 Welcome back to Radio Rothbard and I'm joined as always by Ryan Macon who is paying through the pain with the cold right now so it's just FYI so I'm not going to do perhaps a little bit more talking than the normal but it's also a very interesting time in the calendar I know you have on it is World Economic Forum Week and I felt this was a good opportunity to talk about something that I've talked a little bit about on Twitter it's a topic that I found interesting over the last year or so and there's been renewed interest in a variety of different channels in the works of James Burnham and in particular the idea of the managerial revolution and I think that the World Economic Forum in particular while I think there is something to be said about how we perhaps overstate the importance of Davos as a physical place and you know Carl Schwab and his like really creepy you know space outfits and John Kerry talking about how the people there might be extraterrestrials and all sort of stuff well I think it's easy to perhaps overstate the importance of that individual room in this individual event you know you can do all sorts of evil things without getting together I do think they kind of are a perfect embodiment of larger concerns about global corporate power about the view of kind of decaying direct private property entrepreneurs guiding society that increasingly it seems that the political agendas are less dictated by democratically elected officials for all the problems that we know of democracy and more about a rooted bureaucratic class and this is why you've had people interested in the work of James Burnham because you know he was writing during World War II about a new economic system that was going to replace capitalism that had failed and he was wrong right this is this is Burden was wrong about this but that capitalism had failed we were never going to get back to full employment we're gonna have endless homelessness unless we adapted that socialism doesn't work you know as a former Marxist himself you know socialism has its own problems and therefore all advanced systems are going to adapt this form of third way politics this this economic managerialism that you know was very in vogue in Germany and and Italy and in FDRs America and that this is a way forward and that ultimately all these other forms on the side are going to kind of decay into the oblivion what's interesting is that reading Burnham's book a lot of his predictions are absolutely wrong and his absolute I think his disinterest in economics and instead his very great interest in political power and this sort of Machiavellian project as as you know this was criticisms that Burnham has received from George Orwell from our own Justin Romando and a very interesting article about Burnham's thought Murray Rothbard had a review of Sam Francis's beautiful losers that touches upon Burnham's failings as well with his connection with Francis and what I think is interesting and completely missed in this contemporary discussion of this Burnham notion of managerialism which I think is true now more than when he was writing is of course the financialization of the economy and so all of this is sort of a wind up into the way that modern central banking a common theme on this show Ryan you have a great article out this week about you know the the laughable notion that the Federal Reserve is a bank by many you know real measure of it that is a purely political institution and of course again I think one of the most important lessons that I would love to see continue to trickle out into other circles is the degree to which financialization which you've written right I think one of my favorite articles on this topic in the past as well financialization is what has created modern managerialism that has empowered the steep state class and that if we do not strike at the root of modern central banking and finance then the Davos crowd and everything they represent wins and so if that wind up there Ryan take it away well there's so much there that we could talk about oh good my voice sounds nice and low thanks to this cold so we'll just continue on this for this week I just wish it would stay this way for the the future but the last but yes talking about Burnham I mean yeah the I would highly recommend Justin Raimondo's chapter on Burnham from reclaiming the American right one of Raimondo's best books and yeah not overly sympathetic toward Burnham at all just takes out what what good insights the guy had but I think you could learn a lot of the same information by just reading information about state building and the history of the state which has come out in the last 50 years or so probably you could learn a lot from say Martin Van Kreveld and his rise and decline of the state this talks about how managerial institutions the bureaucracy basically took over our notions of what government should be in the last couple of hundred years so that's like the larger historical context there but I think it's the way I had suggested this episode to you a little bit was in in the in line with the idea of here we've got the central banks they're pumping out money there since the 1980s when financialization took on a whole new dimension and became much much larger and much more dominating in the economy central banks become the key financial institution especially in the last 20 years and so what you see over and over again our Wall Street hacks and media and basically everyone talking about how what's gonna happen in the economy well it just depends on what the Fed does next well that's not normal in a in an actual economy that has you know markets and such then what happens next in the economy depends a little bit if not mostly on what's going on in terms of production and income and wages and efficiency not just how much money will the Fed pump out next month but that's where we are now and so the way I saw the episode to you was hey let's talk about how we're gonna hear all about how all this capitalism in the world is ruining the economy and how there's just too much capitalism right now and how when the economy fails we're gonna hear about how capitalism screwed us over when we could just look out there and we can see right now that the Fed has bought up about 23% of all mortgage loans so you