 My name is Kathleen Hunker. I'm an attorney and senior policy analyst here at the Texas Public Policy Foundation specifically in our Center for Economic Freedom. I will also be your moderator for today's lecture and book signing with Dr. Yaron Brooke, the author of Equal is Unfair America's Misguided Fight Against Income Inequality. Before I introduce our guest, I wanted to take a moment of your time and offer some context behind our invitation to Dr. Brooke and the reason for today's event. On January 28th, 2014, the Fort Worth Star Telegram published a column under the headline A Growing Divide Between Rich and Poor in Texas. Not to be outdone, the Texas Tribune released an article two days later entitled A Growing Income Gap in Texas. The Dallas Morning News joined in on the fun, observing that Texas is a leader in income inequality too. And since that time, similar subject lines have appeared in almost every major Texas newspaper, each with the implicit demand that governments step in and fix what they view as an imminent problem to prosperity in Texas and the United States. We at the Texas Public Policy Foundation have an expression for that, bolder dash. When you dig underneath the surface, you uncover that the Texas model, that combination of liberty, free markets, low taxes, tort reform, has done more to provide opportunity than any of the alleged policy prescriptions in the articles I just mentioned above. To give you a glimpse of this, I'm going to share a couple of statistics that my colleague, Vance Gen, published in his paper, A Labor Market Comparison. For instance, Texas employers created 73% of the U.S. total non-farm jobs during the last 15 years. Unemployment has been below the national average since 2007. It has a greater share of its population employed than other large states like California and New York. And did you know that the inequality problem, if it could be called an inequality problem, is lower in Texas than compared to other popular states? The top 10% of earners in New York held 54% of all income from 2000 to 2012. Here in Texas, that number was 49%. By nearly every measure, the poor, the young and the daring do better in Texas. So why all the fuss about income inequality? Why the multi-page spread? Well, I hazard a guess, and that is that the claim about inequality is really not about opportunity, at least not in truth. Instead, the claim is a means for others to secure the moral high ground. It is a rhetorical device capable of setting a narrative, which in the left's mind leads to one conclusion, and that is government intervention. That is why we at the Texas Public Policy Foundation and all throughout Texas have to take a stand and challenge the story of income inequality, and demonstrate that not only do free markets represent the better remedy to what inequality exists, but also challenge the assumption of whether inequality, or at least all inequality, is inherently unjust. Fortunately today, we have Dr. Jaren Brook with us, who has made it his vocation to answer the myths surrounding income inequality. And he has agreed to come and give a presentation about his book, Equal is Unfair. Dr. Jaren Brook is the Executive Director of Anne Rand Institute. He is the co-author with Don Watkins of the National Best Seller Free Market Revolution, How Anne Rand's Ideas Can End Big Government, as well as, of course, the book that we'll be discussing today, How Equal is Unfair, America's Misguided Fight Against Income and Equality. He is the host of the Jaren Brook Show, a live blog talk radio podcast. He was also a columnist for Forbes.com, and his articles have been featured in the Wall Street Journal, USA Today, Investors' Business Daily, and many other publications throughout the net, and newspaper stands across the country. For seven years, he was an award-winning finance professor at Santa Clara University, and in 1998, he co-founded BH Equity Research. In 1987, he moved to the United States, where he received his MBA and PhD in finance from the University of Texas at Austin, making him, of course, a longhorn. Anyway, Dr. Brook. Thank you. Thank you. Thank you all for coming, and thank you for the, for you guys for inviting me. This is great, and congratulations on this beautiful facility. This is really gorgeous. So, about three, four years ago, I noticed a similar trend to what we just heard. The newspaper articles everywhere talking about inequality. And today, if you open up in New York Times, I know you don't do that in Texas, but generally, if you open up in New York Times, you won't find a day in which there isn't an article that describes some ill going on in the country and blaming it on inequality. Income inequality, wealth inequality. The Atlantic magazine just ran a story a few weeks ago of a new concept of inequality. They're calling it total inequality. And they're saying, look, it's not just income. It's not just wealth. It turns out there wasn't an unequal in other things as well. We're psychologically unequal. Some people are risk takers. Some people are not. There's even such a thing as marriage inequality. Have you heard about marriage inequality? It turns out that smart educated men tend to marry smart educated women. And this is just not fair because unsmart uneducated men then have to marry unsmart uneducated women and that's creating a marriage inequality. And of course, the kids of smart couples tend to be better. It just goes on and on and on, right? But they are observing. What all these people are observing is a fact that you would have thought that the left would have figured out a long time ago because all you need are eyes to see this, but the left doesn't tend to use their eyes very often. And that is that we're just unequal. That's just the fact. That's just reality. Look around the room. We have different skills. We have different abilities. We have different education standards. We have different genes. We have different backgrounds. We're just different. That's metaphysical. That's the fact of reality. What they're complaining about is life. What they're complaining about is reality. It's not surprising that if we're all different, that we do different things and the outcomes tend to be different. Thank God for that, right? Imagine a world without Michelangelo because we didn't allow Michelangelo to do his thing because he was unequal. He was good at it. Imagine if everybody drew and sculpted like I do. That would be awful. It would be a boring, horrible world. Oh, thank God for LeBron James, right? Some people are really good at basketball, and we all enjoy watching that. We're willing to pay large sums of money to watch it. I'm no good at basketball. It's good that there are these differences. It's great to have great entrepreneurs who are good at creating values that generate wealth and that they accumulate that wealth. That's their skill. It's no different than LeBron James' skill. He worked very hard at it. It's no different than Michelangelo's skill. It's a matter of the skills you have, what your passions are, the hard work you put into it, the thoughts you put into it. There's no difference between being a great businessman, a great entrepreneur, being a great artist, being a great basketball player. There are manifestations of hard work, the exercise of human reason, applying yourself and making the best of your life you can make. We should celebrate these people. So the left is claiming that this issue of inequality, let's take income and wealth inequality because that's the main thrust of it, is causing huge amount of damage