October 17, 2020 • 29 mins
In this new series, Trump’s America, we’re going to look at key issues that illustrate how starkly divided Americans are as they go to vote this fall. Part 2: Rebuilding the Greatest Economy. The economic recovery is one of the key issues of the upcoming presidential election. President Trump and Former Vice President Joe Biden have presented two vastly different economic plans. Which one will improve the prosperity of America? Newt’s guest is businessman Andrew Puzder, author of: The Capitalist Comeback: The Trump Boom and the Left’s Plot to Stop It.
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Episode Transcript
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Speaker 1 (00:03):
On this episode of News, We're coming back, and we're
coming back strong. We built the greatest economy anywhere in
the world. We're gonna build it again. We're gonna build
it fast. It's going to go very quickly. This economy
is really coming back strong. Look, the President built the
world's best economy once, and he's already doing it again.
We've already recovered half of the jobs lost to the coronavirus.
(00:24):
You are to project it from here linearly, you'd get
to April of next year, where we would have recovered
one hundred percent of the economic activity. I'm really delighted
to have handy positor with us today. Be visited. I've
(00:47):
known Andy for the entire Trump presidency, and he has
a knack of explaining how markets work, how free enterprise works.
His instincts on the economy have been I think one
hundred percent right. Every time he writes an article, I
read it because I'm fascinated with what he's learning. Andy.
(01:09):
It is just great to have you with us, But
I want to start back at the beginning, because if
you earned your insights into free market economics by being
in a free market, I mean, you're not a theoretician.
Here's somebody who actually went out rand company, has made money,
I suspect on occasion and loss money, has a background.
So people can realize how really rich your understanding of
(01:33):
the American system is. Could you share just a little
bit of your work experience so people will realize you're
talking from practical down to earth real knowledge about how
the country works. Sure, I'd be glad to nude. And
thanks for having me on, and thank you for the
kind words as well. My first paying job was scooping
ice cream at a bask and Robbins when I was
(01:54):
sixteen years old. Got a driver's license so I could
get to a job. To get through college and law school,
I worked every dirty job you can think of. I
painted houses, I cut lawns. I busted up concrete with
the jackhammera one summer in Saint Louis, Missouri, as I
was finishing my first year of law school. I then
went on to law school, became a trial lawyer for
about thirteen fourteen years, and then ended up representing individuals
(02:19):
i'd met through my trial practice. I did commercial laws,
so I got some wealthy individuals and became attorneys for
these individuals and for their companies, one of which was
Carl Carcher, who owned the Carl's Junior restaurant chain at
the time. And I couldn't try cases anymore once I
got these clients, because you can't say to a client,
I'm a CEE. In a month, I have a trial.
(02:40):
You have to pay more attention to what they're doing.
And I got to learn a lot about the intricacies
of business. I ended up representing Bill Foley, who was
the CEO of the Lady National Title, and I said
Carl and Carl's Junior Morris Shanker, who ran the Dun's
Hotel in Las Vegas. So I got a lot of
practical experience. And then in the year two thousand when
carl Junior got in trouble because they bought a restaurant
(03:02):
chain called Hartise, which was much bigger than Carl's Junior,
and the integration of the two brands did not go
very smoothly. I think the border director said, let's see
if the cocky lawyer can fix it, because I've been
giving him my advice. Solut one, they put me in
charge and we saved the company. We took a company
that was on the verge of bankruptcy and turned it
into a chain with about three thousand, eight hundred restaurants
(03:24):
in forty five states and foreign countries. All from a
hot dog cart to Carl Carter nineteen forty one, that's
how the company started. But I've done everything from work
a mill and Wade's job to be the CEO of
an international corporation. Free markets are like movie pictures, are
not like a polaroid snapshot. You just describe a guy
who starts out in nineteen forty one with one hot
(03:45):
dog stand and ends up with thirty one hundred stores.
Now that's a dynamic that doesn't fit the sort of
classic bureaucratic way of thinking, and yet it's the dynamic
that it seems to me was made America the economically
most successful country in the world. I would agree with that,
(04:06):
But Carl is a great example. There's a guy with
an eighth grade education buy the hot dog cart. By
the time I met him and was his lawyer, he
had a half a billion dollar publicly traded company. That's
the American story. It's people like Carl or people like me.
I'm from a working class family in Cleveland, Ohio, and
I ended up having to work my way through college
at law school. I didn't have government help, I didn't
(04:27):
have family help, but I was able to continue moving forward.
I never was resentful of people that had help, either
from the government or their family, because I always knew
that when I took the next step, it was up
to me. Whether I went for or wasn't up to
the government. It wasn't up to anybody else. And I
always felt like I had opportunities open to me. And
that's America. America's about those opportunities. Well, having lived in
(04:49):
works with what was your sense of the eight years
of the Obama Biden economic policies. They were a disaster,
and it was a disaster mostly for working Americans. You know,
the stock market did okay if you were rich, if
you were wealthy, if you own the land or your
own stock, it probably did okay. The people that did
not do okay. We're working class Americans. In fact, when
(05:11):
Obama left office, we had one point nine million more
people unemployed than we had job openings. Wages hadn't hit
three percent growth for seven and a half years since
the end of the recession, and people were leaving the
labor force unable to find good paying jobs, unable to
find jobs at all, let alone good paying jobs. Employers
weren't competing for employees. It was employees who were competing
(05:34):
for jobs, and that cost stagnation, and you didn't see
the kind of growth we should have seen coming out
of a recession. Milton Friedman pointed out in the early
nineteen sixties, the deeper the recession, the stronger the recovery.
And you'll hear a lot of Democrats say, oh, that
recession was so deep, it was so tough for Obama. Well,
the deeper the recession, the stronger the comeback should be.