got almost a quarter of the entire mortgage market in the Fed portfolio that's that's not what a market is that's not a functioning market central banks have come to so dominate everything that it's just the latest reminder of how you've got these technocratic organizations run by these Davos type people which is absolutely who's running the Fed and you've got as we're seeing a Davos all of these organizations quote unquote private organizations in league with these government officials there's so little separation between the so-called capitalist elite and the government elite it's not the 17th century when the entrepreneurs and the capitalist were this hated group that was on the outside and the people who ran everything were the nobility and the monarchs and then the capitalist were fighting to get some independence and representation and they were separate from the ruling class everything's very very different now and of course then there's no real market functioning in any of these economies right now where the central bank has completely taken over so yeah when we're looking out there and we're seeing what's what's going on right now the the age we're living in is the third way age as you're talking about right it's what a lot of the critics well it's it's what we could call neoliberalism now when a lot of critics of neoliberalism whine about neoliberal neoliberalism what they really mean is all liberalism they mean anything that's like markets so they equate neoliberalism with libertarianism even though they also include Hillary Clinton among the neoliberals I mean the word is so broad is to have no meaning but when people who hate neoliberalism from the left talk about neoliberalism they're just talking about hey there's too much capitalism but the reality is that if you think of neoliberalism as this thing that's occurred since World War two where we can't let laissez-faire happen we've got to regulate it we got to have big welfare states which is the reality because it's not real liberalism then that's where we are you can talk about how capitalism failed so has every other ideology except neoliberalism right monarchism failed conservatism failed classical liberalism failed communism failed where are we now everything every regime wants its own brand of this third rail or not third rail third type of market organization and that's this whole highly interventionist state it's the intervention Mises talked about because he always made a distinguish they always distinguish between communism socialism and then just interventionism which he didn't like either of course and pointed out that it just gradually leads more and more to socialism but that's where we are everywhere if you look at the global elites that's what they all want they want something that's not communism so that they can continue to be in control of their own little pieces of it but they certainly don't want laissez-faire because that would mean real competition and real freedom and that's unacceptable to this elite as well so that's where we are that's the ascendant ideology that's the world we live in and so I'm getting a little sick of hearing about how capitalism and laissez-faire is out there running rampant destroying everything and of course the problem is is that the the figureheads that we see as being the great titans of our modern age right are the business biggest benefactors of it and it's becomes a very depressing dynamic where you know Jamie Diamond who is by all means you know not not exactly one of our our favorite people for a variety of reasons but like it's it's him standing up to some brain-dead congresswoman from I think Minnesota Minnesota I believe railing against how you know their sort of energy policies and their desire to force banks to not invest within energy projects is going to you know create hell on earth I think it's might have been his literal words there it's been a while since I've seen the clip and it's like if Jamie Diamond is as good of a is the best spokesperson we have out there you know trying to push back and get some of this stuff then that's a really bad sign right I mean Elon Musk even with all of his quirky you know recent stuff and his Twitter accusation his Twitter acquire meant and you know that the Twitter files on sort of stuff and here's a man who has built his entire career largely based off of benefiting from government subsidies and itself I think this is one if we look at the auto industry it perhaps I think is a very concrete example of how this form of managerialism truly works because they've built into the market so many incentives promoting a particular market in electric vehicles they did by subsidizing Tesla they've done it by hurting with with regulations on emissions and things like that you've had it happen both from Washington bureaucracy as well as even your far more progressive policies from a state like California that carries with it a tremendous amount of economic weight and so the dynamic to which profit and loss guides the way that you know it guides a steers a market your steers what is produced they have done a wonderful job of so manipulating the factors that go into that profit and loss dynamic and you are a winner if you're a consumer buying electric vehicle you are a loser if you buy a vehicle that's not even getting into the taxes on gasoline and all of the the energy dynamic there and the way that you know we have made it harder to create gas processing facilities that you diminish our America's ability to you know fully utilize its own oil reserves and etc etc you know there's so many fingers so much weight skewed on both sides of this equation that it has created a signal for so many other car companies to rush into the specific market this particular specific ideas following Elon Musk and I do like that fact I tell you what a CEO you know has this comment and I had there are they're avoiding that marketplace because they think that there's nothing wise there I don't know maybe they're Japanese really are smarter than the West and their ability to figure that out but so again if Elon is the punky you know guy is trying to stand for the right thing we don't have those sort of Titans of industry that are willing to speak out with a confident voice to highlight what is