Episode Transcript
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Speaker 1 (00:04):
Here's your host is Alex deren.
Speaker 2 (00:10):
Well, in the effort to have one leg up our
news for you once again here on the one lie
Gup Network with Alex Garrett. It's interesting the timing of
my next conversation with former Senator Congressman Philgram. Yes, he
served in the Senate and the Congress, was an economic
advisor to President Reagan. So we get into that in
(00:31):
this conversation. But before we do, I want to break
the news tea if you haven't heard that a US
Trade court has blocked President Trump's tariffs, remember the Liberation
Day tariffs from going into effect, asserting the present oversteps
of authority by imposing across the board tariffs on imports
from nations that sell more the United States than they buy.
(00:56):
So the timing of this is interesting because I'm inspired
now to really release this conversation I had a few
days ago with Senator Phil Graham, and you might remember
that name from the eighties. We talk about that economic
prosperity time, and we also talk about, in addition to
what the tariffs and all the cuts to different services
(01:19):
like medicaid and all that, how that will impact everyone
in America.
Speaker 1 (01:24):
We also go into his book.
Speaker 2 (01:27):
The Triumph of Economic Freedom, Debunking the Seven Great Myths
of American Capitalism by Phil Gram and American Economists. Professor
and co director of the Program on the American Economy
and Globalization at the Mercadis Center at George Mason University
in Virginia, Professor Donald J. Boudre. So, we got to
(01:51):
talk to the former Senator of Phil Graham about this
book about the seven great myths he liked to highlight,
and such an in depth conversation. I'm excited to release
this now here on the One look Up Network because
you know, it's not often you get a senator on
your podcast, former or president. So always seizing the opportunity
(02:13):
to talk to these great minds that have been in
DC and continue to be in DC.
Speaker 1 (02:20):
One way or another.
Speaker 2 (02:21):
And clearly Senator Philgram has his eye on everything going on.
So let's get to that conversation right now with former
senator from Texas.
Speaker 1 (02:29):
Oh great, thank you. I'm glad to be here and
I appreciate having me.
Speaker 2 (02:35):
I'm very honored to have you. You actually served multiple
terms in Congress TOD both at the Senate and House
of Representatives, and now you're writing So talk about, first
of all, your time in Washington, because I barely get
to day to talk to a senator. So what was
your time in Washington like?
Speaker 1 (02:50):
Well, I was electors of the House as a Conservative Democrat,
and during that first two years in office, I offered
a bipartisan budget with David Stockman that we call the
(03:12):
Bipartisan Conservative Budget. And then Reagan was elected President. Stockman
became omb director and our budget became the core of
the Reagan budget, and I became the primarier author of
the budget in the House, and we put together a
(03:32):
bipartisan coalition and we passed the Reagan Economic Program at
one point by one vote, and once we had gotten
that vote, in seven or eight other people changed votes,
but it was close, and then the Democrats threw me
(03:55):
off the Budget Committee for co author and the Reagan Program.
The President invited me to join the party, so did
the Republican leadership. But I felt if I just changed
parties that there might be people in my district that
feel that I'd flown false colors or somehow betrayed them.
(04:18):
So I resigned from Congress and ran for re election
as a Republican and no Republican never got more than
thirty six percent of the vote by district, so it
looked like an uphill battle, and it was. I had
nine Democrat opponents, but I managed to win the race
(04:39):
without a runoff pleaded.
Speaker 2 (04:42):
And then you go to Senate and you become chairman
of the Ranking Committee. First of all, all the chairs
that we see day day out in the Senate hearings
and huven House hearings, they have a lot of pressure
on them. Did you feel a lot of pressure as
the chair of the Ranking Committee.
Speaker 1 (04:57):
No, it was a subjec I phil. I knew a
lot about it. I've been an economist. I talked for
twelve years money in banking. In fact, had Texas A
and M. And one of my students was Jeb Hensling,
who went on and became Chairman of the Banking Committee
(05:17):
in the House. So it was a good time to
be in Washington. Eight years with Reagan were great and
I had a good working relationship with both Bushes and
with President Clinton. So it was a good period. People
(05:38):
see me and they say, gosh, I'm sure you'ld lad
you that red race, and so I always smile and
explain to him that, well, you know, I enjoyed it.
It was a good job, and I felt like I
was doing something important. Everybody who's ever served in Congress
(06:02):
thinks things when they all the day they left. I
try to avoid that thinking, but it's tempting to think
that way.
Speaker 2 (06:11):
You know a lot of senators. It's a difficult decision
to retire. So when you decided to retire, what was
the motive? What was the what was the next streat?
Speaker 1 (06:20):
I think it was two things. Alex One. I decided
when I went that when I turned sixty that I
was going to look at doing something else. And by
the time I turned sixty, everything I'd gone to Washington
(06:42):
to do, we'd achieved. The inflation rate was totally under control.
