 Welcome to our special edition of Tea Time hosted by the New Jersey Tea Party Coalition. Today our guest is Dr. Yarnbrook, who is the author of Free Market Revolution, along with this co-author of Don Watkins. Thank you for being with us today, Dr. Brook. Pleasure. Thanks for having me. So, when we talk about the Free Market Revolution, what does that really mean? Well, first of all, it means free markets, and let's be clear, because I think people are very confused. We don't have free markets in the United States today. When I mean free, I mean free of government regulations, government controls, government interventions, I mean real free markets, and I don't think we've had anything resembling free markets in the U.S. Probably for a hundred years. So, we're talking about changing the world of government from what it is today, which is to redistribute wealth, to regulate business, to try to control the economy, to decide when it's a boom and when it's a bust, and all the involvement the government has that it has in our lives, in every aspect of our lives today, to what I believe is the original intent of the founding fathers for what government should do, and what government should do is protect our rights, protect us from crooks, protect us from thieves, protect us from fraudsters, from terrorists, have a judicial system and leave us alone otherwise. And that's what a Free Market Revolution really means. It means freeing up the market. It means getting the government off our backs and letting us actually be free. So, how do we put the genie back in the bottom? Well, that is a big challenge. The argument we make in the book is that the case for free markets is not primarily an economic case. The genie is not lack of knowledge in economics that people have, and if only we talked about economics, they'd get it, because economics is pretty simple. Well, if you get deep into economics, it's a complex field, but here the economics is simple. There's a direct correlation throughout human history between economic freedom and standard of living, and wealth and well-being. And that's right there in front of our faces. There are plenty of examples of that. American in the 19th century and the kind of economic growth and prosperity that it generated. We went from a second-rate colony of the British Empire to the mightiest industrial power in human history. In a span of 130, 40 years, which are the span, not accidentally, of the period where we were freest. And there's examples of Hong Kong where they have incredible economic freedom, they've done phenomenally well in spite of having no natural resources, and no safety net, and no redistribution of wealth. It's exactly for those reasons. They've done this incredible, being incredibly successful. So my argument is the economic argument for free markets is out there. It's clear people have chosen to ignore it. People choose to look away, not to deal with the actual facts. And they choose their economics, they choose their belief system about politics and economics, based on their ethics, not based on economic argument. And my argument is that the ethical code that exists today in America is much more consistent with socialism than it is with capitalism. Much more consistent with statism, government intervention, than it is with free markets. So what I'm really calling for in the book is a moral revolution in order to bring about a free market revolution. The genie has to be, in a sense, we have to replace our existing conventional, standard view of morality with a new morality, with a morality that respects individualism and freedom and enterprise and entrepreneurship. That's the kind of morality that we need to replace the morality that exists today. So how do we really get there? Because as you said, we're now in this whole different place. We're in a place where people don't want to work as hard. They don't want to be accountable. When we talk about selfishness, people are reviled by it and they think that it's this horrible thing. They don't think that having an interest in your own self-worth and preservation is a good thing. So being that people from the time they're born through the entire educational system and then society and pop culture also are telling them that all these things that should be good for them are bad. How do you get people to rethink? Now I'm depressed. It's hard and we have to be very realistic about this. This is going to be war. This is hard. This is going to require enormous effort by a lot of people, but there's no way around the fact that the struggle we're in is an educational one. This is about education, education, education. Educate kids, educate adults, educate as many people as you can, particularly the ones who are going to be influential, the smart kids who one day will be in the media or one day will be professors at the universities or going to politics or going to think tanks. We need to educate young people on a massive scale. And you're right, we're going up against a massive educational infrastructure which is all set against us. We have one weapon on our side that is incredibly powerful. Well, we have more than one, but one big one. And that is the truth. We have reality on our side. What we're saying is right. It's right morally and it's right factually. It's right practically and it's right ethically. And that is an enormous advantage that we cannot underestimate. So give them the infrastructure. I'll take truth over infrastructure any day. I also think we have another kind of