It's really just the opposite. The best President Trump has
(05:56):
recently just proved with a very deep recession, agree to
which this is a V shaped recovery, and they're now
talking about maybe thirty two or thirty three percent growth
in the third quarter, which would be astonishing. Now it's
off of an artificial collapse imposed by government, but it's
still astonishing when we started down this road. I want
(06:19):
to get Grant's book on the depression of nineteen twenty
twenty one, which is a very V shaped depression actually
comes off of a pandemic, the Spanish flu. The system
goes straight down for about fourteen months, and then goes
straight back up for about twelve months. I actually called
Grant and talked about it. Because it happened so fast,
(06:41):
it created no cultural memory. I mean, people didn't think
of it as nothing like the Great Depression. What we
had with Obama and Biden wasn't a great depression, but
it was a great disappointment. It year after year of
subnormal operation based on the American mall. I love the
title of your book, The Capitalists Come Back. He was,
(07:02):
in a way, Trump represented the revitalization of the system
that made us so extraordinarily successful for the last two
hundred and fifty years. From the day he was elected.
How fast was he able to send signals that entrepreneurs
and investors and small business owners could pick up? One
(07:23):
The very day he was elected, signal went out. The
National Federation of Independent Businesses has a poll every month
on business optimism, and it goes up three to four
percentage points immediately upon the President of being elected. It
went to historically high territory and it stayed there until
the pandemic. Consumer sentiment zoomed. Everybody that President Trump was
(07:44):
going to come in and number one. He promised to
slash regulations, and he did it, even to a greater
extent than he promised. He promised to cut taxes, he did.
He promised to renegotiate trade agreements to get them to
be fair earth, and he promised to focus on domestic
energy production. He did all of those things. Investors knew
it right away, businesses knew it right away and began
to invest. And didn't that then draw people back into
(08:08):
the labor pool. Well, you know, I gave you the
example a minute ago about President Obama and more people
unemployed than of job openings and no wage growth. By
March of twenty eighteen, under President Frump, the number of
job openings exceeded the number of people unemployed for the
first time since the government began tracking the data back
(08:29):
in two thousand. So for the first time, really in
eighteen years, we had more job openings and people unemployed.
It stayed that way for twenty four months, and for
seventeen of those months we had over a million more
people unemployed than we had job openings. That's a complete
turnaround from what Obama left for President Trump. And Obama
didn't have a single month where the number of job
(08:50):
exceeded people unemployed then starting in August of two eighteen,
so we're really just in the first year of the
tax cuts here. By August of that year, wage growth
hits three It stays at or above three percent for
twenty consecutive months until the pandemic, and wages grow more
for blue collar workers than they do for white collar workers. Well,
with more job openings and higher wages, people started coming
(09:13):
out of the woodwork to take these jobs. In fact,
in the fourth quarter of twenty nineteen, about seventy one
percent of the people who took jobs who became employed,
came from outside the labor force. They didn't come from
the ranks of the unemployed who were considered in the
labor force. They came from outside the labor force. These
are people who gave up under President Obama and Vice
(09:35):
President Biden and came back in under President Trump because
of the incredible job growth the labor market he created.
He took the worst recovery since World War Two from
an economic recession and turned it into perhaps the greatest
labor market ever, and certainly the greatest labor market since
the Great Depression. It strikes me as something Stephen Moore
(09:57):
has written about that we're having a great experiment right
now because the majority of the Blue states have governors
who are petty dictators who have kept their state artificially
closed down. Majority of the red states have governors who
actually believe in free enterprise and have opened their states up.
And the difference in unemployment and the difference in economic
(10:18):
growth between the two models is almost the elaboratory study
in which system works. It is. In fact, if you
look the numbers from August, the unemployment numbers, we don't
have September yet, but in August we had ten states
with unemployment six percent or under. Nine of them had
Republican governors, and the one that didn't have a Republican
(10:39):
governor was Montana, which is a very conservative state. If
you look at the ten worst states for unemployment rate,
nine of them had Democrat governors. This was all over
ten percent unemployment, including New York, New Jersey, California, Illinois.
The one state that didn't tap a Republican governor was
very liberal Massachusetts. The dynamics of this are very very
(10:59):
o it's underreported, it's undercovered, it's not going to get
the coverage that it deserves to get because it's very
favorable the president dropped and very unfavorable to the Democrats
in Joe Biden. Hi, this is new. I want to
(11:22):
invalue to sign up for a yearly subscription to my
Inner Circle membership. Club. Were in a critical time in
our history, for the outcome of the next election will
set us in a course of two very different American teachers.
As a member of My Inner Circle, you'll receive exclusive
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(11:44):
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(12:05):
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And as an Inner Circle member, you'll receive an invitation
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two year membership today and newts inner Circle dot com.
(12:27):
That's Newts inner Circle dot com. My thesis is that
the country has to choose between a Trump recovery and
(12:49):
a Biden depression. That if you look at what Biden's
policy proposals are, they literally would cause a depression. I'm
an historian. You know much more about how the mark
the works than I do. I mean, when you look
at these two programs side by side, what's your reaction?
If you look at Biden's website, every program he has
(13:09):
involves substantial increases in government spending, if not dramatic increases
in government spending. And now one program says, here's how
I'm going to encourage private sector businesses to create jobs
and create growth. This is the same theory that Obama
and Biden administration. They thought, because there was this terrific,
horrific recession, that the economy was just going to bounce back.
(13:33):
They were forecasting four percent GDP growth. When they first
went into office. They said, if the stimulus bill was passed,
we would never hit eight percent unemployment, that eight hundred
billion dollars in spending would keep unemployment below eight percent. Well,
unemployment hit eight percent the month they passed it and
stayed there for forty three months. They think that no
matter what they do, the economy is going to bounce back,
(13:55):
and it's just not true. They are going to spend
us into a horrific situation. He's taught about raising tax
is four trillion dollars to cover eleven trillion dollars in spending,
which is on top of our twenty four trillion dollars
that we currently have in debt. I mean, these numbers
will bankrupt America. The only way we can get out
of this, the only way we can start to pay
(14:16):
our debt down, the only way we're going to see
the kind of incredible results we saw in twenty nineteen
under President Trump, which by the way, had the lowest
poverty rate in the history of tracking the poverty rate
going back sixty years. Ten point five percent had the
biggest decrease in the poverty rate going back sixty years,
and the decrease was bigger for Blacks, Hispanics, and Asian Americans,
(14:38):
so every minority saw a decrease. We saw the biggest
increase in median family income since the late sixties. When
they start at tracking median family income, we can get
back to those kinds of dynamic numbers. Twenty nineteen really
set a new bar. A pre pandemic bar for where
the economy needs to go to show success with President
(14:59):
Trump's policies cutting taxes, reducing regulations, keeping a focus on
domestic energy, and going forward with these renegotiated trade agreements
which really got cut off in the pandemic hit. I
think we're going to get back to where we were,
which is historically great numbers in a very very short
period of time under President Biden. I don't think the
economy may never recover. Certainly isn't going to recovery during
(15:22):
his presidency. Shouldn't that be a fairly clear, simple message
to the American people. It should be very simple. Even
income inequality, you know, the big bugaboo of the Democrats,
Briny Sanders, Elizabeth Warren, Joe Biden. Well, income inequality decreased
in twenty eighteen and twenty nineteen, and back in two nineteen,
(15:43):
the share of wealth held by the lowest twin tile,
the lowest twenty four percent of Burghers increased two point
four percent. It all came from the top twin tile.