In fact, from the time we brought inflation under control
until it got out of control during the Biden administration,
we had forty years price stability. The Reagan program produced
(07:04):
twenty five years of strong prosperity. And so the day
that I announced I wasn't gonna run again, the Buzget
was balanced, we had no inflation, the economy was booming,
the Soviet Union was dead, and so I figured, if
(07:24):
you ever gonna leave while you're ahead, this is it,
but it was a hard decision. I thought it would
make a difference when I left, and I said on
the day that I announced, I wasn't running again. All
the battles i'd fought mostly we'd won, We're gonna have
to be fought again. And certainly that's turned out to
(07:46):
be true.
Speaker 2 (07:48):
But clearly you haven't really lost touch with it, because
here you are. We're gonna talk about tariffs in a
little bit, because you still got an eye on this.
You have this great new book out by the way
called The Triumph Economic Freedom, debunking the seven Great Myths
of American capitalism. And of course we're all for capitalism
in these parts on the podcast, so thank you for
writing about it. But before we get to that, you're
(08:11):
retired at sixty. Do you honestly feel some senator, some
commersmen stay beyond their time? I mean, is there?
Speaker 1 (08:17):
Well, I didn't. I didn't. I didn't stop working. I
retired from the Senator char I wanted to work for
a big bank in New York, and then I went
to work for private equity firm. I still work. I
lie and tell people I have a young wife who
wants money, and he would put me in a cheap
nursing home. But the truth is, I like working. I
(08:41):
learned something every day. I like being around young, smart people.
And as I tell my wife, she says, how much
is enough? And I say, well, some morning I'm gonna
get up. I'm not gonna want to get on that plane.
And when that happens, that's when I'm walk quick. But uh,
in any case, I do now write a lot. Issues
(09:06):
come up that I don't think my viewpoint is being
heard on, and so I've written maybe over the years
one hundred and fifty articles in the Wall Street Journal
since nineteen seventy three, when I wrote the first one
as the young professor of Texas. They and am and
(09:28):
so don't. I'm not a regular writer with a journal,
but they publish a lot of my stuff. I'm grateful
and it gives me a chance to weigh in on
the issues. I try to stay out of the personalities.
But needless to say, today there are a lot of
issues out there that I care about, and many of
(09:53):
those issues are the issues I wrote about in the
book The Triumph of Economic Freedom, Debunking the Seven Great
miss of American Capitalism.
Speaker 2 (10:06):
Well, what let's start with this then, because obviously are
going to go into the myths. But the tariffs are
on my mind a lot. I mean they were, but
they're on my mind because I do feel like we're
doing it wrong in a sense. Right we should just
be going after enemies, not so much our allies. Or
maybe you disagree. Where are we getting it right? Where
(10:26):
are we getting wrong with the tariffs here?
Speaker 1 (10:28):
Well, I think we're getting wrong pretty much across the board.
Tariffs are taxes on American consumers. So I'm not saying
you don't hurt foreigners by imposing tariffs, but you hurt
Americans a lot more. And tariffs drive up prices. They
(10:52):
force you to buy at home things you could buy
cheaper abroad. They disrupt theistic production. And we just put
this to the tests. Eight years ago, when President Trump
came into office, he raised tariffs for the first two years,
(11:16):
we cut taxes and we reduced regulatory burden, and the
economy grew, reaching a thirteen year high growth in twenty eighteen,
and in the middle of that year, Trump imposed his tariffs,
and the objectives of the tariffs, as he stated them,
(11:36):
was to bring down the trade depsit, to increase manufacturing
domestically to increase economic growth and to raise total employment
and agriculture, I mean in manufacturing as a percentage of
total employment. It failed every one of those tests. The
(12:01):
trade depths that went up, not down. And it went
up because the economy was strong from deregulation and tax cuts,
and so foreigners rushed in to invest in the American economy,
drove up the value of the dollar, made imports cheaper,
and so we ran a trade depthsit. Industrialization actually fell
(12:26):
in twenty nineteen before the pandemic. Genp fell in twenty
nineteen from the level in twenty eighteen, and employment and
manufacturing as a percentage of total employment continued to fall
at roughly the same rate it had fallen for the
(12:49):
previous fifty years. So the tariffs in the first term
achieved no positive objective, and now we've been posted tariffs
many times of that level. It's disrupted the production process
in America. Remember that sixty one percent of all imports
(13:13):
or component parts used in American production of goods and services.
They're not fined, they're not final goods that people consume.
And so when you impose high tariffs, as the president did,
you make those inputs more expensive, and you disrupt the
(13:35):
production process and then you get retaliation. And the net
result is we created tremendous uncertainty, We disrupted millions of
businesses of production process, and we did great damage to
(13:57):
the world trading system that gave us eighty years of
prosperity in peace. So I think it was a bad decision.
