Richard Salsman - Ask Me Anything - September 2023

[00:00:00] Speaker A: I'm Scott Schiff with the Atlas Society. This is an ask me anything with our senior scholar, Richard Salzman. We want to encourage you to ask questions. I've got my own questions. We encourage you to share the room, richard, we appreciate you doing this, as you do so often. You know, you're an economist. People are interested in your take on the economy. Goldman cut the recession risk to 15%. I mean, they're seeing the same inverted yield curve biden is trying to run on the economy. Is it possible the yield curve isn't taking everything into account this time? [00:00:44] Speaker B: No, it's not. One of the great things about the yield curve is it's a kind of summary measure of a whole bunch of things. So you always want that. Just as in Epistemology, you want integration, you want concepts that condense and essentialize. The most important features I have found over the years, that that is exactly what the yield curve does. Now, for those who don't know, this is a bit technical in economics, but the yield curve yield just means interest rates. And the idea of a curve is if you plot I can't do this physically, obviously, but in your mind, if you plot on a two dimensional axis, the vertical being interest rates and the horizontal being the term from overnight to three months to ten years to 30 years, everyone's familiar with the 30 year mortgage. Normally, that is upward sloping, which is another way of saying normally short term interest rates are below intermediate term interest rates by term, by mean maturity. And then equally intermediate rates are below long term rates, meaning the longer the term of lending is, the higher the interest rate will be. Now, I think you can imagine why that might be the case. Under normal circumstances, the lender is less certain, the longer the time frame is, what inflation will be, what your credit history will be. So it's okay, they're going to charge a higher interest rate for longer term, all else equal. Well, inverted means that curve is well upside down, meaning short term interest rates are very much above long term interest rates, and for various reasons. First of all, one, that's rare. Two, it actually makes financial intermediation unprofitable, another technical term. But financial intermediation means financial institutions borrow money. They basically take your deposits. They pay you an interest rate, they turn around and lend it. Now, imagine if the rate they paid you was higher than the rate they earned. That's what an inverted yield curve is. They're paying a higher short term deposit rate than they are receiving in longer term lending. It's a losing proposition. They tend not to do it, so the credit system seizes up. Now, why do we get inverted yield curves? The Federal Reserve mostly controls short term interest rates, not long term interest rates. And so they can deliberately, and they often do deliberately raise short term interest rates so as to invert the yield curve. And it might surprise you, Scott and others, that they also know the very thing I'm citing. They know by now, maybe they didn't quite know this 20 years ago, but the evidence is so overwhelming, they now know that an inverted yield curve tends to lead to recession. So now you have to ask, why would they deliberately adopt a policy which makes credit intermediation unprofitable and tends to lead to recession? Not just, by the way, not just tends to the last eight recessions in the United States, going back to 68. That's a long time ago. That's almost 60 years ago. Every single one of those recessions was preceded by an inverted yield curve by the Federal Reserve. Not just raising interest rates, because occasionally they do that, but importantly, raising them above long term interest rates. So it has a perfect forecasting record. And you mentioned Goldman, I've noticed. I've been doing this about 22 years now. So I've used the curve to forecast three recessions. Now I'm forecasting one for 2024 because the curve has been inverted since October 2022. They always will cite something saying, it's different this time. They'll say the curve is inverted. Yes, it's had a perfect forecasting record. I chalk this up to epistemological myopia an inability to think in principle, such a focus on concrete bound stuff, that they're in the weeds, as we call it today, they're in the weeds, unable to see the broader principle involved. But I'll leave it at that. It's a technical, it's a hard thing to explain technically, but that's where we are. And so someone like Goldman saying, well, we're reducing our forecast of recession in 2024. I've been increasing my call on recession in 2024 because not only is the yield curve still inverted, it's very deeply inverted, meaning the short term interest rate remains much above the ten year bond yield. And the recent Fed meeting, I think, very importantly, they all came out and said, the Fed formal announcement said, we think inflation will remain so elevated that we are going to keep interest rates at the short end elevated. And I looked today and most of the Fed officials, because they were on record, being asked, what's your prediction of what rates will be? These are Fed officials being asked. All of them said that all through 2024, they expect to keep interest rates at the short rate above the bond yield. So I haven't seen this in my entire career, that the curve could be inverted for more than a year. The longer it's inverted and the deeper it's inverted, the longer and deeper is the subsequent recession. So I'm now talking about the recession not just of 2024, I'm talking now about the recession of 2024. 