's really complicated.

[1750] And I think we get idealistic or are ideologically based in like, you're a left wing, you think this way, your right wing, you think that way.

[1751] And we get very rigid in how we look at things.

[1752] 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.

[1753] and that's the one that people support with their money if they have total freedom.

[1754] But if you have the government that steps in and dictates that you have to go this way or that way or has cost this much or that much, then the government itself becomes a business.

[1755] And 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, freedom of competition.

[1756] Yeah, every time the government writes a regulation or passes a lot, law, we're less free because those regulations and those laws are limiting our freedom because they're restricting our choices.

[1757] Right.

[1758] But to bring the two of us together, to bring everybody together, don't you think that, like, maybe there's an opportunity where people can recognize, like, that doesn't mean you're a bad person.

[1759] You're just looking at the actual game.

[1760] 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.

[1761] But the reality...

[1762] I think most of the people...

[1763] on the left are not bad people.

[1764] They're motivated by good intention.

[1765] Kindness.

[1766] They just don't understand the bad outcome.

[1767] Yes.

[1768] But, you know, and this is the interesting thing because a lot of people of my persuasion, right, we look at the left and we don't think they're bad people.

[1769] We just think they're missing.

[1770] You're talking about Puerto Rican Jews?

[1771] But the people on the left actually think people like me are bad and evil.

[1772] Because we don't agree with their programs.

[1773] We must be mean people.

[1774] You must be heartless people because we're against all the good that they want to do.

[1775] Okay, but stop.

[1776] You know that that's a reductionist argument.

[1777] The rational thought because they don't have those thoughts.

[1778] Right.

[1779] But you know that's a reductionist argument that doesn't really make any sense.

[1780] But you'll entertain it, even though you know it doesn't make any sense.

[1781] Like the people that are really paying attention know that doesn't make any sense.

[1782] It's not that you're a heartless person.

[1783] You're not heartless at all.

[1784] You're explaining what is actually going on in terms of like government subsidizing education.

[1785] you're talking about competition in terms of the free market you're what none of what you're saying just from me to you is in any way conveying a sense that you're a heartless person 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 yeah and look i i watched your your interview that you did with john stewer right and you know and john 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.

[1786] But again, what he didn't understand was that's not capitalism.

[1787] That's wrong.

[1788] That was an example of socialism that never should have happened.

[1789] But then when you guys were talking about it and you said, yes, I mean, you'd be willing to pay more taxes if it would make the problems better.

[1790] Yes.

[1791] The problem is paying more taxes is going to make the problems worse.

[1792] We're paying a lot of taxes and the government is spending even more money.

[1793] And that spending is the taxation.

[1794] Government has never spent this much money.

[1795] and the problems have never been bigger.

[1796] If spending money solves problems, we would have solved them a long time ago.

[1797] Yes, I agree with you.

[1798] But can I stop you for a second?

[1799] When I'm saying that I would pay more money if I thought it would fix it in taxes, I don't, I'm not thinking of the government as its current entity that ruins everything.

[1800] I'm thinking of like, if I could give more of my income to taxes and it would actually make a solution, I would be willing to do it.

[1801] I'm not saying that it would work that way.

[1802] I don't know if it would work that the way.

[1803] I don't understand economics at all.

[1804] And I don't understand the government at all.

[1805] But when I say, why not cut out the middleman, right?

[1806] Because you think, hey, if I can give my money to government and maybe they do good with it.

[1807] There's no example of government doing good with money because it's not their money.

[1808] They don't give a damn.

[1809] I don't disagree with you.

[1810] I don't disagree with you.

[1811] What's stopping you, Joe Rogan, you from giving more money directly to causes that you think are worth while you don't need the middle man you don't have to cut in the government on your charitable giving you can do it yourself that you know one of the best things that you can do for people is employ them provide them with a job grow your business so if the government taxes your money you can't invest in growing your business i have a fucking manageable business with a skeleton crew and you're not going to fuck this up for me all right i'm not making more business settle down buddy but you can also joe you can invest let's say a friend of yours came to you right a good friend of yours and said hey joe i got a great idea to start this business right he had a business plan and here's what i'm going to do i say good look bitch hey i'll invest in your business and then all of a sudden the government takes that money in taxes oh i can't afford to make that investment in your business because the government just took the money in taxes so now you can't start that business completely understand what you're saying when i was saying it and i don't disagree with 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, like, 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 that they'd just get 5 % more taxes from people that are doing well, I'd be willing to do it.

[1812] It wasn't saying that I be, I think it's a good idea to give more money to these people that we elect, that we don't even know.

[1813] I mean, I don't know Gavin Newsom.

