 You know it's it's interesting. I was thinking last night. This is we're sitting here And this is the day that we all knew was gonna come But yet we also thought it would never come Which is the day that we're seriously talking about the political unraveling of America So the question is whether that's a happy or unhappy day I think that determines on that depends on whether you think there's some kind of deterministic arc to human history I personally think it's a happy day And I think it's something that we should be celebrating and thinking about and pushing forward because it's not really just about us Is it it's about our kids and grandkids more than anything? So I'm just curious how many of you saw the brew ha ha which happened with ran Paul the other night as he was leaving the Republican convention and I was really struck by some of the coverage of that event and of course Rand and his wife Kelly went on TV a couple times to discuss it and As I was watching that and I was seeing some of the usual suspects come out from underneath rocks and Say oh, they weren't attacked That wasn't threatening Politicians deserve to be yelled at the very fact that he was at a Trump rally means that he deserves it etc etc etc What what I thought was you know Not only is this not a nation anymore. It's not even much of a country at this Point a friend of mine a lot of Mercer. I wouldn't go this far personally, but she she calls America Walmart with nukes And that's what it kind of feels like doesn't it it feels like we live in a transactional Country where the only commonality we have is is basically material and and I'm not downplaying that that's a lot Materials a lot we're very very blessed to live in a country with it with this kind of material wealth But it feels to me like we have lost sight when you look at this incident with Rand Paul of Who are the imposers and who are the imposed upon? It seems like that's gotten very very murky because the people who are attacking him and those police officers They they feel like they are the imposed upon Right the people who are burning and looting and rioting in cities like Portland Chicago They feel like the they are the imposed upon not the imposers Of course, I think that's wrong. I think that's the opposite But what's the the important point here is that both sides think that for example? Christian America very much feels like the secular world is imposing on it and that it is acting in self-defense Let's say by voting for Donald Trump or whomever So this is a very strong thread that runs through the American psyche right now This sort of victim oppressor narrative. It's not very healthy So the problem one problem with the left is that Everything that happens Everything in human society now has to be viewed through this lens of critical theory now That doesn't mean that your average Joe Biden voter has thought much about this or cares much about this But but at that really hardcore part of the left, this is the animating spirit, which is that? We have to view today's events through this lens of presentism Everything has to be designed Everything has to be thought of in terms of identity and Of course what this does is the opposite of what economics does what markets do which is it inhibits social cohesion The whole point of a society of a culture is to have some social cohesion and and it appears that the Entity of politics right now is aimed at disrupting that I Think a lot of you recall Steve Bannon recently had some legal trouble as he was one of the architects of Trump successful 2016 campaign Well way back in in January of 2020 When the only thing dividing the country was Trump in those those idyllic days when we didn't have riots and COVID He was on this PBS Show the documentary called divided America. They interviewed a lot of other people as well and one of the things he mentioned is that We're we live in what he calls post persuasion America Which means we all have these little cell phones in our pockets and and even though we can access all the information in the world all of all of history In fact, we're sort of more dug in than ever before with respect to our personal worldviews And so you think that a time of unlimited virtually free access to information would make us sort of more open-minded or searching or critical of our own perspectives perhaps But it's he says it's done the opposite Maybe that's true. I don't know but his point is that If we're in post persuasion America what matters is not trying to win people over Intellectually or via debate or something like that. What matters is mobilization and of course he was using that term in the sense of the 2016 and now upcoming 2020 election That the side I guess is that's going to win is the side which mobilizes best But since then since January things have changed in this country We might think of mobilization more of something is who mobilizes in the streets And that's what's really happening in our country So this doesn't bring me any pleasure don't get me wrong. I know like a lot of you. I love America I care about this country very much. I feel very blessed to have been born here and You know one of the great Sources of wealth in this country is just its vast landscape I mean if you think of the diversity between some place like, you know Honolulu is a bunch of lava rocks and then Des Moines and then Alaska and then Miami and New York City I mean this is incredibly vast country and That vastness might come in handy Because it looks like we're all fixing to spread out a little bit here as people start to flee cities but the problem with this vastness is that We have a vast population too We have 330 million odd people who are all being governed mostly by Washington DC And not only just by a few thousand people in Washington DC or even a few hundred Members of the so-called legislature, but more and more they're being governed by five or six Supreme Court justices and That more than anything is a recipe For anything but social cohesion So we've always had this this sense that America needs 50 states and you know manifest destiny Americans America goes west and we at some point we needed