Republicans Have a Messaging Problem | Guest: Steve Forbes | Ep 41
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Republicans Have a Messaging Problem | Guest: Steve Forbes | Ep 41


– Welcome to Kibbe on Liberty, this week we talk to the
editor of Forbes Magazine, the one and only Steve Forbes, about some of the ideas
being proposed by Democrats. And he offers some serious
advice for President Trump to get the economy moving again. Check it out. (rock music) And this is our podcast, Kibbe on Liberty. Thanks for joining me. – Good to be with you, thank you. I like that word liberty these days. – Yeah, well, it’s a word that’s
not used enough, I suspect. – Or honored enough. – Honored enough, something like that. And I thought what we might do today is tap into your knowledge
about basic economic principles and how they apply to politics. Everyone knows who you are, I’m not gonna waste much time on that. But you’re the Editor-in-Chief
at Forbes Magazine, two time presidential
candidate, really the guy that figured out the flat
tax and made it popular back when the Republican
Party talked about tax reform, that’s not really so much a thing anymore. – And part of the problem is
they use the word tax reform, which means nothing to people. If you say tax cuts and tax
simplicity, people get it. The GOP has got a communications
problem, among others. – Well, we’ll get into the GOP, but there’s such a
target rich environment. So few politicians, and I would include Republicans
and Democrats in this. We don’t really talk about policy anymore, we seem to spend a lot of time talking about sort of tribalism,
and us versus them and why the other guys are so bad, but we don’t really talk
about substance and policy. So I thought we might
take a couple minutes and walk through some
of the marquee proposals of the candidates running for president, and I suspect you have an opinion about some of these things. – Oh, I might, I think. – It’s a little depressing to see how a lot of the ideas of Bernie Sanders have become sort of
baseline popular proposals amongst almost everyone running for president as a Democrat today. And right now we’re arguing
about Elizabeth Warren, and she has proposed, let’s
start with Medicare for All. Medicare for All, which
I guess is a euphemism for socialized medicine,
government-owned medicine. It’s not just government-controlled
medicine anymore. Is Medicare for All a good idea? – Medicare for All is
another way of saying, less health care for the many. And the way other countries
control health care costs is by rationing, you just don’t
get it or you wait for it. In Britain, for example, if
you need kidney dialysis, you’re above the age of 60 or 65, you will not get it, they
will simply let you die. This country has always been based on the principle of turning
scarcity into abundance, and when free markets
are allowed to operate, that’s what happens. Just take our handhelds, virtual supercomputers in your hand, if you’d said 20 years ago, grandma could operate a supercomputer they’d have looked at you insane, wondering if you’ve been
in the sun too long. Now we take it for
granted, grandma can do it. That’s the virtue of allowing creativity. And what we see here in terms of government
control of health care, not only does it mean
less, not only does it mean politicians deciding who
gets and who doesn’t, but also kills innovation. Europe, for example,
was once a great front of new medicines, new medical devices. They went more and more
for government control. And as a result, they aren’t
creative as they once were. We are, they’ve fallen by the wayside. So it just doesn’t mean
waiting for health care, it also means you’re not gonna get things that we could have had. – So the price inflation in health care is a very real thing. And the cost of insurance since the implementation
of Obamacare has — – Yes, it was supposed to
cut it by several thousand the last time I heard, yes. – Well, it doubled mine,
I don’t know about yours, but I’m–
– It did it for everybody. – I’m paying out the nose for that. – And also were the co-pays. So the deductibles, so
you may have the insurance but you end up paying
more than you did before. – It’s as if every single promise under Obamacare has been broken. – Or turned upside down. And the thing about health care is to recognize this is not free markets, this is all third party. There’s a disconnect between
providers and consumers. And it’s Medicare, Medicaid
mostly in the government part, large insurance companies,
the patient doesn’t count. Nobody designed the system,
so no pointing fingers, but it evolved in a very poor way. And you see it with hospitals. They know their revenue depends on how well they negotiate
with insurance companies, how well they negotiate
with Medicare, Medicaid, not on how they’re serving the patient. So it’s amazing we do as well as we do with this kind of contorted system. And I like to point out to show where the patient
stands in this pecking order is that the lousiest motel in America wouldn’t dare put you in
a room with another guest, a sick guest with a curtain in between, as is routinely done in hospitals. So the key on that is to
get real free markets. We have a little bit of that in food, which is more basic than health care. Government I think is still too
much involved in agriculture but at least the government
