 My name is Betsy Hansen. I was a summer fellow many years ago now, and I had the great pleasure of getting to know both Tom and Bob over the summer, and the summer fellowship experience is extremely unique, and I cannot tell you how grateful I am for that experience because you're working with individuals that are so passionate about what they do and will talk for hours about what they've been studying, and it's a really rare experience to have that. So I have all the supporters of the institute to thank for that, and really appreciate everyone coming here today. It's a lot more people than I expected, and it's a very pleasant surprise. So let me move on without delay. Bob Murphy is an associate scholar at the Mises Institute and a former Mises fellow himself a number of years ago. He's currently a research assistant professor at Texas Tech University and a research fellow at the Independent Institute, and he's also president of consulting at RPM and runs the free advice blog online, and it's highly entertaining, I totally recommend it. He's also a co-host of the Contra Krugman show and has recently come out with a book entitled Choice, Cooperation, Enterprise and Human Action, and you guys can all buy it downstairs if you like. And Tom Woods, who is about to make a dramatic entrance up here, he is a senior fellow at the Mises Institute and he was also a former summer fellow at the institute, and he's a New York Times bestseller of, believe it or not, 12 books, and he's created an extensive line of courses for the Ron Paul Homeschool website. He also hosts a daily show called the Tom Woods show, and it comes out every day at TomWoods.com and also co-hosts the Contra Krugman show. So, busy fellas, very impressive resumes, you can read a lot more online, but I will stop it at that and let you guys go. Okay, well thanks Betsy for that introduction, Tom of course the diva who has to wait off stage and then come up as he's introduced. And I think I speak for Walter Block as well, for those of you who are downstairs with the autographing that it's always a pleasure to come out to Seattle, so Walter I can watch people ask Tom for his autograph, that's always what I long to get on a plane for. So thank you all for coming here, as Betsy mentioned in all seriousness, I also was a summer fellow at the Mises Institute and in truth I really do encourage people who are around the world, you know, getting a PhD is ideally the kind of person they want. It doesn't have to just be an economics, but in some field where you're going to be using the Austrian school and your work, that's the kind of person we want to apply for the program and it really is, as Betsy said, an area where you just go, I want there just to give you the background, so I was at NYU getting my PhD in economics. The first summer I just worked at like a temp job, you know, just to raise money because at NYU they gave me a fellowship, but it wasn't enough to pay for, I just recently paid off all my student loans, you know, just for the standard of living there. It was kind of just, oh thank you, are we plotting that? Yeah, you know, so I'm not like Trump, I didn't just walk away, you know, I paid off those loans. I don't want those bankers holding that over me the rest of my life, so it was very good. So the first summer that I came across, I think it was just, I was reading Justin Romando at anti-war, he mentioned lurockwell.com. I went there, then I heard about this thing called the Miesen suit and I went down there the first summer for a fellowship, so I guess it was my second year in grad school and I'm not kidding, I honestly thought I was going to be like getting Lu Rockwell coffee every day, like that's what I thought I was going to be doing and so I show up and they're like, so what's your research going to be this summer? And I don't know, coffee beans, you know, I don't know, you know, with the kind of tie he wants me to put out in the morning, but I don't know, you know, and I was astonished that no, you go there and they just have a whole library and you study Austrian economics all summer and there's other experts from around the world. So again, it's a tremendous program and we of course thank those of you who are responsible both here and who are perhaps watching this later on for your funding to make that possible. So another thing I should mention is I have been doing these events with Walter for a while and he routinely refers to himself when he was younger as a stud and I had always assumed he was taking dramatic liberties with that, but did you guys actually look at this? He really is a stud. I'm being serious. I mean, if you don't do it now, like we'll listen to our show, but I'm just saying later, look at this, they didn't put his address, his home address here where they have everyone else, I think it's because they didn't want the ladies just like around, hey Walter, hi, you know, peeking into his curtains. The other thing, he used to say too, I've seen him give that talk a lot of the minimum wage and you say how when he was younger he would jump over this. This is tall, all right? I don't know. I mean, I'm sure when I was 19, I physically could have jumped over this, but I wouldn't have done it in front of a crowd, right? And so, but now looking at his track picture, I mean, he might have been able to do it. All right, it's impressive. All right, so I have to one more sort of housekeeping announcement. There's this flyer for the Contra Cruz that's down there. Yes, thank you. Some of you have already signed up for it and you've chosen wisely. The rest of you, just a matter of getting your checkbooks out. And we also accept major credit cards. And I just want to encourage you, this has to do with for those who don't listen to the show. This is an outgrowth of the Contra Cruben podcast, which I will explain in a moment. And the flyers are all downstairs, so we encourage you to make sure you catch one of these things. It's going to be October 9th through 16th 2016. It's a week long cruise. It's we're going to we're departing from Galveston during the at sea days. We're going to have all sorts of fun and games planned. You might even learn something here or there having to do with Austrian economics and libertarianism. And then we're going to go to Honduras, two stops in Mexico, and then we're back in Galveston later. And if President Trump does build that wall, we will be back safely before the wall is enacted. Just some people were worried about that. Okay, so I am here to formally introduce the Contra Cruben podcast, which you see the slide up there. I know many of