going on I mean back in the day you know some of the biggest benefactors for Louis von Mises for Leonard Reed you know for the libertarian aspect of the old right in particular were general motors right it was major manufacturing and all that in the way that they've been able to the regime has been able to so co-op this class with perhaps the occasional you know the occasional example right and I know John Mackie from Whole Foods goes around to the students for Liberty events and you know that's great right fine you know the Koch brothers you know historically played that role in their own sort of ways you know plenty of criticism there I'm from certain people but you know fine they they made a big part of their industrial mission promoting you know free markets and the name Louis von Mises whatever fine but that that class is dying off and very much in that process and so that leaves you who defends capitalism if the biggest economic benefactors that represent industry are all completely co-opted by this economy that the this this financialized managerial revolution has created and I think that is creating a lot of the angst and the frustration that you're seeing kind of percolate politically on the right that they're taking a a more business skeptic and perhaps more appropriately corporate skeptic viewpoint I think often they are right on this but the problem is is that if you're not grounding these critiques back into an appreciation of sound economic theory right if your only focus is you know Bernaw Machiavellian politics then you are missing a massive piece of this equation because ultimately you know if you own the libs and and you succeed you still have to figure out how to create and produce stuff so that your society doesn't decay and destroy itself and and that that is the aspect here where you know how do you promote the importance of industry if all of the great figureheads of industry are completely co-opted and like that that's that I think is something that makes that world economic forum sort of dynamic so so scary to people because again you know once upon a time not that long ago you know owning owning a computer you know was was really cool and the internet embodied everything great about society and all this all this age of advancement and now you know Bill Gates is viewed as a as you know I think rightfully so like I'm not defending Bill Gates but you know now if Bill Gates has become you know one of the comic book villains of the modern age you know I can understand why kind of forces you to rethink everything yeah I mean who are these great saviors of freedom people at Twitter people at Facebook I mean come on these people not only yeah sometimes they were strong armed by the FBI but they willingly assisted the regime with spying on people censoring people silencing people they pushed back a little bit but come on these these people they all grew up in the same sorts of places a lot of the time if they all went to Ivy League together they all think alike the only people who are really out there who are defending freedom are generally the outsiders and it's it's because once you've reached the apex of industry normally most sectors of the industry not all there are some areas that don't benefit heavily from government subsidy and intervention the closer you get to financial sector stuff real estate banking Wall Street the more government intervention there's going to be because states for 500 years have figured out that one of the first industries you take over is the financial sector so they've been meddling in that for centuries so anytime you hear a banker talk about the bankers right there they're happy to accept boat loads of government subsidies they're subsidized to the tune of trillions of dollars now through the interest paid on reserves by the central bank heavily subsidized by the taxpayers not to mention the fact that they benefit first from a lot of the newly created money and net let's never forget tarp and those low interest loans they got that the bankers ridiculously well we paid all the tarp money back yeah you would have gone out of business without the tarp money you should have been bankrupted and liquidated the only reason you still have a job Mr. CEO is because you got that taxpayer subsidized loan and then so of course they're living off the sweat of the taxpayer these bankers and then they every time there's some regulation they don't like they turn around and whine about how you know we need to protect free market economics I mean give me a break they don't care anything about that they're just trying to protect their own particular shop and if if they can build their their portfolio through government favors so be it and that's of course the electrical automobile thing being an entrepreneur now is figuring out ways to get government money it's figure out ways to screw the taxpayer that's what entrepreneurship is among this this elite of people who are involved in electric cars in the financial sector for the most part yeah there are always people on the outside there are people who are trying to create new products and compete who are not favored by the regime and those are the people you probably have to look to and I think maybe that's why 20 years ago 25 years ago we looked at people like Jeff Bezos and we looked at people like Bill Gates and we thought hey these are scrappy little entrepreneur types there they're doing something different maybe the future will be all these entrepreneurs controlling the internet and they're gonna be these laissez faire types and it's gonna be great what people forget is that the regime has boatloads of money and it could easily co-opt the brightest people the smartest people and and get them to work for the regime and do what the regime says so you're only the only way out of that is you need people who are extremely suspicious of the regime in large numbers and that's certainly not the case at the moment you would need to change things so that you you had something going on like in the 19th century where you had more of a mass movement of where people hated the regime but that was because they learned to hate those institutions like the monarchists like the people who were involved in mercantilism right but that's where we're back to we're