to our societies. Now it's interesting because they don't try to prove this, they just state it. There is no economic theory that links income inequality, for example, to low economic growth. There's a lot of talk about it, that a lot of income inequality is generating low growth economies. No economic theory links the two. Not even Keynes would have thought that made any sense. I dare even say Marx wouldn't even have thought that was true because he lived during a period. What happened during what Marx was writing, Karl Marx was writing, what was going on in the world? And that's the revolution which generated huge inequalities. Think about this. 300 years ago, before the Industrial Revolution, before the founding of America, what percentage of the population was poor? Poor in a sense of barely surviving, growing enough food to eat, maybe a little bit left over, working at a trade, where you got basically your basic necessities, but nothing more than that. What percentage of the population? Yeah, 90 plus. So there was vast equality. There were a few aristocrats up here, but almost everybody was down here and they were all poor. Equality, the genie coefficients were great. The left would have loved the genie coefficients, a measure of inequality. And genie coefficients represented equality in those things. And what happened during the Industrial Revolution, during the time Karl Marx was writing? Inequality exploded. But what happened to poor people? It went from everybody being the same, right? Yeah, flat, right? Watch my hands. Magician, right? Everybody got better off, but some got better off faster. Who cares? So Marx would have said, and what was the economy doing in the 19th century in the West? Exploding. So economic growth was vast. So the idea that inequality increases, generates slow economic growth is ridiculous. All you have to do is look at Hong Kong, look at the United States during the 19th century, look Europe during the 19th century, look at China right now. China right now went from everybody being poor to having vast inequalities and the economy's been growing at over 10% a year, right? So there's no correlation between the two. This is complete fallacy. And again, the left doesn't learn that if they repeat stuff over and over and over again, we somehow accept it as truth. Partially because I think we on the right have failed to challenge them on so many things that they do. We've got to stand up to them and say, no, this just isn't true. What you're saying is a lie. So there's no correlation between, there's no relationship between inequality and economic growth. And I would argue that it's actually, if there is a correlation, it's reverse. How did the poor get less poor? Generally in the world. How do poor people become less poor or become middle class or become successful? What kind of economies generate that? Well, free economies. Economies in which entrepreneurs start businesses, create jobs, hire people, deploy capital to make those people more productive, and thus raise their wages and raise the wealth that they have. So yes, the entrepreneur himself gets fabulously rich, but while he gets fabulously rich, everybody else is better off. And I hate it when people call this trickle-down economics. Because it's not trickle-down, this is a flood. And it's not that you're granting the wealthy some favor, and some of those favors trickle-down. It's that you're leaving the entrepreneur free to create wealth by creating wealth and creating opportunities for everybody else. And people are taking advantage of those opportunities and rising up. So again, the opposite is true of what the leftist is claiming. When you leave entrepreneurs free to make lots and lots of money, they help the poor by creating jobs. The poor who are ambitious, the poor who want to work and be successful rise up with them. And yes, they're not rising at the same speed, but again, who cares? Why doesn't it matter? Everything that the left argues in terms of inequality, it's just not there. It just doesn't make any sense. The economy doesn't grow any slower because of inequality. The poor do better in economies where income inequality is rising than they do when it's shrinking, when that inequality is being driven by the free market, by actual wealth creation. So the one thing to differentiate here, the one thing that we should step back and say, yeah, there's a real problem, is cronyism. If people are making money off of the government, if people are making money because of connections, if people are making money purely because of the Federal Reserve policy, whatever the government is doing, then that's not helping anybody. That's destructive, and that's a problem. But that's not a problem of inequality. That's a problem of cronyism. We don't need to deal with cronyism. Just like there's no question there are problems with poverty. Too many people are poor, and there seem to be barriers for people who are poor to wise out of poverty. And there are real problems of economic growth. We'd like to see the economy growing. None of those problems, cronyism, poverty, or economic growth, have anything to do with inequality. They have everything to do with the kind of policies that the left would like to implement in order to address inequality. So I don't even like to say, I never say the problem of inequality, because inequality is not a problem. There is no issue of inequality. We should basically say there's nothing about inequality that's a problem. There are problems of poverty, there are problems of cronyism, there are problems of economic growth. None of them have anything to do with inequality, per se. The gap between the rich and the poor, which in the middle class is irrelevant to any of the real problems we have in the economy. And let's see, what are the remedies that the left would like us to have for this gap? How do we solve the gap problem? What's that? Yeah, confiscate. The only way to solve the gap is to penalize people at the top and try to benefit people at the bottom. But the most that's really done is to penalize the people at the top. I mean, I like to use the example of basketball. So I'm really offended by inequality in basketball, because LeBron James is just too good, right? And I would like to be able to get on a basketball court with LeBron James and play one-on-one basketball with him and have a chance of scoring a basket. Now, if you'd seen me play basketball, you'd know that I ain't scoring any baskets against LeBron James as it stands now. So how do we get basketball equality between me and LeBron James? Because I feel bad. I want to be able to play basketball with LeBron James, right? This is all about feelings. It's all about not offending anybody. And I'm offended by LeBron James beating me 100 to zero. I need a safe space. That's a reference to Brown University. How do we do that? Take away his advantage. How do we take away his advantage? What would be a good way to... What's that? Put him in a wheelchair. Put him in a wheelchair. Strap into a wheelchair. I mean, this is a civilized group. Usually, somebody raises their hand very quickly. It says, break his legs, right? Because that's what it's going to take. It's going to take penalizing LeBron James. It's going to take knocking him down. Because I could train all day. I could train every single year. And I'm never going to be anywhere close to good enough to play him. The only way to make us equal is to push him down. Now, in a famous book about inequality, maybe the most famous book that's come out in recent times, Thomas Piketty, the