 This is Mises Weekends with your host, Jeff Deist. This weekend, we're featuring an interview Jeff had on the Free Man Beyond the Wall podcast with Mance Rader. Stay tuned for a wide-ranging discussion on Rothbard, monetary policy, immigration, and more. We have discussed, we've talked about in going back and forth on Twitter, talking about Murray Rothbard. And when it comes down to it, would there be a Mises Institute without Murray Rothbard? I suspect not. It's hard to say. Lou was close with him. And the short answer is probably no. Okay. I was going to ask you what you think he would have thought of Ron Paul's run-up in 2008. But I think a better question would be, what do you think he would have thought of George W. Bush's run-up in 2000? Considering the fact that when we look back on that and we look at the speeches and the things he said in the debate, he basically sounded like a libertarian candidate. I mean, what did you think at that time? What do you think he would have thought? Well, Murray had a serious ear for politics and a very jaundice tongue for political campaigns. And I think he would have seen through W, certainly not an intellectual by any stretch. And I think he would have seen that Bush Jr. represented the worst of the neo-conservative end, as opposed to the Rockefeller end, but also somebody who was wishy-washy on economics and fiscal issues. So, I guess the best thing W said during his campaign was talking about a kinder, gentler foreign policy. Well, that all went out the window, obviously, on 9-11. So, I suspect he would have been as hard on him as he was on his dad. You know, and it's really, really a terrible thing that Bush was elected. In many ways, from a liberty perspective, I think we might be better off if Gore had been elected in that famous recount in Florida, because I'm not sure that Gore would have gone as whole hog into Iraq and Afghanistan, because we have to remember that when W came into office, the national debt, maybe not as a political matter, but in terms of the math, in terms of the numbers, the debt still could have been wrestled to the ground and the dollar still could have had some sort of potential. It was a little over $5 trillion when Bush entered office at the beginning of 2001. Of course, now it's $20 trillion. So, you know, if you do the math, if there had been some combination of Medicare and Social Security cuts and means testing, it still might have been doable, but it's sort of like James Dean. When James Dean was in the car, was in the Porsche hurtling towards the cliff and he's going around the corner and he's going too fast, think of it this way, there was still a chance that there was still a point at which James Dean could have applied brakes or countersteering or something to prevent himself from going over the cliff. But at some point when you're too close to it, you're beyond the point of rescue. There's no longer anything he could have done to prevent himself from going over the cliff. And that event essentially happened for America in 2001 because three very bad things happened. 9-11 sent federal spending and federal warmongering into hyperdrive. And within the next couple of years we invaded, well, immediately we invaded Afghanistan, but within a couple of years we invaded Iraq, both of which blew deficit spending up towards a trillion dollars a year. And then not too long later because Bush wanted to defeat John Kerry in 2004, he engineered along with a very willing pharmaceutical industry what we call Medicare Part D, which was just a naked sop to senior citizens so that they would vote for him over John Kerry. That's how politics works, that's how democracy works. You give people something or at least the perception that you give them something and they vote for you. So the unholy combination of trying to pay for two wars simultaneously in Iraq and Afghanistan and then creating Medicare Part D, which at the time and even today isn't that big of an expenditure, but in an actuarial sense over time the prescription drug benefit that seniors will get will actually cost more than the original Medicare Act, which is just providing doctor visits and treatment and that sort of thing. The drugs cost more over the decade. So basically my argument is that in that period between George W. Bush coming into office in 2000 and about 2005 at which point Medicare Part D had passed and the two wars were in full swing, America's fiscal house went around the bend and over the cliff to the point where it could never be rescued. And now of course with $20 trillion and an aging population with the cohort over 65 is going to about double in the next 20 years, which means entitlements will be particularly Medicare and Social Security will just rise exponentially. And then all the accumulated debt at some point we're gonna have to raise interest rates to attract anyone to our treasury debt. And as you know, I'm sure just raising interest rates a couple of points would quickly make servicing the debt the single biggest budget item for Congress every year. So 9-11 really, really was a watershed moment for the United States and not in the way the mainstream media thinks it was but it's a terrible time. And conservatives who refuse to repudiate Bush, Bush Jr. have simply lost it completely. They've lost any credibility, any claim to some mantle of limited government or fiscal responsibility. And they're a complete joke, rightfully so. So it's a painful time for America but to the extent it opened anyone's eyes with the resulting Ron Paul