doesn’t try to run the farms, if they did, we’d have no more obesity, we’d all be starving. They tried in China and Russia that way, had some disastrous results. So let entrepreneurs have
a free run in health care, have real markets in health
care, and have safety nets. Food, if people can’t get it, you everything from food
banks to food stamps, why in the world can’t we do
the same thing in health care, unleash that kind of creativity, give more control to the patients and make sure people if
they come in rough times, they’re not gonna be
thrown on the sidewalk. – It seems like Republicans
aren’t bold enough when they propose health care reforms because they seem caught in this trap where they’re defending the status quo and it sounds like they’re
defending drug companies, and they’re defending insurance companies and of course these
lobbyists warm the Capitol and game the system. And we have a problem just explaining what a actual free market,
consumer-based system would actually look like
because everybody knows that the costs are up through the roof. Everybody knows that even now
there’s a form of rationing, it’s difficult sometimes to
get the services you need for lots of patients. But we don’t think bold enough. We, I shouldn’t say we, I feel like legislators and
particularly Republicans who aren’t proposing single-payer happily, they don’t know what the
vision is, is that fair or not? – There’s not been a good
job, a good performance in explaining what free markets would look like in health care. What it would mean is you
would control the resources, not some third party, that’s the glories about
health savings accounts. You control that money
in your own account, not a Washington politician. If you get a better price on a drug, that’s your money, not an employer’s or an insurance company’s
or the government. We need more of it, there are
various ways you can do it. Nationwide shopping for health insurance instead of these restricted markets. We’re now in New York, if you wanna buy a policy
offered in Pennsylvania, it’s illegal. You can buy a car in Pennsylvania, but you can’t buy the insurance.
Have a nationwide market, equal tax treatment, if
you’re an individual, you pay with after tax
dollars, that’s not fair, where others get it with pre-tax dollars. Transparency, have hospitals
and clinics post prices, have postings of infections received after you’re admitted to a hospital, have the Justice Department go after what they call CONs, certificates of need. If Starbucks wants to set up a
store next to Dunkin’ Donuts, they just go and do it, and see which one does
better, they both may prosper. But in 36 states, you still have to get permission from the government, if you want to expand
an existing facility, start a new existing facility, which crushes innovation, no surprise. How about removing all these restrictions in health savings accounts, both what you put in, and
what you can use them for. Right now you can’t use them for over-the-counter
medicines, that’s crazy. And so removing these obstacles, to put you more in charge, and technology’s been coming
to our rescue more and more, especially as 5G starts to get rolled out in the next few years. You’re gonna be able to measure things, you don’t have to go to a
doctor’s office or hospital, all these kinds of new drugs and medicines and medical devices coming
along, so it’s ripe for it. And because more and more companies are going for high deductible
plans, many of the smart ones combine it with a health savings account. But even with Obamacare, the
high deductible is there, you might have subsidies,
but you still end up feeling you’re getting restricted in terms of your choices and
paying more out of pocket. Those are creating a consumer market. And you’re gonna see the
kind of disruptions there that Lyft and Uber have done in taxis, Airbnb in hotel industry
and so many other areas. It’s starting to come to health care, and we should clear the obstacles so that patients are in charge. When patients are in charge, you don’t have that disconnect
between doctors and patients. By golly, we’re gonna get
the best of all worlds, more for less. – Yeah, and a lot of the barriers to competition you described
are in fact barriers that were lobbied for by industry groups and health care providers and insurance companies
and drug companies. And I think we should be
willing to call them out for that bad behavior, that’s not free market, that’s cronyism. – And how about taking a look at the PBMs, pharmaceutical benefit managers, they were originally created to help consumers and organizations bargain with the pharmaceutical companies, now they’re kingdom unto themselves. If you’re a pharma company,
pharmaceutical company, and you don’t appease the PBMs, your drug does not get to be available. – Yeah, there’s mostly
bad news on health care, even attempts to repeal and
replace Obamacare fell short. But one bright side that really captures that positive message
about patients and doctors making choices without bureaucrats and regulators between those, is the legislation President
Trump signed for Right to Try. – I feel like the story of
allowing patients more control over their own lives,
particularly patients who have been given a
virtual death sentence, why would anyone oppose
something like that? – Because it’s all rules based. And this goes back to the
