 Aloha and welcome to Hawaii Together on the Think Tech Hawaii Broadcast Network. I'm Kili Ikeena, president of the Grassroot Institute. Well, today I know you're going to enjoy the program as much as I am because we have a wonderful guest and we're just going to have a great conversation about some wonderful topics like what economics is all about and what free market economics is all about. My guest today is Professor Mark Scousen. I don't know where to begin to introduce him. His resume is a mile long. He has been a professor at an Ivy League College, Columbia University. He currently is a distinguished professor at Chapman University. He's a financial analyst and the author of one of the most popular letters advising investors and others. He's the producer of the greatest gathering of free minds known as Freedom Fest. He has been a cohort of presidents of the United States and titans of business and I could go on and on and even tell you the wonderful things that his wife Joanne tells about him. But I'm going to let you get to know him online today as we talk with Professor Mark Scousen all the way up in New York City, New York, just probably 10 or 15 miles north of Manhattan. Mark, Aloha and welcome to the program. Well, Aloha to you. It's a pleasure to speak across these satellites. It's amazing the technology that we enjoy today and it's a real pleasure to speak with you, Kili. Well, you know, what's wonderful is you've been here several times and we at the Grassroot Institute have hosted you and done functions together. I just appreciate your Aloha for the state of Hawaii and the fact that you really care a lot about the economy of Hawaii as much as you do about the economy of our country and the world. Mahalo to you. Well, thank you and we were there a couple months ago. My wife and I, we had a great time. There's a certain spirit in Hawaii. It's better than any other. I mean, I've been to 77 countries and there's nothing like the, that atmosphere that you can really relax in Hawaii. And we just enjoy it thoroughly. So thank you for the invitation. Well, Mark, for almost half a century, I know you've had a romance with your wife, Joanna, but you have had another romance and that's with the economy over the free market. I wonder if you'll tell our viewers what exactly this thing called the free market is. A lot of times people get their views from television or from the movies. I remember that movie a few years ago entitled Wall Street where the main character Gordon Gekko was credited with having the philosophy of the free market. His main phrase about the free market was greed is good. How would you describe the free market, Mark? Well, having been in the financial markets for over 40 years, I can tell you that greed is a very dangerous vice. Anybody who's greedy ends up buying at the top are tempted to get involved in speculations that turn out to be unprofitable. I know I've been greedy before. I've gotten involved in these kinds of deals. And a lot of people are, if you get greedy, you're tempted to get involved with the Bernie Madoff scandal, which promises high returns and little or no risk. So greed is not a virtue. Selfishness is not a virtue. When we talk about the free market, yes, you are free to be greedy. You are free to be selfish. But you learn very quickly that that doesn't necessarily work out to your advantage. Adam Smith is the heroic figure of free market economics. And he taught us that a free market is where you have the right to decide what you're going to pay your workers, what you're going to produce, who you hire, who you fire. And how you're going to share the profits, if you're going to share the profits with your workers and so on. So there's always a variety of what is chosen. And government regulation is essential for a thriving economy. I'm not an anarchist and neither was Adam Smith. But you need to be careful that you don't over-regulate, where in today's world too much is prohibited or mandated. So we're being squeezed from both sides when it comes to economic freedom. And you need to give people most of their profits. You know, if you're going to tax people, they should be taxed at a very low rate so that people can do what they wish with their own money, whether it's to continue to expand their businesses or give money to charity or to their churches or what have you. It's all about maximum freedom of choice. When you talk about the free market, you talk a lot about freedom of choice. You talk about the freedom individuals have to choose whom they trade with, whom they buy from, what they pay and so forth. So would you say that the government tends to interfere with that in our country? I know you mentioned that there is a role for regulation. But how much regulation is good regulation? Before you answer your question, one of the things I know you're fully aware of is that there are these annual rankings of the free market in various nations of the world. Some of those nations that are at the top include Singapore and Hong Kong. But the United States isn't at the top. So what are your thoughts about the United States government and its role in helping to preserve the free market or interfere with the free market? The economic freedom index is an excellent indicator of how much freedom we do enjoy. And we have been on the decline for the last decade or two, especially after financial crises. The government is vote to act quickly and over-regulate. We saw this with Sarbanes-Oxley after the collapse of Enron. We saw this with Dodd-Frank after