We've had an incredible year economically. It's been ignored, it's
been covered up, it's really been censored, and it should
be obvious to the American Why do you think the
news media finds it so difficult to a reported and
(16:08):
be learned any lesson at all from Actually, I think
it's very difficult for them to ignore it, but they
managed to. They are so hateful of President Trump. Do
you hear about Trump arrangement syndrome? And initially it was
kind of a joke phrase. I don't think it's a
joke phrase anymore. I think these people have Trump arrangement syndrome.
And even though you can see that, what's happening in
(16:29):
the economy is that Trump is accomplishing all of the
things that Democrats claim that they would accomplish, all of
the things that Obama and Biden were completely ineffected at accomplishing,
again the kind of things Ronald Reagan accomplished for the economy,
where working class Americans were better off, people had more
money in their pockets. You'll recall this question back in
nineteen eighty four, are you better off now than you
(16:50):
were four years ago? Well, forty four percent answered yes
to that question. Today, fifty six percent of Americans are
answering the question positively. And we're in a recession and
ran a pandemic. I think the American people know that
they're better off, but I don't think we've done a
terrific job of explaining it in some simple enough terms
that people can put their hands around the numbers. What
(17:29):
led you to decide to write The Capitalist Combat After
my experience with the Secretary of Labor nomination process, which
was very discouraging for me, I wish they had gone better,
it became obvious to me that somebody needed to get
out and talk about these economic policies that President Trump
was implementing. What a complete revolution it was with the
(17:51):
progressive agenda. He was reversing things progressives had been slowly
putting in place for a hundred years. That we're having
a devastatingly negative impact on Americans and the American economy.
And I think somebody needed to kind of lay out
the history. I was a history major and undergraduate school
before I went to law school, and would have actually
gone like you and got my master's or a doctor
in history if I hadn't gone to law school. That's
(18:11):
a subject I love. It's not being taught in our schools,
and I thought it was important to lay it out
for people to put it down in writing and say
here's where we were, here's the problems we had, and
here's where we're going, and here's what will happen if
we followed for President Frump's policies. And luckily we did
turn the economy around, and the policies he implemented work
very well well in that sense, The Capitalists come back
(18:34):
as a book you sort of wish every mayor of
a failing big city would read it, and every governor
of a blue state that's losing population would read it,
because you captured the essence of what makes America work,
and they seem to have no clue. I wish they
would read it. You know. The comment that I get
the most about the book, he probably get this with
(18:55):
all of your books as well. The comment I get
the most is this book should be required reading in
a high school or college history. Of course, it's the
kind of thing that with the history books that are
out there, Zin's book and the rest of this garbage
that they're teaching kids today the history, and here is
the history they're missing. And one of the things I
tried to do that I thought maybe I was a
little better able to do than some others was tied
(19:16):
the history to economics, you know, make it readable, but
tie the history to the economics. So that was my effort.
Whether I accomplished it or not as up to the reader,
but that's what I tried to do. So when you
look ahead down the road and you look at the
rise of a centralized dictatorship like China, and you look
at the decay of Europe, are you an optimist about
(19:38):
the long term power of capitalism and free markets to
arouse entrepreneurs and create wealth despite all these problems, or
do you think that we're in a downward spiral. In
some countries we've gone down and come back. For example,
Denmark actually did go towards a more socialist form of government,
and they came back the same things swet and they
(20:00):
went to a very socialist type system, found out it
didn't work and became very capitalist. In fact, Denmark i
think ranked higher last year on the Heritage Foundation's Index
of Economic Freedom than the United States, although it's the
country that Bernie Sanders always uses as his example of
how socialism works. Well that Danes are very upset about that.
In fact, Lar's restless and came to the United States
(20:22):
back in two thousand and sixteen, spoke at Harvard and said, look,
you guys have to stop saying that Sweden is not
the socialist country. It's a free market economy. So I
think you see some of these countries go towards socialism,
realize it doesn't work, and then come back. In the
United States, we have such a strong basis of entrepreneurs
and strong history of people expecting to be able to
(20:43):
improve their lives by their own will and their own
talents and their own desires that I think that progressives
are having an incredibly difficult time trying to kill capitalism
here in the United States. If President Trump is reelected,
I think will be set for at least another twenty
thirty years, because it'll be very difficult to convince people
that this system doesn't work because it happens to be
working so well. The various attacks that have been leveled
(21:06):
against President Trump, I think it is because he is
an existential threat that everything progressives believe and everything they've
been trying to convince the American people of more government
is not better for people. Limited government is better for people.
The Constitution as it was originally enacted is better for people.