’60s where the idea grew up. If you have enough rules and laws, you don’t have to rely on human judgment. They’ll cover every contingency,
which is preposterous, but that’s why you have
these 500 page manuals, telling teachers how to teach
or discipline a student. You have to learn pretty quickly, if you’re gonna be any good in that job, you don’t need a book to
tell you how to do it, experience will do it. And so, yes, these are steps
in the right direction. But that’s why, again,
we’ve got to do all we can to get this consumer market going. And these things will happen on their own, like electronic records, every drug store, every laundromat, every gas station, had electronic records 20 years ago, why didn’t it happen in health care? Because there was no competitive
advantage in doing so. Now the government’s trying to say, do it from the top,
here’s what you must do. Whereas in a free market, you’d have all different kinds
of electronic record systems for all different kinds of specialties. It would have happened just by
people doing it on their own. – So let’s go back to Elizabeth Warren and her Medicare for All. And she has– – And by the way, the nasty little secret is these people who propose these things always have their own
special health care benefits. – Yeah, the Congress
is not going to suffer under Medicare for All. – No, sir. – But she says this is a good deal, it only cost $20.5
trillion, according to her. Even Bernie Sanders has thrown out a much bigger number with that. And objective third parties
have said, it’s $30 trillion, it might be $40 trillion,
it might be even more. I suspect they’re all underestimating
the total cost of this because, as Margaret Thatcher once said, the problem with socialism
is that eventually, you run out of other people’s money. How much does this cost? And like, how would they
ever raise that money? – Well, this is where you
have to be a little careful, don’t lead with the fact that it’s gonna cost a lot of money. Because what you lead with is, it’s gonna mean less health care for you. You’re not being able to decide what you might need for your
child or your loved one. Taking away, we’re
already restricted enough, but this way bureaucrats
are making those decisions. You should be able to
make those decisions. You should have providers
trying to find ways to make your life easier,
make it more convenient to get these medicines
and medical devices. And if people need help,
there are tried and true ways to make sure you’re not left
behind in terms of needed care. That’s again, the virtue of free markets will turn scarcity into abundance. And that’s the way you attack it. In terms of the numbers,
they’re just so gargantuan, nobody can get their heads around them. And what she proposes is
how to, quote, pay for it, after she destroys the system
and makes it totally chaotic, is by destroying the economy. The economy moves forward,
economy is people, and people move forward
when we have investment, people starting businesses,
expanding businesses, replacing obsolete equipment and the like, coming up with new products and services, that takes savings, and
she would destroy savings. And so we’d have stagnation. And we’ve seen in other
countries where that leads. Why do we wanna do that here? Why does she ignore experience? So one can make a crack
about her ethnicity in terms of her calculations in saying, “Oh, you won’t pay any more, “it will be all free and glorious.” Yes, right. – Yeah, I mean she’s only
gonna tax the wealthy. I mean, who’s against that? – Well, she tries to play the envy card, all your woes are those evil people, like the head of Morgan Stanley
and the head of JP Morgan, these hedge fund blah,
blah, blah, blah, blah. And so you pick out
convenient scapegoats and say, by golly, if we get rid
of them, if we crush them, all would be well and
aren’t they so selfish for not giving more to her favorite causes and supporting her? And as Lincoln said, “You
don’t help people move up “by crushing the rich.” You don’t make people
richer by crushing the rich. You will make it possible
for people without the means who are starting out
the chance to rise up, as he put it, “Improve your lot in life.” So she’s playing the demagogue card. And so you wanna go to
Venezuela, you wanna go to Cuba, North Korea and other paradises, and even the exalted systems overseas, there’s some pretty good systems, but you don’t have the
innovation and you do wait. – To back to your point about tax reform, I mean, the Democrats envy card is always, we’re gonna tax those rich
guys, we’re not gonna tax you. In practice, it’s the middle. – And this is where the Republicans have got to get their act together. They talk about, how do
you pay for the free stuff? Nothing is free, well, look at Europe. In this country, most
states some exceptions, have sales taxes 5, 6, 7%, some crazy place like Chicago is 10%. In Europe, they have a super sales tax called a value added tax, 20 to 25%. So you buy something for $100, just add $25 to it to
pay for your free stuff. Payroll taxes, what we call
FICA, 15.3% in this country, just keep 15% in mind, comes off the top. In Europe, 35 to 50%. Their income tax rates are higher. That’s how you get your free stuff. – Yeah, the counter argument
that you made so well when you ran for president is