Hawaii so we could refuel our Our airplanes and at some point we bought Alaska from the Tsar in Russia because we thought we were gonna have gold and furs up there But but it's really become something that's fixed in the American psyche, and I think it's time that it becomes unfixed Because at this point our size our vastness has become our Achilles heel This country is becoming ungovernable, and if you look at happy countries At countries that do have a degree of social cohesion. They tend to be smaller No one knows what that optimal number is, but We do know that 330 million doesn't look like it and and I would add that what we should care about is that is per capital wealth in the United States not GDP not some number about big You know size or who's got the biggest GDP or something That's why you would rather live in Liechtenstein than India right India's got a lot bigger GDP than Liechtenstein But it's per capita that matters so as We look at this unraveling of our country. I think it's time that we honestly assess it You know who who are we what is America and what do we want? Because Tom Woods points out that Political arrangements exist to serve us not the other way around We can pick and choose this isn't written in stone So how how might this happen? Well, I've got some good news It's happening already that really the decentralizing impulse in the midst of an otherwise rotten 2020 Is the most important trend of the 21st century and it's accelerating every day It's decentralizing impulse away from the sclerotic, you know the vertical top-down Organizations like federal government would be a good example of that and towards interconnected networks with no central hub And we have seen this unbelievably with respect to the response to COVID This has been just an unbelievable example Not only a federalism within the United States, but even on an international scale I mean all of the centralizing bodies On our planet the the UN the CDC the WHO have been proven absolutely useless Nobody's listening down. They give us conflicting information about asymptomatic spread about masks, you know locked down Don't lock down go outside. Don't go outside. And so they're losing credibility And as a result of this individual nation states have reasserted themselves and they've all gone in their own directions The the the vaunted Schengen area agreement in Europe even broke down and and now Or at least right right as COVID began to become known A Frenchman couldn't just drive into Germany anymore. I mean that's how little Accord people really give to international agreements and and bodies when things get a little ugly. It turns out that all crises are local So not only have we seen within Europe different responses to COVID but but we've seen Incredible differences worldwide, you know, you had very authoritarian approaches in in the Wuhan District of China where we continue to see a very authoritarian approach You know in the victoria state of australia and then you've had other countries like sweden and Belarus That have pretty much done nothing about it. They pretty much stayed open Just you know done some minor precautions with wash your hands use a sanitizer, etc So you've got a tremendous amount of diversity there, which I think bodes very well For a decentralized future within the United States, of course, we've had all kinds of examples We have governor christy gnome out in south dakota Having tv ads where she says we're open for business relocate here You know, they had the recent Sturgis motorcycle rally and then you have other states new york and new jersey the city of san francisco, for example Has been very heavily locked down and then Even even when you go a level below the governmental level if you look at college football This is an absolutely fascinating example of how the nc double a the putative boss of college athletics has no authority Not only have different conferences started to disagree and break up over whether they're going to play football Against whom they'll play but even within the conferences Individual schools that have power like ohio state is saying well, you know, we don't know if we're going to abide by the big tens decision So that strikes me as really really interesting That's that a cultural component of america a strong cultural component, especially in the south college football Could actually be helping to lead the way in this decentralized revolution so after covet Another really heartening trend that we see is this great relocation that's happening. I mean, this is really a de facto form Of secession and it's taking place right in front of us because people are moving away from big cities like new york and san francisco And los angeles and chicago in numbers that were already happening but have been accelerated by the covet crisis And you know, it wasn't that long ago That they were telling us all these people under 40 They all want to live in big cities, you know the country's dad even the suburbs are dead There was a 2019 study and something called the journal of regional science That studied the net migration of younger people under 40 from about 1980 to about 2010 And they said, you know these young people today They're changing they they they don't care about having a big house in the suburbs. They're getting married later if at all They're having fewer kids if any They don't really want a car and all the trappings of adulthood and they might be perfectly happy Living in in the hip city well into their 30s or even 40s with roommates And this is a fundamental change in how we do business in america um And so in the 80s and 90s the the trend was for young people to go to new york and san francisco And then in the 2000s they discovered washington dc and miami and some other cities And so we were told that this is the new trend and Within just a year now We're being told the exact opposite That all of a sudden young people Are realizing that cities don't offer much opportunity anymore that they're full of crime That uh their rent and housing is way too expensive And furthermore now we all find out that we can work from home And that we can telework. Maybe you don't