And we've got two undred forty years of history to
prove it. I think one of the questions that I
(21:28):
have is this gap where there are people who live,
like in California and New York Chicago, who are almost
in a different world now that their experiences of big government,
their experiences of the imposition. I was talking earlier with
somebody about the rules, for example, for whether not a
(21:49):
church can open up. And then there's a level of
dictatorial control, mostly in the Blue States that is kind
of amazing. And I worry about whether or not the
emery can people or a substantial portion of them automnly
decide that there's just too much trouble and they're just
going to let the bureaucracy tell them how to live. Well,
(22:10):
I hope that doesn't happen. I think there certainly are
people in all of those states who feel as you
and I do about the economy and about government. In fact,
if you look at the states, people are leaving, the
people are leaving California, Illinois, New York. They're going to
states like Texas, Tennessee, and Florida. I moved our whole
company from California to Tennessee, I mean, and it wasn't
(22:31):
for the weather. I mean, I love Tennessee, but we
lived in California for twenty five years. The businesses in
there since nineteen forty one, but we just had to
get out. And I think you see people who feel
like they're being repressed in those states. Luckily still have
a choice and can get out and go to these
other states, which is one of the reasons the electoral
college is so important. We need to make sure that
(22:52):
states like California New York are not dominating the political
discussion in this country, and that other states and other
people have a I go around and speak at colleges
and universities when we're not locked down by a pandemic,
and there's a real hunger. Even at liberal schools where
I've managed to get in and speak, there is a
real hunger to hear about capitalist and what I tell
(23:13):
people that in a capitalist society, your goal, your desire,
everything that you do is aimed at trying to make
other people happy. Now there, you're always trying to meet
the needs of your consumers. When I was selling burgers
at Carl's Junior, I wasn't trying to figure out what
kind of burgers I wanted to or the government elits
want to deed. I always trying to figure out what
kind of burgers these kids want to do, and to
(23:35):
serve it to them. And that's any business. You're always
trying to meet the needs of other people, whereas in
a socialist society you're always trying to satisfy your own needs.
You're always trying to get as much from the government
as you possibly can. If you're standing in a line
for food, and inevitably in a socialist country you will
be standing in a line for food. You're not thinking
about what the person in front of you are behind
you once. You're trying to figure out how you can
(23:55):
get the most for yourself when you get to the
end of that line. So I try to tell people
that free enterprise means that you're a customer. Bureaucracy means
you're a client. And if you're a customer, you're the gravity.
If you're a client, the bureaucrat is the center of gravity.
I have to tell one quick story that one of
the occasions when I got to fly on Air Force
(24:16):
one with Reagan. Reagan would always come back and tell jokes,
and he collected Soviet jokes and this was during the
period of Gorbachov and the collapse of the Soviet economy.
And so he comes back and he says. Guy goes
out in the morning and gets in line and waits
about three and a half four hours, gets to from
the line and the guy says, ooh, comrade, I'm sorry,
(24:38):
we just sold the last of the port. But I
think if you go down the street they still have sausages.
So he goes down the street, he gets in line,
he gets the end of the line. The guy goes out, comrade,
you just sold the last sausage, but I think if
you got down a little further there are some chickens.
He goes down there and he starts to gripe about
(25:00):
all this. Gorbachev talk about paristroika, and glassnees thro rather
this rather that guy behind him taps him on the
shoulder says, I am KGB under a comrade brushmo what
you just said, I would have gotten you shot as
a traitor. But luckily for you, comrade Gorbachov has created
(25:21):
Parastroika and you're allowed to speak. He goes home, his
wife says, well, how are things He said, It's worse
than ever. They're out of bullets. There you go. It
was a real positive for Reagan. He was said, yeah,
had a great sense of humor. That's right. Delivery. Well,
it makes it made him accessible because he's laughing at
(25:45):
the fact. We have a picture of he and I
on the plane, both in our rolled up the shirts
and we're both laughing and something he had just said,
and it makes you feel like this guy's normal. I
can reach you. Let me ask you one last thing.
How do we somehow at young people to understand the
power of entrepreneurship and their opportunity to go out and
(26:09):
if they're willing to work hard have an extraordinary future
as opposed to just staying inside the bureaucracy and accepting
thirty years or forty years of work and at pension.
How do we make it vivid and attractive for them
to decide they want to really be in the game.
I think going out in speaking to these kids is
(26:30):
very important, offering them examples, letting them see people who
have accomplished and achieved from very meager beginnings that they
really have a chance to do this, that despite what
they're being told in school, despite what they're being taught,
they really do have a chance to achieve their goals
and accomplish whatever they choose to accomplish in life. I
think Betsy de Vos has a very important role in this.
(26:52):
We need to get a school choice. We need to
do the kinds of things that would allow us to
terminate bad teachers, for example, that would make school competitive.
You're one message that really resonates with young people. In
a matter of fact, it came up in the area
of health insurance. I was speaking at Davidston College and
one of the students said, how can you get up
here and talk about there are people dying in the
(27:13):
streets because they don't have health interns and people need
health insurance. He said, you know, how can you not
be all for medic care for all? And I said, look,
nobody's dying in the streets. But let's leave that aside
from let's look at what you and I can agree with.
Could we agree that we should improve the quality of
health care and reduce the price that that's what we
need to do. Said yeah, he said, that's absolutely what
(27:35):
we need to do. I said, well, then you'll enjoy
this because there's only one thing in history that has
ever improved quality and reduced price. You know what it is.
Could just stared at me. Everybody in the audience just
stared at me. It's competition. It's the only thing that
can reduce price and improve quality. You want the government here,
that's the one thing that government doesn't have. The government
doesn't compete with anybody. You want to take competition out
(27:56):
of the system. And there's no answer to that. They
really don't have a response. If we can just get
them thinking, you know, it's kind of like King Arthur
at the end of Camelot when he finds out that
the kid comes up and asked him where the roundtable is,
and he says, you know, you heard about it. You
heard about justice and civil law. Kid says, even though
he's going into a war, he feels relieved by that
(28:17):
because kids knew the message was out there. And I
think if we get the message out there, Americans are
smart enough to pick up on this and we can
turn this around. Look, we elected Donald Trump. That wasn't
an accident. People know something's wrong, and you know, if
God's with us, will elect him again. Yeah, And I think, frankly,
if we do elect him again, we will see the recovery.
Next year I think he keeps saying next year will
(28:39):
be the best year in American history. I think he's
probably right. The explosiveness, oh the entrepreneurial comeback will be
amazing and just remarkable. Thank you, this has been great.
News World is produced by Ginglish, Sweet sixty and I
Art Media. Our executive producer is de Wie Myers and
(29:00):
our producer is Garnsey slam. Our researcher is Rachel Peterson.