that a very complex tax code that attempts to punish wealth creation, it attempts to sort of
separate us based on income or industry or however they demonize that. It’s ultimately not fair to those of us who don’t have an army
of lobbyists and lawyers to game the system, to rig it, and I feel like we should
steal the fairness argument back from Democrats because
treating everybody the same used to be what meant fair. – Yes, and half the lobbying in Washington revolves around this monstrosity. So let’s just go through the
words, my favorite thing. Constitution amendment, 7,200 words, Bible took centuries to put
together, 773,000 words, the federal income tax code and all the tenant rules and regulation, not just the code itself,
that’s just the start, which have different
rulings, interpretations from Treasury and everything else, 10 million words and rising, and nobody knows what’s
in it, it’s a travesty. Several years ago, a
magazine did a survey, they took a hypothetical
family’s finances, numbers, gave them to 46 different tax preparers, people considered experts in the field. And you know what they got back? 46 different tax returns,
46 different estimates of what that family owed, all different, thousands of dollars of differences from people who make
their living at the thing. So it brings out the worst in us, and you have to look at opportunity cost, this is something very important because we tend to get
caught up in economics and sound like we’re nerdy bookkeepers. What is happening here, the IRS tells us we spend 6 billion hours a
year filling out tax forms. Experts tell us we spend
two to $400 billion a year complying with this incomprehensible,
corrupt monstrosity. Go back 20 years, think of literally, tens of billions of hours,
hundreds of billions of hours, literally trillions of dollars,
all for the stupid code. Imagine if all those resources had gone instead to new
products, new services, new medical devices,
new cures for diseases, how much better off we’d
be at opportunity costs, all that wasted brainpower. We do it to ourselves, so
let’s liberate ourselves and have that time, that
brainpower, those resources, go for something that benefits all of us. – So based on those principles,
how do you rank the tax cuts that Republicans passed and
President Trump signed into law, I guess two years ago now? – Yeah, on December of 2017, a nice step in the right
direction they could have done even in their constricted way much more. One of the amazing
things about Republicans is they worship this thing called, the Congressional Budget Office, which purports to tell us what
the impact of tax changes, spending changes we’ll
have for the next 10 years. If they knew what was gonna
happen the next 10 days, they wouldn’t be working at the CBO, they would be in the stock market, the commodities market
buying lottery tickets, they don’t know. But nonetheless, the Republicans
take it very seriously. And when you program these models to assume that tax cuts
don’t do very much, then the tax cuts don’t do very much. And so it’s biased, the old GiGo thing, garbage in, garbage out, but the Republicans took it very seriously instead of, all right,
those models are wrong, rewrite them or throw
them out, and just do it. And if they did, we’d have an even more
prosperous economy today. – So, Elizabeth Warren has a wealth tax, and she appears to have stolen the– – I call it the wealth destroying tax. – Well, an economy
destroying tax, for sure. Funny thing about wealthy
people is that they’re mobile. And they have ways to get around this including just leaving. – Well, they have this
sort of cartoon fantasy, these Elizabeth Warrens of the
world, that people’s wealth is like that old Disney
character, Scrooge McDuck, sitting in his money bin, swimming in all his coins and gold, jewelry and bills and all that kind of thing. Their wealth is not
liquid, it is not cash. Most of it is in the form of assets. And when you tax asset,
you reduce the value of it. So you slam Bezos and Amazon, suddenly he goes from $120
billion to $60 billion, poof, just disappears, it’s not physical, they don’t understand that. So by taxing assets, you
destroy the value of assets. And so you end up with less, less savings. People use the word capital,
I use the word capital, that’s another word for savings. Whether it’s you deferring or
not spending all your income, companies making a profit, it’s savings to finance existing
businesses, new businesses, coming up with new ways,
most new things don’t work. So you have to finance
those in the marketplace. So enables us to find out what works, and give us a higher standard of living. And again, we all benefit from it. So in the name of helping
us, she’s gonna destroy us, and the only people who will be helped are those who, commissars around
her, making those decisions and they always seem to live very well helping We the People. – Yes, I’ve noticed that Nicolas Maduro is gaining weight as his country starves. – You would not use him
in a Weight Watchers ad. – No, you would not at all. But of course, Elizabeth
Warren is moderate compared to some of her colleagues
on the presidential stage and I think she stole a lot of these ideas from Bernie Sanders,
who is actually a self– – There are no copyrights in politics. – Well, there’s no property rights in socialism either, I guess.