2025. The last time we had a multi year recession like that sequentially was 74, 75. You'd have to be pretty old to remember it, but it was horrific. [00:06:45] Speaker A: I guess for me, it's part of the same paradigm that Europe shouldn't have been able to have gotten away with negative interest rates for as long as. [00:06:54] Speaker B: They you know, that's part of it. And what we mean for those who don't know what we mean by negative interest rates is if you take what's called the nominal interest rate, just any interest rate you'd see out published and seeing in markets say the mortgage rate is five, but what if the inflation rate is six? What Scott's talking about is economists will subtract one from the other and say, well, the interest rate is not really five, it's minus one. Why? Because you're paying 5% but in cheaper money, in an inflated money, and the lender is going to be screwed at the end of the period that he's being paid back in cheaper dollars. That's very perverted, right, because a free market would not have negative interest rates. A free market always would have positive interest rates in the sense of what do interest rates do? They equilibrate savings and investment. They're one of the most important prices in the economy and the least understood price, I might say. I mean, if I said to you, what's the price of bananas? Or even what's the price of I don't know smartphones people kind of know that and they know the law of supply and demand. But if I said to them, what is an interest rate? What is that the price of? And how can it get distorted by government intervention? Most people would just draw a blank. But Scott, you're on to something. The first point is, if I said there's a negative price for a smartphone, people would scratch their head and say, what do you mean? The smartphone makers are giving it away, right, because a price would be they get some value for their smartphone, but a negative price would mean what they're paying you to take it. They're engaged in philanthropy, everyone knows that in the consumer products market, something would be effed up. And it's very much true in the interest rate market. It's something central banks do. My theme over the years has been increasingly that the reason central banks are doing this, perverted as it sounds, someone should mute, I think, Scott, someone should mute where they are. They're getting traffic in the background. It might be David. Everyone thinks the Federal Reserve is there to preserve the value of money and to secure the safety of the banking system. It's a very backward, old and naive view. I don't think it was ever actually really true, but it's definitely not true now. You have to think of the Federal Reserve as the government's favored pet bank. It's there to help the government fund itself. And in a world where the government will not choose to fund itself by taxes, namely, it doesn't dare. It doesn't dare. You see why? Electorally, it doesn't dare tax people to the full extent of the spending because there'd be tax revolts or there'd be people fleeing. Capital flight would be fleeing, atlas would be shrugging. So what they do instead is something very surreptitious. They spend way in excess of what they tax. The difference is they have to borrow. They just can't borrow unlimitedly. They turn to the central bank and they basically ask the central bank to print money for them. They give them bonds, the central bank turns around and gives them money and off to the races. That's what central banking is now. That is what the Federal Reserve is doing now. But the raising of interest rates is simply their panicky reaction to the idea they already caused inflation. They already caused inflation by printing money during the COVID shutdowns. And now in retrospect, they're looking back and saying oh my gosh, we have inflation of 9%. And they think the only way to stop it is to wreck the economy. They think that inflation is caused not by them creating too much money, but by the economy growing too fast. And so they're trying to slow the economy, if necessary, cause a recession. [00:11:06] Speaker A: Thank you, David. Did you want to ask a question, Richard? [00:11:10] Speaker B: Say again? [00:11:13] Speaker C: I did. Thanks Richard. I always love listening to you explain economics because thank you David. As a non economist, so many things I don't even know where to start. My question is about what do you said about interest rates, what interest is a price of? I always thought that interest is what people charge for taking the risk of investing their money in a loan. And the risk is inherent because all kinds of things can happen and that would result in you're not getting paid back. So is that wrong? Is it true but not essential? Or in any case, how does that relate to what you said? [00:12:07] Speaker B: That's not wrong at all, David. That's definitely part of it. So you said way the way economists who understand this would talk about it is they would oh, OK, here's one risk. One risk is the borrower might default. Well, yeah. Okay. So you can analyze ways in which to assess the risk that they might default. Have they defaulted in the past? What's their credit rating? Have they ever borrowed before? All those kind of things that bankers do to judge whether someone should get money or not. So you're absolutely right, David, that's one risk. But here's another one. Another one would be I lend to someone, they're perfectly fine as a credit risk, I think they will repay me. But a risk I have to think about, which comes from the government is what if the value of money goes down? That's inflation and that's a risk you have to judge whether it'll happen or not. I have to judge independently of the borrower is the government going to debase money? So three, four, five years down the road, when I get the money back, it's worth less? I'm not saying it's worth less. I'm saying it's worth less. So lenders will raise interest rates if they expect inflation to occur. So that's another risk. I can mention geopolitical risk and other things, but you're absolutely right. David, you're a very good economist and a lot better than most of them. Risk uncertainty definitely get incorporated into interest rates. The error that you did not make, which most do make, and I always quiz students on this, and they always make this mistake. I'll say to them, an interest rate, what's that the price of? And I'll always say money. It's not really true. The value or the price of money is its purchasing power, how much it buys. And there's a supply demand curve you can draw if you get into the technics of this. And that's different than an interest rate. An interest rate is the supply and demand of savings, and it