French economist, wrote about the problems of inequality and the inequalities of disaster. It's a really bad thing and he gives all the statistics and he has reams of data. It very much reminds me of the global warming kind of discussion, the way he presents the data and what he does to the data. But his conclusion is we need to do something, right? And what do we need to do? We need to break producer's legs. How do you break producer's legs? You don't literally break people's legs. 80% marginal income tax rate, 80%, 80%, with no loopholes. So he wants really you to pay 80% on the top dollar. But that's not good enough. That's not good enough according to Piketty. What we really need to really address the issue of inequality is a 10% wealth tax. Global, so you won't be able to hide your money anywhere in the world. So you will sign up to this. 10% wealth tax. Now think about this, every year we'll calculate your net worth and we'll take 10%. So just to keep even, you would have to earn 10% on your money every single year, right? Just to keep even. Now Piketty writes in the book, it's not like this will generate a lot of money to help the poor. That's not his goal. But it will knock down the rich. That is his goal. So I think we have to understand what we're up against here. We're really up against people who are not trying to help the poor. They don't care about economic growth. What they really care about is knocking down success. What motivates them is resentment. What motivates them is envy. And you can evaluate this just by looking at what their solutions are. Knocking 10%, 10% wealth tax does nothing for economic growth. It hampers economic growth. We know this because economic growth is driven by investments and saving. And you're taking investment and saving and you're consuming it through the government. So you're destroying economic growth by doing that. And every economist left and right knows this. Even the former economist by the name of Paul Krugman knows this, right? Or at least he knew it when he was economist. Everybody knows this. So taking 10% wealth tax has nothing to do with economic growth. What about the poor? How are we going to help the poor? Well, Piketty says that 10% is not going to be enough to redistribute to them. So what we need to do is raise minimum wages to 15 bucks an hour, right? We're doing that all over the country. We in California are leading the effort. We've just passed a law that will do this. But what's interesting about the law in California is you know why they passed a law? Jerry Brown, who is like this radical from the 60s, Jerry Brown is the most conservative politician in California. Now, he's to the right of the California Senate, the California House. And what was happening in California was that the unions had drafted this proposition that voters were going to vote on to raise the minimum wage to $15 an hour within two to three years. And even Jerry Brown knows how devastating that would be to the poor and to businesses in California. So what he did was negotiate with them and passed a law that does it over six and seven years rather than do it quickly. So the compromise wasn't, and Brown is on record saying this, this is damaging, but we'll spread it out as much as we can to minimize the damage. Even a leftist politician like Jerry Brown knows that raising the minimum wage hurts the people you're trying to help. What happens when you raise the minimum wage? This is economics 101. What happens to any price you artificially raise? What happens to the demand for it? For that good. It goes down. If you raise the price of unskilled labor, what will happen to demand for unskilled labor? It goes down. It goes down. There's no way around this. Again, even Paul Krugman, a long, long time ago, when he was an economist, wrote an economics textbook in which he has a whole chapter dedicated to the minimum wage in which he writes that the minimum wage makes zero economic sense. The only minimum wage that makes economic sense or sense in terms of helping poor people is zero. And that it's purely a political issue. Now that he writes in The New York Times, and he's a political hack, not an economist anymore, he is a big advocate of the minimum wage. So here's the minimum wage. They want to raise it in the name of reducing inequality while they realize they all know this, that all it does is create massive unemployment among the least, the most vulnerable in our society. In a city, minority youth are the ones that suffer the most from raising the minimum wage. One of the highest minimum wages in the world is in France. Guess who has one of the highest youth unemployment in the world, France? I mean, this is not hard stuff. This is pretty basic stuff. Yet everybody believes in the minimum wage. And unfortunately, it even polls well among Americans, something like 60%, 70% of Americans believe in raising the minimum wage to $15 an hour. Because they bought this story. They bought this story. So the left knows this. The left knows it's not going to help the poor. They don't care. It's not about helping anybody. It's not about helping anybody. What about cronyism? Cronyism is a big problem. It's getting bigger. It's getting worse. And people are sick and tired of it. And a lot of the inequality discussion out is couched in the frame of cronyism. Does the left really care about cronyism? Does Occupy Wall Street care about cronyism? You remember Occupy Wall Street? I always found it interesting that there was Occupy Wall Street, but there was never Occupy Detroit. Because if I cared about cronyism, I would want an Occupy Detroit as well, because they were bailed out. Why is Wall Street different? So what's interesting about the left again is that they don't want bailouts at Wall Street. They just want to nationalize the banks, which is basically what Dodd-Frent to Logic said does. But they're fine with bailing out Detroit. They're fine with bailing out any industry that they think is a good industry. They just hate bankers. And what they want is more regulations, more government controls, a bigger government, which generates more what? Clances. What's that? Clances. But in terms of cronyism, what does bigger government generate? More cronyism. My favorite story here is the Microsoft story. I don't know how many of you are familiar with the Microsoft story, but in 1994, Microsoft was spending exactly $0 on lobbying. No presence in Washington. No law firm, no building. They just weren't in D.C. Nothing. And they were brought in front of the Senate. Senate hearing. R&Hatch. Well, R&Hatch said Republican senator from Utah stood up and he started yelling at the Microsoft executives. You guys need a presence in Washington, D.C. You need to start lobbying. You need a law firm here. You should build a building inside the Beltway. We need you here. In other words, please, right, please give me money. Black, you know. Microsoft, at the end of the meeting, the senior executive was there. It wasn't Bill Gates. It was the senior executive. They said, look, you leave us alone. We'll leave you alone. We're not interested. They went back to Bellevue in the state of Washington and guess what happened? Six months later, knock, knock, knock on the door. We're from the anti-stress division. And what is your sin, Microsoft? What was Microsoft's sin? Internet's for giving it away for free. There's called dumping, right? They're trying to corner a market. How many web browsers do we have today? I don't know, half a dozen, at least. How many of them charge money? Zero. So all that was happening