[1814] I make fun of them all the time.

[1815] I bet he's a nice guy.

[1816] I don't know Mayor Garcetti.

[1817] I bet he's a nice guy, too.

[1818] It's a fucking impossible job.

[1819] I don't want that job.

[1820] That benevolent government doesn't exist on this planet, right?

[1821] So, you know, there's no point in saying I would be willing to give money to government if they would use it wisely.

[1822] Right.

[1823] But it's like effective socialism.

[1824] I'd be willing to give my 10 -year -old, you know, more money if I thought he would spend it wisely.

[1825] I mean, they're not going to do that.

[1826] And, you know, to the extent that you want government to have money, it should be local government, closer to the actual source.

[1827] So you should, if you're going to, if you want government to have more money, it should be your local government, your city, your county.

[1828] Don't send it to Washington, D .C. You're in California.

[1829] That's 3 ,000 miles away.

[1830] What the hell are they going to do about your commuter?

[1831] They don't know what's going on.

[1832] They're so far removed from the money they're spending.

[1833] They can't, it makes no sense to do this.

[1834] this is such a really good point of money and such a waste of resources that's a good point that's something that hunter s thompson had said in the 70s when he's running for sheriff in aspen he said you can affect local community but the people in bothington they really don't affect your day -to -day existence it's a myth yeah the more money that you send to Washington the less money you can send to your local government i mean initially the federal government didn't have any taxes i mean and so the taxes were local okay Okay, again, Peter Schiff.

[1835] But now the government takes everything, and now all the towns have to beg to get the money back.

[1836] And now the government has all kinds of strings.

[1837] 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.

[1838] We're not going to give you student funds.

[1839] So now the government is taking control.

[1840] The federal government is taking control of all the states.

[1841] Let's take the power away from the federal government and put it back in the states where it belongs.

[1842] By you don't let the federal government take all that money out of the local economy.

[1843] and now you free up more resources for local governments that would do a much better job with the money than Washington, D .C. So essentially, it's like we all, 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 controlling us and telling us what we can and can't do because it's written on paper somewhere because somewhere in the halls of justice people agree that you should be able to control people in a certain fashion and acquire some percentage of their income and you'd use that money at your own discretion with no receipts whatsoever is that what you're saying yeah and here's you know here's an important point though that I really want to get across uh in in you know in this podcast because you know we are headed as I said for a massive economic crisis I mean what we've seen so far is nothing right what happened in 08 what's happened since COVID this is a a dress rehearsal for a much bigger show that's coming.

[1844] That's going to be much worse.

[1845] It's going to, you know, inflict a lot more pain.

[1846] And I'm not happy that this is going to happen.

[1847] If I could stop it, I would.

[1848] I'm just like watching this, you know, train wreck and slow motion.

[1849] And I can't do anything about it.

[1850] But I know what's going to happen.

[1851] It's going to be blamed on capitalism, right?

[1852] 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?

[1853] And the public is going to buy this nonsense, just the way they bought it about the financial crisis.

[1854] The reason that I was warning people for years about the housing bubble in the financial crisis, the reason I was able to write a book and lay it out exactly the way it happened.

[1855] 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.

[1856] I understood the mistakes that Greenspan was making and I knew the consequences that were in store for us.

[1857] Well, the mistakes that have been made by Bernacki, by Yellen, by Powell, dwarfed the ones that were made by Greenspan.

[1858] It's the same mistakes, just on a much bigger scale.

[1859] The country is in far worse shape now than it ever was at any point in the past, structurally and with all the debt.

[1860] And this crisis is going to be a currency crisis where the dollar crashes.

[1861] We're going to have massive inflation in a weak economy.

[1862] They called it stagflation when it happened in the 1970s.

[1863] The Keynesians didn't know what to do.

[1864] with it because it violated all their rules of economics because they don't understand economics well this is going to be much worse and i want to make sure that people understand where to put the blame it's not capitalism it's not freedom it's government and government is going to try to sell us on another bull of goods that the solution is to give government even more power to give the federal reserve even more power when the only solution is to take away the power that they have but i also want to make sure and this is what i'm doing personally i do two things right I try to educate people so that they understand the economy and so they know who to blame for the problems.

[1865] But I'm also trying to make sure to spare as many people as I can from suffering the financial consequences.

[1866] I said earlier in the podcast that the government is financing these expenditures through inflation.

[1867] Inflation is a tax, right?

[1868] The government is aching your purchasing power.

[1869] We don't feel it that much now because foreigners are subsidizing us with holding our dollars in treasuries and other instruments.

[1870] But when the dollar crashes and prices go through the roof, people are going to get wiped out by this inflation tax.