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Special thanks to the team at Gingwich three sixty. Please
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(29:22):
you'll go to Apple Podcasts and both rate us with
five stars and give us a review so others can
learn what it's all about. I'm new Gingwich. This is
New twil
On this episode of News, We're coming back, and we're
coming back strong. We built the greatest economy anywhere in
the world. We're gonna build it again. We're gonna build
it fast. It's going to go very quickly. This economy
is really coming back strong. Look, the President built the
world's best economy once, and he's already doing it again.
We've already recovered half of the jobs lost to the coronavirus.
(00:24):
You are to project it from here linearly, you'd get
to April of next year, where we would have recovered
one hundred percent of the economic activity. I'm really delighted
to have handy positor with us today. Be visited. I've
(00:47):
known Andy for the entire Trump presidency, and he has
a knack of explaining how markets work, how free enterprise works.
His instincts on the economy have been I think one
hundred percent right. Every time he writes an article, I
read it because I'm fascinated with what he's learning. Andy.
(01:09):
It is just great to have you with us, But
I want to start back at the beginning, because if
you earned your insights into free market economics by being
in a free market, I mean, you're not a theoretician.
Here's somebody who actually went out rand company, has made money,
I suspect on occasion and loss money, has a background.
So people can realize how really rich your understanding of
(01:33):
the American system is. Could you share just a little
bit of your work experience so people will realize you're
talking from practical down to earth real knowledge about how
the country works. Sure, I'd be glad to nude. And
thanks for having me on, and thank you for the
kind words as well. My first paying job was scooping
ice cream at a bask and Robbins when I was
(01:54):
sixteen years old. Got a driver's license so I could
get to a job. To get through college and law school,
I worked every dirty job you can think of. I
painted houses, I cut lawns. I busted up concrete with
the jackhammera one summer in Saint Louis, Missouri, as I
was finishing my first year of law school. I then
went on to law school, became a trial lawyer for
about thirteen fourteen years, and then ended up representing individuals
(02:19):
i'd met through my trial practice. I did commercial laws,
so I got some wealthy individuals and became attorneys for
these individuals and for their companies, one of which was
Carl Carcher, who owned the Carl's Junior restaurant chain at
the time. And I couldn't try cases anymore once I
got these clients, because you can't say to a client,
I'm a CEE. In a month, I have a trial.
(02:40):
You have to pay more attention to what they're doing.
And I got to learn a lot about the intricacies
of business. I ended up representing Bill Foley, who was
the CEO of the Lady National Title, and I said
Carl and Carl's Junior Morris Shanker, who ran the Dun's
Hotel in Las Vegas. So I got a lot of
practical experience. And then in the year two thousand when
carl Junior got in trouble because they bought a restaurant
(03:02):
chain called Hartise, which was much bigger than Carl's Junior,
and the integration of the two brands did not go
very smoothly. I think the border director said, let's see
if the cocky lawyer can fix it, because I've been
giving him my advice. Solut one, they put me in
charge and we saved the company. We took a company
that was on the verge of bankruptcy and turned it
into a chain with about three thousand, eight hundred restaurants
(03:24):
in forty five states and foreign countries. All from a
hot dog cart to Carl Carter nineteen forty one, that's
how the company started. But I've done everything from work
a mill and Wade's job to be the CEO of
an international corporation. Free markets are like movie pictures, are
not like a polaroid snapshot. You just describe a guy
who starts out in nineteen forty one with one hot
(03:45):
dog stand and ends up with thirty one hundred stores.
Now that's a dynamic that doesn't fit the sort of
classic bureaucratic way of thinking, and yet it's the dynamic
that it seems to me was made America the economically
most successful country in the world. I would agree with that,
(04:06):
But Carl is a great example. There's a guy with
an eighth grade education buy the hot dog cart. By
the time I met him and was his lawyer, he
had a half a billion dollar publicly traded company. That's
the American story. It's people like Carl or people like me.
I'm from a working class family in Cleveland, Ohio, and
I ended up having to work my way through college
at law school. I didn't have government help, I didn't
(04:27):
have family help, but I was able to continue moving forward.
I never was resentful of people that had help, either
from the government or their family, because I always knew
that when I took the next step, it was up
to me. Whether I went for or wasn't up to
the government. It wasn't up to anybody else. And I
always felt like I had opportunities open to me. And
that's America. America's about those opportunities. Well, having lived in
(04:49):
works with what was your sense of the eight years
of the Obama Biden economic policies. They were a disaster,
and it was a disaster mostly for working Americans. You know,
the stock market did okay if you were rich, if
you were wealthy, if you own the land or your
own stock, it probably did okay. The people that did
not do okay. We're working class Americans. In fact, when
(05:11):
Obama left office, we had one point nine million more
people unemployed than we had job openings. Wages hadn't hit
three percent growth for seven and a half years since
the end of the recession, and people were leaving the
labor force unable to find good paying jobs, unable to
find jobs at all, let alone good paying jobs. Employers
weren't competing for employees. It was employees who were competing
(05:34):
for jobs, and that cost stagnation, and you didn't see
the kind of growth we should have seen coming out
of a recession. Milton Friedman pointed out in the early
nineteen sixties, the deeper the recession, the stronger the recovery.
And you'll hear a lot of Democrats say, oh, that
recession was so deep, it was so tough for Obama. Well,
the deeper the recession, the stronger the comeback should be.
It's really just the opposite. The best President Trump has
(05:56):
recently just proved with a very deep recession, agree to
which this is a V shaped recovery, and they're now
talking about maybe thirty two or thirty three percent growth
in the third quarter, which would be astonishing. Now it's
off of an artificial collapse imposed by government, but it's
still astonishing when we started down this road. I want
(06:19):
to get Grant's book on the depression of nineteen twenty
twenty one, which is a very V shaped depression actually
comes off of a pandemic, the Spanish flu. The system
goes straight down for about fourteen months, and then goes
straight back up for about twelve months. I actually called
Grant and talked about it. Because it happened so fast,
(06:41):
it created no cultural memory. I mean, people didn't think
of it as nothing like the Great Depression. What we
had with Obama and Biden wasn't a great depression, but
it was a great disappointment. It year after year of
subnormal operation based on the American mall. I love the
title of your book, The Capitalists Come Back. He was,
(07:02):
in a way, Trump represented the revitalization of the system
that made us so extraordinarily successful for the last two
hundred and fifty years. From the day he was elected.