definitely does involve money, right? Because you're saving money and then you're lending or borrowing money. But it's a derivative concept, still an important one. But many, many people, David, you didn't do this. Many, many people will say, and interest rate is the price of money. By the way, Keynes believed that, and he codified the textbooks through Samuelson for years. Here's the idea. Imagine this. If it's true that interest rates are the price of money, how do you lower interest rates? Create more money, increase the supply of money. It'd be like saying, how do you reduce the price of shoes? Make more shoes. So the Keynesians adopt this fallacy. Their view is the way to lower interest rates is to print money. Well, you look at the long history of this, and even over the world today, the countries that most inflate the countries that most produce excess money have sky high interest rates. Why? Because those bankers are not idiots. Those bankers are not stupid. They know they're going to be repaid in money of lesser value, of lesser purchasing power. So to offset that, to compensate them, so they'll raise interest rates. [00:15:32] Speaker C: Thanks, Richard, I appreciate that. And I see maybe what I can take away is that there is a risk to a lender that a borrower won't repay. That's only one of many risks. Including what might be a bigger risk of government money. [00:15:52] Speaker B: Exactly. [00:15:55] Speaker C: Great, thanks. [00:15:57] Speaker B: Great. [00:15:58] Speaker A: Let's go to Connie. Connie, thanks for joining. [00:16:02] Speaker D: Oh, you're welcome. I'm glad I was able to pop in this time. And hello, Dr. Salzman and Jag and David, it's good to see you. [00:16:11] Speaker B: And Connie, I have to say, I'm so impressed with your capacity to unmute right away. Most people can't do that. You're very guys, notice how quick you are with unmuting. Very good. [00:16:22] Speaker D: Well, thanks so much. Quick hands, warm. [00:16:29] Speaker B: Yeah. Quick hands, quick thumbs. [00:16:31] Speaker D: Yes. There we go. I had a question. I'd been kind of watching how some things have been unfolding, and I've watched just the further dipping of the yen, and apparently it was decided today to keep the interest rates exactly the same. And from the report I read, it said, I apologize, a motorcycle, of all things. [00:17:05] Speaker B: I have a barking dog. So we're competing here, Connie. [00:17:09] Speaker D: But it's basically they are going to keep the interest rates unchanged and keep supporting the economy, they say, until inflation sustainably hits its 2% target. [00:17:24] Speaker B: Yes. [00:17:24] Speaker D: Do you look for others to follow suit? And how much further down can the yen go? [00:17:31] Speaker B: That's funny. The first part of your question, my answer would be no. I do not expect other central banks to keep interest rates at near zero, which is what the bank of Japan has been doing almost for three decades. No, most of the central banks today are facing not low inflation like Japan is, but high inflation. So all of them, in a knee jerk way, tend to respond to that by raising interest rates. It's a totally bogus policy, by the way. I just don't want to discuss this in a way that makes it something I'm endorsing I'm just explaining I'm just describing it more than anything, you do not fight inflation by raising interest rates. Higher interest rates are the effect of inflation, not the means of fighting it. I don't have to tell you that, Connie. I'm not preaching to you more than anything. But what's weird about Japan is for almost three decades now, they have kept interest rates at almost zero, and their theory has been inflation is not high enough. Now, in my political economy philosophy, there should be no inflation. There should be no deflation or inflation. There just should be price stability. But also that should not be delivered by central planning. It's wonderfully, historically been delivered by a gold standard, and no one's on the gold standard anymore. I understand that. But Japan's unique tragedy is that they have spent the last three or four, three decades, I guess it's three now, printing money, borrowing money. The debt to GDP ratio over there is something like 270% now. They are completely indebted and their economy has gone nowhere, I truly mean nowhere, for three decades. Their production levels are no higher than they were in 1993. That is shocking, especially when you go back and older people in the room will remember, not China, but Japan was seen as the powerhouse economically in the they were going to overwhelm the United States. Yes. Except then after that, they started adopting Keynesian policies which have totally run them into the ditch. So it's a sad thing. They do have low inflation. That's okay. But the problem, Connie, is that because of that, they think the problem is the inflation rate is too low, where in fact, the problem is the production rate is too low. They're so focused on prices that they don't care about production anymore. Which is very odd, because from the end of the war in 1945 until, I don't know, I would say something like 1990, 45 years. Japan's whole success was based on booming production, and they didn't have inflation. They just boomed production. They were very good about it. And sadly, they adopted Keynesian policies after that. So we can talk about exchange rates. I think that's a bit technical for this room, but, yes, as long as they keep doing that, the yen will decline. You can't just keep printing your currency and not expect it to decline in foreign exchange. So, yes, that's going to happen in Japan still. [00:21:07] Speaker D: Thank you for that. I have another question, but I know there are others in the audience, so come on back to me later if there's still time. [00:21:17] Speaker B: Would love to. Thanks, Connie. You always ask great questions. [00:21:21] Speaker A: We will. Great. I do want to switch gears. There's an Instagram question asking for 2024. Who's going to get the nominations in each party? I mean, we've got the next GOP debate coming up Wednesday. You're doing a debate analysis with our student programs manager Abby Behringer on Thursday. What