– Good point. So Bernie came out with
something, it sounds great, Economic Bill of Rights. And of course, his tax the
rich scheme is in there, he wants to tax Wall Street. He wants to tax capital, in particular, which seems somewhat ironic, given that he points to
the Scandinavian countries as what he means. When people accuse him
of being a Socialist, he’s like, “No, I’m a
Democratic Socialist, “and I’m not talking about the USSR, “I’m talking about Norway.” And if you look at countries like Norway, other Scandinavian countries
that Bernie celebrates, they actually treat capital pretty well. – You take the two biggies,
Denmark and Sweden, which don’t have the oil that
gives a cushion to Norway, and places like Kuwait. And they originally created their wealth relative to other countries
with free market economics, low taxes, sensible regulation. And as they got more
prosperous, they decided, hey, let’s do all these
freebies and more benefits and why bother to work, and they got into
serious economic trouble. And so they scaled back
the very kinds of behaviors that Bernie Sanders wants to bring here to the United States. Sweden, for example, does
not have a death tax. Sweden allows you school choice. Is that what Bernie Sanders is proposing? If so, I haven’t heard it yet. – Yeah, If so, I’d sign up. – So they have their fantasy
land that don’t exist. – Yeah, the other thing that he does, and he of course has also
embraced Medicare for All. Government ownership of
the provision of medicine is how I like to describe it, and he says his, by the
way, costs a lot more than Elizabeth Warren’s. But he takes it a step further. And this is the first time I
think I’ve seen this proposal. He wants to forgive medical debt, and along with education debt. And I think about, you’ve seen this data, you look at industries
in the United States where price inflation is rampant, and two industries stick out, health care, and you mentioned perhaps the reason why even before Obamacare, the majority of $1 spent on health care
would come through Medicaid, and Medicare and other
government providers of health. – Or third parties even if they are in a free enterprise system, it’s not the traditional
provider consumer model. – So, and maybe I think this
is counterintuitive to people that don’t think like economists but the more that the
government throws money at something like health
care, without competition, without accountability
of all these third party decision makers, you get less and less but you can spend seemingly
an infinite amount on really bad health care. – And you see it in higher education. The other area where costs are going up. Sticker prices going up four
times the rate of inflation, and all with good intentions. Decades ago, hey, let’s help kids by encouraging student loans, we’ll guarantee them, guarantee the banks. Give them grants like Pell grants, we’ll help them out to
pay these tuition costs. And unlike the traditional scholarship that colleges and universities had, where you are expected to
work and get help from others, this became a way for universities
and colleges to get money and jack up costs and
build more facilities. You look at the rise and this
also is government regulation. You have huge administrative
staffs, huge bureaucracies. You look at the growth of
bureaucracies and mandates versus professors actually
doing real research or teaching in the classroom, boy, the lines diverged
a long, long time ago. So you have all this bloat. If you wanna see where decent management, where there’s real
accountability can work, just look at Purdue University. Seven years ago, a new president
came in, former governor, former budget officer from
Washington, Mitch Daniels. And they came to him and said,
we’ve gotta raise tuition as we always do every year three to 4%. He said, “I’m new here,
we’re gonna freeze it a year. “I just wanna get my arms around this job “before doing something like that.” And the admissions office
said, “If you do that, “if our price is seen as
lower than other universities, “people are gonna think we
have an inferior product, “it’ll hurt admissions.” Now they come to him and say,
“Don’t raise the tuition.” So for seven years, he froze tuition, not for one year, but
for seven years in a row. Cut deals with places like Amazon to make textbooks cheaper and the like, efficiencies in food services. And today, a kid going to
Purdue will spend less overall than a kid going to
Purdue seven years ago. They’ve hired more professors, so it’s not skimping on
educational opportunities. So it goes to show where
there’s accountability, and you have the traditional
markets consumer isn’t working, by golly, you will get more for less. And that should be the
model for higher education. But right now with these subsidies, they don’t care if you take six years, they don’t much care if you don’t graduate and stuck with debt. So college, which was once
seen as a road to mobility, really helping you advance your career, realizing the American Dream,
comes as a form of servitude because you end up with this debt that you spend years trying to pay off, and a lot of them are not
gonna be able to pay it off. So before even talking about what you do about existing debt, and taking account of people
who did pay their debts, you’ve got to fix the problem, otherwise it’s just gonna come back again. – So you see like how young people who borrowed a lot of money
to get a college degree and discovered in the process
that it wasn’t worth nearly as much as they thought it would. So they’re burdened with all of this debt. And let’s say they came
to age around 2008. And they saw Washington,