secret weapon. And that is the link to the founding fathers. There's still an incredible respect in this country across the board. You know, less so I dug you on the coasts, right? On the bastions of liberalism, more so on the hotline. But a majority of Americans still feel a certain deep respect for the founders and the founding ideas. They don't understand them, but they kind of have a sense of it. We need to teach them about that. We need to teach them about what the founders really meant. We need to be careful here. We don't want to make the founders into people they want. We don't want to distort their views, which I think many people do. But we need to teach them about the founding documents and the founding spirit. Because this is about a spirit. And you know, what we need to hook up with is this desire that Americans have in spite of everything that they're taught. Americans, you know, a unique way if you look at other countries. We still want to be happy. Yes, we do. We still, you know, self-help sections in the bookstore are massive. You don't find us in Europe. It doesn't exist in Europe. Europeans, in a sense, in some deep sense, don't care about happiness. They don't want to be happy. They've been taught by existentialist philosophers that happiness is impossible. It's not important. You just live and you live for the moment. That's why they don't want kids. I mean, a lot of sociological consequences to the philosophy that Europeans have adopted. Americans want to be happy. They want to be successful. They even want to make money in spite of everything we say about the rich. Who doesn't want to be rich in America? Almost everybody, right? Even those leftist kids who all voted for Obama. They want to be rich. They want to be successful. They want to be happy. That's what we need to leverage. We need to take that and we need to say, yeah, that's all good. Stop feeling guilty for it. This is why they read self-help books. All it takes is getting rid of that guilt, really. You don't need the self-help books. You need to figure out what are truly your values. And you need to be consistent about pursuing your own happiness. And learn that, for example, the common label for selfishness, being a lying, cheating, thief, is wrong. That's not what selfishness is. Just look at Bernie Madoff. His life is pathetic. It's self-destructive. Self-interest is about rationally figuring out what are your values? What are the things that are important to you? What makes the human animal as a species function well? Achieve true fulfillment. And the things Ayn Rand talks about them and encourage people to read The Virtue of Selfishness, one of her essays. I have it. It's important to read it. And then she says, you know, this requires being rational, you know, connected to reality, dealing with facts, not with fiction, not with what you feel is good. But what is truly good, it means being honest. It means, you know, honest to the facts, not corrupting your rational faculty with untruths, with falsehoods. It means having integrity and being independent and, you know, having pride in your own achievement. And one of the most important ones is be productive. Absolutely. Take care of yourself. Know that you can take care of your own needs, that you can, you know, feed your family, that you can clothe your family, you can provide. You know, even poor people, and a friend of mine, John Allison, who was the CEO of BB&T, a bank, he used to talk in his talks about his grandfather, who was a bricklayer. Very, very poor. But every day he went and he did his job and he did the best job that he could. And he made enough money to take care of himself and his kids. He was poor. He was always poor. But he earned it. Whatever he earned was his. And he had dignity and pride. And he raised his family with pride and he raised his family to be educated and to take pride in their own achievements. And in this case, his grandson became a CEO of one of the most successful banks in American history. But the key is that this grandfather could be happy in spite of being poor because he had pride. And pride is an incredibly important virtue. So be productive. Take pride in your own productivity. And what we do with the welfare state, for example, is we eliminate pride. We tell people, don't work. You know, here's a check. You don't get pride from being needy. You don't get pride from getting a check from somebody else's work. You don't get pride from being entitled. So we're destroying whole generations of people by putting them on welfare. They're the victims. And that's a message we need to communicate. We need to hook into this idea that Americans have about happiness, about success, about prosperity, about all the good things in life and teach them what that actually means. And then explain to them what it means in terms of politics. So do you think that that is going to give them that sense of fulfillment and happiness? Because just like you said, what you're really talking about is an American dream. Yes. That everybody can share in. And I often tell people about what my history and my dad were. They grew up, they were sharecroppers. But they were happy. And they were able to achieve the American dream by leaving the sharecropper farms and only having a limited education. And their children becoming educated. And they had a lot of pride and dignity in the things that they did. It wasn't a shameful thing. They were proud that they were able to do these things. And today, it's almost like that's been stripped