campaigns to the folly of our war intervention and the impossibility of our entitlement spending then that's the silver lining, man. That's what we have to think about and work on. Well, not only that. I mean, look at the last seven years. Look at, how did the Fed decide that they wanted to fix the 2008 crisis? Zero interest rates for how long? Seven years? I mean, interest rates almost at zero for seven years when interest rates at zero are just a little bit higher than that for two years led up to the 2008 crisis. Not only that, I remember 2004 very clearly being in Fort Lauderdale and reading that George W. Bush said that every American had a right to a home. And when I heard that, it was the same thought I had always had about student loans is, well, why is education so high? Well, if you're giving away free money, I'm gonna raise, for my product, I'm gonna raise the prices too. And if the general public and public schools, government schools will never teach this but simple economics, just requiring them to read. I read Tom Woods's Meltdown before I actually read Economics in One Lesson by Haslett. And by reading Meltdown, I think I read it twice. I kept Macopius notes on it. And I had a general understanding of what I knew. He basically everything I knew that was leading up to that point that I couldn't put together that I couldn't have a full understanding of, that book made me understand it. But now, people do not realize why the stock market is as high as it is. They think that this is happening organically and it's not. If we saw just a housing bubble in 2008 because of low interest rates and easy money, look at what we've had in the last seven years. I mean, what do you think we're coming up? I know that everybody, if you have a background in Austrian economics, they accuse you of always being a bear. But how can you not be with all the evidence we have up until now? Well, I think that the central banks around the world and particularly ours will do anything and everything they can to keep equity markets high nominally. The Bank of Japan already does this. The Bank of Japan buys Japanese equities. It buys stocks in Japanese companies to prop them up. Now, so far, quantitative easing, which the Fed says is coming to an end and has tapered away. So far, they've only bought some bad subprime mortgage-backed security debt from various commercial banks and also, of course, huge amounts of US Treasuries. But you can never believe what they say because as recently as 2010, James Bullard, who was head of the St. Louis Fed was saying, well, you know, all these purchases we've made since the crash will all be unwound or sold off or allowed to mature. And when it's all said and done, we'll return to the same level of Fed balance sheet as before the crisis. Of course, now they're saying, well, we're not going to return to that, but maybe we'll return to two or three trillion. And if you recall, the Fed's balance sheet went from about 600 billion to about a little over 4.2 trillion at its peak. So, you know, they keep moving the goalposts, they keep changing the story. And to the financial press, which is the most credulous bunch of court reporters you ever saw, they keep saying, well, you know, Janet Yellen's steady hand and her replacement Powell seems like he'll keep the same course and all this and that. You know, central bankers are groping around in the dark. They don't know what to do. And they're terrified of letting things crash. So the criticism leveled at Austrians and Austrian business cycle theory is certainly legitimate in the sense that it doesn't tell you when and how all of this will result in bad things for the economy. It just says, well, when you artificially inflate something, it has to pop at some time. So I understand the frustration with Austrians the public says, well, you guys are perma-bearers. You're always doomed saying, I get that. And I also get that what people really want from economists is timing. You know, when is the housing, the current housing bubble gonna burst? When is the stock market gonna burst? The problem is that we can't know what the Fed will do. Is it really that far-fetched to think that the Fed would buy fang stocks since tech seems to be driving all the gains in the stock market right now? No, I don't think it's that far-fetched because, and if you do, I would say this, do you think it was far-fetched in 2007 that the Fed would suddenly increase its balance sheet five times over in just a year or two? Yeah, you would have said, oh my gosh, Jeff, that's far-fetched. So there's no more normal monetary policy. Everything now is extraordinary, so-called monetary policy and it's an artificial form of trying to engineer the economy. Everybody knows that more money, base money or more credit doesn't equal more goods and services in the economy. It doesn't make us wealthier. So it's a form of financial alchemy and unfortunately, it's probably the most under-reported story in America or in the West. People just don't talk about it. It's not reported and it's just presumed that half of every transaction, meaning the money side versus the good or service that's being bought with that money, that half of every transaction will involve a dollar or a euro or a yen or a Swiss franc or whatever that is manipulated and engineered by a central bank. Nobody sits around and says, we ought to have, well, some people sit around, but most people don't sit around and say, you know, we ought to have a board of governors for the auto industry in America and they