are you hoping to see? Any early favorites? [00:21:49] Speaker B: Oh, that's a really good question. I'm really looking forward to this. I think it's one of the first times Tas has done this. Yeah, I'm really looking forward to this. I do watch the debates closely from both parties, by the way. Just aren't going to be any Democrat ones this time. But I watched the first debate, the next one's at the Reagan Library, and I think there'll be a bit fewer people on stage than before. I'm very curious. I've always been a Republican. I'm a true blue Republican. I do not like that wing of the objectivist movement that says, go with the Democrats and to hell with Trump and vote for Biden. I mean, it's hard to believe, but that is actually happening elsewhere in the movement. I'm not going to name names, but what I've committed to do next week is listen very closely, as I normally do, take notes about what the Republicans on stage are saying. I'm always looking for some Republican to do the following one. Not just be anti Democrats, not just be anti, quote unquote, liberals or anti media. They need to have a positive message, a positive argument, and a future oriented argument about where the country is going. And of course, this audience won't be surprised for me to say, I want it to go in the direction of liberty. I want it to go in the direction of rights. I want it to go in the direction of constitutional government. I want it to go in the direction of entrepreneurial capitalism, heroism. Now, if you use that standard and then assess, all the candidates and Trump will not be on stage, unfortunately. But I think from what I saw in the first debate, the only candidates that even come close to that are DeSantis Ramaswamy, and now I'm going to forget her name. Haley. Nikki Haley? Yes. The South Carolina governor. Nikki Haley. If you look her up, I know the conservatives don't think she's the real McCoy, but if you just Google Nikki Haley and capitalism, you would be surprised how overtly she defends capitalism. She's really very good at that. And to me, any Republican or right winger who even uses the know the word is very controversial. It's very controversial even among libertarians and conservatives. Many of them will say, don't use that word. Don't use that word because it suggests something Iran might say. Nikki Haley uses the word unabashedly. Doesn't mean she's a laissez fairist. My favorite is DeSantis. All of them are a bit too religious for me, but setting that aside, I prefer DeSantis. Now, if someone's asking me for a mean, my thinking is there's no way that DeSantis and any of them can beat Trump in the primaries. On the other hand, I think people are underestimating how vicious and nasty the weaponization of the Justice Department and these other AGS are against Trump. I think he's being unfairly, viciously, mistreated. Anyone who knows me knows that I'm not a big Trump fan. But I'm a big fan of the Constitution, I'm a big fan of free speech, and I'm a big fan of anyone who says I'm going to question, and I think there's reason to question whether there was fraud in an election because there is fraud in American elections. The only question is what degree of fraud exists and whether they change the actual outcome. But I believe what's happening is they're trying to criminalize as fraud grows, they're trying to criminalize anybody who questions the degree of fraud in these elections. So I think it's possible and you know, they're trying to do this, that they will not let Trump be on the ballot, that he'll either be in jail or he'll be so smeared by all these what is it up to now, five cases against him. And so people who say to me, like, why do you even care about the horse race between DeSantis and Nikki Haley and others? Well, Robin Swami, it's because it's quite likely that Trump won't be there. So one of those three will be there. So we have to listen to their arguments. And even if Trump wins the primary and goes into the election, I think it's very important. I learned this about the Reagan years. Reagan, if you know, ran against Ford in 1976, did not win, but learned a lot. Ronald Reagan learned a lot by that race. And of course, he had been governor of California for a couple of terms, and it paved the way for 1980 and then 1984, two landslides. So I like the fact that DeSantis is trying this. Whether he'll succeed or not, this round doesn't really matter. He's going to learn a lot. He's going to figure out who will fund him or not. He's going to figure out whether the arguments work or not. Trump is not going to be around forever. He might not even be around in 2024. I believe the future of the Republican Party is DeSantis. DeSantis and the argument of California florida is free. California is not. Gavin Newsom is the next new shiny thing coming from that side. It's going to be DeSantis Newsom in our lifetime over the next eight years, I believe. And DeSantis has a good story. Newsom has a terrible story, but the media loves him. So my prediction, if Trump is not in jail, he will win the nomination and then lose to, again, very, very tragic. And if you go the route of Biden can't possibly make it, therefore, he'll be replaced by someone like Manchin or Newsom or who's that vice president? I can't even think of kamala Harris. Oh, that non entity. If it's Kamala Harris, then Trump will beat her. If it's newsom, Trump will lose to newsom. We're in a very precarious situation because the Republican Party, much as I prefer them, so, so much more to the Democrat Party, they're much closer to capitalism than Democrat Party. They're really very not good at defending and positively extolling capitalism. They're shy about it. They're very shy about it. And they're on the defensive. They needn't be. But they are, I think, our job as right wingers, but more than that, philosophic right wingers, that's how I think of objectivists should really be trying our best to bolster improve the arguments of the Republican the arguments and strategies of the Republican Party. By the way, notice recently that Trump has gotten pushback and criticism from conservatives because he has said, very interestingly, you guys are losing because of Roe v. Wade. I