[1871] A lot of people who are retired are going to see their life savings just evaporate.

[1872] I mean, they'll still have their money.

[1873] They just won't be able to buy anything with it.

[1874] And what I'm afraid, too, is that we're going to get price controls.

[1875] 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.

[1876] But, I mean, it's going to be way higher than that this time.

[1877] But they're going to create shortages.

[1878] They're going to create black markets.

[1879] There's going to be blackouts.

[1880] Food shortages.

[1881] There are be riots.

[1882] You think the riots are bad now.

[1883] Wait to see how much worse they're going to get.

[1884] Right now people are getting, you know, placated by all these checks that the government is sending out.

[1885] But when the checks bounce because they don't buy anything, that's when you're really going to see the civil unrest.

[1886] But I want to make sure that people do something, right?

[1887] That's what I do with my clients, that they get out of their dollars to escape this inflation tax.

[1888] I want as many Americans as possible not to go broke like you.

[1889] I want to make sure you just signed a big check with Spotify.

[1890] You know, you should have had a gold clause in that contract because, you know, it's over 10 years, five years from now.

[1891] You're not going to get anywhere near the money you think you're going to get because that inflation is going to destroy its value.

[1892] So you've got to do something.

[1893] A lot of people who are retirement.

[1894] Hold on a second.

[1895] Stop.

[1896] What would you have done differently and what can we do now?

[1897] Like 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.

[1898] What do you think I should do?

[1899] What would you have done differently that would have somehow or another preserved at least a modicum of our economy?

[1900] And what would you do?

[1901] What would you do?

[1902] What would you have done differently first?

[1903] I don't want to preserve.

[1904] I don't want to preserve the economy we had because it was a bubble.

[1905] And so trying to preserve that as a mistake.

[1906] Right.

[1907] But what would you have done?

[1908] First thing.

[1909] You know this shit's coming.

[1910] We need higher interest rates from the Federal Reserve, not lower interest rates.

[1911] We don't need any more money printing.

[1912] And we need the government to cut spending.

[1913] Okay.

[1914] But a disease is coming.

[1915] A disease is coming, Peter Schiff.

[1916] We've got to shut down the world or we're going to kill people.

[1917] What do we do differently than what we did?

[1918] 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.

[1919] I think that we've acted so cavalierly because we believe we're getting all this government for free.

[1920] We believe it's okay for people to stay at home and watch Netflix and receive government checks.

[1921] We don't understand the greater damage.

[1922] See, what we're doing now, this monetary policy, this fiscal policy is going to impose far more harm.

[1923] on average Americans than the coronavirus ever could have.

[1924] So we have to get that, that our cure is so much worse than the disease ever could have been.

[1925] We got to, we got to understand that concept, and we got to understand the concept that we had a bubble.

[1926] We need to let it deflate.

[1927] That is the best thing you can do with a bubble.

[1928] Don't try to blow more air into it.

[1929] Okay, okay.

[1930] Hold on, hold on, hold on.

[1931] Let me take this from this alternative perspective.

[1932] 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 because they were going to have to go to work and they were going to die well that's what we were thinking but Peter that's what we thought in March we did think that in March but hold on you know they thought take care of it we don't need the federal did you not think we were going to die in March Did you not think we were going to die?

[1933] Do you not think a certain percentage of people you knew were going to die?

[1934] Well, there's always a certain percentage of people who get the flu died.

[1935] But obviously I knew from the beginning that the people were dying were the people who were 80 years old or higher who were dying from all sorts of things.

[1936] I mean, that's when we start dying.

[1937] I mean, not many of us live much further than 80.

[1938] That's about life expectancy.

[1939] That's not necessarily true, though.

[1940] I know I have a good friend that almost died.

[1941] My friend Michael Yo, who's a comedian who's been on this podcast, who's a, very healthy.

[1942] He almost died from it.

[1943] Right, but how does the Federal Reserve printing money save somebody's life?

[1944] I'm not saying it does.

[1945] What I'm saying is when it happened...

[1946] It just creates a new problem.

[1947] What I'm saying is when the pandemic occurred, we were all scared.

[1948] 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.

[1949] In March, I was fucking scared of it.

[1950] I was really nervous.

[1951] That's what I'm trying to do.

[1952] My point, Joe, is that our economy was such a disaster before COVID.

[1953] I understand that.

[1954] That we were vulnerable to anything that came out of left field, any problem.

[1955] See, this is another financial crisis.

[1956] It's like the 08 financial crisis.

[1957] Why is this a financial crisis?

[1958] In 2008, the reason it was a financial crisis was because real estate prices went down.