away. People don't seem to see the value in even doing a job that isn't a high-paying scale. Absolutely. And they suffer the consequences. I mean, we as society are all suffering as a consequence. But they are the primary victims. That is, they will never learn that sense of pride. Which is where happiness comes from. You cannot be happy unless you have self-esteem. Self-esteem comes from achieving stuff. From knowing you can take care of yourself. From knowing that you're worthy of achievement. And you're capable of achievement. It comes from taking pride in your own actions and taking pride in your own character. If you don't have that self-esteem, you can never be happy. That self-esteem comes from work, primarily. The fact is that most of us spend, most of our effort, most of our time, most of our mental energy at work. Most of the achievements that come about, the challenges that we experience at work. If you deny somebody work by denigrating their job or by having a minimum wage, which denies many people a job, or by regulating industries, or by giving them welfare, or by giving unemployment insurance for 99 weeks, you're denying them the ability to be happy. That's how we should phrase it. That's how we need to make the argument. See, I was horrified by Guamni's 47% argument because, to me, the Republicans, if they stood for what I hope they can't stand for one day, should be going after that 47% and saying, you're the victims. You want to have a life. You want to be happy. You want to be successful. You want to join the middle class. Then free markets are the solution. You're being institutionalized by the left into this position of poverty, into a lack of self-esteem, into a position where your life won't add up to what you wanted to add up to. Join us because we can provide you with the opportunity, not anything more than that, the opportunity, the freedom to pursue your own happiness. I mean, we always have to come back to the pursuit of happiness. It's in our Declaration of Independence. That's the secret weapon, and we need to latch on to that, and we need to take advantage of that, and we need to go after audiences. I mean, it's tragic that those who claim to be representing the free markets have given up on so many Americans. Is that why you think the Republicans lost their audiences? Because they just weren't delivering the right message in terms of, you know, the American dream and prosperity? I think there are a lot of reasons why the Republicans lost. I was just talking to a friend of mine, and he said he's already produced a list of 20 different reasons. What are you talking about? But I think, you know, I think we had a lousy candidate. I think Mitt Romney was a lousy candidate, and we had lousy candidates across the board. I think our senatorial candidates were pretty horrible. I think we focus on the wrong issues. But the primary thing is the Republican Party did not present the American people with a vision. A vision of what this country should be, a vision of what this country can be, where we should be heading, what their leadership would create as an alternative to what we have today. What they presented themselves as, we're not Obama. We want all Obama's programs, we just want to do less of them, right? So we want to say Medicare, we'll just do it better. We want to say security, we'll do it better. We'll even keep some of Obama care, right? Don't worry, nothing is going to change. Just we're more efficient because we were in private equity and we know how to run a business. That's inspiring. That's ridiculous. Ronald Reagan would have won this election by a landslide. And Ronald Reagan, in my view, was not as great of a president as many Republicans think, but he had a vision. He could communicate, he could inspire people to a goal. I think it's unfortunate he didn't use more of that in order to actually achieve some of those goals. But that's what was missing here. There was any kind of projection of where we're heading. What fundamentally was Romney different than Obama on? That was never really made clear. And even Paul Ryan, who I have a huge amount of respect for and I like a lot, in his vice presidential debate, it's as if he was muzzled by the Romney campaign. He couldn't even say a lot of the things that I think he would have. I mean, why didn't he talk about Medicare? He's got a really interesting proposal about Medicare, not as radical as I'd like it to be. But it's the best proposal on the table about Medicare turning it into a, you know, just giving people a check and going to insurance markets and buy insurance for their health care in old age. That is good. That's better than anything else on the table. But he wouldn't say it because it's too upsetting. But that's the difference between, should be, between the Republicans and the Democrats. We believe in markets and we're going to facilitate markets and we don't believe government is the solution. And instead, he was a me too debate, yeah, I'm going to do everything the other guys want to do. So I think that's a big part. You know, we could talk about social issues which I think the Republicans lose on and I think in key demographics and then, of course, there's immigration which I think they also lose on. So I think those are important but they could have overcome even that if they presented American people some kind of alternative to Obama, real vision for an alternative America. So you have this vision but here we are and we are at a state where obviously although, you