It was ill advised. It's not going to work. And
the sooner we can negotiate our way out of it,
the better off we will be. And if we don't
do that, if we let anything like the level of
(14:21):
tariffs that have been announced going to effect, I just
don't see how we're going to avoid a recession.
Speaker 2 (14:28):
Well, I'm going to say two things here. Do you
think President Trump is wanting us to get into a recession?
I mean people are saying us intentionally. Do you believe that?
Speaker 1 (14:37):
Or no? No, of course I don't believe. Look, President
Trump believes in tariffs. He's always believed in him. But
you know people, a lot of people believe in things
that aren't so. And you know, we have experience with tariffs,
both their impact economically and politically. For a long period
(15:04):
of time, we've dealt with them in America for three
hundred years, and they've never worked. So I don't know
that there's a lesson in the second or thirtieth kick
of a mule. But these were bad decisions, and now
the administration is trying to negotiate its way out of it.
(15:27):
But the President appears to still want to end up
with a ten percent across the board tariff that's three
hundred percent higher than the tariff was on the day
Trump is elected. And so that if we ended up there,
obviously we'd be better often if we had the tariffs
(15:48):
going to effect that the President proposed. But if we
ended up there, we're going to still have a lot
of economic disruption. And as we know from Walmart, you
name it, businesses are making it clear that we're call schooling,
they're going to actually the prices. Yeah, and that's going
(16:10):
to be death politically in the off your election, which
is what seventeen months away.
Speaker 2 (16:19):
Senator I got to say this. You know, other countries
at corner the way House were wanting to come to
the table with tariffs. Why would countries want to get
tariffs on their own countries because they think they can
get one over Trump? Is that why? Or why why
would they want to meet with him about being tariffed.
I'm not sure about that.
Speaker 1 (16:36):
You've got to realize that there are a lot of
miss out there. One of those misses is that we
have the lowest tariffs in the World's not true. Every
EU country has a lower average tariff weight that we do.
Japan has a lord average tariff right than we do.
(16:58):
What I would like to see administration due is sort
of turn up Sal's era into a silk purse by
negotiating a reduction in American terrorists and trade barriers for
foreigners doing the same. Then everybody would benefit. And you've
(17:20):
got to realize we have a lot of some of
the worst protectionist measures in the world. We have in
America we pay twice the world place for sugar. Take
food out of children's mouths so that forty three hundred
sugar producers can be well off. We have in the
(17:42):
Jones Act a prohibition against foreign carriers of goods that
travel among states, and as a result, it costs more
to ship oil from Houston to New York than from
Saudi Arabia to New York. As a result, we ship
(18:06):
it from Saudi Arabia. So there are a lot, we
have a lot, a lot of bad provisions that this
is an opportunity to get rid of while opening markets
for US products aboard.
Speaker 2 (18:21):
All right, let's get into the other myths of capitalism,
because you know, I'm getting tired of those that protest
down in Wall Street, Like it's just it's almost like
they don't know what they're protesting half the time, or
if they do, it's a little outlandish. So what are
the myths are you trying to debunk for those even
younger than I am, to try and under them understand
(18:44):
their benefits of capitalism.
Speaker 1 (18:45):
Well, first of all, the book is based on the
fact that how we assess the facts really depends on
sort of the the views we start with, how do
we think the world works. For example, if you took
(19:07):
the Republican leader of the Senate the Democrat leader of
the Senate, they're going to differ on virtually every issue
of the role of government the free society. And as
tempting to say, well one's a liberal, one's a conservative,
But if you ask them in the Industrial Revolution, at
(19:29):
the birth of capitalism, what happened, Schumer is going to
say that what happened is the capitalist got rich and
the worker was impoverished. Soon is going to say everybody
benefited from the Industrial Revolution. If you ask what caused
(19:50):
the depression? Or was America's manufacturing capacity hollowed out by
the growth in post war trade, or you're brought up
to We look at five historical periods, the birth of
capitalism in the Industrial Revolution, the progressive era of regulations,
(20:18):
the depression, the postwar expansion in trade, the financial crisis,
and then we look at poverty and inequality because we
found that those seven areas are areas where people that
have different views have different assessments of what happened. And
(20:41):
let me just start with the first myth. We call
it the genesis myth. Well, what happened? What happened in
the Industrial Revolution? Will even Carl Marx, who is the
most avid of the most avid opponent of capitalism, begins
(21:04):
his analysis by noting that in one hundred years capitalism
has raised the living standards of people more than all
the other generations combined. The question for him is did
the worker benefit or did the capitalist benefit? And fortunately
(21:29):
for us, us being the people of this earth. In
the nineteenth century, governments, especially in Britain and the United
States started collecting and reporting data on what was actually happening.