[1959] Because they were a bubble created by the Federal Reserve, Fannie Mae, Freddie Mac, Moral Hazard.

[1960] I wrote a book.

[1961] I would lecture for years and years about the housing bubble and how the government nurtured it, right?

[1962] And so because we had this housing bubble, once real estate prices went down, people who borrowed money didn't pay back their loans.

[1963] They no longer had any incentive to make the payments because their house was worth less than their mortgage.

[1964] They just mailed in the keys.

[1965] They called it jingle mail, right?

[1966] So now the banks were in trouble because the loans went bad.

[1967] And now Wall Street had packaged up these loans into pools of subprime securities.

[1968] I made some money shorting those back in the day and some other people did too because we recognized what was going to happen.

[1969] But the crisis started when people defaulted on their loans.

[1970] Well, what's happening now?

[1971] Way more people can't pay their loans than in 2008.

[1972] It's not just people with mortgages that can't pay.

[1973] Businesses can't pay their rent, right?

[1974] companies can't repay their debt.

[1975] We have a corporate debt bubble in addition to a consumer debt bubble.

[1976] We have record credit card debt, record auto loan debt, record student loan debt, record corporate debt, record government debt.

[1977] Everybody is loaded up with debt.

[1978] And now nobody can pay.

[1979] It's all a financial crisis.

[1980] But again, the only reason that this economy is so screwed up is because government policy screwed it up.

[1981] And the solution isn't to increase that population.

[1982] policy, 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, because eventually you can kill him.

[1983] You could overdose.

[1984] And that's where we are now.

[1985] The amount of monetary stimulus that the Fed is now crammed into this economy is a monetary overdose.

[1986] They are going to kill the economy.

[1987] Peter, I see where you're coming from when it comes to a 2008 loan crisis.

[1988] That makes a lot of sense.

[1989] But the difference between this and that is these people, didn't make any poor decisions.

[1990] They're just thrust into this crazy world where there's a disease that forces businesses just shut down.

[1991] But this is my perception.

[1992] 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?

[1993] Don't you think there's a, there's a balance?

[1994] People would organize themselves.

[1995] Do you think they would?

[1996] There would be private charities.

[1997] Nobody would starve.

[1998] And nobody was starving.

[1999] America.

[2000] Before all these government anti -poverty programs, when poverty was on the decline, nobody was starving.

[2001] Right, but hold on a second.

[2002] It's starving.

[2003] People in right now are in the, they're in a real peril.

[2004] They could lose their house.

[2005] They could lose their car.

[2006] They could lose their education.

[2007] There's a lot of weird shit going on right now that's through no fault of their own because businesses are shut down.

[2008] This is why I disagree that it's the same sort of situation that happened in 2008.

[2009] For sure, what you're saying makes sense in terms of economics, about the foundation of our economic country, the way the economy was was fucked up already.

[2010] That makes sense.

[2011] But the same thing happened in the Great Depression.

[2012] People through no fault of their own, people were unemployed.

[2013] But the government didn't come in and bailing out.

[2014] I mean, we had, we, during the Depression, Roosevelt initially got some relief.

[2015] That was the first time we had welfare.

[2016] They called it relief.

[2017] It wasn't a lot of money, right?

[2018] There were no bailouts for businesses, really, you know, cash bailouts like we have.

[2019] Now, look, if the government state out of this, let the free market, let landlords and tenants work it out among themselves.

[2020] I mean, the landlords know they can't evict because there's no other tenants, you know, let employers and employees, everything will work out in a free market, right?

[2021] If you let people voluntarily interact, people aren't going to be kicked out on the street, people aren't going to be left hungry, the market is going to be able to solve the problems.

[2022] The government comes in and creates a whole new set of problems that are far worse, right?

[2023] because the government doesn't have anything.

[2024] All it does is print money now.

[2025] It doesn't create anything.

[2026] It just prints.

[2027] It just creates money out of thin air that doesn't have any real value.

[2028] I understand what you're saying.

[2029] But in the process of doing that, they destroy the value of the money that exists, and they screw up the economy immeasurably.

[2030] They make the economy less productive and less efficient.

[2031] And so that means people are going to be poorer.

[2032] Government makes me people poorer.

[2033] It's free market capitalism that makes them wealthier.

[2034] I understand what you're saying, but in this situation, isn't this really unique where no one can work?

[2035] We're in a situation where for months and months we have to stay locked down.

[2036] A lot of businesses are not essential or labeled essential.

[2037] Whoever gets to decide that, I mean, shouldn't that be something we vote on?

[2038] What's essential and not essential?

[2039] I mean, that seems a little crazy.