know, Obama didn't win by huge margin but it was good enough, of course, to win. But you have a huge group of people who are already tied to all these entitlements. And so how do we, you know, shrink government when we have all these people who are on entitlements? You know, how do we overcome that? Well, first you have to convince the people on entitlements that it's not good for them. The fact is that if you went to kind of a voucher system the Paul Ryan plan healthcare would improve for the elderly. The fact is that Medicare is bankrupt. I mean, that's just a fact that somebody should say. I mean, it would have been great if Mitt Romney had looked into the camera and said to the American people Medicare and Social Security are bankrupt. They need major fixes. We can discuss what the fixes need to be but you can't pretend that these systems can go on the way they are today. Now, I believe they should be phased out. Obviously Romney doesn't, Obama, but at least admit it. You remember, I mean, you probably won't remember. You're too young, but when Ross Perot sat down at a desk and put out these graphs and showed American people debt levels and how the economy wasn't doing well people took him seriously. I mean, he was this uncharismatic little guy behind the desk showing people graphs and he got 19% of the vote. If somebody would have just treated Americans as adults and you've seen that in the midst of the physical cliff debate nobody's treating Americans as adults. I mean, the Republicans are pathetic. Well, Paul Ryan did try to come out at and I see your face. He did before he was nominated for vice president but once he became part of the campaign he was finished. He was muzzled. No, I like Paul Ryan generally but he does try to deal with these issues straight on and that's why I respect that and I was very optimistic when Romney chose him as vice president but then he muzzled him. So what's the point? So, you know, my point is we need to confront these issues directly and American people are not stupid but if they hear the same thing then I'll go for the more consistent. Both of them want to say, so security, well, this guy's probably more honest about it so let's go with Obama. And look, so you have to convince them I'm at the very tail end of the baby boom generation. I was born in 61 so it's a very end, right? There is no way I'm going to get the kind of healthcare that people today in the 80s and 90s are getting. There's just not enough money in the world that will be able to, that will last. The unfunded liability for Medicare is 100, you know, it's close to 100 trillion dollars. That's me and that's you and that, you know, the younger generation. They're just not going to get it. So let's be honest, say they're not going to get it. What's an alternative? We can continue this system and there will be death panels, as Sarah Palin said, you know, when we call death panels there'll be, you know, rationing panels. They'll have to ration healthcare because that's the only way to deal with shortages which there will be. Let's be adult about it. Let's talk about it. Talk about solutions. I think morally, economically, the best thing is over the next generation or two phasing out Medicare and shifting to a completely private system where people actually save and buy insurance and use the private markets for it. I think healthcare costs will go down and I think a value will go way up and quality will go way up. But okay, there are other interim steps that may be a more political palatable like Paul Ryan's point. Let's take that as a first step. But you have to first talk about it and you have to tell the truth and you have to talk about the morality of it. How is it moral to place a burden on every child born today which is in the six figures? It's probably close to a million bucks when you take the full unfunded liability. How is it moral to say to every baby born you have a liability when you're born of a million dollars because these people want to have great healthcare before they die, particularly in the last few years? I mean that's just wrong. Let's talk about that. Let's talk about the fact that Social Security is a system that encourages people not to save. It's a system that teaches people that saving is a bad thing. It's a system that rewards irresponsible people and penalizes responsible people. Responsible people would save if there was no Social Security and they would have much more money if retirement Social Security gives them. Irresponsible people with no Social Security would spend all their money as soon as they made it. They benefit enormously for Social Security. How is that right? How is that moral? If we talked about that I don't think the grandmothers who are on Social Security and Medicare right now would say yes, we still support it, this is great. They'd say look, we paid into the system, we should get it but you know what, the system is wrong. Maybe we should start changing it. Maybe we should start reforming it. Maybe we should look to get rid of it to replace. Chile, the country of Chile, way down there in South America, privatized their Social Security system. You would think the United States of America could do it. The homeland of capitalism. You'd think we'd be able to do it. So I think it's an issue of communication. I think it's an issue of telling the story. It's an issue of having a story to tell and having passion and having conviction and having a moral argument, an ethical moral argument for why, how ideas are the right