you know what it is, but for those who don't, so Tom called me this was it like last September that you called me with that that fateful call. And he's I'm not kidding. The way he started the call is he was okay, Bob, I want to have an I have an idea. I'm going to pitch it to you. And you cannot say no until you give me four minutes. And I said, okay, he started out and said, we're going to start a podcast where we take apart Paul Krugman's column every week. And honestly, my initial reaction was no time we can't do that, because then we'll be pigeonholed and it will look like Krugman is the big man. And we're just always nipping at his heels. And it's the longer he talked, the more he convinced me. And the number one reason was just say how many people would really enjoy that this podcast exists. And you know, how can we turn away from the consumers, you know, the consumer sovereignty? And I mean, I'm not this isn't a joke. I recently realized just the depths of hatred of Paul Krugman, I went over to Europe, I went to Texas Tech, and we have a sister program over there with called the European Free Market Roadshow. And so they sent me over there touring in every city in Eastern Europe that I went to, people would come up and the first thing out of their mouths was we love contra Krugman, we can't stand that guy, right? And they were talking about Krugman, not Tom Woods, right? So so what the count what what it is the show is every week, we pick Paul one of Paul Krugman's op eds. And then we go through and dissect it. And the point is to entertain but also to teach Austrian economics and libertarian political theory. This week we're actually concerned, because as of Thursday, you know, the columns we had to choose when we're not particularly great for for this purpose. And we were thinking we should go into if we go to blog post and then Krugman just delivered he gave us a gift from heaven as it were. His op ed yesterday is just perfect for this as you'll see in a minute, just exactly what we want, sort of the greatest hits of, you know, economic ignorance from a from a Keynesian perspective, could not I almost think that he must listen to the show and realize that they're going to be in Seattle doing this live. I got to get them throw them a bone, you know, maybe Bernie call them say I'm my old high school buddy is going to be there. Can you just you know. So the last thing I will mention is, of course, so what we're doing is we are taping this, you know, this is going to this is going to live so we're recording this. So what we're going to release for this week's episode is what you guys are going to see here or here here. And we're a little bit, you know, a little bit hesitant. We're like, you know, we normally have a good banner going on and whatever, but it's going to be kind of weird with hundreds of people watching us. But then I relax. I said, you know what, we've proven ourselves. We have dozens of episodes out there that are phenomenal. So we know that Tom and I can do it. So if this episode's a flop, it's on you guys. All right, with that, join us as Tom Woods and Bob Murphy teach economics by uncovering and dissecting the arrows of Krugman, Nobel Prize winner, newspaper columnist and destroyer of nations. It's time for Contra Krugman. Hello, everybody. I'm Tom Woods with Bob Murphy here for episode 36 of Contra Krugman for the first time ever recorded before a live audience here in Seattle. I don't know about you, Bob, but I like Seattle. Yes, Seattle's great. I love it. We should get one of those things say applause, applause. Today's show notes page will be contra Krugman dot com slash 36, where we will be linking as we always do to the Krugman column that we're talking about, and then to the various refutations that we've found. And of course, the whole episode is an audio refutation. We're talking today about the Krugman column, as Bob said, from just yesterday. It's the May 20th 2016 column. It's called Obama's war on inequality. So this one, as Bob says, it's just dripping with inanities. So it's perfect, just perfect for what we were looking for. Now we did, I will say, we did consider for a time having everybody get a copy of the column so that you could follow along with us. So we thought of putting copies on all the seats and whatever. But then we thought I'm stealing your joke, Bob. Then we thought if this is your first Mises event and you show up and there's a Krugman column in the seat, you might get confused. They might think, oh, they're trying to make it for a Seattle crowd. Yeah, exactly. That's right. So instead, we don't actually bring the thing we're talking about, but we do bring a flyer about our crews that we hope you'll join us on. So our priorities are where they ought to be. Alright, so the way the podcast works is I start off by summarizing the Krugman column. I'm sort of the straight man to Bob's genius over here. So I summarize the Krugman column. And then we just sort of go back and forth. And occasionally we get little digs in at each other. Like I think I was trying to, I don't know if I was trying to teach comparative advantage or what. But I was saying, you know, I suppose Bob is a really, you know, good golfer but a lousy chess player. And I said, now, of course, this is hypothetical because we all know Bob's a lousy golfer and chess player. So we have these fun little goofy back and forth. You know, these are all unrehearsed. So here we go. I'm going to go through the column for you and pull out the highlights and then we will go to town on this baby. So we begin here with, and it is a greatest hits column really, because we begin with a discussion of financial reform and Dodd-Frank. Now we've closed the doors. I know people would want to leave when they hear Dodd-Frank. How could this be interesting? It is. So stay sitting. It is interesting. He says that it just goes to show how out of touch Donald Trump is that he wants to do away with Dodd- Frank, the key measure of financial reform. And he says, you know, even though Trump is called a populist, almost every substantive policy he has announced would make the rich richer at workers' expense. So he thinks that Dodd-Frank is really, really keeping an eye on those big financial institutions. Well, we're going to talk about that, of course, in a little while. Then he's talking about the new Obama administration guidelines regarding overtime pay. And he says that also has been that's a great step forward that we've had that and Dodd-Frank are two great Obama initiatives. So we'll be talking about those. So you see, I don't refute them as I go