back to a sort of mercantilism mercantilism whatever you want to call it where the state has figured out to co-opt whatever markets exist to turn these people into servants of the larger regime and then to use them to actually empower the regime it's not a new strategy it was perfected really in the 17th and 18th century but it's certainly back the 19th century had a great run for some more laissez-faire the mercantilists came roaring back they seized control of that and so when you see the world economic forum meeting it's just the it's just the mercantilist 2023 all getting together to figure out how they can work together to empower the regime and themselves and so yeah we can't just when these conservatives they trash industry they trash the markets they don't really understand that they're not really trashing markets they're trashing people have been co-opted by the regime they're usually they don't have much interest in how markets work or how capital works so they can't even really tell the difference between a new entrepreneur who builds up a large successful business and someone who's living off subsidies from the government that's very hard for them to understand a lot of the time and so they don't make that important distinction there's the productive class and there's the parasite class and the conservatives don't make that distinction properly there's just industry and then there's people who want to live like farmers on the open land like it's the 13th century or something of this romantic view of how everybody should be living when the reality of the distinction that matters from classical liberal exploitation theory which the markets Marxist then ripped off and created this idea that people are exploited by the capitalist the reality is the exploitation is simply one of people allied with the regime who use regulation of taxes to rip off the productive classes so those are the two classes you need to worry about productive and parasite and some people involved in industry or parasites some are not everyone involved in government's parasite and they're in league with a lot of the people involved in quote-unquote private business and so that's what you need to be on the lookout for that's the difference between a good entrepreneur and a bad entrepreneur and you know as far as I can tell and some some libertarian some classical liberal the only people are really properly making that distinction right now but that's what we have to look out for because you cannot just look out and say oh this person's their head of a private business they must be some lover of capitalism so many private businesses heck they're only client a lot of the time is the government think of these construction firms that build roads or government owned sewage treatment plants right they don't have a single private sector customer think of that horrible company that makes like voting machines right which was just now suing for being being defamed right they're basically a government agency and then all these private weapons firms or Eric Prince with his a mercenary firm we're supposed to act like these people are princes of capitalism they've never made an honest buck in decades because they're all living off taxpayer funds so we do need to have a more sophisticated view of what the markets are and just how much of it's also being financialized by central banks that is by the regime and that you need to just be more discerning and what's what's laissez-faire what's not who are the good guys who are the bad guys because the way it is right now people are getting it very very wrong and of course I think it doesn't help on this and it's gonna sound like a almost a left-wing criticism here and I think doesn't know me well enough but that's not the case but you do have a dynamic there where if you look at the list like the 25 richest Americans you notice a lot of similar last names right you there's a lot of those that are the the biggest benefactors of these large corporate enterprises that were not the people that founded them so you you have there's there's another aspect here where again this ties into another aspect of this which is the takeover of the late institutions where you know the the sons and grandsons or granddaughters of these these great titans you know have that they're in a position to enjoy the the fruits of their you know what they've inherited and yet can then utilize that in all sorts of you know ways that go completely against all the values that their superior predecessors had I know Curtis Yarvin likes to highlight you know the complete decay of the Ford family and how you go from Henry Ford to the Ford Foundation and everything that they finance my wife and I have been enjoying we were watching a series food that made America which highlights all of these great sort of industrial age food Titans and you know how they solve these problems of people moving from like small-town farms to these these very tightly condensed cities and all of the problem-solving the innovation that you had to come about to like feed all these sort of things and it is worth noting that back in the day like you did have the sons or in one case of the post family the daughter was very innovative from their own right and help you know build what was already a successful company to something even you know far greater than what they inherited so this is an I think a historical you know a historical absolute that the set next generation must be worse than that came before but but that's another dynamic here and when you combine that with the financial incentives in particular that post 2008 era where those that are in financial markets benefit so much more than those without it you know how many new you know how many people that have the talent in the mentality to have succeeded in becoming one of those great Titans of disrupting an industry creating that that that creative destruction that I always have to be careful throwing around you know Schumpeter references and Austrian podcasts I know but you know how many people that might have otherwise been able to have that ability in other eras have had a far harder deck stacked against them because of just the incredible power of you know the extent to which modern financial policy has rewarded those