DC bail out Wall Street, and yet they have all of this debt. – Well, you see, Washington said to them, “We’re helping you, “we’re making it easier
for you to go to college “and you don’t have to
worry about the cost.” Well, it was a false advertising. And so again, watch what happens when they say we’re here to help you out, those banks that got bailed out. They suffered in the sense that, yeah, they may have gotten a bailout. Most of them, by the way, like
Morgan and some others, BBT, did not want a bailout, they were fine. They did not want to have
to put money up and suffer for the sins of their brethren. But even there, their
opportunities were restricted, they’re told not to lend,
which hurt the economy. So all of these things
are bad, bad all around. But in terms of students,
what you’re gonna see, and again, high tech is gonna help if we give it a real push, is you can get to do your
education on your own. You can do it online,
Starbucks helps their baristas get an education not through
the traditional scholarship, former head of the company, creator of it, a fellow named Schultz. This Howard Schultz said,
“That’s not gonna work. “We can’t give baristas
$20,000 to go to college.” So they came up with innovative
online education courses with the Arizona State University, worked it out with them, a very,
very creative way to do it. So you can get that higher
education, still earn money, and not end up with crushing debt. And what you’re gonna see more of is what business schools
discovered years ago, is you can get schools like Wharton and Harvard and Northwestern and others, a very nice degree, a
certificate in a certain area, with the business school imprimatur on it, but you take a course, 12
weeks, 16 weeks, 18 weeks, but you may only spend one
or two weeks on campus, the rest is online. And so you’re gonna see
more and more of that, show us you’re proficient in an area, if you want humanities, plenty of opportunity
to go online to do it. So the traditional way of education is gonna profoundly change. You can use the cliche, there’s more than one
way to skin this cat. – Yeah, and the old idea of
bricks and mortar education, particularly with the insane
inflation that we have, and all of this, it seems
like it’s ripe for disruption. And we talk a lot about that on this show, that technology and the
ability to Google stuff is a radically disruptive– – Well, I’m old enough to remember a thing called
card catalogs in libraries. We did laboriously have to go through, and now you just go
online, boom, boom, boom. – Finding ideas was an
arduous process back then, you had to be super motivated
in order to do that. – And by the way, in terms of reform, why does it take four years
to get through undergraduate, maybe you should be able to
easily do it in three years, you won’t have the long summer vacation, but take five weeks off
and do it in three years. Your parents will be happy,
you’ll be productive sooner or at least to have
more time to figure out what you’re gonna do with your life. And in law school, most
will tell you in whispers, you could do that in two years. And how about letting students once again do what they used to do, if you want, apprentice in a law office and still be allowed to take the Bar. – I’m not sure the legal
guild would allow for that. It’s a cartel, like all of these things. – Which gets the whole
subject of licensing, perhaps another subject for
another time of restricting– – Well, it should be something
that young people care about, you’re talking about a lot of freedoms that would particularly affect
Millennials and Generation Z and yet back to this problem, every year there’s a new
scare poll that shows that more and more young
people are embracing socialism, and they embrace Bernie’s philosophy, and they embrace Elizabeth
Warren’s wealth tax. How do we turn the ship there? – Well, part of the problem is the way, who’s been teaching in the schools? They’re not taught about what happened with the Great Society, ’60s, especially the aftermath and the ’70s. They’re not taught about what’s happened in these other countries, the
ugly results of these methods, and these ideologies. So if you’re not taught then socialism, “Oh, okay, that sounds okay, “better than having $100,000, $50,000, “$20,000 of student debt.” Yeah, that sounds pretty good. You don’t know. So we have to do the counter ideas. And one of the things we have to learn is it’s not just winning elections, important though that is, we got to learn to fight in the culture. Fight in the schools,
fight the battle of ideas, and make the case that
what we’re advocating gives you more freedom, more choice, more opportunity in life than
what the others are offering. – I actually think, and you’re
preaching to my choir here because I think the only way
to connect with young people is upstream of politics, because the divisiveness of
Republicans versus Democrats, conservatives versus
progressives, this tribalism, I’m not sure that it’s advantageous for us when we’re trying to reach young people? I mean, President Trump has said, “This will never be a socialist country.” I’ll pick on President
Trump here for a second, because I’m reminded of Friedrich Hayek, warning us that many of
the critics of socialism didn’t exactly understand what it was that they were criticizing. And if running against socialism and running against Bernie Sanders just becomes a talking point, I think you sort of lose
that intellectual debate. And we’ve been picking on Democrats a lot, but I feel like there’s some things that we should hold Republicans
accountable for as well when it comes to expanding