should sit around every year and decide how many cars are gonna be manufactured, what the price of each car will be, how much auto workers will be paid and when the cars should come out. You know, everyone would say, oh my God, that sounds like Soviet planning, but that's effectively what we do with interest rates in the dollar. So to me, very, very scary and the biggest untold story in the US. And when this bubble finally bursts, what's going to happen? Everybody's gonna look to the two-party system, well, not everybody, but the overwhelming majority of people are gonna look to the two-party system. The Democrats are gonna blame it on capitalism and they're gonna blame it on Trump and they're gonna blame it on a free market, which none of those things would have anything to do with it. And the right is going to say things like, this was engineered to make Trump look bad, it almost seems like you can't get the word out there of sound money and sound business and sound trade because whenever something happens where you can, which is a teachable moment, to borrow a phrase from the previous president, it's always a blame game and no one wants to learn by the mistakes everybody wants to blame somebody else. So let me ask you, if somebody just wanted to come to you and talk about economics, how would you, and they knew nothing about, nothing about Austrian economics, nothing about a free market even close, what would you use as, because you're always gonna have to play on people's emotions. You find that thing that they're emotional about, you talk to them about it, you give them facts about it and then it really gets them thinking, but they have to be interested in it. What do you think is something that is a, something that pretty much everybody would be interested in that we can talk to them about to, to start to try to expose them to how much of a house of cards this is? Well, what scares me and what I think touches a lot of people on a deep emotional level is this terrible situation with millennials. I mean, does anyone noticing, this is the first generation basically in US history that has diminished expectations relative to their parents. I mean, this is a shocking development to have a whole group of kids, and I'll use millennials broadly to say people born in the 80s and 90s. You know, a whole group of kids who says, well, I'm probably not gonna have as good a job as my parents. I'm probably not gonna have as good a house. I'm probably not gonna have a family, whatever it is. I mean, that's really astonishing because whether it's self-delusional or not, America with all of its checkered history has always had a sunny optimism that European countries don't have. You know, we're not a deterministic country. We're not a fatalistic country. And so to me, this is something people can understand on a visceral, non-intellectual level that something's wrong. They may not understand exactly what that is or agree with us. Not everybody agrees with us, of course, about what's wrong. But the point is that nobody's looking at the stock market and saying, oh my gosh, America's doing great. Nobody's looking at unemployment numbers and saying, gee, everyone's really, we have full employment. Everybody knows that a lot of people dropped out after 08 and that the unemployment figures are, you know, whether they look at them scientifically or not, they just have a sense, an unease, that things have been hollowed out and that especially since the crash of 08 that it's just harder. It's harder for young people to get on a career track job. It's harder to save money. It's harder to have the down payment for a house. It's harder to increase your real income or your savings, even though housing seems to be going up faster, especially in coastal areas and expensive cities, than your ability to save for a down payment, that sort of thing. People feel this and they get it. There's an unease in America. There's no question about that, even before Trump. There was an unease in America and we have to use that and tap into that, I think. That would be my approach for a layperson. Then if you get them even talking or thinking, maybe give them a hazlet's economics in one lesson because there's no better book. The beauty of that book is you can give it to somebody and they don't have to read it chronologically or even cover to cover. They can read a discrete chapter on rent control or tariffs or whatever it is and not even read the rest of the book. So if you wanna be ecumenical, that's the way to go. A lot of people wanna talk about money and bring it up in conversations. What about the people who are more philosophical, more morality-based? What topic would you suggest that you bring up to try and bring them over to our side? Well, I guess you got, it depends on the recipient of your hectoring. If there's bumper stickers all over the back about how you have to support the troops in this and that, yada, yada, you might not wanna go the anti-war rap just off the jump, you know? Yeah. Well, I think the drug war is probably the single place where the libertarian, I won't say necessary libertarians have had the most success, but the libertarian perspective has had the most success. In a relatively short time, people's attitudes on drugs have changed radically and that's due to a lot of hard work by a lot of people over a lot of years to say this is crazy. And maybe what it really took was just the states themselves sort of shrugging and saying, you know, we just can't keep having what's effectively an unfunded federal