[2040] Yeah, I do think that all that government telling people what businesses can and cannot open.

[2041] Look, I disagree with a lot of these policies.

[2042] 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.

[2043] I think if each state had to shoulder the burden of its own policies, they would have a more rational approach to COVID -19.

[2044] This was what I asked you.

[2045] And we thought it was free.

[2046] And we had this huge moral hazard.

[2047] Yeah, this is what I asked you in the beginning.

[2048] And now again, we created this situation.

[2049] Look, you've got all these school teachers.

[2050] They don't want to go back to work.

[2051] They want to get paid not to work.

[2052] We have now created a situation where so many people, oh, I'm not going to go to work.

[2053] Oh, I don't want to risk getting COVID.

[2054] Just send my paycheck to my house.

[2055] Why did you single out school teachers?

[2056] I mean, this is ridiculous.

[2057] Why did you single out school teachers?

[2058] Why did you say school teachers?

[2059] 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?

[2060] There's a lot of people who want to say, I don't want to work because I don't want to get COVID.

[2061] And so, you know, but meanwhile, people take a lot of risk.

[2062] 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 they or they smoke cigarettes you know they do all sorts of things that that risk their health but now all of a sudden no no no i'm not gonna i'm even i don't even want to go if i have to wear a mask i just want to stay home because we're we're giving people an easy way out of going to a job that they'd rather not go to i mean i don't blame people for not liking their jobs you know i don't blame people for enjoying leisure but you know we can't set this situation up but what makes everybody think it's possible is because we don't think there's a cost to all this printing money it's all this like modern monetary theory nonsense that we can just print money we can have whatever we want as long as the federal reserve prints the money to pay for it i see what you're saying this is a disastrous way of thinking i see i see exactly what you're saying um and i think it's interesting because i don't think it's either or 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 for the government but i also hold on second peter i also think 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.

[2063] The free market will do that.

[2064] You know how cheap food is now thanks to the free market?

[2065] The government has screwed up agriculture.

[2066] But here's, you know, the department of agriculture.

[2067] We actually pay farmers.

[2068] Joe, we pay farmers not to farm.

[2069] Yes.

[2070] We pay farmers not to grow food to diminish the supply of food.

[2071] That's a corn thing, right?

[2072] Do you realize that we do that?

[2073] I, yeah, I've heard about that with corn subsidies.

[2074] So the goal of the Department of Agriculture.

[2075] is to keep food prices high.

[2076] That is the stated goal, right?

[2077] What they want to do is restrict farming so that less stuff is farmed so that food prices are higher.

[2078] That is what the government is actively doing.

[2079] They are pursuing a policy to make food more expensive than it otherwise would be.

[2080] But what is there?

[2081] But hold on a second.

[2082] What's their, when they describe it, how do they describe it when they state their business model?

[2083] How do they say it?

[2084] That's your version of it.

[2085] They're saying that they want to protect the farmers from competition or because they could have bad weather or bad crops or they just want to make, they want to keep up farm income.

[2086] Do you know where these subsidies came from?

[2087] Do you know where these subsidies came from?

[2088] Again, they start with the new deal.

[2089] Right, but it came from World War II when they needed food, when they needed to supply the troops, they needed money for food.

[2090] There's a lot of what happened with farm subsidies.

[2091] They recognize that we could get into a. situation where we don't have enough food, especially if farmers go under.

[2092] So they decided to subsidize farms.

[2093] I'm not an expert on this by any stretch of the imagination, but I've 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 like frivolous thing or thing that doesn't really benefit the people.

[2094] But the idea came about because they were worried about one day having a food shortage and this can happen post world war two are you aware of that's the nonsense right that the government wants you to believe look you can go back you know we subsidize tobacco right the government gives subsidies to tobacco farmers and and and actually if you go back when they you know they talked about it initially because they say hey why are we subsidizing tobacco farmers because you know don't why do we want to make it easier for people to smoke and they actually agreed that the subsidies are restricting the production of tobacco and making tobacco more expensive and so so by subsidizing tobacco farmers will actually have fewer smokers because we're making the cost of tobacco higher that's what government does government comes in and makes the price of food higher that's their goal that's a make food more expensive that's an industry that kills people that's that's tobacco you're talking about an industry that knows from the jump but but tobacco is different man they know they're killing people no this is the same okay i'm saying we shouldn't we shouldn't subsidized tobacco farmers.

[2095] But they said we're doing it because it makes tobacco more expensive.

[2096] Well, it's the same subsidy for wheat farmers.

[2097] But it wasn't originated.

[2098] The goal is to make a price higher.

[2099] Yes, but that's not, that wasn't the initial goal.