along. I'm the impartial observer. I'm just summarizing the column. But now we're sharpening our fangs as we do this. We've got the sharpener going. And he says, now what are the sorts of things that the federal government can do to limit inequality? Well, of course, it can simply redistribute incomes, take from the rich and give to the poor, that sort of thing. It can also do what's called pre-distribution, which and here's I'm quoting Krugman, strengthening the bargaining power of lower paid workers and limiting the opportunities for a handful of people to make giant sums. So that's that's so called pre-distribution. And he says, we did this in our own society during the New Deal, for example, we had pro-labor legislation that led to an expansion in labor unionism, and that coupled with a fairly high minimum wage helped raise wages, especially at the bottom. And then taxes on the wealthy went up sharply, and these were all positive things, according to Krugman. And then Krugman goes on and says, and by the way, Denmark's a great example of a government that's very active, and there's a large public sector, and there's a lot of public spending, and it's doing the sorts of things I'd like to see done. So we're calling this a greatest hits thing because we did a whole episode on Denmark because of Krugman. And here's old Denmark coming back up again, you know, just like just an old fashioned love song by Three Dog Night or something, comes right back up for you. All right. Then finally, he talks about Obamacare. Come on, Obamacare. This is subsidies mainly to lower income Americans, and it's partly paid for by taxes on the wealthiest. So again, this is great. It's going to help reduce inequality. And then he says now, and then he returns to Dodd-Frank and says, look, the bankers are howling over it, so it must be good. It really is stopping them from earning money hand over fist. So by the end, he says, look, I know some cynics think it doesn't matter who gets elected. And by the way, in order to understand his climax here, let's put in parentheses, he wants to be in the Hillary Clinton administration. So practically every column is a sappy dripping love letter to Hillary Clinton. And so here he says, but it's not true that both parties are the same. They're so different. Oh, they're so different because if we got, if we got the Republicans, we know terrible things would happen, but it's the Democrats who will do the right thing and who actually have the IQ and the intelligence to follow an economic argument. Oh, rumbling in the room. Well, then I have done my job well. That is the Krugman column for May 20th, 2016. Bob, I'm actually going to start off, you don't mind because I'll throw it over to you for the overtime pay stuff. But this whole Dodd-Frank thing, that's a greatest hit because we did talk about Dodd-Frank in a previous episode a little bit. But it turns out that you'll never believe there was a major regulation that disproportionately harmed smaller institutions at the expense so that smaller institutions bear the largest burden and larger institutions more or less coast by. I mean, I know you'll never believe they did something like that, but it turns out, according to the Harvard Kennedy School of Government, which is not known for, you know, being anti-establishment, the Kennedy School of Government did a study that found that since the second quarter of 2010, which is right around the time Dodd-Frank was passed, community banks, your local small bank, their share of U.S. banking assets has fallen drastically right around right at the same time. And this is not a coincidence. The reason is the compliance officers you have to hire, the burden of complying with the regulation is extremely difficult on these smaller institutions. And as it turns out, where are small businesses getting the credit they need for their businesses? Well, from the small community banks, big businesses can get the influx they need from the capital markets. But the small businesses rely on those community banks. Now, if those community banks are suddenly under a tremendous amount of pressure financially because of Dodd-Frank, they can't extend the loans. And if they can't extend the loans, then the small businesses suffer. Well, when we look at job growth starting 2002 and going up to Dodd-Frank, a whole lot of it is coming from small business. But then after Dodd-Frank, that source of new job creation basically dries up. And so, in fact, you see a divergence between larger firms in terms of their job growth and job growth in small businesses right around the time that Dodd-Frank begins pummeling your community bank. And yet Krugman says, Dodd-Frank is really going to, if you want to get rid of Dodd-Frank, that means you want to help the big banks. The big banks are being quite helped by this current arrangement. So Krugman, it turns out, is wrong on the first point of his column. But Bob, is he maybe right? Does he redeem himself with the overtime pay discussion? I'm glad you asked that time. No, he doesn't, actually. It's funny as we're sitting here because I remember folks who are listening to this at home, we are doing this in front of a live audience. And so something felt odd to me and I couldn't put it. I realized what it was normally when Tom's going through and summarizing Krugman's column. I'm checking my Twitter feed and I can't really do that with you guys all staring at me. It'd be awkward. So the one thing I want to do point out, though, is that just the title itself. Now, by the way, people should know if you write an op-ed for an outlet, it's possible they give you a title, right? So don't ever get mad at somebody and send an email and bite someone's head off because of the title. They might not have any influence, but I think here this is a fair one. Again, just Obama's war on inequality. I just want to point out that it is perverse that in American culture, when you want to deal with some social issue, the war metaphor is always there. And you see it also when they talk about the Federal Reserve, what is the thing they always say when Bernanke was saying in yelling, don't worry, the Fed's not out of ammunition yet. We can keep shooting stuff at the US economy until we blow it up. Don't worry, you know, it's we still have more, you know, powder, dry powder. One last thing too about the Dodd-Frank stuff. Remember folks, do you remember like there was the Enron and Tyco scandals in the early 2000s, right? And they passed Sarbanes, Oxley, George W. Bush signing that was bragging how it was one of the biggest overhaul, I think he said the biggest