was Microsoft was ahead of the curve, realizing this was going to be something that was going to be bundled and free. But that was the original justice department accusation against Microsoft, was that they were giving something away for free. For 15 years, they were part of this settlement with the justice department. They had regulators at the Microsoft offices. Every decision Microsoft made had to be approved by regulators. Whereas in 1994, Microsoft was the largest company in the world, the most innovative company. People were excited about going to work there. It was changing the world, literally changing the world. Within a few years, it was a boring company. Nobody wanted to work there. They left the CEO, and it's not considered an innovative company anymore. Regulators destroyed it. What was the lesson Microsoft learned? Gotta play along. Gotta play along. Today, they spent tens of millions of dollars on lobbying. You worked at Cato. Right behind Cato, there's a beautiful Microsoft building. I think where I spoke, that was the Microsoft building, the talk you attended. Beautiful building, many stories. Beautiful facilities. They went out to a little amphitheater for nonprofits to give talks. I've been there giving talks a couple of times. That's the lesson, right? As government grows, as government is more intrusive, as government regulates more, businessmen are going to respond. They're going to respond by trying to influence regulation, by trying to influence those who are trying to control them, by trying to lobby. Cronism primarily starts out as self-defense. Now it evolves into something more nasty than just self-defense, but that's how it starts. So what's the solution to cronyism? How do we get money out of politics, supposedly? Take the power out of the hands of politicians. Make politicians not have as much power over business. When you shrink government, cronyism falls away. Because why am I going to spend tens of millions of dollars lobbying somebody who has no power over me? The more power we give politicians, the more they can regulate, the more they can control, the more they can influence our lives, the more we want to lobby them, the more we want to control them, the more we want to bribe them. It's no accident that those countries that are very, very statists are the most crony, who is just in Brazil. It's a great example of exactly this. If you're in business in Brazil, you have to have contacts with the government because you cannot do business unless the government gives you a thumbs up. So the solution to cronyism is not the left solution, more regulations, more controls, a campaign finance reform and so on. No, it's shrink government. It's limit government. When government in the United States was very limited, did very few things, didn't get itself involved in business, didn't try to regulate, tried to control businessmen for the most part left government alone. If we want to eliminate cronyism, that's what we have to return to. And by the way, I hate the term crony capitalism. Capitalism isn't crony. Statism is crony. There's more cronyism in socialism. There's more cronyism in fascism. There's more cronyism in statism in big state than there ever is in capitalism because again, capitalism is a system where the government is tiny. It does one thing, really, really well. That's protect us, the military, the police, the judicial system. That's pretty much it. That's real capitalism. And in the real capitalism, there's no cronyism. So if we want to fix the problem of cronyism, smaller government. If we want to fix the economic growth, smaller government, right? What's hampering economic growth in the United States today? Regulation, regulation, regulation. And a crazy tax code that distorts everything, right? So regulation, if you cut regulation, if we did away with regulations, if we cut taxes, it's simplified. More importantly, cutting taxes is simplifying taxes. Get rid of all the loopholes, the exclusions and deductions. Just make it simple and flat and easy. Particularly on the corporate side, on the business side. There's nothing preventing this economy. The U.S. economy from growing double, triple, quadruple the rates it is growing today. What's hampering is the fact that as businessman, you are being constrained. You are being restricted. Nobody wants to grow their company in an environment with the kind of political and economic uncertainty that exists today because of government. You want to help the poor? Get rid of minimum wage laws. Want to help the poor? Get rid of licensing laws. Think about licensing laws. Now, I don't know, Texas is probably a little bit better, but probably only a little bit better. In California, you need a license to shampoo hair. Who does that hurt? Who does that help? Nobody. But who does that hurt? It hurts a poor person who's trying to get that first job. And shampooing hair is easy. You don't need any skills. So now we need a license. Now she needs to take a course. Pass that thousand bucks. Forget it. She's not going to get that first job. Or we need a license to start a nail salon. Really, we need protection from the evil nail salons, and we need government regulators to license them to make sure that we don't get fungus or whatever it is that the nail salon is going to inflict on us. I love Uber, just as an aside. I love Uber because Uber has taught us not to be afraid of taxes. Because we'd be terrified of taxes. I mean, who knows what will happen in a taxi? That's why we need government to regulate taxis, control taxis. Everything a taxi does is regulated and controlled because we've been afraid of it. That's why. Now Uber's come around and taught us not to be afraid. You can actually get into a car and you get driven to where you need to go and nothing happens to you. And no government regulator stood in between the two of you. It happened without government regulation. Wow, maybe we can even reduce the regulations on taxis now. What a thought. Technology is showing us... I think this group knows it already, but showing many Americans that they don't need government in order to get good service. There's this notion that somehow we need government to protect us otherwise bad things are going to happen to us. Well, maybe no. Maybe it turns out that we can actually regulate ourselves. You know, when you get out of an Uber, what do you do? One of the first things you do is you rate the driver. And the driver rates you. So when you are trying to get a car, your rating pops up and the driver decides whether he wants to pick you up or not. So behave. But I get into Uber and often I get off at a bottle of water. When was the last time a taxi driver offered you a bottle of water? This is capitalism. This is what happens when you get the regulator out. You get great service. You get great growth. You get entrepreneurship. You need me to get the regulators out. A business, a business will grow. The economy will thrive. So if we want to help the poor get rid of all those licensing laws, get rid of all those restrictions, and encourage entrepreneurs. Not encourage them by giving them money. Not encourage them by subsidizing them. Encourage them by getting out of the way. And let that not trickle down, let that flood down happen. Let jobs be created. The best thing you can do for ambitious poor people is create opportunities. And government doesn't create opportunities. Government can only destroy opportunities. You create opportunities. We create opportunities. Businessmen create opportunities. Entrepreneurs create opportunities. Entrepreneurs