the financial crisis of 2008, where government regulation has gone overboard. Community banks, you can't create a community bank anymore like you used to. There's all kinds of expenses for going public, and that's why the number of stocks that trade on the stock exchanges is in a secular decline. So there's a lot of negatives out there where it's costly, it's expensive, HR, human resources is one of the fastest growing areas of business where they constantly have to deal with regulation. So I think we've gone overboard and we need to back away from excessive regulation. Regulation is valuable to set the rules. So everybody knows where they stand, but you don't want to over-regulate. And it's an art more than a science. The other thing that Hong Kong and Singapore have that's really beneficial is that you can use your profits wherever you want. You can sell stock and move it to some other investment. You're not taxed on capital gains. You're not taxed on interest and dividends. So money can move around to its most efficient use. We can't do that in the United States. A lot of people delay selling their stock or their real estate because they don't want to pay 25% or more in tax. So tax can also be a real burden. And reducing taxes, like the reduction in the corporate income tax was a very smart move to increase our free enterprise system. You talked a little bit about when government over-regulate. You've said there's no problem with regulation as long as it's done in a balanced way. But I think of Hawaii and I think our viewers can see the beautiful background behind us. It isn't Manhattan, but it's lovely Hawaii. And one of the problems that we have is that housing is extremely costly here. And there is an artificial scarcity of homes, particularly affordable homes. Frankly, there's more than enough land in Hawaii. About 95% of it isn't developed. We could house everybody at a reasonable price. But did you see the study, Mark, where Harvard University has published a study that says that it's government regulation that is the biggest factor in driving up the cost of housing because it creates scarcity and it interferes with the mechanisms of the free market? More generally, I wanted to ask you, if we just reduce this kind of regulation, would we be able to trade in such a way that the market would give us better prices and better quantities of housing and other goods like that? Well, Hawaii is a good example of there's been some good regulation. And I do think that when Diamond Head was being covered up by condominiums and new apartments going up and they were completely covering up what was a landmark for representing Hawaii. So the city council voted very narrowly to discontinue growth during that time period. But I think it's gone overboard, as it has in California as well, where you see artificially high prices for real estate as well as rents as a result. And so it crowds out the middle class and lower middle class. They have a much more difficult finding homes. So I think they can deregulate and make land more available for builders and to develop some cheap housing. I think that would be really good. If you were giving advice to presidents, and I know you've at least golfed with them, what would you tell our current leadership should be done in order to improve the economy of our country? Well, I do think that infrastructure is a serious problem. We live here in New York. And Republicans, Democrats come and go. And there's still no improvement that I can see in terms of roads, the deterioration of the roads. I mean, even LaGuardia Airport doesn't have a direct route, a subway route between the airport and Grand Central. You see other cities that are developing this. Seattle has a train that goes from the airport to the city, Atlanta, Toronto. Major cities all across the country and in the world are doing this. Hong Kong is a perfect example of it. In 30 minutes, you can go from the airport to a hotel. So infrastructure, we've under-saved for so long, we've adopted this Keynesian policy of a consumer spending at the expense of capital investment that has really hurt our country. And we're going to have to spend billions of dollars to fix the subway systems and our train systems and our infrastructure in the United States. So that's an area that has to be developed. I think tolls and other forms of taxation are going to be required in order to do that. But we have fallen way behind Europe. And I asked one of my students at Chapman, who's from Germany, I said, do you know what a pothole is? And he says, no, I'm not familiar with that term. Ouch, that hurts. Mark, we're going to take a break in just a couple of minutes. So I'd like to sandwich in to our two segments a quick word from you about this marvelous event you do on an annual basis in Las Vegas called Freedom Fest, the greatest gathering of free minds in the world. You want to tell our viewers just a little bit about it? I only have a couple of minutes to let you do that. Yeah, I know it's next week in Las Vegas. I know there's non-stops from Hawaii to Las Vegas. And we'd love to have people come. It's the world's largest gathering of free minds. We have over 200 speakers. Kevin O'Leary of Shark Tank is our keynote speaker. And we have a lot of other speakers, including yourself. And if people go to freedomfest.com, they can see our entire program, our list of 200 speakers, panels and debates. And Wild West is our theme this year. And it's going to be a lot of fun. I look forward to it next week. Well, that's great. In