overhaul of the financial sector since the new deal. And he was saying, you know, the age of corporate malfeasance and falsifying profits is over. Remember how the last falsified corporate profit happened in like 2004? Remember, you guys remember that? What, no history majors in here? Come on. And so again, it just I just everything about that's wonderful. Number one, George W. Bush is not, you know, this anarcho-capitalist hero, right? We can go check the roster. I don't think he was ever a Mesa summer fellow. I don't think he was there. And so this idea and also this notion that all the Bush administration rolled back financial regular. Thank goodness we have Obama at the helm to come in with Dodd Frank to finally clean up Wall Street. Every time there's a huge scandal, they always pass new legislation tightening up things. It's promising. Okay, that won't happen again. You know, now thank goodness, because if you want to make sure that people on Wall Street play by the rules and don't steal money, clearly you have to get Washington involved because those guys, if they're not known for anything, it's being truthful and good with money. But let's, yeah, as you say Tom, let me focus on the one of the main elements of this column where he's talking that the reason we're supposed to be happy about the Obama administration and not listen to the cynics. And Tom is right that it's it's not merely right wing people attacking really what Krugman is doing here is more aiming this towards leftist progressives who are fans of Bernie Sanders and he's trying to show them why you should support Hillary, even though she's taking all this money for giving speeches and stuff, you know, to Goldman Sachs or whatever, you know, for her wonderful oratorical abilities. That's clearly why she's getting paid such top dollar. And so that's that's the function of this column. You just make sure you understand that. But the specific thing he's pointing to is the Department of Labor recently came out the issue to final rule. And I'm going to summarize it very loosely. The idea is you know how people, if they normal workers, there's first of all the minimum wage, but then there's also rules on getting time and a half, right? If you work overtime, you work over 40 hours, you got to get paid 1.5 times your base salary for those that access. But that those regulations don't apply to every single worker, their exemptions for what you might call white collar workers. And so recently, the rules have been tweaked such that now millions more people are going to fall under under the jurisdiction of that particular act. And so the way Krugman summarizes it, he says the Obama administration issued new guidelines and overtime pay, which will benefit an estimated 12.5 million workers. So first of all, I want to quote Don Boudreau. He wrote a letter to the New York Times complaining about this column and he said, Paul Krugman, sadly, no longer even pretends to reason like an economist. He instead reasons as if he's a 19 year old cultural studies major, right? And as a great, great line and what Boudreau means there is often Krugman will come up with some specious argument like he'll build an economic model to justify whatever the thing he's talking about. So for example with the minimum wage for those here in Seattle live, you saw Walter Block walk through the standard deductive, you know, Austrian textbook thing about the minimum wage. And that's even wasn't Paul Krugman's textbook, believe it or not recently. And they can come up with arguments as to why actually now if you raise the minimum wage modestly, it won't have these huge impacts on employment that we say and they can come up with reasons why they think that might be true. Krugman doesn't even try to do that here. And he links that where he gets that figure about the workers that would be benefit. He linked to some EPI study, which is a very progressive pro labor outlet. And I went through and read their press release, I clicked open their methodology. I did not see anybody even bring up the fact that hey, if you now say that employers have to pay workers 50% more for these hours that are above 40, they might purchase fewer hours. Okay, so now we've gotten to the point where they don't even give a nod to the fact that making something 50% more expensive might make the buyers of that thing want to reduce the purchasing power or purchase of it. So that's just astonishing that they don't even, you could say there's pros and cons in the pros, but they don't even bother bringing it up. It's just very naive. You want to help workers pass this measure that increases their pay by 50% on these hours and boom, count up how many people that affects. And those are the people benefited by this and who could possibly object except right wing Neanderthals. One more point on this time, and I'll turn it back to you. And I get this from Boudreau. He's saying that just think about it, the way they're couching this and describing is to say that there's all these workers out there and they're in an inferior bargaining position vis-a-vis their employers. So we're going to help them by now making it illegal for the employers to refrain from paying them time and a half, right? So now they have to pay time and a half. And so Boudreau is saying in general if two people are bargaining and you take away options from one of the people, how are you strengthening their bargaining position? Okay, so let me paraphrase it. Forget overtime, babe, just in general, suppose you're somebody, you're sitting down with a potential employer and you're negotiating over your strategy. So normally what happens is you throw out a number, they throw out a lower number, then you counter offer and you go back and forth and you might meet somewhere. What if they passed a law that just said from now on, if you're negotiating with an employer for a new job, the first number you throw out, it is illegal for them to pay you less than that number. You are not allowed if they give you a lower one to then come, you have to just give that number, say take it or leave it, and if they say no, you've got to walk out and you can't work for that company anymore, because we're going to strengthen your bargaining position, because if we gave you the option to be able to then, if they undercut it and then you came back and you ended up signing a contract for a lower number than the one you first threw out, well then, you know, clearly they're going to take advantage of you if they know they have the option of giving a lower number. So that's how we're going to help million, I mean