How fast was he able to send signals that entrepreneurs
and investors and small business owners could pick up? One
(07:23):
The very day he was elected, signal went out. The
National Federation of Independent Businesses has a poll every month
on business optimism, and it goes up three to four
percentage points immediately upon the President of being elected. It
went to historically high territory and it stayed there until
the pandemic. Consumer sentiment zoomed. Everybody that President Trump was
(07:44):
going to come in and number one. He promised to
slash regulations, and he did it, even to a greater
extent than he promised. He promised to cut taxes, he did.
He promised to renegotiate trade agreements to get them to
be fair earth, and he promised to focus on domestic
energy production. He did all of those things. Investors knew
it right away, businesses knew it right away and began
to invest. And didn't that then draw people back into
(08:08):
the labor pool. Well, you know, I gave you the
example a minute ago about President Obama and more people
unemployed than of job openings and no wage growth. By
March of twenty eighteen, under President Frump, the number of
job openings exceeded the number of people unemployed for the
first time since the government began tracking the data back
(08:29):
in two thousand. So for the first time, really in
eighteen years, we had more job openings and people unemployed.
It stayed that way for twenty four months, and for
seventeen of those months we had over a million more
people unemployed than we had job openings. That's a complete
turnaround from what Obama left for President Trump. And Obama
didn't have a single month where the number of job
(08:50):
exceeded people unemployed then starting in August of two eighteen,
so we're really just in the first year of the
tax cuts here. By August of that year, wage growth
hits three It stays at or above three percent for
twenty consecutive months until the pandemic, and wages grow more
for blue collar workers than they do for white collar workers. Well,
with more job openings and higher wages, people started coming
(09:13):
out of the woodwork to take these jobs. In fact,
in the fourth quarter of twenty nineteen, about seventy one
percent of the people who took jobs who became employed,
came from outside the labor force. They didn't come from
the ranks of the unemployed who were considered in the
labor force. They came from outside the labor force. These
are people who gave up under President Obama and Vice
(09:35):
President Biden and came back in under President Trump because
of the incredible job growth the labor market he created.
He took the worst recovery since World War Two from
an economic recession and turned it into perhaps the greatest
labor market ever, and certainly the greatest labor market since
the Great Depression. It strikes me as something Stephen Moore
(09:57):
has written about that we're having a great experiment right
now because the majority of the Blue states have governors
who are petty dictators who have kept their state artificially
closed down. Majority of the red states have governors who
actually believe in free enterprise and have opened their states up.
And the difference in unemployment and the difference in economic
(10:18):
growth between the two models is almost the elaboratory study
in which system works. It is. In fact, if you
look the numbers from August, the unemployment numbers, we don't
have September yet, but in August we had ten states
with unemployment six percent or under. Nine of them had
Republican governors, and the one that didn't have a Republican
(10:39):
governor was Montana, which is a very conservative state. If
you look at the ten worst states for unemployment rate,
nine of them had Democrat governors. This was all over
ten percent unemployment, including New York, New Jersey, California, Illinois.
The one state that didn't tap a Republican governor was
very liberal Massachusetts. The dynamics of this are very very
(10:59):
o it's underreported, it's undercovered, it's not going to get
the coverage that it deserves to get because it's very
favorable the president dropped and very unfavorable to the Democrats
in Joe Biden. Hi, this is new. I want to
(11:22):
invalue to sign up for a yearly subscription to my
Inner Circle membership. Club. Were in a critical time in
our history, for the outcome of the next election will
set us in a course of two very different American teachers.
As a member of My Inner Circle, you'll receive exclusive
invitations to join my video conferences with two twenty election
(11:44):
updates and my analysis of the upcoming presidential debates. Here's
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(12:05):
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two year membership today and newts inner Circle dot com.
(12:27):
That's Newts inner Circle dot com. My thesis is that
the country has to choose between a Trump recovery and
(12:49):
a Biden depression. That if you look at what Biden's
policy proposals are, they literally would cause a depression. I'm
an historian. You know much more about how the mark
the works than I do. I mean, when you look
at these two programs side by side, what's your reaction?
If you look at Biden's website, every program he has
(13:09):
involves substantial increases in government spending, if not dramatic increases
in government spending. And now one program says, here's how
I'm going to encourage private sector businesses to create jobs
and create growth. This is the same theory that Obama
and Biden administration. They thought, because there was this terrific,
horrific recession, that the economy was just going to bounce back.
(13:33):
They were forecasting four percent GDP growth. When they first
went into office. They said, if the stimulus bill was passed,
we would never hit eight percent unemployment, that eight hundred
billion dollars in spending would keep unemployment below eight percent. Well,
unemployment hit eight percent the month they passed it and
stayed there for forty three months. They think that no
matter what they do, the economy is going to bounce back,
(13:55):
and it's just not true. They are going to spend
us into a horrific situation. He's taught about raising tax
is four trillion dollars to cover eleven trillion dollars in spending,
which is on top of our twenty four trillion dollars
that we currently have in debt. I mean, these numbers
will bankrupt America. The only way we can get out
of this, the only way we can start to pay
(14:16):
our debt down, the only way we're going to see
the kind of incredible results we saw in twenty nineteen
under President Trump, which by the way, had the lowest
poverty rate in the history of tracking the poverty rate
going back sixty years. Ten point five percent had the
biggest decrease in the poverty rate going back sixty years,
and the decrease was bigger for Blacks, Hispanics, and Asian Americans,
(14:38):
so every minority saw a decrease. We saw the biggest
increase in median family income since the late sixties. When
they start at tracking median family income, we can get
back to those kinds of dynamic numbers. Twenty nineteen really
set a new bar. A pre pandemic bar for where
the economy needs to go to show success with President
(14:59):
Trump's policies cutting taxes, reducing regulations, keeping a focus on
domestic energy, and going forward with these renegotiated trade agreements
which really got cut off in the pandemic hit. I
think we're going to get back to where we were,
which is historically great numbers in a very very short
period of time under President Biden. I don't think the
economy may never recover. Certainly isn't going to recovery during
(15:22):
his presidency. Shouldn't that be a fairly clear, simple message
to the American people. It should be very simple. Even
income inequality, you know, the big bugaboo of the Democrats,
Briny Sanders, Elizabeth Warren, Joe Biden. Well, income inequality decreased
in twenty eighteen and twenty nineteen, and back in two nineteen,
(15:43):
the share of wealth held by the lowest twin tile,
the lowest twenty four percent of Burghers increased two point
four percent. It all came from the top twin tile.