think that's very interesting because when he was in New York all those years and I was in New York all those years, I knew exactly what Donald Trump was. He was not a Republican. He was a pro choice, kind of middle of the road Democrat when he was in New York City. And that doesn't mean he was a bad guy. It just means that Donald Trump is much more pro choice, more libertarian than people think. He's not principled enough. So that when he was trying to get the Republican nomination in 2016, he sidled up to the religious right and came out against abortion rights. And actually, I remember him specifically asked, because the left knows how to do this, they pressed him and said, well, would you actually imprison doctors for doing abortions? And he said yes. And I thought, that is the most disgusting thing I've ever that's that's how much Trump was trying to get that vote. He did get the vote. He got the evangelical vote. And the left was like, why did Donald Trump get the oh, my God, we can't he's so immoral. He mistreats women, blah, blah, blah, blah, blah. And yet the evangelicals loved him because he said stuff like that. So that's too long an answer. But what do you think come back at me. [00:30:48] Speaker A: I mean, you could also argue that he appointed justices that overturned Roe v. Wade. [00:30:55] Speaker B: I know. I thought of that today. I thought, he's giving these talks saying, well, you guys really need to be careful on the Republican side to not be he's not really saying that the overturning of Roe v. Wade was wrong. Notice the way he put it was, some of you guys, like in the southern states, are restricting the right to three weeks of six weeks or seven weeks, and it's hurting us. But you're right. Absolutely right. Scott, you can come back and say the only reason Roe v. Wade was overturned is because he nominated do. I have it right now? Gorsuch kavanaugh and Barrett. Yes. Did he not know that they would possibly overturn? It amazing. He probably did. [00:31:50] Speaker A: Yeah. I just don't know how much of the pro choice vote he's going to be able to pick up. He's got so much dominance, he's already running to the center right. [00:32:02] Speaker B: And you know, the Roe v. Wade I'm on the Roe v. Wade side. I'm against dobbs. The Roe v. Wade people will say exactly what you said. Blather all you want about the Republic coming to anti women's choice, but you, Mr. President, was the one who gave us these three that tipped the court. You're absolutely right. It's going to be impossible for him to escape that I think it's going to be hard for him to escape. I, by the way, for those listening, I think one of the most interesting debates within the Republican Party and within the right is when I say things like and as I often do on Facebook and elsewhere, if the republican Party could bring itself to defend a woman's right to choice and take a more objectivist libertarian position which know on the bumper sticker the argument was we are pro choice on everything. Not just what to do with our bodies, but what to do with our businesses and what to do with our lives. We want liberty and that the Republicans would never lose another election. But many people will push back on that and say to me, that's wrong, Richard, because if they took that position, they would also lose the religious right. Now, I think that's possible, but I don't believe it's. Ever since I saw the evangelicals vote for Trump, I've thought to myself that the religious right is much less principled than people think. They are much more willing to vote for people who are sketchy on these issues. Because everyone knows that if you dig into his background, donald Trump was pro choice. So the evangelicals know this. They have a more pragmatic and that's not a good thing unprincipled view of backing the horse that might win the race. So I think it's a myth, although conservatives push it, I think it's a myth that if the Republican Party became pro choice, they would gain some. Votes, but cannibalize the base quote unquote, the base? I don't think that's true. But Nancy Mace if you look up Nancy Mace mace and others, there's a small contingent within the Republican Party. Nancy Mace is the leader of them who's been advocating for Republicans being pro choice, and she gets crap from Mark Levin and conservatives. But I'm hoping that's a growing group within the Republicans maybe it starts with women. I don't know how many men are that way, but the Republican Party really needs to be pro choice on reproductive rights, in my view. Great. [00:34:58] Speaker A: Chris, you want to chime in here? [00:35:01] Speaker E: Yeah, I just got off a Twitter space. We were discussing one of my favorite discussion topics. I got to know what do you all think about Javier Mile. [00:35:15] Speaker A: The Argentine Libertarian candidate for president, kind of out there with some of his views, like many libertarians? [00:35:25] Speaker B: Well, Chris, I have to confess, I don't know much about him, but I am intrigued by the idea. I almost can't believe it, but tell me otherwise that Argentina has a chance of going libertarian. What I do know about Argentina is they did go through a really good stretch of having a currency board and Cavillo and others, and Steve Hankey was down there advising them to put the economy back on sound footing in the 90s. But then they blew it. Right. They gave it all up in I think it was 2002 or so. They wrecked the currency. They went back to their old methods. So this has been on my periphery, Chris, to look at it, because I'm always looking for success stories. But I think in this case I want to hear from you. What do you think? [00:36:12] Speaker E: Well, I've recorded 13 shows talking to people about him, americans who live down there one guy who said he became a libertarian because of Melee. [00:36:23] Speaker B: Wow. [00:36:24] Speaker E: And they all say that he's actually making a moral case for capitalism. [00:36:28] Speaker B: No kidding. [00:36:29] Speaker E: It really seems to be phenomenal. He seems very rough know? He's got a dog named Murray, and it sounds really know. I've also heard that Antonella is not a big fan of Melee. I know. She might be Antonella