that would help 300 million workers, right? Because right now it's legal for everybody to throw out a number and then settle for something less. So, I mean beyond the absurdity of it, like how is that going to help workers by taking away options and surely, you know, just think through the logic, what in practice would happen, everybody would realize, okay, now the worker is going to throw out a lower initial number. If he or she knows, I have to, you know, stick to my guns on that number. So it's not going to make them, there's no reason to suppose in general workers would be getting paid more if that was the crazy new rule. So likewise with the minimum, or sorry with the overtime pay regulations, what's the obvious thing that's going to happen once things adjust is now when workers are bargaining and they're white collar workers who traditionally wouldn't have been affected by this rule, their base pay is going to be lower than it used to be because now the employer knows if I want to have them work more than 40 hours, I got to pay 1.5 times that. And of course the other thing is fewer people now are going to be able to work more than 40 hours a week. So it's perverse right when we're wringing our hands and lamenting how come people, you know, they're underemployed and now we're going to come in and say if you want to work more than full time, we're going to make it 50% more expensive. It's not even bringing that up, not even coming with some crazy argument as to why that doesn't apply here because we're in a liquidity trapper. So we didn't even bother bringing that up. All right, I'm going to talk about inequality in general, and of course given this is episode 36, you can be sure we've done an entire episode on inequality. It's one of my favorite episodes of the whole show. So I'm just going to give you a few facts that I think will help clarify this debate a bit. But bear in mind we did like a, you know, we try to keep it to 30 minutes, but that we never are able to do that. So this inequality one is like 55 minutes. So I got 55 minutes worth of this. Here's your two minute encapsulation of that. When you're looking at these statistics related to inequality, and so, you know, rich and poor. And there's vast inequality between super rich and the super poor. A lot of these, a lot of the examinations of this data take place by looking at the different quintiles of the income distribution. So quintiles are fifths. So there's the lowest fifth, the second to lowest, the middle, and then all the way up to the top fifth. And they act as if these people in the lowest 20%, they say, oh, look at what's going on with people's income in the lowest 20%. They act like these are the same people over the course of 50 years. But they're not. Almost nobody stays in the bottom 20% over the course of 50 years. Basically nobody. So if you're studying the fortunes of the 20, lowest 20% over 50 years, you have to realize you're looking at different people. Most people have already left that thing. So it's much more interesting to look at what exactly is the trend among individual people, not categories of people. But where's Joe Smith, who started off in the lowest 20%? Where's he? And it turns out that 16 years later, 95% of the people in the bottom quintile are no longer there. 26% have gone all the way to the top 20%. Then when we think about the top 10% of income earners, top 10%, there is an elite group. But yet, over the course of their lives, 56% of Americans at one time or another will be in the top 10%. Now that is probably more income mobility than they had in, say, I don't know, the year 1700, 1600, 1500, 1400, ever. That's probably the most we've ever seen. Also, most of the households in the bottom 20% of income earners have nobody working in them. There's a slight hint as to what may be going on there. There are more heads of households working full time and year-round in the top 5% than in the bottom 20. Then let's look at households headed by a 25-year-old. Households headed by a 25-year-old, 13% of those at one time or another have been in the top quintile. But then you look at households headed by a 60-year-old and 73% of those have been in the top 20%. And then you realize, well, wait a minute. A lot of this has to do with age. Turns out if you're 60, you earn more than when you're 19. How about that? And since most people who are 60 were also at one time 19, over the course of a normal human lifespan, this all works out. It all works out. You're not stuck in some category where, well, I'm never going to have a chance of rising. Just wait. You get older. You have a much, much better chance. You're age 60. You have a 73% chance of having hit at one time in your life or another the top quintile in incomes. Again, compare that to any time or place in world history, I would say it comes out pretty well. And this is under a highly hampered market economy. Then finally, compare free countries to less free countries. I mean, this is a rough estimate trying to compare the economic freedom of one country to another. But let's suppose, all right, we take the countries that are obviously the freest. And let's say we take all the countries in the world. We divide them into four groups like the freest and the second of freest and that now you're getting really not free and then the worst, the least free. And it turns out if you look at the least free countries and you look at what do the poor earn in the least free countries? The bottom 10%, they earn in $2011, $932 a year. The lowest 10% on average earn $932 a year in the least free countries. In the most free countries, the bottom 10% earn $10,556 per year. Now, even if, by the way, it turns out that the most free countries also have less inequality, oddly enough. But even if there weren't, if you were poor, but you were much closer to the rich, would you want to live in the least free countries and say, well, I'm only earning $930 a year and I'm crawling around looking for worms and berries in the dirt. But at least the rich only earned $1,200 a year. So I'm sticking it to them. Who would care? Who in his right mind would be that full of envy that you would even care? Whereas even if in the US you were earning $10,5, and you knew the rich guy was earning $2 million, what difference does that make? You don't have to eat worms. Like, that's something. Why does that not count? All right, Bob, what else? Do you have anything about worms? Yeah. Tom, you talked about countries that were not free. You know what else is not free? The contra-cruise. The contra-cruise. No one eats worms on the contra-cruise. No, sir. And