fact, you're going to give a lot of personal advice as well. I think there is an opportunity for some people to sit down with you and your wife, Joanna, and hear a little bit about how a couple can invest their money and make all the money that they really need to make it. Is that right? Is that taking place as well? Well, good. Yes, it is. We have a breakfast coming up called Investing for Two, kind of partnership investing. And I'm more speculative. My wife is more conservative, but she has her own bank accounts. She has her own investments. It's so important that both couples have their own investments and become educated. And that's what we're talking about at our Freedom Fest Saturday breakfast. So if they go to freedomfest.com, you can see the whole program. My wife also does the Anthem Film Festival there. We have a mock trial. We're even having a square dance with our Wild West theme. So it's really going to be a lot of fun. Very good. Well, Mark, when we come back from this short break, what I'm going to do is tease out of you a preview, if you will, of some of the advice that you'll be giving on how couples can invest and invest well, as well as talk a little bit more about the free market and how we can improve it. I'm Kayleigh Akina with the Grassroot Institute on Think Tech Hawaii's Hawaii Together. Don't go away. We'll be right back with Mark Scousen. Aloha. I'm Jane Sugimura, a host here at Think Tech Hawaii, a digital media company serving the people of Hawaii. We provide a video platform for citizen journalists to raise public awareness in Hawaii. We are a Hawaii nonprofit that depends on the generosity of its supporters to keep on going. We'd be grateful if you'd go to thinktechhawaii.com and make a donation to support us now. Thank you so much. Aloha. I'm Stan Osterman, a host here on Think Tech Hawaii, a digital media company serving the people of Hawaii. We provide a video platform for citizen journalists to raise public awareness here on the island. We are a Hawaii nonprofit that depends on the generosity of its supporters to keep on going. We'd be grateful if you'd go to thinktechhawaii.com and make a donation to support us now. Mahalo. Well, we're back on Think Tech Hawaii with my guest today, Mark Scousen. Again, a renowned professor of economics, one of the top 20 economists in the country today. And more than that, somebody who has personally invested in the market and done very well and passes on the wealth of his knowledge. Mark, welcome back to the program. Good to have you with us all the way from New York. My pleasure. In fact, I was going to tell you I'm wearing this fedora hat that I bought in Hawaii. And people, I get more compliments on this fedora than I had on any other hat I've worn. Well, I wonder if it's an investment that you'll sell one day with the added value of your signature on it. Mark. Oh, my DNA, my sweat. Is it possible in this country for individuals and couples to build wealth? Or are we on such a down slope economically that we can barely survive? What are your thoughts on this? Well, there's a lot of financial gurus out there that are giving sound advice. Others that are not. I do think Dave Ramsey does a great job on his program to tell people how to get out of debt, reduce their debt, invest conservatively and reasonably and to create a budget and watch your credit card use and that sort of thing. You have, on the other hand, Robert Kawasaki of Rich Dad, poor dad who argues that leverage is the way to go, especially in real estate and starting your own business. That's a much more risky venture. And what I tell people is that you have to find out what kind of investor you are. This is critical. Some people are not satisfied with being conservative and a desk job and just getting a regular income and saving and investing and staying out of debt and paying off their home and so forth. But you can go that route. In fact, for most people, that's the way to do it. And you need to invest conservatively in mutual funds and stocks that pay dividends. I write an investment newsletter, Forecasts and Strategies where I've been offering very conservative advice over the years. But I know there are also people out there that love to speculate. They like to gamble. And for those people, you can't hold them back. You just want to encourage them not to overdo it and not put all the eggs in one basket. A perfect example that my wife and I have, I speculated on a penny stock and made a couple million dollars and she sat me down and said, listen, you're going to take half that money. You're going to pay off the mortgage. We have a big mortgage in our home. So she took the conservative approach. I took the speculative approach. We work together well. And that's really key. Too often couples, the husband often hides what investments that he's doing away from the wife. And the wife has to depend on the husband for all the income. And it doesn't have her own checkbook. I mean, we believe that each spouse should have their own checkbook, their own investment program. And they're both learning. And you can benefit from both a conservative and a speculative point of view and work together as partners. What advice, maybe one piece of advice you'd give to a couple that has not paid attention to investment. Maybe they have a home. Maybe they have a gather. They've had an IRA and a retirement plan. But nothing much beyond that. Everything they earn tends to go out and so forth. And they come to you and say, well, we want to get started investing. What would you