have to live in with three roommates in park slope anymore So this has been a boon of course or will be a boon for so-called second-tier cities places like columbus ohio or Or charlotte or tamper maybe or lando and so that's going to be very interesting to see because We already had an aging population in this country that was sort of headed out of the northeast Uh towards the sunbelt states or the southeastern states just because as you get older you tend to want to have lower property taxes Which is mostly true in the south you also tend to want to get away from snow and cold So now we have sort of a a twin axis where both older and younger people are moving Away from cities into suburbs and then beyond suburbs to what we might call ex herbs like Orlando and I think that this will have a decentralizing influence on political power Because do you look at new york state is dominated by Manhattan politically and so all the upstate people in new york's really resent That they can't get anything done, you know politically Atlanta dominates georgia Nashville increasingly dominates tennessee But but as people spread out more a lot of that political power Is dissipated with them and and so they're out in cities or they're out in suburbs. They're out in ex herbs and I think that the uh the chokehold That urban america has had on the political landscape may be lessening as a result so Maybe the happiest decentralized revolution that's happening in front of us is of course an education Which is Crumbling with rapidity. I think that is pretty astonishing to most of us In just my own personal circumstances I would say in the last three to five years my own considerations of what my teenage children might do in the future Has changed completely from sort of a well sure they'll go to college, but You know, maybe not some expensive grad school or something too Maybe they won't go to college and that's fascinating if you think about it because what colleges want to do Is exactly the opposite of what they ought to do. They no longer want to teach a real classical liberal education Which is the one thing you ought to be getting when you're young and you have some time to study classics and history and literature and philosophy So they don't do that anymore. They teach gender studies and wokeism and How to borrow money and how to hate your parents guts But the flip side is they do a really bad job of technical training You go to four years of undergrad, you know, you still don't know anything about being a nurse or a doctor Or an automobile technician or an hvac person or electrician or anything else. So You know as it turns out that both technical training other than perhaps maybe engineering law medicine Can be done at the at a technical school level or an online level But also that classical liberal education, which I think people ought to have Is something you not only can but but now you really have to obtain on your own. You can go read Uh mobi dick Without a 180 thousand dollar college professor. It turns out So what I think is happening though over the past couple of months is the the teachers unions have had A meltdown and the American people and American parents are starting to call their bluff They're saying what do we need these guys for if we're going to be online? Why can't we just have the best social studies teacher in the country teaching every kid? Why do we have to have the crappy one at the middle school where I live? It's an interesting question, isn't it? And so what what fascinates me though about this homeschool revolution is it used to be viewed as something that was kind of Uh Crankish that it oftentimes People on the left viewed homeschoolers as religious types People who wanted to have their kids removed from society People who were raising sort of cultist kids and of course Worryingly to the left people who were Withdrawing their kids from the sort of left social indoctrination that they think every child needs to have But now because of coveted for the first time We're seeing a lot more sort of mainstream and left-wing people keep their kids home And that is a development that I think bodes very very well For our movement because I mean once you realize you can keep your kid home And once you start to see that flexibility and once you start to think about the possibilities I think that could be a sea change. So this isn't just something that's uh, you know some some uh Mormons in utah or some baptists down in alabama doing anymore. This is something that's going to come into the mainstream And and I think it's also going to dawn on people that Education ought to be delivered more like a marketplace Good or service. In other words, there ought to be some a la carte options. There ought to be some accountability There ought to be some price competition. There ought to be some some merit To the instructor, uh, and that's this this is going to be a very very interesting development And the final I think Decentralist message that's happening Is just the state and its financial situation I mean the idea that the that uncle sam is going to be able to Continue to do what he does Um much, you know remake afghanistan in the image of thomas jefferson You know much less fixed potholes on interstate 10 is very much in question. It is I mean just six months ago or 12 months ago. It almost seems quaint. We were just fretting about 22 trillion dollars In debt or a 200 trillion dollar fiscal gap between future entitlement promises we've made and as an actuarial matter the likely value of future Tax receipts 200 trillion dollar gap Okay, which basically means the baby boomers are the last generation to get social security medicare So those were the quaint problems we had six or nine months ago Add to that now what both congress and the fed have done I mean the fed's balance sheet has gone from a from about four trillion dollars to over seven And I don't know if you saw jerome powell's uh speech the other day in jackson hawai oming But he basically acknowledged that inflation is going to be a thing because they've been doing their dams to tell us It's not a thing for the last 20 years And apparently