that's why we have to charge you a little bit, but it's not too expensive. By the way, can I just interject to it? I mean, of course, the jokes aren't funny when they are explained. Well, they're not funny if they're told by Bob. But then they have to be explained. But half the fun of the show is making completely ridiculous, awkward segues into promoting our cruise. So that was classic. That was good, Bob. Good. Well done. Yeah, I like to partner with Tom, because he explains my jokes to people. And I can just sit back sort of like... That was almost like Andy Kaufman. He needed to have a straight man. Let me, yeah, mention what's funny too, though, is the way Krugman talks about this. He says, among advanced countries, the U.S. has the highest level of inequality, Denmark the lowest. So that phrase among advanced countries, I think partly the reason he, and Krugman's mind, he's thinking, oh, because I want to make it a valid comparison. And we're just... What part of the reason, too, is the U.S. certainly isn't the lowest in terms of their inequality, genie coefficients or whatever, of all countries in the world, or especially over world history. So in a very legitimate sense, like communist countries where totalitarian states, there's clearly differences between the type of people who are politically connected in the average masses, right? And so, again, it just shows you that by giving the state more power, that's certainly not a guarantee that you're going to have a quality of outcome in the sense of things of what people actually care about. Surely society was much more unequal in terms of classes of people in the Old Soviet Union than compared to the United States today, for example. Let me also mention, Tom, just very quickly, we've talked about this before, but he's got a line here about, he says, most obviously, Obamacare provides aid and subsidies mainly to lower income working Americans, and it pays for that aid, partly with higher taxes at the top. Now, for one thing in there, the Kaiser Family Foundation recently came out with this piece. It was just like last week on Obamacare and how you guys aren't going to believe this, but Americans do not like buying health insurance. They find the process distasteful. They don't like it. They would rather go buy, like, color TVs or something. And so this Kaiser, if you don't know, the Kaiser Family Foundation is totally in the tank for Obama. Like, they're very much in favor of the Affordable Care Act. And so they're trying to understand, you know, why is it that people don't like this? And it turns out it's because they don't feel they're getting good value for their purchase. You know, so it's kind of odd that the government comes along, forces insurance companies to sell products to people they're going to lose money on and then the companies try to make the product not that attractive. It's an odd thing. I don't know, there should be like, of course you could study in college that would teach these sorts of things to understand it. Maybe, of course, starting with an E and ending with Nomics. I don't know. But another thing on that, just so you guys understand, it's let me just very just give you one example of what these health insurance companies, and all this was predictable. And in fact, many people did predict that many free market economists like John Goodman and so forth, the book Primal Prescription I have with Doug McGuff, we talk about some of this. But to give you an example of the kind of the way this thing works, let's say you're a health insurance company. Now, if somebody who has cancer comes up and applies for a policy legally, you can't turn the person away. You know you're going to lose money. You can't charge a person a lot more either. You can't say, well, you're going to cost us tens of thousands of dollars in treatment. So we're going to, you can't do that. It's illegal. So what do you do? You either go out of business or what you do is you tell your people, OK, figure out where we are in the marketplace, the kinds of people who are going to apply. Figure out in this area who are the best cancer doctors. OK, you got their names? Make sure they're out of network for all of our plans. Right. And so that way, with somebody who actually has cancer and thinks, oh, thank goodness, President Obama made sure these tight-fisted insurance companies can't turn me away. And then they sign up everything they sign up and they're all great. I got coverage now. Thank goodness. And now the doctors that all the experts tell them these are the ones you've got to go to for your condition. These are the best doctor. They're out of network. You know, so that sort of thing happened. And they're not unless they're trained in economics or free market, you know, fans who go to Mises.org and so forth, who are they going to get mad at? They're going to get mad at the insurance company. Like, how dare you? You guys must know that these are not the best cancer doctors. Why aren't they in network? And so this is going to just lead to people being outraged and then down the road demand single payer. And the politicians at that time are going to say, well, we gave the free market a chance. Didn't work. And so now we have no choice. So I'll turn it back to you. All right. I'll say a quick thing about Denmark. Because you know, you guys know if there's one thing I'm an expert on. It's Denmark. But we did an episode on Denmark. So that means I know more than Paul Krugman knows about Denmark. He made a passing reference to Denmark. And it turns out when you look closely at Denmark, you learn a few things. First of all, Denmark's actually very, very high. It may even be one slot higher than the US in economic freedom. Oh, that's a little inconvenient. So it turns out their corporate income tax is lower. They're in terms of legal system, property rights, sound money, openness to international trade, better than the US, and on all counts. So, you know, you could at least debate. It's at least debatable that these factors might have a teensy-weensy bit to do with if it does well. But then also the New York Times, which is a newspaper that ought to be familiar to Krugman, did a story on the welfare state in Denmark not long ago and showed that the government of Denmark is desperately trying to wean people off government support. So they've cut unemployment benefits like the amount of time you can be on them in half because they don't know what to do. They've got 9% of the potential labor force. 