We've had an incredible year economically. It's been ignored, it's
been covered up, it's really been censored, and it should
be obvious to the American Why do you think the
news media finds it so difficult to a reported and
(16:08):
be learned any lesson at all from Actually, I think
it's very difficult for them to ignore it, but they
managed to. They are so hateful of President Trump. Do
you hear about Trump arrangement syndrome? And initially it was
kind of a joke phrase. I don't think it's a
joke phrase anymore. I think these people have Trump arrangement syndrome.
And even though you can see that, what's happening in
(16:29):
the economy is that Trump is accomplishing all of the
things that Democrats claim that they would accomplish, all of
the things that Obama and Biden were completely ineffected at accomplishing,
again the kind of things Ronald Reagan accomplished for the economy,
where working class Americans were better off, people had more
money in their pockets. You'll recall this question back in
nineteen eighty four, are you better off now than you
(16:50):
were four years ago? Well, forty four percent answered yes
to that question. Today, fifty six percent of Americans are
answering the question positively. And we're in a recession and
ran a pandemic. I think the American people know that
they're better off, but I don't think we've done a
terrific job of explaining it in some simple enough terms
that people can put their hands around the numbers. What
(17:29):
led you to decide to write The Capitalist Combat After
my experience with the Secretary of Labor nomination process, which
was very discouraging for me, I wish they had gone better,
it became obvious to me that somebody needed to get
out and talk about these economic policies that President Trump
was implementing. What a complete revolution it was with the
(17:51):
progressive agenda. He was reversing things progressives had been slowly
putting in place for a hundred years. That we're having
a devastatingly negative impact on Americans and the American economy.
And I think somebody needed to kind of lay out
the history. I was a history major and undergraduate school
before I went to law school, and would have actually
gone like you and got my master's or a doctor
in history if I hadn't gone to law school. That's
(18:11):
a subject I love. It's not being taught in our schools,
and I thought it was important to lay it out
for people to put it down in writing and say
here's where we were, here's the problems we had, and
here's where we're going, and here's what will happen if
we followed for President Frump's policies. And luckily we did
turn the economy around, and the policies he implemented work
very well well in that sense, The Capitalists come back
(18:34):
as a book you sort of wish every mayor of
a failing big city would read it, and every governor
of a blue state that's losing population would read it,
because you captured the essence of what makes America work,
and they seem to have no clue. I wish they
would read it. You know. The comment that I get
the most about the book, he probably get this with
(18:55):
all of your books as well. The comment I get
the most is this book should be required reading in
a high school or college history. Of course, it's the
kind of thing that with the history books that are
out there, Zin's book and the rest of this garbage
that they're teaching kids today the history, and here is
the history they're missing. And one of the things I
tried to do that I thought maybe I was a
little better able to do than some others was tied
(19:16):
the history to economics, you know, make it readable, but
tie the history to the economics. So that was my effort.
Whether I accomplished it or not as up to the reader,
but that's what I tried to do. So when you
look ahead down the road and you look at the
rise of a centralized dictatorship like China, and you look
at the decay of Europe, are you an optimist about
(19:38):
the long term power of capitalism and free markets to
arouse entrepreneurs and create wealth despite all these problems, or
do you think that we're in a downward spiral. In
some countries we've gone down and come back. For example,
Denmark actually did go towards a more socialist form of government,
and they came back the same things swet and they
(20:00):
went to a very socialist type system, found out it
didn't work and became very capitalist. In fact, Denmark i
think ranked higher last year on the Heritage Foundation's Index
of Economic Freedom than the United States, although it's the
country that Bernie Sanders always uses as his example of
how socialism works. Well that Danes are very upset about that.
In fact, Lar's restless and came to the United States
(20:22):
back in two thousand and sixteen, spoke at Harvard and said, look,
you guys have to stop saying that Sweden is not
the socialist country. It's a free market economy. So I
think you see some of these countries go towards socialism,
realize it doesn't work, and then come back. In the
United States, we have such a strong basis of entrepreneurs
and strong history of people expecting to be able to
(20:43):
improve their lives by their own will and their own
talents and their own desires that I think that progressives
are having an incredibly difficult time trying to kill capitalism
here in the United States. If President Trump is reelected,
I think will be set for at least another twenty
thirty years, because it'll be very difficult to convince people
that this system doesn't work because it happens to be
working so well. The various attacks that have been leveled
(21:06):
against President Trump, I think it is because he is
an existential threat that everything progressives believe and everything they've
been trying to convince the American people of more government
is not better for people. Limited government is better for people.
The Constitution as it was originally enacted is better for people.