previously wealthy and so skewed the markets and ways to drive completely political outcomes and of course this this is what leads to broader concerns right when we think about the manipulation of you know food of health outcomes of you know the way that housing policy and now you have banks you know saying that they're not going to make mortgages and there's Wells Fargo or someone I mean pretty major player in the market saying that they're not that they're going to make mortgage decisions based purely off of skin color and things like that I mean you have some of the most profound important sort of needs that society has that is now being filtered through a purely ideological ends that can then result in very material environments that can fundamentally alter the way that people think going forward that can have incredible consequences to family structure and production down the road on this kind of you know that kind of touches into you know the consequences of how you know in debt millennials in generation Z has been pertinent in particular from the student loan scam and the way that helps fuel people you're not getting married or having kids later and later in life which can influence political views of individuals you know it is it's a very very scary time and again the important thing is that for those that have appropriately realized you know what time it is to use a popular phrase the the issue here is not you know the the the victories of libertarian economics and you know the right worshiping at the altar of the market it is entirely that the managerial revolution that Burnham was in in his case celebrating has come true through financial markets and then unless we deal with that dynamic then you know any facade any attempt to fight it without taking that to into account is is you're not hitting the actual problem there yeah and you can see just how much they depend on all of that of course it's never a surprise to see a company like Wells Fargo doing exactly what the regime would like to see they're always in lockstep with the regime in terms of whatever the latest political fat is and why wouldn't they be when you've got not only the fed buying up nearly a quarter of all mortgage back securities and thus buy through that taking worthless mortgage loans and propping them up by just holding them on the books forever and not selling them and buying them with newly printed money which you pay for in terms of inflation so that's a just a basically a indirect subsidy to the whole banking sector right there the whole real estate sector and so you wouldn't want to upset the the monster that controls that sort of thing not to mention the fact that of course big financial institutions also have sizable bond portfolios a lot of the time and the Fed has also bought up huge portions of government debt as well in order to keep interest rates low on that so that the government can just keep up with deficit spending and not have to to deal with what in a normal market would result in an inevitable rise in interest rates so it's got its fingers deeply in there and of course then banks they don't want to what they don't want to upset the apple cart and so it's all of these cultural issues culture war stuff is actually being funded indirectly by the regime because by buying up so much of what's important to the private sector they just have to do whatever it is that the regime wants to do and it's really no different than from the east india company or these other government corporations in the 18th century that tended to be in lockstep with the monarch right what he wanted that's what you did because that's how you got your special favors in order to carry out here in order to enrich yourselves as the people who headed up the east india company and so they're just two sides of the same coin and that's what's going on now you should view these companies in the same way that an american revolutionary would have viewed a government a monarch backed corporate entity in 1775 it's the same sort of relationship their extensions of the crown if you will jp morgan is and that's the amount of moral legitimacy you should give them in terms of respecting them and in terms of seeing them as something distinct from the regime the only way out of that then is to starve the beast you got to stop buying into this idea that the government should be able to print all the money it needs that deficit spending is no big deal because all they're doing is financing your oppression by propping up all these companies that can then just do whatever it is the government wants in terms of enacting social policy cutting you off if if you say something that the company doesn't like in social media all of that would be impossible really without just these constant subsidies coming out of the federal government because companies would have to actually compete for customers to treat their customers right they would have razor thin profit margins it would be much more competitive and it would be much more open to new entrepreneurs coming into the marketplace to serve underserved groups but as it is everything's just fine because we fully financialized the economy what does that mean i mean we keep throwing that term around what it means is that the central government through a variety of mechanisms and there is an article that we'll link to in the description on this where they have essentially shifted the balance away from physically productive firms so by offering risk free essentially financial investments and by making it more so that moving money around that lending money that buying up government debt or other types of debt is more lucrative thanks to central bank intervention regulation then putting that same money and investing it into say an automobile factory or a pharmaceutical factory or something that builds things or say a trucking company that's good for logistics any of those things that that work in the physical world that move around things that build real things that employ large numbers of people those have all become relatively less profitable because thanks to the central bank where all the real action is where all the real money is is in the financial sector because they'll bail you out they'll ensure that risk is low by buying up assets to increase