[2100] The initial goal, it became that.

[2101] They're never said that.

[2102] Government is never honest about what it's doing.

[2103] But don't you think post -World War II?

[2104] The farmers want higher prices.

[2105] I understand.

[2106] 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 you think it was really all about economics you know joe one of the things they did during the great depression was they destroyed food so this is one of the big programs of what i'm saying is just propaganda because we had too much of it so it's just propaganda what i'm saying is just yes i got a whole they they hit me they hit me with their propaganda i'm reciting it yeah it's all look people always want something from government look people who are selling a product want high prices right consumers we want low prices but if you're selling something you want high prices but competition brings prices down so what you do is you enlist government to help you and government helps you get higher prices than you can get in a free market right so government private companies have an incentive to get the support of politicians so they can make more money than they could in a free market the problem is we need to take away the power of the government to grant those special privileges to any business they're showing should be no subsidies for businesses.

[2107] You know, corporate welfare does as much damage, maybe more than welfare for individuals, right?

[2108] All of this has to go, and we need a vibrant free market economy.

[2109] 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 of Americans and we go through a really, really, you know, hard, deep economic time period, if we could do a reboot, If we can resist the temptation to fully embrace socialism and go all in on the ideology that destroyed us, if we can go back to free market capitalism, we have a bright future.

[2110] I mean, you know, with the tools that we have today, if we can have 19th century capitalism with 21st century technology, I mean, it's amazing what we can achieve.

[2111] You know, I watched your interview with Andrew Yang, you know, who's afraid of technology destroying jobs.

[2112] Look, technology is going to liberate labor.

[2113] It's going to make us richer.

[2114] People have been advancing Andy Yang's analogy probably ever since the wheel was discovered.

[2115] There's always some politician that says, oh, this new technological advancement is going to put somebody out of work.

[2116] Yes, we want to save labor.

[2117] We want to free up labor to do something else because labor is scarce.

[2118] And if we can free it up from a mundane activity, that labor can do something else.

[2119] And now we can have more.

[2120] We can have more stuff.

[2121] We can have a higher standard of living.

[2122] So all that is possible.

[2123] but I want to make sure that there are people who don't go broke.

[2124] That's why I'm telling people, you know, get out of your dollars.

[2125] I'm, you know, buying gold.

[2126] I've been telling people on your podcast.

[2127] You know, gold is now over $1 ,800 an ounce.

[2128] I think when I started coming on, you know, it was closer to $1 ,000.

[2129] But I think it's going to $5 ,000, $10 ,000, $20 ,000.

[2130] I mean, and it's not really gold going up.

[2131] It's the dollar going down.

[2132] The dollar is going to lose its value.

[2133] This is how, this is where people are at today.

[2134] one of the concerns 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 are making these decisions don't have a lot of life experience so you've got a tremendous amount of momentum for 18, 19, 20 year old people and when they hear something like free market free market capitalism is going to fix the world one of the things that bothers them the most is that they associate free market capitalism with greed with greed and money over people and this is what what the problem is the way they promoted themselves yeah I agree someone says like I'm a libertarian there's a lot of people I think the socialists are doing a better job of selling their ideology yes then the capitalists and capitalism is getting blame for a lot of the problems that socialism is is creating but you know when when people are saying again it's somebody is greedy we're all greedy in the sense that we all want uh the best for ourselves and our families right we all want to go out and and and make money so that we can have a better life and buy more things that we feel will make us happy right yes and so but what again what people have to understand is capitalism channels that greed in a very positive way.

[2135] Because in order for somebody to enrich themselves in a free market, they need the voluntary cooperation of other people.

[2136] They need to be able to provide goods and services that are better, lower cost, higher quality than somebody else.

[2137] And they have to provide employment opportunities.

[2138] They have to provide people with better jobs than somebody else because they usually you can't have a company unless you can get people to work for you Peter I'm agreeing you have to have good jobs and good products Peter I agree with everything you're saying and the worker I agree with everything you're saying but what I'm saying is that the in the general public's view when you say free market capitalism they equate mean when you see socialism yes equate kind this is the problem 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, but rather the way the public perceives it.

[2139] When they think of socialism, they think is good and healthy and warm and loving and inclusive, and they think that's the future.

[2140] Like, I don't know what socialism is done to market themselves so well.

[2141] Whatever socialism is done to market itself.

[2142] There's nothing benevolent or caring about theft.

[2143] Yes.

[2144] I don't care if the thief is well -intention, right?

[2145] It's immoral.

[2146] Capitalism is moral.

[2147] It's honest.

[2148] And it's lifts people out of poverty.

[2149] You know, the world is littered with examples of socialists that have impoverished people.