economists don't go to the grocery store They don't pay copays at the doctor. They you know, I don't know who these guys are but Basically jerome powell says something pretty profound and the the profundity is always buried in the details, isn't it? But they have this two percent inflation mandate, which is of course crazy Because inflation is a process by which we all get poorer whether it's one or two percent, you know or 20 percent But nonetheless they they target two percent inflation in the economy. That would be quite a trick if you could do that, wouldn't it? But now he says well, you know instead of targeting this We're going to let inflation go a little hotter, which is just basically his way of acknowledging That the new money creation on the fiscal side by congress and on the monetary side by the fed Is going to cause some some pain and some price inflation But instead of going for two percent, we're going to let it kind of go like this Remember those uh in math those the sine waves where you had kind of a line through the middle But the wave was going like this And so, you know, we're just going to try to aim it for two percent Let two percent be the line But sometimes it can go up to four and it's been zero for so long that it's okay if it's four for a while because that'll average out to two Okay I mean what this is is basically an acknowledgement Okay, the the the people in charge don't know what they're doing any more than we do Okay, we're on our own here And that's that's that's a beautiful thing If if we allow it to be so So for the first time in u.s history for the fiscal year 2020 which ends october 1st Cal fiscal year versus calendar year for the first time we're going to have a federal deficit a single year deficit That is as large or perhaps even exceeds tax revenues for the year So the the the budget that congress passed nobody ever follows a budget that they pass I mean it's just a meaningless document But the budget that congress passed for 2020 was supposed to spend about 4.8 trillion And the projection was that we would bring in about 3.7 trillion. Well as it turns out With the the cares act With all the federal unemployment benefits that are being paid that are being paid With potentially another round of federal unemployment benefits with which trump wants to do of course to improve his own election chances You know the federal government's going to spend something more like 7 trillion this year maybe eight And they're going to bring in maybe four So what you have is a situation where literally half Of the federal government's operations for the year Are funded by debt And of course the mmt years for those of you who have been following monitor modern monetary theories. Hey, this is a okay This is not only a okay. It could be a hundred percent And it can be for a while I mean, there's some truth to that the mmt years would go out a little bit differently than how the fed goes goes at it, but If if we can do 50 percent why not 80 percent? Why not 90? And when you get into 80 or 90, you know, we start to look more like switzerland Where taxes are flipped right in in switzerland very little is done at the federal level constitutionally And and and political matters are pushed down to the canton's the 26 canton's which is which are the states in switzerland Or to the communes which are the cities in switzerland So if you're swiss you pay about 80 percent of your tax bill To your city your state and only about 20 to the feds. That's flipped in the united states, isn't it? Well, that's that's interesting though if we start to look at how the the federal government ostensibly finances his operations This this we could reach a point very quickly where People across this country and and governments across this country simply stop submitting federal tax receipts I mean at what point do you say it's all funny money and smoke and mirrors at what point does a christie gnome say? You know, we're gonna we're gonna finance this road ourselves. It's a very interesting experiment I don't think we've ever been in this kind of situation before because you know that these states and these governors Are expecting a bailout I mean if you look at your town Somebody has to mow that grass by the side of the highway. Somebody has to pay the police You know Somebody has to perform basic functions We're not talking about new projects for which your city might flow to bond You don't you don't issue bonds for basic maintenance and operations of your city Um, you know and the ability of cities and states to borrow money is very constrained Do you want to buy muni bonds right now? from Kenosha I don't So so they're looking for a bailout from the federal government and when you when you think about what? Probably second and third especially third quarter tax receipts are going to look like for these states and cities with all the restaurants closed All the retail dead in the water So many people staying home. Nobody's buying gas hardly to drive. No one's going out to eat. No one's traveling No one's going to hotels I mean they they're they're going to want a bailout from the federal government So this is the the idea that the federal government is going to constrain itself in the next couple years is Is is absolutely not happening and and I think Jerome Powell in so many words admitted that On his end the other day. So this this unraveling this decentralized impulse Perhaps more than anything is going to occur simply because the federal government's not going to be able to pay the bills anymore And we're going to be forced to come up with a new way so I guess the question is is Can all this happen peacefully? Well That that's a very good question. I mean it feels like A simmering cold civil war in the united states is breaking out into a hot civil war That's what we're seeing on on the streets of some cities The problem of course is that we have 24 7 media today We have social media as well on top of that So that could give us a false perception As we consume content of really how much unrest is out there things might be a lot more peaceable than we think Most people might be a lot more reasonable than