its value and anytime that the financial sector looks like it's in trouble here comes the central bank writing to the rescue other parts of the economy they might just be let go out of business they might be forced to actually exist in a competitive marketplace whereas we all know that the more deeply embedded you are in the financial sector the more likely you are to get special favors and so that just shows how screwed up the economy is because now building things is relatively less profitable what is profitable is just parking billionaires parking their money in certain places that are likely to get bailouts and of course that's simplifying due to a significant extent but that's essentially what has been going on for the last thirty five forty years and that's what we mean by financialization i do have a a note from legal that when you say that these companies are like we should view them the same way the revolutionaries feud uh british corporations we are not advocating people breaking into ports and throwing bug burgers into the sea just you just want to make very clear burgers yes um but uh i think we need a a little bit of a end on an uplifting note and because this is this is a lot of a doom and gloom on where we are now but this is what makes this current environment so interesting um where you're we're now dealing with james bullard um you know one of the members of the fed earlier today um said that he looks at uh he's viewing interest rates in 2023 going up you know well beyond five percent um you know continuing the the gradual increase in rates um you know going against the pivot narrative out there um he has been right in the past but you know any fed official has you go back long enough and they they will be wrong um i i am interested in this dynamic what we talked earlier at the start of the episode the degree to which past fed policy has fueled all of these problems and yet there there does seem to be something of a tension between what the fed is doing and what the rest of the world wants the fed to do um and at tom the long go um who is who's always interesting or always at a very interesting pundit out there um gold guns and goats i believe his blog um but he does a lot of very interesting stuff on on financial and geopolitics and things like that his sort of framing of current events right now is that there's very much a tension between let's call it the new york crowd and the davos crowd and that um that going forward like that that the euro and the ecb you know is is is not very happy in particular with what the fed is doing and that other economic powers out there be them central banks dealing with the real cost of rising interest rates and the the government that they have subsidized um they do not have quite the same strength that america has for a variety of reasons and that ultimately we might see more of a break between after after um you know a decade plus of relatively you know hand in hand central bank policy and the consequences there of other countries if pal continues to increase rates um and i i know we have and i think continue to be skeptical of again what we're not trying to to certainly paint you know lawyer j pal as some sort of great heroic figure but if if they really do prioritize lowering interest rates to the degree that they have voiced in the past and have so far followed through with policy it'll be interesting to see how that breaks away with some of the fact you know some of the folks that attend davos in the world economic forum because ultimately this very financialized politicized economy needs the fuel of artificial low interest rates to help make up for the real profit and loss consequences of making products that people don't want until they are perhaps engineered to want that that's a larger process that is a longer process right there um so that's that's that's a dynamic that looking forward you know does a pivot from what has been a long gross um hedonistic monetary uh financial framework does a the potential of a sustained new era we'll see if that happens but does what what impact does that have on the problems that we are discussing right now well i think that everybody loves the fed of course when the fed's inflating right hey everything's great the fed it's keeping the the the money spigot going it's great the fed is a perfect genius organization run by brilliant people we love them there's nothing wrong with them that's what wall street always says when the fed is inflating that's what other governments always say when the fed is inflating but as we have tried to emphasize here at the mesis institute and we'll get we got to keep doing it more because people still aren't figuring it out especially wall street the problem is the boom not the bust because the problems were all being created when the fed was just inflating everything because that's what was causing all this money to flow into bs enterprises that like like uh all of these marketing employees legions of marketing employees at twitter who couldn't ever manage to create an actually profitable company beyond a couple of quarters these people what they were making money to do nothing and that was only uh made possible by all the inflation so people feel great when the money supplies being inflated by the central bank but suddenly they're all criticizing the central bank when it takes a hawkish turn and of course i use that in relative terms i mean i wouldn't describe the fed as hawkish per se but relatively so obviously compared to the days of janet yellen and now everyone's complaining about the fed uh but what's important to keep in mind is that the fed uh i think in particular j powell i think he's smart enough to recognize that inflation can actually get out of hand and that they don't know enough to know what could happen if they just let things fly and so i think he's trying to err on the side of caution now why would he everybody everybody wants him to spend more money well wouldn't that make him popular well if there's any rule in politics that you might be able to point to historically it's that high inflation leads to political instability and the the job of regimes is to avoid political instability they hate instability we hear about how bad instability is all the time in a variety of contexts