Martin. [00:36:51] Speaker B: Yeah, I know. Antonella is great. She's on our team. Do you know why she says that? [00:36:58] Speaker E: I'm not really sure. He's not very big on abortion. Jag ablas espanol, right? [00:37:07] Speaker F: Jag v yo Ablor mismo in Guatemala. Just gave two speeches at UFM. I've been back and forth with her on this a bit. I think she's pointed out that he's been critical of Ayn Rand. The abortion issue is a big. Yeah, but I think if I am reading between the lines, what I get is that there are just a lot better alternatives. There are maybe less high profile or less bombastic reform candidates in Argentina that she prefers. But I would say that overall I think it's positive because if nothing else, he is getting more people interested in Austrian economics, and maybe they'll check stuff out. I mean, I wish, however, that he at least understood, even if he, for whatever reason, doesn't personally like Ayn Rand, her kind of strategic value as a recruiter and a very good entry point with the art and with the novels. I say Big Tent, and there is something to be said for these kind of really something to be said both positively and negatively for these really very fiery personalities, because they do break through the noise, but they also do damage along the way. And there's one thing that in talking to the people down here in Guatemala and the students, and one refrain that I hear is that the socialists do a very good job at manipulating. You know, they, of course, don't want as principled libertarians and objectivists. They don't want to engage in that. But at the same time, they see that they're at a loss. And so they're looking at somebody like Millet and saying, well, at least he's kind of playing against the left using some of their same oratory and communication tactics, but you should have her on your show to talk about it. You should have Edinella on her arguments. [00:39:52] Speaker E: Yeah, well, I did find her email address, and I sent her an email I've had Eduardo Marty on. I don't know if they're related, but no, not related. [00:40:02] Speaker F: Not related. What was his opinion? [00:40:06] Speaker E: He thinks he's pretty good. Yeah, I've had some quite a few. Everybody I've had on has been a Spanish speaker, so that's one requirement. It's not necessarily from there, but I've talked to people who know him, people who work on his staff. Yeah, it seems like he says, for example, that you don't have a right to things, and I think he's a pretty philosophically consistent campaign. He calls the Pope a communist, which is true, unfortunately. [00:40:43] Speaker A: Yeah. [00:40:44] Speaker B: Well, that does work in Argentina a lot better than it works in Brazil and elsewhere. Chris, I'm really glad to hear your take on this. The Atlas Society. Jag mentioned big tent. We are really I don't want to speak for tas, but from my own standpoint, I am looking for eager to see, pleased to see politicians and serious public policy people either citing Ayn Rand or citing her arguments, because that's a good trend. Objectivists are very philosophical. That's a good thing. But they often will say, we're not going to get involved in politics because they'll say it's too early. It'll take a century for these ideas. I've never believed that. I've thought, if we can somehow find political leaders and others who at least come in our direction, even though they're not perfect, and I thought Ronald Reagan was that way. I thought Margaret Thatcher was that way, and you would be surprised if you know the history there was a long history of Objectivist intellectuals trashing those two. I mean, I don't think Ein Rand said one nice thing about Margaret Thatcher that's hard to believe, actually, because Margaret Thatcher was in office for three years, and Ayn Rand certainly should have said something nice about her in the direction she started privatizing everything in Britain, and her and Leonard Peacock and others hated Ronald Reagan. It never made any sense to me whatsoever. We knew that Reagan wasn't perfect. We knew that Reagan was partly religious, but we have to look in terms of, are they coming in our direction? So it's a directionalist what my colleague at Duke, Mike Munger, calls directionalist arguments versus destination. You cannot reject these candidates and these proposals because their destination is not identical to ours. You have to be happy that they're citing our heroes mises. Rand haslett others. Ted Cruz has done that. Ronald Reagan did that. Ronald Reagan said very nice things about ayn Rand. People don't know that. So I like this kind of thing. They're always on my radar. Any politician that is willing to cite, albeit partially our principles, is, to me, a leading indicator of really good things. We are going to win in the end. I'm 65, and I hope I see it before I die, but I know it's going to happen within the next 50 years. The leftist altruist socialist argument is disgusting, obscene, and impractical, and everybody knows that. And the only issue is whether we will stand up and say, capitalism is the most wonderful, moral, amazing habitat for humanity, and no one can beat us if we're consistently arguing about it. So thanks, Chris, for I'm going to pay more attention to him. When is the election in Argentina? Is it coming up or what are the dates? [00:43:49] Speaker E: The 22 October. He's got to get 45% to win. So it's kind of a convoluted system, but they're talking pretty good. That space had Jeff Tucker on, so I was finally glad to hear what Jeff had to say about him. [00:44:04] Speaker D: But. [00:44:08] Speaker E: I don't know if Jeff knows Spanish. And for something like this, you got to look to people who at least know Spanish, because you don't know what's going on there. You can't really know what's going on there if you don't know Spanish. [00:44:18] Speaker B: Well, thankfully, our CEO and Antonella and others do. The Atlas Society has a unique, real, amazing extension into South America that I love. I think Europe is kind of lost, but not South America. South America has pockets of loving capitalism that are completely untapped. It's a great and Jennifer jennifer jag. You're in Guatemala now, a