are the only people who create opportunities. Business creates opportunities. So let businessmen create those opportunities. And yes, they all get richer faster than poor people get richer. Who cares? Why is the gap mad? And I'll say one more thing about getting rich. Now, typically, I talk about things that actually you know something about. I'm not sure I know a lot about getting rich, because I haven't done it myself. But how do you get rich? What's the secret of getting rich? Making a lot of money. How did Bill Gates get $70 billion? How do you get rich? What's that? Helping others? Yeah, in a sense, helping other people. You get rich by creating values that other people want and are willing to pay more for than what it costs you to produce. It's very simple. The only way to become rich is to create values that other people desire, that other people want and are willing to pay for. In other words, the only way to get rich is to make other people's lives better. Because I paid $300 for this. How much is this worth to me? More than $300. And it turns out much, much, much more. But I'm happy to pay $300, and I am better off by buying this. By the way, poorer, according to Piketty, I'm $300 poorer. But I'm richer, because I've got an iPhone. Steve Jobs, Apple, is richer, because they made a profit. It cost them a lot less than $300 to make this. Who lost? Nobody. It's a win-win transaction. So I won, Apple won, even their employees in China won. The ones they're supposedly exploiting, because they're getting paid more than what their time is worth to them in any other activity. Everybody along the supply chain wins when I buy an iPhone. Win-win. And the way people make money is by creating beautiful things like this that I value and you value. And the more people value the stuff that you produce, the richer you get. The only reason Bill Gates is the richest man in the world today is because everybody on the planet is better off because of Microsoft. Microsoft is not a human being on the planet, almost, that hasn't been touched by Microsoft in one way or the other. We all use computers. They're all standardized. We use Microsoft software everywhere. Even if we don't use Microsoft software, we're using software that ultimately was competing with Microsoft or that mimics Microsoft. Microsoft changed the world for the better. So Bill Gates made $70 billion. Why would we ever resent that? We should celebrate that. When I look at somebody wealthy, I say, that's cool. They made something that's probably made my life better. I admire that. I respect that. I don't resent that. But you see, that's exactly what the left, that's exactly what the left wants us. They want us to resent it. They want us to be Europe. And I'll end with this. The real goal is to turn us into Europe. Now, let's talk just a little bit about Europe. Why isn't in Europe people resent wealth? They really do resent wealth. And if you go in Scandinavia, if you're wealthy in Scandinavia, not all wealthy people in Scandinavia, they don't drive nice cars. Because if they drove nice cars, they would be keyed. And sometimes our cars are keyed. But everybody frowns upon keying a car in Texas, even in California. But in Scandinavia, that's acceptable. To key a beautiful car is acceptable. Because they resent wealth. Why? Well, think about where wealth traditionally, and Europe has a long tradition, came from. So 400, 500 years ago, how did you get wealthy in Europe? You were born into it, but where did your forefathers get the wealth? From the crown. But where did the crown get the wealth? It stole it. All wealth in Europe, pre-industrial revolution, was stolen. We really did live in a zero sum world. If I was rich, it was because you were poor. Because you probably worked the farm, and I was truly exploiting you. Surfs and masters, that's exploitation. That's not capitalism. That's not freedom. So in most of the policy in my view about Donald Trump. Policy in my view about Donald Trump, not that I want to talk about politics, is the zero sum nature of what he views deals. When he talks about deal making, he views winners and losers. If you're really a good businessman, policy in my view about Donald Trump, not that I want to talk about politics, is the zero sum nature of what he views deals. When he talks about deal making, he views winners and losers. If you're really a good businessman, when you do a deal, do you want the other side to lose? No, you want them to win. Maybe you want to win more. Maybe you're gonna make a bigger, but you want to leave something on the table for the other side always. You want win-win transactions. This is true in life, true in marriage, true in friendship, and true in business. Win-win. Both sides should come out of the transaction better off. But free capitalism is all win-lose. Zero sum world. So they have this resentment. Wealth in their mind is associated with theft. America, in its founding, was very different. Because we were the first country in history founded on the principle of individual liberty, on the principle of individual freedom. And what that generated was a reality of win-win transactions. What that generated was capitalism. And Americans created the term, Ayn Rand talks about this in Atlas Shrugged, in the famous money speech, though in America we make money. We create wealth. We don't take, we make. And for the first time entrepreneurs in America were perceived with respect, with admiration, because they created the wealth. They didn't take a pie and divvy it up differently. They created a pie. And under freedom we each create our own pie and nobody has a right to take it away from us. Statists view the pie as social and they just divvy it up. And it's a question of how do we divvy it up? But no, under freedom every one of us creates his own pie. And that's what makes America unique, has made America unique in the past. We make money. We create wealth as individuals, not as a group, not as a collective, not even as a nation, as individuals. And we have a right, a right protected by our constitution to the pie that we make. And nobody has a right to take it and redistribute it in the name of some social good, which is never a social good, which is always destructive. So what we, who defend America, us, we on the right, more broadly, we cannot accept the terms of the left. We have to reject the whole terminology of inequality. Inequality doesn't matter, is irrelevant. What we stand for is freedom. What we fight for is freedom. What matters is freedom. Freedom is good for poor people, class people, rich people, it's irrelevant. Freedom is good, period. And that's what we should be fighting for and reject the whole agenda of inequality that the left is preaching. Thank you all. All right, so we've got some time for questions and we've got a microphone, so. Thank you. I read your book, or I'm halfway through it, and I really love it, your latest book. Thank you. The thing that's bothered me the most is the leftists that run the Federal Reserve. And everybody, the left talks about inequality, but it's the Federal Reserve that's causing astronomical asset prices and purposely robbing the American public of its income every year by a minimum of 2% if you believe their goal, and in some cases more, if they can purposely cause inflation. That is an attack on society. What do you have to say about that? Well, I mean, I agree with you about the inherent evil which is the Federal Reserve, and it's a very simple evil. We don't believe in central planning. We don't believe in central planning. Everybody