ideas. Going back to the book, this is the argument we're trying to make in the book. This is about morality. The free market revolution is a moral revolution. We need these ideas and even if you don't agree maybe you think I'm radical in terms of how free market I want to be. Even if you want to just move in that direction you have to start making moral arguments. We're playing, we've given the left a moral high ground and we're playing on their field and we'll never win. They've got the home court advantage. Yes they do. So have you been able to get your message to people on Capitol Hill? Because a lot of it is really educating the people who are sitting in Congress. See I have a very cynical view of politicians. As many of us do. I think politicians will do whatever they think will get them elected. I think they're very much put their finger into the wind. So I think we get the politicians we elect, we get the politicians we deserve. I think that we need to educate the people. I think it's the voters that count. I don't think politicians matter. If the voters say we want free markets the politicians will give them. It's not the politicians, ideologues, socialists. They're just giving the people what they want. Now Obama I think is more of an ideologue than most politicians. But he would have never got elected if the people were better. What we try to do is educate young people. Is educate students. Is educate adults. We even try to educate congressional staffers. You know the people that actually make their decisions for the congressmen. But they're young. The average age of a staff is 26. So we're running for example a program right now where we have a monthly talk, kind of a seminar with staffers. We give them free lunch. We're getting a good group to come. We're averaging, you know, 35, 40 people at every one of these. And we're trying to talk to them about the morality of capitalism as applied to, you know, healthcare and fine melas and policy, the economy. I just was there talking about the physical cliff. Talking about all these things with the idea that these young people are going to advise their congressmen so that hopefully we can move them or move the congressmen. They will also go into politics as adults. You know, that's why the staffers, they want to learn. Or if they don't go into politics, they will go to some think tank. Or they'll be involved. These are passionate people, passionate about the state of the world. Those are the kind of people I like influencing. When I go and meet with politicians, I just feel, you know, they say what I want to hear. They all love me when I'm there. And they say yes, yes, you know. And the fact is that today in Congress, there are more congressmen who have respect for Ayn Rand than ever before. There's probably at least three dozen of them. Do they understand it fully? I don't know. Do they agree with it fully? Probably not. But they've been influenced. So we've already had an influence through Atlas Shrugged and through Ayn Rand's ideas. I mean, in the Senate, there are a few Senators. But it's going to take a lot more than that. And it's going to take educating our... Teachers. Have you been able to get to any teachers? So one of the funnest programs we have at Ayn Shrugged, which we launched about eight, nine years ago, is what we do is we offer every English teacher in the United States, a high school teacher. If she'll teach Ayn Rand, we'll give her OEM free copies of the books. And we thought, you know, we start the program. How many teachers would want to teach Ayn Rand at Hanford? We ship 400,000 copies. Wow. We believe about a million kids read Ayn Rand in high school every year. And we think that changes the world right there. Because the fact is, what if you think of Ayn Rand, she changes minds and she influences people. She changes lives. How many times have you met people who've said, I've got Atlas Shrugged to change my life? There's no other book that has done that. No other book in American literature that's done that. So if we can get people to read the book, that's a huge step forward. We, for example, run the largest high school essay contest in the country. We have 29,000 essays. We write in high school about one of Ayn Rand's books. So we're getting to teach us through the novels. We also support a lot of university professors who are teaching these ideas, who support free markets, who support the small case for capitalism, and a number of university programs that do that today. And, you know, I spend a lot of time on university campuses speaking. In a sense, being a counterpoint to what they're studying in the classroom. Propaganda. They get something very different from me. So you're hopeful. So when you look forward, your best guess, how much time do you think? I know we're in for a long time. So this is the metaphor I use. We're all on a raft, right? 