mandate where every time our cops pull someone over and a guy's got a little bit of a joint in his ashtray, all of a sudden we're putting him in handcuffs, we have all this paperwork, the cop has to take half a day, you're taking this guy downtown, the public defender has to get involved, the prosecutor has to get involved, he's in jail for a day and a half. I mean, just the cost of this is so crazy and so out of whack that I don't care if someone wants to end the drug war for pragmatic reasons rather than ideological reasons, I just want it ended. And so, you know, medical marijuana, well, I shouldn't say medical marijuana, I should say legal marijuana in various states, Colorado being sort of the leader is really an unbelievable libertarian success story and Michael Bolden of the 10th Amendment Center reminded me the other day that I didn't remember correctly, but at the beginning of his, the first couple of years of his first term, then President Obama had sort of tried to send in the feds to bust up dispensaries and arrest everyone and seize their inventory and all that, but then towards the second half or maybe a second term to his credit, he kind of stopped doing that. So it's a little bit of Irish democracy in the sense that there may be federal laws on the books that preempt state law, I don't believe in federal preemption, but in the current legal climate, you have federal laws on the books that preempt state laws and say X, Y, and Z is illegal in the drug arena. And states just kind of say, well, okay, we're just not gonna follow the federal law. And that sets up a potential showdown is somebody gonna sue the state in federal court or is the Justice Department gonna send in a bunch of federal cops? You know, Obama to his credit, stopped doing that at some point. And now I think the genie's out of the bottle on marijuana and it may be slower than we wish it would be and there may still be a lot of dumb thinking about so-called harder drugs, but it is a great success story and it's one I think provides a bit of a roadmap to us for how we can go about other libertarian legislation. It's tough because it's been gradual and incremental and that doesn't satisfy the radical in many of us, but man, look at what the progressives did incrementally in the 20th century. Oh my God. So we gotta take our victories or we can find them, I guess. Do you think liberty can be won that way through the political process? I don't know. I don't know and I do know this. I don't think that we are oppressed in the sense that we would be justified in some sort of physical armed revolution. I don't as awful as things are in many ways, not always, but in many ways from a libertarian perspective. I don't think we, from a proportionality argument and from just a human argument, I don't think we have that sort of right of self-defense. And a lot of good libertarians would disagree and say we absolutely have reached that point. I get that. Personally, I'm a Rothbardian and cap. I'm not someone who believes that the state is necessary even to provide so-called national defense or police or judiciary. But that being said, if Rand Paul or somebody like that can throw a monkey wrench in an NSA or FISA amendment in the Senate, that's great too. I'm all for a multi-pronged approach, but the bigger question is whether human beings in the West, who are quite comfortable materially, will ever really change things politically, absent some sort of cataclysmic event? Do we need an economic collapse? Do we need a war? Do we need some big political event to rouse us from our slumber? I don't know. That's a question about human nature. That goes to psychology and all kinds of things that I'm not equipped to answer. I hope that's not the case. I hope we can turn this thing around without having some awful crash that hurts a lot of people. But history and human nature tell us that that might not be possible. In the age of Trump, since we've seen Trump get elected and even before, it seems that a lot of liberty-minded people, people that think like us, have glommed on to this idea of building a border wall and they don't mind the taxation. They don't, taxation isn't theft anymore. They don't mind taxes going towards a border wall, something that they wouldn't have talked about three or four years ago. What do you think has happened? Well, I don't know that any libertarians are talking about a border wall. I think Trump people are. It certainly become a hill that a lot of libertarians wanna die on, which is this idea of borders. So if you wanna talk about borders, I'd love to just discuss it. Maybe I can frame it a little different than people might have heard it framed. Go ahead and do it. You know, the question here is, I don't know any libertarians, including Hoppe or Kinsella or anyone else who want government in charge of borders. I think that's a bit of a misnomer. So starting with that, you know, I heard a prominent libertarian the other day. This might have been a week or so. I probably saw it on Facebook or something. Say, I'm for completely open borders with the only proviso that for criminal background checks and public health. And I started to think about that a little bit. And I'm basically an open borders guide myself, Jeff, depending on the semantics here. And so I was thinking about that for a while and I thought, man, imagine this. What would a criminal background check and public health check really look like? Well, first of all, you'd have to detain folks physically somewhere. Well, this was occurring. Is