9% gets lifetime disability. I mean, it's just an astronomical figure. So again, they're looking with greater scrutiny at that. Only three out of the 98 municipalities in Denmark have a majority of residents working. That's a result of both disincentives to work and the aging of the population. And the aging of the population in turn is egged on by the welfare state because the more extensive welfare state you have, the less need there is for children. You don't need children to look after you in your old age. Other people's children will look after you in your old age through taxes. And so children become simply a financial burden rather than a benefit. And I know you're thinking, but nobody thinks that way when they sit down and have children. Yeah, you would think they wouldn't. But it turns out in the same way that it is true that single motherhood was encouraged by subsidizing it. When you subsidize something, you do generally tend to get more of it. I could have said something about there being only one contra-cruise. But I think I don't want to try the patience of a brand new audience. So we're just going to leave that there. Bob, I'm looking at our time. And I think we're getting close up to it. In fact, I think we're slightly over it. So let me just say a quick little thing here. Not directly related to this column, but Krugman has this smug superior kind of attitude in his columns that he can't believe all the stupid heads he has to deal with who don't understand basic logic and basic economics and so on and so forth. And they don't understand the empirical evidence is all on his side. And in a recent episode, Bob was really carrying his weight on this episode. He pointed out that there are only two cases where, when you ask the Keynesians, look, give us a case of government spending was increased dramatically. And that got the economy out of a depression. And they'll say, well, the 1930s and after the 2008 financial crisis. All right, but the 1930s, it was still double digit unemployment the whole decade. So you follow up with them. You say, well, what's that about? And they say, well, think of how much worse it would have been if we hadn't done all that government spending. That is the Krugman answer. And likewise, we've had this very anemic recovery from 2008. And his response is, well, think of how much worse it would have been. And so I thought, how am I going to, I have four of the woods girls are here, actually, four of my daughters are here today. And today, I was trying to think, how would I convey this point to them? So, Bob, I used your analogy, the medicine analogy. I mean, suppose there was some cancer treatment, let's say. And every time you gave this cancer treatment to somebody, the cancer remained. Nothing happened to the cancer. It was totally unaffected. But I insisted to you that it was a cancer cure, even though I could show you no evidence of this, there were no people who had been cured of cancer by this medicine. But every time I administered it to somebody, I said, well, think of how much worse your cancer would have gotten if you hadn't taken this medicine. You would know this guy's a quack. Well, guess which quack it is? Our privilege to refute every single week. You're looking at his big, fat head right here on the screen. Thanks for listening, everybody. Thanks for listening to Country Proogman. Subscribe to the show for free on iTunes or Stitcher. At countryproogman.com. You'll also find detailed show notes pages, our blog, books, Tom and Bob, and more at countryproogman.com. See you next week. OK, well, thanks to everybody for this. When I first went to the Mises University summer program that Jeff mentioned, and we've been talking about, all the way back in 1993, I went to the Mises University program. Now, I was just learning this stuff. And when you're just learning this stuff and you go to Mises University and it's all these faculty members and they're all hardcore, it really knocked my socks off. I wasn't, I was the most free market guy I knew. And then compared to these people, I thought I'm like a pink Okami compared to these people. Gave me a lot to think about. I'll never forget I had the opportunity several times to meet Murray Rothbard. He was a faculty member at Mises University. And it was just tremendous. And everybody followed him around. And it was just an incredible experience because he was kind and gracious and decent and encouraging. And everybody loved him and admired him so much. And yet none of it ever went to his head. He was just so regular and normal and approachable. Like you could just talk to him on and on and you never got the sense that I'm some crummy undergraduate and he's Murray Rothbard and I'm wasting his time. You never got that feeling. And I remember there was a time when Rothbard, he'd be listening to you and he'd be doing this while he was listening. And you'd look at the crowd and as time went on the kids didn't even realize they were doing it. They were all kind of sitting here. Like Rothbard was just totally crazy. All right. Well, this wasn't just something that benefited me because I was intellectually curious, although it did. It also had real practical consequences for me. After the 2008 financial crisis I thought Ron Paul should write a book on what caused the financial crisis because I thought who has more credibility on this than a guy who in 2001 on the house floor said these jerks just blew up a tech bubble and now we're suffering through the wreckage of that and now they're going to replace it with a housing bubble. He said that in 2001. I mean the guy can predict the future. He should write this book. So I'll just tell you right now. I just came flat out and told him you should write this book. Now is the time. And he says, yeah, but I've already written so much on it. I have nothing else to say. And I said, that's what makes it easy. Just collect all your speeches and make a book. I mean, come on, right? And make it focused on the financial crisis. Write one extra chapter and the book is done. He didn't want to do it. So I said, all right, look, somebody's doing it because if there's no Austrian response, then Paul Krugman wins by default. The terrorists have won. I will not let that happen. So I said to Dr. Paul, if I wrote such a book, could I basically guilt you into writing the forward, at least? Which he did. Score. OK. So in 2009, I had a book come out called Meltdown on the financial crisis. And it gave a non-Keynesian explanation. And it was the first book to come out on the financial crisis that included a discussion of the bailouts. The first one out. And that was because my publisher said everybody in the world is going to write a book