we think In other words the people who show up the loudest on cable networks and on social media might might be that 10 percent Who are sort of hyper partisan? angry aggressive opinionated and that there's actually this sort of complacent Majority in america that doesn't want all this unrest and I think that's probably true to an extent The the the percentage of americans who are going to be over 65 is set to double over the next 30 years so you know Civil wars are usually fought by younger angrier countries So that that's a that's a fact that might bode against a hot civil war and we certainly hope it does I mean we want we want this to be peaceable but When the federal government can can no longer provide social security or medicare Or highways or defense, you know all these things that it does. I think that's that's going to be the pain threshold We have to reach To really get there and start breaking up and of course the difficulty In doing so is that we don't have clear geographic lines every state Is a mix of what we might call deplorables and And wokers, right? I mean if If you look at california people think of it as a deep blue state It's not a deep blue state that coastal california is deep blue. You go 20 miles inland anywhere in california It's country music and mexican rancheros and and and you can say the same about portland in seattle The state where I happen to live alabama People think of that as some deep red state You know There weren't really any trump signs in in 2016 I think alabamans would have probably preferred to vote for a mike huckabee or a ted cruise or something I saw far far more trump signs in pennsylvania places like that the rust belt when I was up there but nonetheless Alabama has some very blue cities. It has birmingham and montgomery, which are historic black cities Uh, and so any kind of geographic or physical separation along those lines would would Presumably leave a lot of those blues blue voters feeling disenfranchised and and this is this is something that's inherent in any sort of political or geographic breakup It's inescapable. There's the idea of the rump state, which is the old Uh, uh, government or state left behind and then the new state Um, it's it's a difficult problem. And and I don't I don't have any easy answers other than to say It might happen just because we we start shrugging It might not require some big violent upheaval or some constitutional process or some big declaration by the red states. It might just occur in in a Because we just start to say no There's a fascinating article by angela codavilla He's a retired professor at uh, boston new or boston college. I can't remember but um, but he He wrote an article called the cold civil war in the clairmont review of books And that's they have a paywall, but that particular article is available for free the cold civil war and he He talks about in that article very fairly to both sides by the way And and of course we would argue that there's not two sides, but but you know, we understand the rubric he's using is that People could just simply stop complying with federal edicts. It's not that hard to imagine There's something like three million federal employees in total So he describes a situation where uh, you know schools in some southern state just start having prayer again Um, it's school or the what or the federal is going to send in troops It seems unlikely And he talks about the same thing happening in a blue state with respect to immigration or whatever it might be so There's always winners and losers. It's it's just the nature of things and I think we tend to focus On maybe some sort of deterministic or even utopian Plan or approach and if we look at human history, that's not generally how things unravel And of course oftentimes they unravel slowly all of this might happen well beyond our lifetimes but I think we still have an opportunity because of what's happening and also an obligation to do our parts to to move this unraveling along because There's a price for all this There's a price to peace and there's going to be a price paid for peace in america And are we willing to pay it and that price is increasingly we have to reject political universalism This idea that we we have to convince 51 of the electorate to see the world our way And we need to gather them up and we need to Win some big national election and then we need to use our newfound political power to vanquish the other side because You know, let's be honest the the left would vanquish us And whether that would mean politically or worse They would okay. There's there's plenty of people in this country who think it's a okay To break a few eggs to make an omelet And and I think they're they're showing us who they are right now And I think we should believe them when they show us who we are um but nonetheless The answer to that the response to that I think is not to try to vanquish them politically It's some sort of tit for tat game It's to show the strength and the courage to say that we're not going to accept this and we're going to go our own way However, that might look So this is this is the price that people don't want to pay the idea that As much as we disagree with what other people do or another country does or another political subdivision does That we have to let them do it It is somehow exceedingly difficult For human beings, but it is the next evolution if we're going to evolve as a species from from kings and outright subjugation and serfs to monarchs To so-called democracy now unfortunately to social democracy the next evolution. I think is Decentralist and it's far more about the the level at which you're governed than necessarily the ideology by which you're governed so What I would say to you in closing is that You know any problems that we have any difficulties that we face as a result of this political situation with we're in Is really nothing compared to what previous generations of americans went through Uh, this is not about us. It's about our kids and our grandkids And I think we should be clear-eyed and honest about the state of america and let's get moving with this unraveling Thank you very much