tell them? Well, I think that's a great step. I'm really glad that somebody is willing to do that. Too often, older people, the biggest fear they have is they're going to run out of money that they're not going to have enough for their retirement or for other things that they'd like to do or like to travel. I meet these people all the time. Well, I can't afford to. I'd love to go to Israel, but I can't afford it. Well, we're all going to die millionaires anyway. That's usually what I tell them. But living with your means is really key. I'd recommend that people look at a book called The Richest Man in Babylon, for example, which talks about no matter how much you earn, you need to keep some of that for yourself, savings, a regular savings program. And then when it comes to investing in the stock market, you just have to start investing. You just don't want to put all your eggs in one basket. You want to start investing and you try it out. And believe me, when you start buying stocks, you're going to start looking at the prices of those stocks. You're going to start watching CNBC or Fox Business or Bloomberg, and you're going to become educated. So you just need to get started on that sort of thing. And you'll find out very quickly what you're good at and what you're not good at. The danger is don't put too much into speculative investments because if you're at the retirement age, you cannot afford to lose half your wealth or your investment. So take it on a conservative basis, even when it comes to your speculations. And again, we have a three-day investment conference at FreedomFest. We have a separate room. We have Vince Foster, who's the chairman and founder of Main Street Capital. It pays a monthly dividend. He's going to be pretty fascinating, along with Kevin O'Leary, who talks about dividend-paying stocks. He's from Shark Tank and CNBC. So it's going to be a fun event. If people go to FreedomFest.com, they can find more about it. Mark, before we close, we've only got a few minutes. There's a dialogue you and I have been carrying on for many, many years, and that's the relationship between Eastern thought and Western thought and the fact that Hawaii seems to be in the middle of both. You're going to be paying some attention to this. In fact, at the FreedomFest, what are your current thoughts about East-West thought? Yeah, I was going to ask you, is Hawaii East or West, because it's kind of in between, right? Well, it depends upon whether you're coming from Tokyo or Manhattan. But it certainly has the flavors of both. Yes, and I've always been fascinated with Eastern philosophy and how we as Westerners can benefit. I mean, the East often benefits from us, and now they all wear the Western clothes, and they're into efficiency, and punctuality, and goal-setting, and all of those sorts of things. I do think that we can learn from Eastern philosophy, whether it's Confucius, or Lao Tzu, or Lin Yu Tang. We're going to have a wonderful session. I'm really looking forward to it with you and Doug Casey talking about these Eastern philosophers and what we can learn from them. And I think it's really important. I mean, Lin Yu Tang, in particular, is a 20th century Chinese philosopher who lived in the East and the West. So he's very different from Lao Tzu and Confucius, who lived only in the East. And he made some interesting comparisons about the differences between East and West, and when it comes to efficiency, and punctuality, and goal-setting, and honoring the elderly versus the youth. And it's a fascinating topic, and I look forward to our session. Well, I'm looking forward to it as well, and I appreciate the fact that you've included it in your program. Mark, good talking with you today. As you leave, do you have hope? Are you optimistic, or are you pessimistic about the economic future of the United States? Culturally, I'm not as optimistic. I don't relate as well to the culture of tattoos and foul language and a lot of the things that the entertainment world and so forth. I mean, we live in New York, and my wife and I go to Broadway plays, and we love it. But I tend to go to the more traditional ones. But economically, we're still a great country. Entrepreneurship is still alive and well. You can see that with Shark Tank and Kevin O'Leary talking about that at FreedomFest. We're really excited about that. So people can still earn a living, but if we adopt these recent movement towards socialism of high tax rates, of taking away your hard-earned money and using it and wasting it on whether it's foreign wars or an excessive welfare state, I think we're headed for trouble. And I don't particularly like the trade wars that are going on. I'm hoping that will end well because free trade is an absolute essential part of our free and prosperous nation. Well, thank you, Mark. Those are some wise words, and I appreciate all of the contributions you're making to the greatness of our country and to the wealth of individuals all throughout the world. My guest today has been Mark Skousen, professor, financial advisor, and producer of FreedomFest. And you can learn more about Mark Skousen simply by googling Mark Skousen. There's wonderful references and information about him. Or Google FreedomFest to learn about his bringing together of the largest gathering of the world's greatest minds. But once again, thanks to Mark Skousen. And until next time, I'm Kili Ikeena with the Grassroot Institute on Hawaii Together every other week on the Think Tech Hawaii broadcast network. Until we see you again, aloha.