whether in this country or other countries and that you need to avoid that and i think that's what j powell understands and what the smarter people within the regime understand and that's why they at least in the minority probably are pushing rising interest rates because they want to actually kill the inflation dragon not because they love the american people not because they think inflation is bad based on some sort of economic theory but because they recognize that it leads to political instability and so that's that's bad news for all the other central banks that are deeply wedded to easy fed money or for other governments that depend a lot on fed inflation and and invest american investment in their own in foreign worthless bonds and that sort of thing that's enabled by easy money in america because the fed is able to essentially export its own monetary inflation because other central banks ride on that phenomenon so everybody's real mad about it also they don't like a strong dollar you know quote unquote strong just relatively strong compared to these other currencies we saw it after volker's time when only a couple of years after volker finished uh creating a relatively strong dollar then all these other governments started whining about that and and called america to the table to hammer out the plaza accord so that the dollar would start being devalued again through the central bank because uh they didn't want a strong dollar because that then makes it harder for you to buy american goods and uh also american exporters don't like that and it makes life more expensive for certain groups so they want a weak dollar even though many people of course benefit from a strong dollar so we should of course expect to see lots of whining and complaining uh from other regimes and from wall street about a uh a relatively strong dollar and rising interest rates but the the problems that they're now encountering from a rising interest rate uh wouldn't exist if we hadn't had 20 plus years of easy money and rock bottom interest rates that then reach just ridiculously low levels and essentially negative real rates after 2008 and then that lasted for what 13 years so that should have never happened in the first place that is what made life so easy for all these wall street people it didn't actually have to be particularly productive but could just keep selling more and more and just betting that there'd be some bigger sucker to buy this stuff and that interest rates would never go up and they made boat loads of money and but now they're seeing that in a rising interest rate environment they might actually have to work for a living and they hate that idea so they hate the fed all of a sudden even though the fed was their hero for the decade before that and this is all just becomes because they lack the austrian understanding of the boom and bust relationship and so we shouldn't expect them of course to come to a good understanding anytime soon uh but i think what's important to keep in mind is that this is the the the trade-off the the choice that has to be made is we are is the fed going to buckle from the pressure on those sides from europe from wall street to then start inflating again so that we could get a second round of inflation as what happened in the 70s because that's what kept happening in the 70s was oh we tied the money supply slightly it looked like inflation was going to go down a little bit so then we went back to our old inflationary ways and then we got another larger wave of inflation powell has made multiple comments saying he doesn't want that to happen and of course you can only trust so much what these people are saying but i think that's a reasonable conclusion for him to come to and he so he may actually understand it and again he's not doing it because he's a great humanitarian he's doing it because the regime is actually afraid of high inflation levels and so it's it's a matter of thinking short term versus long term if you don't think long term you might end up with runaway galloping inflation and that leads to things like coups uh we can we can tie multiple military coups and other sorts of um actions that overthrew a regime due to inflation because it leads to major problems for people to be able to afford a living and so if i were them i'd be afraid of runaway inflation too uh so it seems that the fed uh is is for now trying to walk some sort of of road where they avoid runaway inflation but they also don't create too much of a recession which lots of we can talk about this next time so much data now says we're in recession right now i'll be shocked if a year from now we're not talking about the early 2023 late 2022 recession um but they're trying to create something that's uh that's a soft landing whatever that means but they're not going to just go back unless something changes in terms of internal pressure because they are really afraid of uh runaway inflation and the realities is revolution still happen that regimes get overthrown that people riot in the streets this stuff still happens and it happens in places where inflation uh gets away from the ability of the regime to control it and so they're right to be afraid if that's actually what's motivating them right now one particular when you add the geopolitical tensions out there saudi arabia recently mentioned that they're open to treating occurrences other than the u.s dollar i'm always skeptical when i hear these headlines and i was just like that you know hearing for years but oh well china's gonna create a gold base you on any day now don't you worry that's what's going to take down the dollar i have a degree of skepticism of that because of how bad everyone else is right you know our problems are not unique to us but particularly in that sort of environment though the dollar being the cleanest shirt in the laundry becomes even more important in a in sort of the chaos of the current global environment as well so that's definitely uh something to keep in mind but that being said i i think i'm gonna let you get out of here at ryan and get back to your uh recuperation but this has been radia rothbard can remember we will not eat the bugs we will not live in the pods and because of that we will see you next week oh good my voice sounds nice and low