[2150] And, you know, there's various forms of socialism.

[2151] There's communism.

[2152] There's communism, right?

[2153] Millions and millions of people have been slaughtered in the name of this failed ideology.

[2154] And every country that has embraced it, it is impoverished everybody, right?

[2155] They don't share the wealth.

[2156] They destroy the wealth.

[2157] They make everybody equal by impoverishing everybody.

[2158] But Peter, why is it so attractive?

[2159] The rich people under socialism are the people with political connection.

[2160] Why is it so attractive then?

[2161] Why is it so attractive?

[2162] Why are so many kids, why are so many young, progressive ideologically left -wing kids attracted to the idea of socialism?

[2163] Why is it so attractive and why is capitalism so negative to them?

[2164] Why does so many five -year -olds believe in Santa Claus?

[2165] Because you lie to them.

[2166] It's a nice idea.

[2167] Some guy comes down the chimney and gives you a bunch of presents.

[2168] Right.

[2169] But you're agreeing you lie to them when you tell them about Santa Claus.

[2170] That's a willful lie.

[2171] But you don't have to tell them.

[2172] They figure it out.

[2173] I mean, eventually the kid is old enough.

[2174] So this is what happens with socialism.

[2175] Bro, you got a lie about Santa Claus.

[2176] When you're a young guy or a young woman and you don't have any real life experience.

[2177] You haven't worked.

[2178] You haven't had a business.

[2179] You haven't been out in the real world.

[2180] You live with your parents.

[2181] You go to school.

[2182] And socialism sounds good.

[2183] I mean, in theory, it sounds great.

[2184] But you don't have any real life experience.

[2185] By the time you're older and you've been in the real world and you've paid taxes and you'd seen the consequences, you start to understand more.

[2186] And then you give up your childish beliefs.

[2187] The problem with a lot of these older socialists like Sanders, it's like a kid that never grows up.

[2188] It's like somebody who's 70 and still believes in Santa Claus.

[2189] Like they never figured it out, right?

[2190] So that's Sanders never figured out that there's no Santa Claus.

[2191] He thinks there's Santa Claus and it's the U .S. government.

[2192] And we can get all this stuff for free if, you know, if we're just nice.

[2193] I would love to lock you two together.

[2194] I would love to lock you two together in the room and film it for like six hours.

[2195] Just have you argue about shit.

[2196] I would debate any big socialist that you could get on your show.

[2197] I'm sure you would, Peter.

[2198] I'd love to do it.

[2199] Listen, Peter, we just bang through three hours, if you can believe it or not.

[2200] No, we can keep going for another three because there's so much stuff that we could actually talk about.

[2201] No, I think, but I just want to say this before we wrap up.

[2202] I think you provide some very honest and brave.

[2203] insight.

[2204] You buck the trend of sugar -coding things, and the way you describe your version of free market capitalism is very honest, and it doesn't seem mean.

[2205] I think this is what's important about it.

[2206] Like, there's a lot of people that think that they have this thought in their head, this was trying to get across, that if you say capitalism, if you say someone who's ambitious, you equate that and success to mean.

[2207] And this is a part of the problem with the marketing strategy that's been employed by capitalism it's not a real strategy but versus socialism socialism has a really attractive even though it has what you were saying before it has all these deaths connected to it and no success it's got this really like maybe if we just try it one more time this is really attractive it's it's something that's inside of people that are compassionate that like maybe we can try one more time and get it right yeah and it's not my version of capitalism that's capitalism what we have now is not capitalism.

[2208] When I'm saying your version, I mean the way you describe it.

[2209] People who are mean, right, actual mean people don't succeed in business.

[2210] They piss off their customers.

[2211] They piss off their workers.

[2212] They lose their customers.

[2213] Their employees quit and they get better jobs from people who treat them fairly.

[2214] Customers go where they get a good deal, right?

[2215] And so I want to put my faith in individuals and the free market, not a bunch of bureaucrats, right?

[2216] These guys are out for themselves.

[2217] Don't think they're there to be public servants.

[2218] They're there to enrich themselves.

[2219] That's who you have to be suspicious of.

[2220] That's where greed is damaging.

[2221] When you take greed and combine it with political power, that's when it's a problem.

[2222] In a free market, it just helps me. It's government that hurts me. But look, I want to point out, I talk about this.

[2223] I got my own podcast, not nearly as popular as yours, but I would certainly welcome the people that listen to Rogan to go to listen to the Petershift show.

[2224] I do a couple of podcasts.

[2225] You could listen to them on shift radio.

[2226] You can listen to them on YouTube.

[2227] Tell people your Instagram too.