300 million people. And the raft is heading towards this very large waterfall. Not a physical cliff. A real cliff, right? And not only are we being dragged by the river towards this cliff, but we've all got oars and we're all rowing towards the cliff. And you could argue that Democrats have big oars and Republicans have little oars, but it seems to me, unfortunately, that they're all rowing towards the cliff. It doesn't seem like anybody has the sense to row in another direction. I think there's a limited time before you go over the cliff, and then it's a tipping point. It really is too late, or it's very, very difficult then to reverse course. How long do we have, I don't know. You could argue we have a decade, maybe two. I don't think it's much longer than two decades. And I'm not talking about two decades to find some island where we can... I'm just talking about turning this thing around and starting to row in the other direction. We need a major shift. We need a change in the way Americans think about the world. And the Tea Party, I think, is a right first step, but it's only a first step. And we need this to be a massive movement to change direction, and it needs to happen soon because the more entrenched these forces get in Washington, the more government gets entrenched into our lives, the more we are corrupted by a bad morality and a bad philosophy and a bad way of looking about the world, the more difficult it is to replace. We're going bankrupt. So at some point we fall off the financial cliff, which is part of this bigger cliff. So we've got 20 years to turn it around. I guess what are the odds of how optimistic or pessimistic am I depends on the day you ask me. I don't think there's a science here. I think we have to be realistic. The odds are not good. It's how much pain. When I look at everything that's happening and people are getting used to the high gas prices and they're getting used to all of the regulations and they're getting used to doing with less and not even questioning the government, not even demanding that. It's like how much pain are people willing to pay? An infinite amount. People do not learn from experience. It's one of the great shocks. You're depressing me. People do not learn from experience. People do not learn from pain. People get used to pain. I mean, people, look at Europe. Look at Japan. Japan's been in a recession for 21 years and they've just elected a new government that's promised to do exactly the same thing as the governments have for 21 years, which hasn't worked. The definition of Einstein's definition of insanity is doing the same thing over and over again and expecting a different result. We have in Japan and the U.S. and you have an insane culture. We're nuts. And when you're insane, experience doesn't change anything. Pain doesn't change anything. This is an intellectual, ideological battle. We have to change people's ideas. You know, in the 19th century, the U.S. economy grew at 8%, 9%, 10% economic growth a year. We invented things like airplanes, trains, automobiles, electricity, endoplamia. Life's truly changed. Today, we get excited if we have a new app for the iPhone. The change today in terms of innovation is minor as compared to what it was back then. And we learn nothing and we've got used to it. So the economy grows at 1.5%. Fine, that's okay. As long as they have a job, I'm okay. Gas pipes go through the roof. We have inflation. The dollar today is worth what? 3 cents as compared to what it was years ago? Does anybody care? I don't think so. So, no, this is an intellectual revolution. We need to educate. We go back to educate, educate, educate. This is all about educating. And part of education is to educate people about what it could be like. What it could be like to be free. What it could be like without the government telling us what to drink and what not to drink. What to eat, what not to eat. What business to open. To demand that we get licenses to shampoo hair in California. We need a license to shampoo hair. We need every little bit of our activity to tell high tech companies that they're too big or too small or charging too much or too little. People forget the Justice Department went after Microsoft because they offered Internet Explorer for free. And that was monopolistic behavior because it was free. It's insanity what's going on in the world today. Our lives could be so much more richer and more fulfilling and happier and more successful if we had choices, if we could make decisions for ourselves. If mother government wasn't sitting on our shoulder dictating every little thing that we decided. If the paternalism went away, there's a vision of a world out there of free Americans striving to achieve their own happiness and their own success building an economy with no limits. There's no limit to economic growth. There's no limit how successful and how wealthy and how high that standard of living could be. There's no reason we can grow as fast as China is growing today if you believe the numbers. There's no reason we cannot be the most successful go back to being the most successful country, the most successful civilization in human history. It all goes back to what worked for us in the beginning in the principles that founded this country. With all the compromises the founders made, these were the right principles and the principles were freedom. Freedom means leaving people alone. Freedom means not telling them what to do. Freedom means leaving people to pursue the rational values that they believe will lead to their own happiness. Hopefully we will get there and we can get the oars going back the other way. We've got to fight. What alternative is there in life when you know what is possible? You can't give up on that. You've got to fight and again it's worth remembering the founders who gave, who were willing to put their lives on their property and their sacred honor on the line for freedom, for something they really believed in. If people like us who believe in these ideas are willing to put the same on the line then I start being optimistic and saying we can win. Thank you so much for coming and speaking with us. My pleasure. Thank you.