the size of government, the debt and spending, and even failing to make that strong argument
for choice in health care, as opposed to just criticizing Obamacare as socialist medicine. – This is where the politics is important because if we don’t fight there, then bad things will happen. And one of the things that’s happened over the last 100 years is the growth of the administrative state, whatever you want to call
it, and these agencies, now Congress will pass
120, 140 laws a year, these agencies will pass rules and regs that have the force of federal law, three, or four, or 5,000 times a year, and crushing the economy. It’s just so mind boggling. Some estimate that it’s 150 million words. And so that’s also where we
have to fight and make sure, I mean, we’ve seen already the benefits, just of a little bit of deregulation, slowing this train down, and the benefits especially
for small businesses. And the way we fight those battles, not trying to pick each little fight on each little regulation, but go through what a fella named Philip Howard, who’s probably a little left of center but hates what’s happened to the law, principles based regulation. Australia, a number of years ago, had hundreds of pages of regs
on how you run a nursing home. They came with the radical
idea, throw those regs out, they came up with a few
pages of 31 principles, like treat the patient
nicely, keep the place clean, basic stuff like that, and said, you figure out how to do it. And if you don’t, you’ll
be punished for it. You’ll be held accountable. The results were amazing. Nursing homes became better. Patients were retreated
better, principle based, that’s how we fight it instead of trying to fight these battles, which are like trench warfare. You gain ground but at a horrific cost and then they counter attack. The Empire always strikes back. So principles based. One thing the Trump administration
started is another idea, why is everything
concentrated in Washington? Why not have the agencies
all around the country? The FDA, why not in Boston, where there’s a great
scientific community? Live among real people instead
of this bubble in Washington, which makes lobbying harder too if it’s spread around
the 50 glorious states, cannot so easily go make a
few calls and fix things. And so those kinds of
ideas, which people say, “Yeah, it should be spread
around the country.” And one of the things Republicans
keep making the mistake of is they always come across,
and you alluded to it earlier, and that is, taking something away even if it doesn’t affect you directly. If they can do it to him or
her, maybe they can do it to me. So this negative thing. So on Medicare for All,
don’t lead with the costs, that just goes over people’s heads. Sounds like you’re more
worried about money than caring for a grandma. Start with less health care, they’re gonna take away your choices, they’re gonna make choices as to who gets the
medicines and who doesn’t. I don’t want that, it’s bad
enough as it is. (laughs) – So, like if you ask a free marketeer to grade the Trump administration, they will point to the Supreme Court, they will point to the Tax Bill. They will point to the the, what looks to be a fairly
aggressive administrative attempt to reduce the costs and
the number of regulations. And I think you and I would agree that an incumbent president will be judged based on the economy, and all this other stuff, perhaps, doesn’t matter nearly as
much as we think it does. It’s really about whether or not people feel like they’re earning more, that they have more opportunity. – Keyword is not only just earning more, but the chance to get ahead, that there’s a real optimistic
future, what Reagan conveyed. – And from my perspective, you would have opinions
about this, and correct me, but I feel like the economy is not as strong as it should
be, it’s clearly stronger than it performed under
the Obama administration. – It was significantly
stronger in 2017, 2018. Then we got involved in
these trade disputes. And that has hurt, it’s
hurt manufacturing, it’s hurt investment, because if we don’t know what
the rules of the road are, you’re not going to invest as aggressively as you would have otherwise. And the thing to keep in mind is, tariff is another word for sales tax. So when you hear 25% tariff
on autos, think 25% sales tax, and it hurts us, don’t get the idea that oh, somebody else
is gonna pay for it. No, we all pay for pay
it, consumers pay for it, businesses pay for it. That gets to trade abuses, while there are mechanisms in place to deal with trade abuses, we’ve never really
enforced them consistently. And if we need to reform
the mechanisms to do it, as we did in the 1990s, perhaps
20 some odd years later, it’s time to reboot it, reform it, change it for the digital
age, then you do it. And, we should, in the case of China, we should unite with our allies and say this kind of
behavior is not acceptable. And by golly, that will have an impact. So if you’re worried about
abuses, that’s one thing. But tariffs are not the
way to treat abuses. And as for trade deficits, a little higher than they
were year and a half ago, if you take that thing seriously, which ignores capital flows
that come to United States. So it’s an accounting
artifact, by any means. – It really is, I think these trade wars are very much the Trump
administration’s Achilles heel when it comes to what’s
going to happen in 2020. But it’s difficult to argue
with protectionist sometimes because it’s not an economic argument, it’s really an emotional
argument that they make. But, I don’t know, we’ll see. I don’t see any backing down of the administration on this.