knows. Everybody knows, again, most economists accept that central planning doesn't work. For example, if you try to plan for the production of bread, you always mess it up, right? The Soviets try to do this. There was either too much bread because they set prices too high and everybody tried to produce it, but nobody wanted to buy it. So they ended up trashing the bread because nobody could afford to buy it, or there's too little bread because prices are too low, nobody's interested in producing it. And remember, Nixon tried to set prices, didn't pan out to us. Price setting by the federal government, by central planner, doesn't work in any good, except we have decided a long time ago that there's one price. The most important price in the entire economy, I would argue, the most complex price in the entire economy that requires the most input from the free market of any other price, and that's the price of money, in a sense, interest rates, that we're gonna give to a group of 12 people to decide. They meet once a month and they sit around and they decide what the price is going to be, interest rates. I mean, that's ludicrous. If you don't believe the government's gonna be good at setting the price of bread, or imagine they set the price of the iPhone. I mean, we would laugh, that's funny, right? But it's fine to set the price of interest rates. I mean, that's ludicrous, or the quantity of money. How does the government know how much money to print? Central planning doesn't work. It doesn't work, period. There's no buts, exceptions. It never works. So there should not be a Federal Reserve, and we never used to have one before 1914. There wasn't a Federal Reserve. The United States defined without a Federal Reserve, even when we got into problems often created by government, the private sector worked them out and solved those problems. Since we've had a Federal Reserve, we've had a great depression, we've had inflation in the 1970s, the 2008 financial crisis, and my view was largely a creation caused by the Federal Reserve, by Federal Reserve policy. Federal Reserve is done enormous damage. And right now, I think you're right. I think that by keeping interest rates at zero, and it's not just our Federal Reserve, it's the central banks all around the world are doing the same thing. Actually, we've got negative interest rates in Europe, and we've got some negative interest rates even in Japan. And what is that doing? Is it's increasing asset prices. And this happens every time. Every time you have very low interest rates, artificially low interest rates, asset prices go up. Now sometimes it's focused on housing, sometimes it's just stocks and bonds. It varies over time. But asset prices are rising. Asset prices rising helps people who own stock. People who own stock tend to be either wealthy people or pension plans, pension plans. I mean, the positive aspect of this is most pension plans in the United States are bankrupt, so this is helping them come out of bankruptcy a little bit, right? I actually think there isn't much inflation, so I don't think they're devaluing the currency as much as they would like, right? They'd like a target of 2%. I think we're living through deflationary times right now. I think the value of the opportunity power is actually increasing, not decreasing. But the point is, and it doesn't matter, all this in my view doesn't matter, the key is central planning doesn't work and therefore Federal Reserve can't work and therefore whatever it is that they do whether it's inflationary or deflationary, it's going to be bad. It's gonna do harm to us and it's gonna do harm to a lot of average Americans and that's what's happening today. So if you're a saver, you're being screwed. If you're a consumer, it's great. But if you're a saver, you're being screwed. If you're trying to generate income off of savings, you're being screwed. But if you own stocks, you're doing pretty well. Yeah, use the mic. First off, excellent book. Thank you for writing it. Thank you. One of the issues I run into talking with people, I know wide ranges of people, even liberals, and the words and the concepts that you provide are not at their educational level or their conceptual level. In many cases, I find myself saying, hold on a second, just even things like the terms equal, the term of what's fair and unfair. It's almost like an emotional discussion instead of an intellectual one. Is anybody doing, I hate to say about fifth or sixth, maybe as high as eighth grade material on this, because frankly, in many cases, I find myself dropping way down and going back and saying, well, you know, that's not what the Constitution was talking about. And I have to explain word by word what each word meant, and then pull it together. But they don't care. Sometimes they do. I mean, they don't care, very few people care about the Constitution. Even people who claim they care about the Constitution, they care about the Constitution as long as it's reinforcing what they already believe. And they completely disregard it when it doesn't. And I think many of our Supreme Court judges, including many of the conservatives ones, are exactly like that. They like the words when they support their cause and they don't like the words when they don't. The Constitution, unfortunately, has lost any power over the American people today. I don't think it's an issue of fifth to eighth grade content. I think this is an issue of very intellectual content, which they have accepted emotionally. So take the word fair. What does fair mean? In our culture today, it means equal. But that's not what it means. What fair used to mean is getting what you deserve. The world is, for the most part, fair. It's not equal because we don't deserve equal, luckily. Equal is not good. And I've got a lot of great examples of what equal is not good if you're interested in them. But you know, the Bond James example is a good example of it. Equal is not of value. There's no value in equal outcome. Now there's one sense in which equality does matter, and this is part of their confusion, right? In the Declaration of Independence, the founding fathers wrote, all men are created equal. Now they did not mean that we are equal in outcome. They didn't even mean that we had equal opportunities because we don't. We have different genes and different parents and different backgrounds. Our opportunity sets are going to be different. What did they mean? Political equality. We are equal in rights. Every human being, and unfortunately, they weren't consistent in applying this, but the theory was consistent. Every human being is born with a right to his own life, to live it as he sees fit, to pursue the values necessary for his own survival and thriving. The state has no right to discriminate between people. The state has no right to coerce people into doing things that they don't agree with. The whole idea of equality for the founders was equality of liberty, equality of freedom, equality of being left alone, equality before the law. And nobody knows this, right? Nobody talks in these terms, and the left capitalizes it. So they throw out ideas of equality, and who's not for equality? Equality's great, right? What kind of equality? What are we talking about? And then they mix them up. Who's not for fairness? We're all for fairness. Oh, but I've redefined fairness now. Fairness means equality of outcome. They're very clever, just like the word liberal. The word liberal used to mean pro-liberty. It used to mean capitalism. In the 19th century, liberals were capitalists. And in America, it's still