this gonna be some sort of camp with walls and barbed wire while you keep these poor people in there? And good luck with a criminal background check on people from the less developed world where there's not a lot of record keeping and that sort of thing, or people with generic names, like someone from a Hispanic country who has a very generic last name like Garcia or somebody from, who has a generic last name like Smith. Criminal background checks, that sounds like a really daunting sort of administrative task that would require quite a big effort at the border. And then public health checks, I mean, are we gonna draw blood from people? That's pretty invasive. Are we gonna take swabs from the inside of their mouth? Are we gonna ask them to undress so we can check them for communicable diseases or whatever it might be? And I was thinking to myself, some open borders. I mean, that sounds pretty closed to me. I mean, I would favor obviously a private system, but I would also argue that unless and until governments go away, they're always gonna define themselves by borders. In other words, borders would be sort of the last thing to go because that's really how politicians define themselves is monopoly control over a certain population in a certain geography defined by borders. I think we're looking at this a little while. I think you leave people alone and see what they do. I think immigration should be a very localized decision like it is in Switzerland. I think the vast majority of Americans are completely happy with letting smart, hardworking, especially people with some capital come here and they don't want criminal, lazy bad people coming here and the market can take care of this by itself and there's certain areas that need lots and lots of immigrants because they're not populated enough and they have a demand for workers or jobs. And there's some places that are really, really crowded that might say, wow, we don't need any immigrants here. So I think the marketplace could sort this out but it's a really difficult question in the current environment. Just like welfare is a really difficult question in the current environment. So I think when people say, well, this is the hill we have to die on. We ought to have closed borders and even if that means the government enforcing them because if we don't, a bunch of really non-libertarian people from the third world are gonna come here and ruin any chance to have a less-statist America. I don't really agree with that but the flip side, a lot of critics of the Misenstuhl say, oh my God, those authoritarian status at the Misenstuhl. Unless we have completely open borders on a national level, you know, if you advocate anything other, you lose your libertarian incorporated badge or something. Now I just kind of shrug and I say it's like anything else. I think the market could handle it and I think we're overthinking borders. That's my two cents today anyway. Yeah, I've actually heard in the past week or so. I think you said that you listened to my last podcast where I was, I wouldn't name a libertarian journalist who just openly admitted that he has no background in liberty, he just does it for the journalism. You think you said you had heard that? Well, he basically in the same interview just pointed at the Mises Institute, pointed at Auburn and just brushed it away. And I've heard people recently referred to the Mises Institute as the Paleo-Libertarian Institute. And I'm just, I'm trying to figure out where all that came from. I mean, I think everybody went through, anybody who supported Ron Paul in 2008 went through a Paleo-Libertarian phase because a lot of what he was talking about was, had some classic Paleo-Libertarianism to it, but yeah, it seems like a lot of people have been pointing the finger, you guys weigh lately, saying that the Mises Institute is no longer libertarian. And I just, I'm not really seeing it. Do you think that's just hate? Well, I would ask a very simple question of anyone. And I understand the left and right libertarian division. It makes sense to categorize people, but it's a very human thing and it's okay. I think what we're talking about in terms of left and right libertarians is more cultural preferences that are extra libertarian that don't involve the state per se. So here's the question to anyone. Do you advocate significantly reducing or eliminating the role of the state on any issue? That's all I care about. If somebody arrives at libertarian because they read, Benjamin Tucker or if they read Sam Conklin, then that's great. If somebody arrived at libertarianism because they read Rothbard or Hoppe, that's great. Who cares? In other words, are you willing to let the chips fall where they may? Would you still advocate a more libertarian society or a fully libertarian society if it turns out that your cultural preferences were diminished in that society? For me, the answer is yes. You know, personally, I'm not religious, but I do have a lot of sympathy for Christianity as a moderating influence for what we could very broadly call Western civilization. So in the eyes of a lot of people, they would probably categorize me as a right libertarian. Okay, I can live with that. But would I also prefer a more libertarian society if that meant lots and lots and lots of social arrangements that weren't really my cup of tea? Yes, I would. So that's the question I have. I don't care if someone's a left libertarian. I care and I happen to disagree if they attack the misuses too. Okay, that seems silly. If you don't like