[2228] You have an Instagram?

[2229] Instagram.

[2230] What's your Instagram?

[2231] Yeah, you know, I just started Instagram.

[2232] Crazy enough, my wife was like, you got to go on Instagram.

[2233] How many people do you have on it right now?

[2234] Well, I only have, you know, a few thousand followers.

[2235] I just started.

[2236] I've got, I've got about 250 ,000 Twitter followers.

[2237] You know, they still haven't verified my account.

[2238] That's outrageous.

[2239] Whatever it is, I can't.

[2240] can't get verified.

[2241] I'll tell you exactly it is.

[2242] I'll tell you exactly it is.

[2243] There's an Occupy Wall Street videos.

[2244] That's what it was.

[2245] They fucked you over.

[2246] Those Occupy Wall Street videos.

[2247] But yeah, you can watch that on my YouTube channel.

[2248] I've got about 350 ,000 subscribers on my YouTube channel.

[2249] So, but I'm talking mostly economics.

[2250] I do a little politics.

[2251] I touch on some of the social issues.

[2252] I talk a lot about the markets.

[2253] And again, I think it's important.

[2254] I mean, I have an asset management business.

[2255] I'm trying to get people to get out of U .S. stocks that I think are overpriced.

[2256] Out of U. U .S. bonds, I think we're headed for a major crash.

[2257] 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.

[2258] It's not going to be the third time the charm.

[2259] It's going to be three strikes you're out.

[2260] So you've got to get your money out of U .S. markets.

[2261] I'm investing money around the world in countries that I think are relatively free.

[2262] They have less regulation, lower taxes, more economic freedom.

[2263] Their markets are not overpriced.

[2264] Their currencies are going to retain their value.

[2265] We're buying gold.

[2266] We're buying gold stocks.

[2267] I'm doing everything I can to preserve as much wealth as I can for Americans.

[2268] Yes.

[2269] Did you drink black rifle coffee before you did this?

[2270] We can bring that money back and help to rebuild this country.

[2271] You're an animal.

[2272] Listen, how many people do you have on Instagram?

[2273] I want to see how many we can bump you up to.

[2274] What do you have right now?

[2275] As I said, I just started it this week.

[2276] But what is it?

[2277] And I'm going to start putting out, it's my Peter Schiff is my handle.

[2278] But I want to know how many you have because I want to see how many we can get you.

[2279] Look at it.

[2280] 3 ,000.

[2281] Jamie, what does have.

[2282] Jamie doesn't know.

[2283] He's going to find out momentarily.

[2284] We'll see if you can get my Twitter up to a million or my YouTube channel.

[2285] I mean, you know.

[2286] Listen, we will get, people will go everywhere, Peter Schiff.

[2287] Listen, I appreciate you.

[2288] I appreciate your honesty and your perspective and it's always a good time talking to you.

[2289] 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.

[2290] One thing I want to mention about that Occupy Wall Street.

[2291] I did that Occupy Wall Street, and I got two and a half million views on it now on my channel.

[2292] And it had millions and millions of views before I posted it.

[2293] I posted it a couple of years ago right before I went on your show just so I can point people to it.

[2294] But even though I did that, like in 2009, every single day, I don't think I miss a day.

[2295] I get an email from somebody, some young person from somewhere in the world, it's all over the world, to say that that video, that two -hour video of me addressing the occupiers, that that is what changed.

[2296] them and put them on the direction of going from socialist to free market, that after they heard me talk, they did some more research, they educated, and they did a complete 180.

[2297] And they went from being total government socialist to being complete free market capitalist because they saw that video.

[2298] And that's why I went down to Zucati Park.

[2299] I didn't think that I would necessarily change the minds of the occupiers.

[2300] But I knew that the video that Reason was doing would change more people in mind.

[2301] So the more people who see that, you know, who look at that interaction and share it with your friends and people who, you know, who look at me, listen to my podcast or look at my tweets and share them.

[2302] And we got to spread the truth because there's so many people spreading lies.

[2303] There's only me and a few other people spreading the truth.

[2304] So we need help.

[2305] We need the public to help disseminate the information that I'm putting out there.

[2306] And I don't charge anybody for this information, right?

[2307] Everything is, you know, I don't make any money off the podcast.

[2308] I'm trying to get it out there.

[2309] Sometimes I get clients people become clients of mine that I make some money but the vast majority of the people who are listening to my content they're they don't have enough money to fund an account with me but what they but but I'm influencing them in the way they think and I'm helping them influence others right so they tune out all the nonsense thank you thank you Peter Schiff thank you Peter Schiff thanks Joe all right stay hard thanks for having me on thanks buddy