true. Liberals in Europe are the more freedom-oriented. Liberals in South America are the more freedom-oriented. In America, the left estate, the word liberal, has flipped it upside down. Who are the real progressives in the world? We are. I'm all for progress. They're the ones who want to kill progress. I love progress, but they want to destroy progress. The whole environmental movement is built on the assumption of destroying progress, right? And they call themselves progressives. They have taken words, and we never challenge them. And we need to challenge them. We need to go back to the roots in that sense. And we need that. But it's not an issue of writing it for fifth and eighth. It's an issue of defining your terms and teaching people what terms actually mean. And we have to do that over and over and over again. And because the left does it constantly. And again, they repeat stuff. They repeat the lie over and over and over again. And we stop believing it. And too many times, the right buys into their terminology. And we need to stop buying into their terminology. We need to identify where they are distorting reality and call them on it. Yes, you mentioned Donald Trump, arguably, the most anti-capitalist presidential candidate in over 50 years, probably even more anti-capitalist than Hillary Clinton. Will Donald Trump's nomination destroy the Republican Party? I mean, I try not to do politics for a lot of reasons, because I find the topic unsavory. But beyond that, I run a 501c3. And we try to stay away from taking political stance. But I hope, let me put it this way, the only good thing that can come out of Donald Trump campaign is to destroy the Republican Party, because it deserves being destroyed. The Republican Party, we need a new party. This country needs a new party. The old coalition is broken apart. It doesn't work anymore. There's too much friction. And I think the one positive that might come out of this is a much more pro-freedom, pro-founding fathers, pro-principled part of the Republican Party setting its side. Now, that would mean we'd lose a few election cycles. And that could be devastating. So that's the downside. But this is where we are today in American history. I do think Donald Trump is anti-capitalist. I don't think he knows what capitalism is. I think he is dedicated to a zero-sum world in which I win, you lose. And he constantly talks about winners and losers. That's not the language of business. Business is primarily about cooperation. This is another distortion of capitalism. There's a million times more cooperation in capitalism than in this competition. And often, you're competing and cooperating at the same time. Do you know who builds some of the internal stuff in this thing? Samsung. Apple and Samsung work together to build a product that then competes with the products. But if you look at the relationships in Silicon Valley, everybody's like this. There's much more cooperation. The whole idea of employee-employee is a corporation. We are cooperating. So capitalism is about working together. It's not about winners and losers. That's not the essence of what that's sports. It's sports that winners lose. That's fine. But that's one that's a separate part of life. And certainly, for the first time, I moved to the US in 1987. And I'm more fearful now for the future of America than ever before. Not because of Donald Trump, but because people are voting for him and because people are voting for Bernie Sanders and the numbers that they are. I didn't think it would happen this fast. I knew we were heading there. I didn't think it would happen this fast. And I'm more fearful for the country now than ever because of the voters, because voters are responding in this room. Thank you. What would you say to, you've mentioned Bill Gates a few times, what would you say to him and to people like Warren Buffett when they go on record saying that they'd welcome higher taxes on themselves than similar earners? Sure. I mean, with Warren Buffett, I would ask him, because he's such a hypocrite, I would ask him why he does everything in his power to shield himself from paying taxes, which he does. He is the master at finding every loophole in the world. And actually, I think it was the fun page of the Wall Street Journal over the weekend had a picture of me and Warren Buffett's former number two guy. And one of the reasons the guy is the former number two guy for Warren Buffett is because they philosophically constantly clashed. And he is a big Iron Man fan. David Sokol, and that was on, I think, Saturdays Wall Street Journal. Warren Buffett is an interesting guy. Warren Buffett is an interesting guy. And Bill Gates, my understanding of the relationship between Bill Gates is that Bill Gates has been corrupted by Warren Buffett. They have a almost father-son-like relationship. And the Bill Gates looks up to Warren Buffett as a fatherly figure. And Warren Buffett has corrupted Bill Gates. Warren Buffett is very intellectual. He's very smart. He's read. He's well read. And Warren Buffett is clearly influenced by a well-known American philosopher by the name of John Walls, who taught at Harvard for many, many years. When you listen to Warren Buffett, he is talking Wallsian language. He talks about the fact that he is lucky. All his wealth is a consequence of luck. We talk about this in the book because we dissect the whole luck argument in the Wallsian because this is the same argument as you didn't build that. It's a very similar argument. He was born with the right genes to the right parents in the right century so that his particular skills would make him a lot of money. He didn't make any decisions. He didn't make any choices because free will is out. The big debate in psychology that everybody has, the big debate everybody has, is nature or nurture. Are we determined by our genes? Are we determined by our parents and the environment in which we're born? And then the real radicals think it's a mixture of the two. And I'm like, wait a minute, the most important fact is missing. And that's you, the decisions, the choices you make, free will. That's the determining factor, right? But they ignore that. And what about his bought into that agenda completely? He's bought into the kind of Wallsian egalitarianism which says we should all be equal unless if you get richer, you're bringing everybody else has to become richer with you. That is, it's not acceptable if one person is worse off because you got, as a consequence of you getting, that's unacceptable. Walls is the real bad guy of modern American philosophy. And this is the thing I think most people don't realize. Philosophy drives the world. Yeah, they're in the Ivy Tower. Yeah, they write books, nobody reads. And very few people have read a theory of justice by John Walls. Yet they drive everything. Walls is everywhere. Elizabeth Wan and Obama are children of Walls. I don't know that they've even read the book, but all their ideas, the whole you didn't build that speech which is probably the most important speech of Obama administration. Because it tells you what his philosophy really is. That whole speech is straight out of kind of a Wallsian egalitarian view of life. And in the book, we really go after Walls and we analyze and we show how the whole inequality debate is driven by that kind of ideology. And how the left generally in modern times is driven by the egalitarian ideology that's, it's not, Walls is just an air to a long philosophical tradition, but he's the one who has brought it to America in a raw sense. So I would say, there's