– Well, this is where again, you have to prepare for the long fight, studies are starting to
show even the steel industry ended up not being helped very much at all by these sales taxes, and certainly hurt those who use steel. And so the Bush administration, Bush 43, tried some protectionism
in the early days on steel. They saved some jobs
there at least short-term but cost five to 10 times as many jobs of those who use the steel. – Yeah, it was a disaster. – So 240 years after Adam Smith, 180 years after Britain
repealed the corn laws, made themselves a free trade nation, 90 years after Smoot
Hawley disastrous tariffs that started a global trade war, and helped bring on the Great Depression. Here we are still fighting those battles. – And by the way, the same way that Smoot Hawley crushed
the agricultural sector and triggered the Great Depression, that’s part of what’s happening now, is our farmers are
getting hit pretty hard. – Yeah, now they’re patriotic. And they say, “Well, if it’s
necessary to make America, “well, we’ll go through short-term.” But they’re gonna start to ask, “Where does this end?” And when the President said,
and I’m being blunt here, when he said trade wars are easy to win, wars of any kind or not easy to win, they always take courses
you don’t anticipate. And we’re seeing that play out here, which is why I’m now optimistic that seeing how difficult it is, I think we will get a deal with China. And so we can start to move forward. I think the Democrats wanna
show they can get something done other than impeachment
stuff in Washington, so they will pass the new NAFTA, US MCA. So we know what the rules
are with Canada and Mexico. And then the key other big
thing to watch for is Europe. We’ve got actions potentially
against their auto industry and other industries, under
what they call Section 232. Anyway, up to 25% sales taxes
on autos and auto imports, given the fact these
sophisticated supply chains around the world, where
things can cross the border several times before they
go into the final product, you put that kind of a sales tax on, Europe is gonna go into a recession, they’re already kind
of wobbling right now, we’ll go into a recession,
got to avoid that stuff. And if we avoid it, if you
could wave the magic wand and have all these disputes go away. You’d see the market immediately go up 5,000 points on the Dow. And you’d see the economy go from 2% to 3% growth pretty quickly. – So I completely agree with your argument and your sort of macroeconomic analysis of the downside of trade wars. But it didn’t get really personal to me, until they slapped huge tariffs on scotch whiskey, French wine and cheese, then I decided to really
get upset about this. – Well, and you’ve probably
felt it in other ways in terms of what you didn’t
get because of higher costs, what you missed in terms of
greater economic opportunities because of these sales
taxes, and barriers. So yes, it can be direct and indirect, but we all pay for it. – So let’s pivot and wrap up. I wanna ask you, you are a publisher, and you were talking
about technology earlier, and no industry has been
as disrupted as publishing. Tell me what the future
is for your industry. Because getting knowledge to
people and getting these ideas and you write about this every day, making these basic economic arguments that we’ve talked about.
How do you get to this place where everything is disrupted
and disintermediated and I’m sure you lie awake at night asking yourself this question. – Well, Joseph Schumpeter,
the famous Austrian economist, came up with the famous
phrase, creative destruction. The creative part is very
nice, destruction part less so. – It smarts a little bit, yeah. – And in our industry, the print industry, everything sometimes you felt you’d learned is going out the window. And so you have to remember
what Peter Drucker, the late great management
guru once said, he said, “Every organization should remind itself, “what is your purpose? “What is it you’re trying to achieve? “What is it you’re trying to do?” And if you do that, then you become a little
less discombobulated when the means to achieve it change. But where you talk about
laying awake at night, and we live in an era
where we can eat well and asleep well, but not both. Eating part I have no problem with, the other part not so simple. But is that you don’t know
what will work in the future. There’s no playbook. And you’re inventing
things as you go along. And it’s quite hair raising,
and assuming you have hair. And the challenge is, though, come up with new ways of doing things. And one of the things we do now we have, in terms of we still do,
we still print magazines. But online now, we have over
3,000 contracted contributors. You’re paid in part by
the traffic you generate. So we’re providing more content
for people than ever before, but a very different model. And we’ve actually —
– The Uber of publishing. – Yeah, we do a virtual
magazine every day now, over 100,000 submissions a year. And so, yes, you cannot stay still, the world is not staying still. And this also gets the importance, you have to remind yourself the importance of what they call branding. The internet will relentlessly
commoditize everything, you have to have something
that’s truly distinct, where people can go to it, and know what to expect and
trust, then you have a chance. So it’s nice to say, reinvent
yourself, much harder to do. That’s what you’re paid for. Consumers benefit, but those
of us who provide it, yeah. – That may be a concept that
few politicians really realize when they propose all of these schemes. – And they can’t see the future. That’s where socialism fails. Socialism cannot see the future. Planning, you can plan,
but the world may change. Now Hayek said one reason socialism fails is nobody in these positions
has all the knowledge. Even if you had all the
knowledge, go back 20 years, could you have foreseen
handhelds the way they evolved, the rise of things like
Facebook or Google, services like that? No, you couldn’t have. So you don’t know until people do it. And if you don’t have the environment where they can do it, you’ll never know. – Let’s leave it there,
thank you so much, Steve. – Thank you. – Thanks for watching Kibbe on Liberty. By now you know this is the most important
event of your week. So make sure you subscribe on YouTube. Click the little bell so
you get notifications. Kibbe on liberty, mostly
honest conversations with mostly interesting people.

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