And we've got two undred forty years of history to
prove it. I think one of the questions that I
(21:28):
have is this gap where there are people who live,
like in California and New York Chicago, who are almost
in a different world now that their experiences of big government,
their experiences of the imposition. I was talking earlier with
somebody about the rules, for example, for whether not a
(21:49):
church can open up. And then there's a level of
dictatorial control, mostly in the Blue States that is kind
of amazing. And I worry about whether or not the
emery can people or a substantial portion of them automnly
decide that there's just too much trouble and they're just
going to let the bureaucracy tell them how to live. Well,
(22:10):
I hope that doesn't happen. I think there certainly are
people in all of those states who feel as you
and I do about the economy and about government. In fact,
if you look at the states, people are leaving, the
people are leaving California, Illinois, New York. They're going to
states like Texas, Tennessee, and Florida. I moved our whole
company from California to Tennessee, I mean, and it wasn't
(22:31):
for the weather. I mean, I love Tennessee, but we
lived in California for twenty five years. The businesses in
there since nineteen forty one, but we just had to
get out. And I think you see people who feel
like they're being repressed in those states. Luckily still have
a choice and can get out and go to these
other states, which is one of the reasons the electoral
college is so important. We need to make sure that
(22:52):
states like California New York are not dominating the political
discussion in this country, and that other states and other
people have a I go around and speak at colleges
and universities when we're not locked down by a pandemic,
and there's a real hunger. Even at liberal schools where
I've managed to get in and speak, there is a
real hunger to hear about capitalist and what I tell
(23:13):
people that in a capitalist society, your goal, your desire,
everything that you do is aimed at trying to make
other people happy. Now there, you're always trying to meet
the needs of your consumers. When I was selling burgers
at Carl's Junior, I wasn't trying to figure out what
kind of burgers I wanted to or the government elits
want to deed. I always trying to figure out what
kind of burgers these kids want to do, and to
(23:35):
serve it to them. And that's any business. You're always
trying to meet the needs of other people, whereas in
a socialist society you're always trying to satisfy your own needs.
You're always trying to get as much from the government
as you possibly can. If you're standing in a line
for food, and inevitably in a socialist country you will
be standing in a line for food. You're not thinking
about what the person in front of you are behind
you once. You're trying to figure out how you can
(23:55):
get the most for yourself when you get to the
end of that line. So I try to tell people
that free enterprise means that you're a customer. Bureaucracy means
you're a client. And if you're a customer, you're the gravity.
If you're a client, the bureaucrat is the center of gravity.
I have to tell one quick story that one of
the occasions when I got to fly on Air Force
(24:16):
one with Reagan. Reagan would always come back and tell jokes,
and he collected Soviet jokes and this was during the
period of Gorbachov and the collapse of the Soviet economy.
And so he comes back and he says. Guy goes
out in the morning and gets in line and waits
about three and a half four hours, gets to from
the line and the guy says, ooh, comrade, I'm sorry,
(24:38):
we just sold the last of the port. But I
think if you go down the street they still have sausages.
So he goes down the street, he gets in line,
he gets the end of the line. The guy goes out, comrade,
you just sold the last sausage, but I think if
you got down a little further there are some chickens.
He goes down there and he starts to gripe about
(25:00):
all this. Gorbachev talk about paristroika, and glassnees thro rather
this rather that guy behind him taps him on the
shoulder says, I am KGB under a comrade brushmo what
you just said, I would have gotten you shot as
a traitor. But luckily for you, comrade Gorbachov has created
(25:21):
Parastroika and you're allowed to speak. He goes home, his
wife says, well, how are things He said, It's worse
than ever. They're out of bullets. There you go. It
was a real positive for Reagan. He was said, yeah,
had a great sense of humor. That's right. Delivery. Well,
it makes it made him accessible because he's laughing at
(25:45):
the fact. We have a picture of he and I
on the plane, both in our rolled up the shirts
and we're both laughing and something he had just said,
and it makes you feel like this guy's normal. I
can reach you. Let me ask you one last thing.
How do we somehow at young people to understand the
power of entrepreneurship and their opportunity to go out and
(26:09):
if they're willing to work hard have an extraordinary future
as opposed to just staying inside the bureaucracy and accepting
thirty years or forty years of work and at pension.
How do we make it vivid and attractive for them
to decide they want to really be in the game.
I think going out in speaking to these kids is
(26:30):
very important, offering them examples, letting them see people who
have accomplished and achieved from very meager beginnings that they
really have a chance to do this, that despite what
they're being told in school, despite what they're being taught,
they really do have a chance to achieve their goals
and accomplish whatever they choose to accomplish in life. I
think Betsy de Vos has a very important role in this.
(26:52):
We need to get a school choice. We need to
do the kinds of things that would allow us to
terminate bad teachers, for example, that would make school competitive.
You're one message that really resonates with young people. In
a matter of fact, it came up in the area
of health insurance. I was speaking at Davidston College and
one of the students said, how can you get up
here and talk about there are people dying in the
(27:13):
streets because they don't have health interns and people need
health insurance. He said, you know, how can you not
be all for medic care for all? And I said, look,
nobody's dying in the streets. But let's leave that aside
from let's look at what you and I can agree with.
Could we agree that we should improve the quality of
health care and reduce the price that that's what we
need to do. Said yeah, he said, that's absolutely what
(27:35):
we need to do. I said, well, then you'll enjoy
this because there's only one thing in history that has
ever improved quality and reduced price. You know what it is.
Could just stared at me. Everybody in the audience just
stared at me. It's competition. It's the only thing that
can reduce price and improve quality. You want the government here,
that's the one thing that government doesn't have. The government
doesn't compete with anybody. You want to take competition out
(27:56):
of the system. And there's no answer to that. They
really don't have a response. If we can just get
them thinking, you know, it's kind of like King Arthur
at the end of Camelot when he finds out that
the kid comes up and asked him where the roundtable is,
and he says, you know, you heard about it. You
heard about justice and civil law. Kid says, even though
he's going into a war, he feels relieved by that
(28:17):
because kids knew the message was out there. And I
think if we get the message out there, Americans are
smart enough to pick up on this and we can
turn this around. Look, we elected Donald Trump. That wasn't
an accident. People know something's wrong, and you know, if
God's with us, will elect him again. Yeah, And I think, frankly,
if we do elect him again, we will see the recovery.
Next year I think he keeps saying next year will
(28:39):
be the best year in American history. I think he's
probably right. The explosiveness, oh the entrepreneurial comeback will be
amazing and just remarkable. Thank you, this has been great.
News World is produced by Ginglish, Sweet sixty and I
Art Media. Our executive producer is de Wie Myers and
(29:00):
our producer is Garnsey slam. Our researcher is Rachel Peterson.
The artwork for the show was created by Steve Pennelly.
Special thanks to the team at Gingwich three sixty. Please
email me with your questions at Gingwich three sixty dot
com slash questions. I'll answer a selection of questions in
future episodes. If you've been enjoying New Tworld, I hope
(29:22):
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learn what it's all about. I'm new Gingwich. This is
New twil
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