no hope. He's too old. He's too committed to these ideas. He's too corrupt. Cause I do believe he's corrupt. But who knows about Bill Gates if there's hope there? I mean, the thing about Bill Gates is that, you know, he has a guy who really changed the world. I mean, I view him as a hero. I think he's a heroic character because of what he did to Microsoft. But he's left Microsoft and now he's giving his money away and notice in America how our attitude towards that, right? When he was at Microsoft, we didn't like him that much. He was making a lot of money. Now he's giving it away. Now he's a hero. Now he's a good guy, right? We like him, he's on all the TV shows. We might even build a statue for him if he gives all of it away. If he's keeping too much, that's the problem right now. But this is the problem with America. We admire giving. But building and making and creating, I once attended a lifetime achievement award for businessmen in Charleston, South Carolina. Can't accuse these guys of being liberal, right? And everybody was reading long bios and there were eight minutes, two minutes about their business achievement, eight minutes about their community service and charity. And I got up and I told them they should be ashamed of themselves. Because life is not about community service and charity. Charity and community service are nice, they're wonderful, good for you, right? But that's not where you change the world. It's not where you matter. That's not what matters in your life as a businessman. It's what you do in business that matters. It's the money making that changes the world. America did not go from a third-rate colony to the most powerful economy in human history because of charity and community service, but because of businessmen, because of wealth creation. I think I'm out of time. Do we have time for this last question? Okay, last question. Hi, so you described historically from Industrial Revolution how innovation grew the top but also grew the bottom. And that was largely from people being more productive from capital and technology. Going forward, it's not difficult to envision a world where technology replaces unskilled labor. And you've got the Uber driver becomes a driverless car or you already order with an iPad and what if the cook starts to be a robot? And so just the question of, to your comment, we are inherently unequal and there's a natural bell curve of just raw ability. Do you think that there's a potential challenge of people that don't have enough horsepower just even having any role in society from a productivity standpoint? And if so, how do you deal with that challenge? And if not, what industries are gonna absorb the bottom end of the bell curve? So my answer to that is no. I mean that phenomena of less and less need for unskilled labor seems to have really started 200 years ago, because remember 300 years ago everybody was unskilled labor. And then today it's a much smaller fraction. But today I don't know that this is a true statistic but I think it is. They're more unskilled laborers today working in the world than ever in human history. Their percentage is smaller but their sheer number is bigger. Just think of China, think of India, think of Asia as the numbers, the sheer numbers of people actually working to produce stuff that is making our lives better like putting, assembling an iPhone together. There seems to be a constant demand for labor. And one of the untold stories of the last 30 years, this is not exactly the answer to your question but anyway, of the last 30 years that nobody reports on and nobody celebrates is the fact that a billion people have come out of poverty in Asia over the last 30 years. A billion people, not because of foreign aid, not because of charity, not because of any of that but because of capitalism, a little bit of it, just a little. But let's imagine a world. So all we can do to think about the future is look at the past, right? So in the past, we were all working. Now we can project the future but the past is a good lesson about. A long, long time ago, let's take some jobs that didn't exist 100 years ago. Restaurant tour, that profession didn't exist. I know you walk around Austin, there are like hundreds of restaurants, right? Thousands of people employed as waiters in Austin, Texas. That profession didn't exist 100 years ago. Yeah, there were some inns, there were a few pubs but there were no restaurants and certainly no celebrity chefs, right? And there's an unskilled labor job that yeah, at some point you could replace with robots but that's way out there. And even then, can we imagine what jobs would, yeah, I could imagine other jobs that would come about that would just pamper us even more, right? How many nail salons, like manicures and pedicures existed 50 years ago, 10 years ago in Austin. Think about how many exist today and in California they're everywhere, right? So the kind of things change constantly and they change to make us more and more comfortable. For example, more and more people are going to be in the entertainment business than ever were in the past. Already more people are entertaining us than ever were in the past because we have free time. So I can imagine a world in which we only work 20 hours a day maybe or some of us only work 20 years a day. We live at fabulous standard of living and we're entertained and we're provided with food and we're provided with from people, right? So I don't see a point at which there's no work. You're always gonna come up with new stuff. There's always gonna be new things that need to be done. And yes, it's true that over time there's more and more focus on the human mind and that's a good thing. But luckily we all have one and even those who have lower ability will be able to do jobs that are gonna be more fun, more interesting at whatever level of ability they have. There'll be less grudge work. You know how many people in America produced food a hundred years ago? So like 80% of all Americans were in agriculture. You know how many people today? Less than 1%. And do we produce more or less food more? And I have to do this because of Donald Trump. How many people today work in manufacturing? More or less, I mean everybody says less, right? So manufacturing employment peaked in 1979. Manufacturing jobs have declined in America. Guess how much stuff we make in America? Stuff. Double. We make double the number of things. So manufacturing in the United States has increased and the number of people working in manufacturing has decreased, which is a good thing. Manufacturing jobs suck, right? It's physical. We're moving away from physical labor towards more value added labor and that's a good thing, not a bad thing. And most of the declining manufacturing jobs are consequence of technology and robotics, not a consequence of China. Thank you. Thank you. Thank you. Today's lecture in book signing is just one of many events that we hold at the foundation throughout the year. We have two upcoming pretty soon. There's gonna be a book signing of Broken But Unbound with Governor Greg Abbott on May 18th at 1 p.m. We also have Dare to Care expanding the scope of medicine, sorry, scope of practice to fill in the gaps in mental health workforce and that'll be on May 24th at 11.30 a.m. To register, please visit texaspolicy.com and click on the events. Otherwise, if you'd like to talk to our lecturer any further, you can go into the foyer. He will have books on sale and please feel free to pick one up and get one signed. But thank you again for coming and we hope to see you at future events.