couple days. How did it go? How did your speech go? [00:44:51] Speaker F: Well, as usual, as everybody at the Outlaw Society knows, I'm always biting off a little bit more than I could chew, and so I decided I would deliver my remarks in Spanish. But I was very impressed, though. I gave a speech davo there putting the capital back in capitalism. [00:45:14] Speaker B: Wow. [00:45:15] Speaker F: Arguing that I was really arguing in favor of the term capitalism as opposed to the free market as a hook in order to make the point that production comes before transactions. And that making kind of a roundabout point about profits coming before transactions. Yes, they come after transactions as well. But just I think even when I go to these tech conferences and I hear the sort of the left wing tenor of all of these people that are looking for capital to be invested in the startups, I'm like, well, okay, if we do that, 25% wealth tax on billionaires. So in other words, that's going to be spent on expanding bureaucracy rather than going into the next generation of technology startups and biomedical medical startups. And then I just talked about virtue coming before profits. And so that was really well received. And then I just talked about objectivism in general, but I was very impressed with the quality of the students down here and then just generally impressed by Guatemala City. This is the second time I've been here in three years and just how hardworking and how much construction there is going on. You know, again, at the same time, they just elected a socialist left wing new leader, although there seems to again, we were talking before about fraud and that it does occur, and it has occurred all over the world for as long as democracy has been around. And so there is some doubt about whether or not election was actually fair and square. But yeah, very good stuff, very promising. Even young objectivist English speaking professors down. [00:47:29] Speaker B: I'm so proud of you. I'm so proud of you. Atlas, you down there speaking to them. Such a great voice from America, from the know. Jag, let me ask you something, Jag. I always hear about people, conservatives complaining about immigrants poring over the borders. And I really do want the borders managed. I don't want them closed. I want them managed in the Ellis Island sense. But I was talking to someone the other day and, you know, there's very little focus on why people are fleeing. We know they're coming here, which I think is a vote of confidence in America, but no one asks why and where are they fleeing from and what's wrong with those systems. And Guatemala is one of them, right? People are coming from Guatemala, like through Mexico to so and you just said they voted for socialists. So it's a paradox, isn't it? They vote for socialists and then the politicians are voting with their then yes, and then the subsequent vote is, we're out of here. Apparently that's true of Venezuela as well. The New York mayor or someone admitted that half of the 84,000 that have ended up in New York City are Venezuelans. And I thought to myself, I think. [00:48:56] Speaker F: A lot of them are Venezuelans. I think fewer I think there are some Guatemalans, probably more Mexicans. But as I spoke about all of these hopeful signs of development and the work ethic down here, but there are a lot of people begging on the streets and a lot of the people begging on the streets are wearing little Venezuelan flags. So there are Venezuelans here that are completely wow, destitute and desperate. I think that there is growth. The taxes down here are really, actually not bad. They've got a sales tax of like, I don't know, 15% or something like that. And there is basically what I understand is a flat tax of either 10% or it's 30% with deductions. So people make their own decisions about what is better for them. And I can see there's a lot of growing wealth down here, but it's not growing fast enough. So that's the issue is that there is a lot of opportunity. But speaking of that socialist government, one thing that professors at UFM were telling me that they are so disgusted by not only is there this new left wing government or left wing at least elected party in Guatemala, but that the State Department is pushing for that, and it's resisting Guatemalan's efforts to talk about or look at whether or not there seriously was fraught. So, I mean, this is what they're doing. They are, number one, promoting the Biden administration. Number one, promoting policies down here that have wrecked other countries down here. So they are contributing to the supply of illegal immigration, anarchy at the border. And then number three, they are all for comprehensive, so called basically allowing people to come and stay. They're not going to be deporting anybody, and they are all for bigger welfare programs in these cities. I'm so sick of hearing Eric Adams talking about, oh, they're shipping people up here and it's all Texas's fault. Texas is full, okay? If you're a Venezuelan and you arrive in Texas and it's just glutted with other illegal immigrants and Texas isn't going to hand out free this, free that. Texas isn't a sanctuary city. Of course you're going to go to New York or to Boston or to one of these other so maybe somebody gives them a bus fare or whatever. But by and large, they're finding their way. They know where to go. They know where the free stuff is. And so they're heading to, you know, it's the guy who killed his parents and then throws himself on the mercy of the court as an orphan. I mean, that's what he's caused the problem. Put on a big beacon magnet. [00:52:36] Speaker B: So these cities, for years, jag, these cities for years have said we're very moral because we're sanctuaries, we're sanctuary cities. We're going to take people who are poor in destitute and in need. And then when they actually come to your sanctuary cities, they get very upset and they want to ship them what, martha's Vineyard. They want to ship them off to some military base. And these people are so hypocritical. They have no I guess it's virtue signaling and yeah, Greg Abbot in Texas sends him up to New York and all of a sudden New York gets upset and blames it