like this, and they're going to be better known than you. So the only way yours is going to be noticed is if you're the first one. So I had to write that book in one month. Oh, yeah, it was horrifying. It was the worst month in my life. It was terrible. I hated every minute of it. Horrible. But how could I have done that in one month if I hadn't been trained by the Mises Institute? Where would I have gotten the knowledge from? But it was from the Institute, from all the stuff I learned, all the books I was turned onto. I was able to sit down with Murray Rothbard and say, you know, I want to know more about how the Eisenhower people stole the 52 nomination from Taft. What should I read? Boom. He says you should read The 20 Year Revolution by Chesley Manley. No one's ever read that book. I went to the library. That's one good thing. I was at a really good undergrad school. Our library had every book in the world, and nobody at this left-wing school was taking any of those books out. I could get Chesley Manley 10 times over if I wanted. I could roll around in Chesley Manley. No problem. But in other words, I was able to get recommendations right from him. And then from all the people who have succeeded him at the Mises Institute, what an experience. And it made this possible. And I did a lot of media. I got people, though, saying, hey, we never thought about this. We never really thought about the Fed. You've really made us think. But aren't you throwing out the baby with the bathwater? And couldn't we just reform the Fed, make it work better? And I said, well, you do throw out the baby with the bathwater when it's a demon baby. Oh, what a glorious moment. I'd been just waiting for that opportunity, that baby to come out. And now Bob and I, and Bob also, went to the Mises University. He was a fellow at the Mises Institute as I was in the 1990s. Now, every week for free, Bob and I are going out there and doing this refutation of Paul Krugman. And it's just, it's an incredible time that we live in, that, yeah, OK, Krugman has a bigger audience than we do. That is true. But it is a little bit of a David and Goliath story now, because thanks to technology, and frankly, thanks to what I learned from the Mises Institute, I'm able to do what one or two people can to fight back, to get an alternative out there. And I want to say one other quick Mises Institute thing. Actually, let me hold off on the Mises Institute. I want to say a quick Bernie Sanders thing. I don't want to be the only one who doesn't mention Bernie Sanders. All right, we all know Bernie Sanders is all wrong, and he has a lot of fans. So what I'm going to, I'm going to give you a gift right now, because I have a book called Bernie Sanders is Wrong, and I'm going to give it to you for free. It's an e-book. Now, e-book, you think, oh, I know what this is. It's 15 triple space pages. No, no, no. This is a full-length book, and everything Bernie is wrong on, we have a chapter on it, OK? It's called Bernie Sanders is Wrong. You can get it by taking out your smartphone, and you got a text. You're going to send a text to the number 33444. You text to the name Bernie to 33444. Yeah, that's right. I nailed Bernie's name for this thing before Bernie even knew what hit him. Bernie to 33444, and you'll get Bernie Sanders is wrong. Now, that's a miracle, right? That's a miracle that I get to stand up here and do that. Now, you get all this great knowledge, you can go out and drive people in Seattle crazy. But the last thing I want to say about the Mises Institute is, I have had, I've been around the libertarian world for quite a while now, and I know all the different think tanks and the foundations and who's sides with whom and who's quarreling with whom. And I know the whole thing. I know all the names. I know the good guys, the bad guys, I know it all. And I will tell you, there are a lot of people asking you for money who are going to spend it on chauffeurs. I'm telling you that's the case. I know there are foundations that exist for the sake of existing, for the sake of raising money, for the sake of existing still longer. That's why they're there. The Mises Institute is nothing like that. It runs on a shoestring and it runs extremely efficiently and it goes right between the eyes of the establishment. There's no liberty, I call it libertarian light. There's no libertarian light mush. There's no inviting the Fed chairman over for a cocktail party. There's none of that. It's hand grenades everywhere. If you want to help out a bunch of lap dogs who say they're libertarians and say they're Austrians, be my guest. But if you want to help out the best, the foremost institution when it comes to liberty and Austrian economics, there is no choice. And I strongly urge you. They didn't even ask me to do this. I earn no salary for the Mises Institute. But I strongly urge you to become a member of the Mises Institute today because it's not something that just Bob Murphy and I can do or Peter Schiff or Jeff Deist or Lou Rockwell. We have to all be in this together. We're totally outnumbered. So we have to bundle our resources and use them as efficiently as possible. And I've never seen anything more efficient and effective and an institution that I could possibly be prouder to be associated with than the Mises Institute. So do please join us and thanks for coming today. Well, before we adjourn, I want to say Tom mentioned that the Mises Institute changed the trajectory of his life. He has two Ivy League degrees. Yeah, it changed the trajectory of his life. If you'd just stuck with the program, you'd be rich now, like Krugman. Look at you. My god. He mentioned joining us. Anyone who would like to join us today, we have this beautiful new silver coin, a one-out silver coin with Mises on the front and our logo on the back. It's an absolutely beautiful little item. And someday it may be worth well more than the $60 you'll spend for joining us. But I just have two quick messages before we adjourn. The first is that Lou Rockwell, our founder, would love to have been here today and was planning of being here today. All I'm going to say is he is a victim of TSA and an unhappy one of that. But we're thinking of him and we appreciate that he would like to have been with us here today. So a round of applause for our founder, Lou. You're likely listening. And last, before we adjourn, I would like to personally thank and collectively thank Harvey Allison and his family for sponsoring us today, especially this beautiful venue. So thank you so much to Harvey Allison's family. Thank you to Town Hall. See you next year.