Rothbard or if you don't like all of Rothbard, for example, well, you don't have to read him. He's brought a lot of people to a libertarian perspective. And we're talking about a guy who wrote 30 books, who wrote 1,000 articles, who wrote 100 chapters in other people's books over a span of many, many, many decades. So it would be a bit odd if you agreed with every word he said and I don't. But look, if you're asking me about attacks on the misuses, dude, I'm kind of biased. So you should probably ask a neutral third party. How about that? Yeah, that makes sense. But when it comes to the misuses, dude, if you don't like Rothbard style or if you think somebody's attacking somebody, read someone like Bob Higgs. He's not attacking anybody. Has Bob Higgs ever written anything that's offended anybody? So there's plenty to choose from there. I guess what I'll end with is the Mises Institute has meant a lot to me. I've ordered books there from there over the years. I've downloaded PDFs. I've sent people there to download PDFs over the years. I love the story that Bob Murphy told this week on Dave Smith's show how it used to be that people would write letters to the Mises Institute and say, can I get a copy of this? And they'd have to mail it to them. And now they just look at how things have changed in the internet. You can just look at how many PDF downloads you had for a week. And I'm sure books like Anatomy of the State and things like that are amazing. So tell people what the Mises Institute has to offer them as far as educating themselves for libertarianism and for liberty. Well, that's really our mission. And it started out as more of an academic mission that we were trying to help PhDs in their own learning and try to help them with jobs and with networking. And all that was very different, very much more difficult back in the 80s. My God, it was so much better if you're a libertarian or Austrian leading academic today trying to get a job. But it's really our mission morphed over the years into more of a lay-friendly mission because I don't think basic economics is beyond the ken of the average person. But more importantly, it ought not to be because ignorance about economics is what lets the political class and the central bankers get away with all this nonsense while the public sort of stares at their navels and watches the NFL playoffs, right? So we all have an obligation to not be dumb on economics and political philosophy because it's the stuff of everyday life and it affects us whether we wanna put our heads in the sands or not. So that's really become our target audience is just the reasonably curious and educated lay person. And we wanna make as much content available to that person for free on whatever platform where some people wanna just occasionally read an article that looked interesting from a tweet that showed up on their Twitter feed. And that's all the economics education they care to consume and that's fine. And some people wanna come to the Mises Institute, go to Mises U and then dive into, make economics their career and they wanna be consumed by this stuff and go become a PhD and maybe teach people. And that's okay too. We wanna be everything in between. But at the end of the day, we wanna be an alternative education for people. We wanna be an alt school that lets people consume as much or as little as they want for free and learn something about what we would consider proper or correct economics. And yeah, we promote a particular school and is there a bias there? Yeah, I suppose there is. But the flip side is that the whole world's promoting what we'll call some mishmash of neo-Kinsey and neoliberalism, which is to summarize is a demand side mentality. The idea that you either use fiscal policy or monetary policy to make people go out and buy more stuff and want more stuff and make it easier for people to consume and that's how you drive a prosperous economy. Of course, we know that that's not true. We know that that's very, very dangerous and oftentimes fatal and that production and productivity and capital accumulation of what healthy economies are all about. So, when our critics, even our left libertarian critics, but more importantly, our mainstream critics say, oh my gosh, you guys are just promoting this cranky Austrian economics and it's so ideological and it's biased. Well, we're a drop in the bucket compared to thousands and thousands and thousands of taxpayer funded economics departments across the country, huge foundations, huge think tanks that promote views very opposite to ours. I think I find this pushback a little amusing and I also take it as an indicator that we're having some impact and some effect and that we're bothering some people. So, if you're interested in economics, come to me.org, dig around a little bit, find a book you like and I think you'll be rewarded. And if you're not, I would just say, okay, then go consume libertarian content somewhere else and God bless and so that's my ecumenical approach and that's, to me, what the Mises Institute is all about, providing free education for smart lay people. That's Mises.org has done so much to increase my knowledge philosophically and economically and I just can't thank you guys enough. Please keep up the good work and until the next time, I hope we can talk again. All right, well, we'd love to host you at the Institute sometime. Thanks so much for having me. Thank you very much. Take care, Jeff. Subscribe to Mises Weekends via iTunes U, Stitcher and SoundCloud or listen on Mises.org and YouTube.