on Texas. But let me ask you, Jag, also remember when the Vice president was put in charge of this, Kamala Harris, and she very interestingly, said something like, okay, we really need to look at the roots of the migration. Okay, that's interesting. I'm interested in the roots and the fundamental causes and everything, but I was waiting for her to say something like vicious socialist regimes in Venezuela and Guatemala and AOC type and Bernie Sander type governments that they're of course she wouldn't say that, right. But she blamed it on American policy. I don't get that. I don't know what policy that's American would make people from South America in. [00:54:09] Speaker F: Her mind that we really should be taxing Americans much more. We really should be deficit spending much more. We should be shipping massive amounts of foreign aid to these countries. So basically that's going to end up in the pockets of the government. Of course that's what she's thinking. [00:54:37] Speaker B: Yeah, that's exactly what she's thinking. If you said to Kamala Harris, kamala, there are governments down there that are so vicious and so inhumane and so disgusting like Guatemala and Venezuela that people are people are fleeing. They're fleeing and they're coming to America, which apparently you guys think is sexist and racist and whatever, they're coming here. But isn't it the AOC Bernie Sanders policies that are in these foreign countries that are making people they are so oblivious? Sometimes I wonder whether they're oblivious or they know and they say it anyway. And the second one is a little more evil. I mean, like they know and they don't care and they say it anyway. But it sounds like you were at UFM. UFM has been there for many, many years. It's kind of encouraging, isn't it, Jennifer, to be with those people? It's kind of nice you feel more emboldened that we're. [00:55:38] Speaker F: Well, you know, it kind of goes back to something that Rob Tricinski said at our summer conference, which he said that from his perspective, having been in the Objectivist movement for a really long time, that 20 years ago at least, again, from his perspective, it was mostly a US thing. And now we really see a lot of energy chitching around the world, latin America, Eastern Europe, India. I'm encouraged. [00:56:16] Speaker B: Yeah. And we know in the last six months or so our own Stephen Hicks in Europe discussing objectivism with Greg Biddle another great objectivist intellectual discussing whether objectivism should be open or closed or in, if I get it, if I remember right, was that in amazing, amazing parts of Europe that care about these ideas and care about promulgating them. Well, Scott yeah. [00:56:50] Speaker F: I don't want this to become too inside baseball. [00:56:54] Speaker B: No, go ahead in a moment. [00:56:55] Speaker F: But I did just want to mention, David, that you are such a tremendously beloved figure here and the objectivists that I met with had come to your summer conferences decades and decades ago. You also came to UFM. And they are very sophisticated about objectivism and they are quite adamantly on the side of open objectivism. So it was interesting. [00:57:27] Speaker B: Oh, wow. David. David, give us some thoughts about when you were down there. [00:57:34] Speaker C: Well, I was down there two years in a row, once over a decade, a decade and a half ago. The last time, second time, was in 2007 when it was the 50th anniversary of Atlas shrug. And UFM, as well as other places, had put on a celebration of the fact I was invited to come talk. [00:58:01] Speaker B: Wow. [00:58:01] Speaker C: And I did. And at that time oh, the president of UFM at the time, I'm blanking on his name, but he was just a wonderful, wonderful man. And he passed away before his time, not long after. But anyway, he set up a number of meetings for me. But the special thing for me was I gave my talk in the business school. And afterwards there was an unveiling of a wonderful bar relief by Walter Peter of Atlas holding the world up. Went up on the side. And I believe it's still there. Jack, correct me if I'm wrong, but I believe it's still there. [00:59:00] Speaker F: Yeah, it is. And I actually met with the sculptor. [00:59:05] Speaker C: Oh, good. I wanted to ask you, you know. [00:59:09] Speaker F: I see that we've got JP up on stage and I know we just have a minute left. Are you guys willing to take one more question from JP? [00:59:18] Speaker B: Yeah, go ahead, JP. Thank you, David. [00:59:25] Speaker C: Yeah. [00:59:27] Speaker A: JP, you there? [00:59:29] Speaker G: Yeah, I am here. Yeah, I am here. I don't know if you can hear me. [00:59:33] Speaker B: Yeah. Didn't hear you, JP. Go ahead. [00:59:37] Speaker G: Well, no, I would just say hi and let you get on with your day. I know that you guys are very busy usually, so just big hi for you. [00:59:49] Speaker A: Good. [00:59:50] Speaker F: Well, we appreciate JP, what country are you in? [00:59:55] Speaker G: I am Guatemalan. I am in Guatemala. [00:59:59] Speaker F: Okay. I'm in Guatemala, too, at the moment. [01:00:01] Speaker B: Oh, awesome. [01:00:02] Speaker G: Yeah, I heard about your talks on UFM, because I get the notification from new media. So how was that? [01:00:15] Speaker F: It was great. We'll include a write up in the newsletter, and next time I'm down here, we'll have to meet. [01:00:22] Speaker G: Yeah, we'll do. [01:00:25] Speaker A: Great. Well, this has been fantastic. It was great to see the interplay with Richard and Jag. Hopefully, as we get into election season, we might see them do more shows together. Coming up next week, Jag on Wednesday is going to be interviewing Brendan O'Neill Wednesday at 05:00 p.m.. Eastern. Then again, there is a debate Wednesday night with the GOP, and Richard Salzman will be talking Thursday the 20 Eigth at 05:00 p.m.. Eastern with our own Abby Behringer as well, about the debate analysis. It should be good. I'm looking forward to it, especially after Richard's brief analysis earlier. But thanks, everyone. One for joining us and we'll look forward to seeing you next week. [01:01:19] Speaker B: Scott. Thank you, David. Jag you're all great. Connie, Chris, JP. Thanks so much.