And so what that data shows is that for one
(21:52):
thousand years prior to roughly eighteen hundred, there was no
real economic growth to the world. People pretty much lived
as their grandparents had lived. And then in one hundred
year period, per capita income of Great Britain and America
(22:14):
was flat for one thousand years, and then all of
a sudden bam takes off. And this was capitalism. If
you look at the data on wages, income, mortality, literacy,
the availability of nutrition, by all those measures, it was
(22:39):
a worker's revolution. People were better off in that one
hundred year period. The well being of working people grew
faster than any other one hundred year period in world history.
So the myth is that you had these people that
(23:02):
were impoverished living in the cities. Well, by our standards,
everybody in eighteen hundred was impoverished. And what happened is
you had the landed gentry who were losing their workers,
and they were writing all this literature or funding those
(23:24):
who were and so they portrayed the industrial revolution with
all of its problems, as if workers were impoverished in
the cities and had a glorious life in the country.
The truth is they went to the cities because the
(23:48):
cities promised a better life and more opportunity and greater freedom,
and they found both. And we go through each of
the my let mean, now you just turn to poverty,
the myth that capitalism calls it poverty or caused poverty
(24:09):
in America, Well, there is something that just is anomaly
that you got poor people in the richest country in
the world, in the land of milk and honey, in
the land of fertile fields and boundless forest. But basically,
(24:32):
if you look at the data that is available, one
of the reasons that it appears that we have so
many poor people is that we don't when the Census
measures income, it doesn't count two thirds of all transfer
(24:53):
payments is income, and so as a result, it says
that the bottom twenty percent of income earners aren't about
or half about twenty nine thousand dollars a year of income.
But if you count all transfer payments as income to
people who receive them, and that includes a check from
(25:18):
the Treasury and a refundable tax credit, that the Census
doesn't count his income debit card to buy food at
the grocery store. The Census doesn't count his income. Medicate
housing subsisties over one hundred of the federal, state and
local programs. Bottom line is, if you add up all
(25:42):
the subsisties, average income the bottom twenty percent of income
recipients is about sixty five thousand dollars a year. And
the amazing thing is that the bottom sixty percent of
Americans have pretty s or incomes whether they work or
(26:02):
they don't work. And as our welfare programs exploded in
the mid sixties, the number of welfare recipients who were
able bodied, prime work age who worked decline from sixty
seven percent to thirty six percent. So what the poverty
(26:23):
program did is it basically it substituted an eliminated want
at the price of idleness. And so in each one
of these periods we go through and look at how
much opportunity there is. What are the chances if you're
born in a poor family, go up there, you're going
(26:45):
to live in a poor household if you work low.
Speaker 2 (26:49):
You know, I'm ready mentioned that a lot of you know,
people in the you kind of infer about the middle
class as well, that you know, a lot of people
are making middle class income. And this is why when
people when politicians say they want to raise our taxes,
it's a complete light. It only will be raised from
the top. They're going to raise middle class working taxes too.
(27:10):
I mean, it's almost like they're trying to take from
everybody at the middle class on the top to give
to the poor. And I don't know if that's the
best way about it. I just say, give more opportunity
to those at the bottom, right.
Speaker 1 (27:23):
Yeah, Look, just remember this that if you took every
pin of every building there that the government does not
already take in taxes, you couldn't fund the government of
the United States and the States in twenty twenty two
(27:46):
for a week. Okay, They're just not enough mega rich
people to pay for government. In the end, the middle
income Americans and upper middle income Americans, where most people
are in the strata of income distribution, they're the people
(28:09):
who pay these taxes. And another point that we make
in the book on inequality is that the way the
Census measures income by not counting transfer payments or most
of them, and by not counting taxes as income lost
(28:31):
is they say the ratio of the top twenty percent
of income owners to the bottom twenty percent of income
recipients is sixteen point seven to one. But if you
count all transfer payments is income gain and all taxes
income lost, it's forty one, not sixteen point seven to one.
(28:53):
Now you say forty one is too much A very
different debate. And we look at all all of these
studies Picketty in France. You know, how does he show
this incredible inequality? Well he shows in three ways. One
doesn't count any government transfers his income. Two he doesn't
(29:15):
take taxes into account, and three he makes up an
income for uper income people like Warren Buffett as to
what their income would be if they sold all their
assets every year and paid taxes on it. Well, a
needless to say, by that definition, if your income was
(29:41):
what your car's worth, your house was worth, your pension's worth,
and you had to pay income on tax on that
every year, you would be paying a low rate today
as compared to what you would pay. Then well what
does that tell you? And finally we look at mobility.
You know, how likely are people to rise? How likely
(30:04):
are people to do better than their parents?
Speaker 2 (30:07):
And by the way, this was such a thing in
the thirties because always saw in the movies with rags
to riches stories, right, and I feel like that's right exactly.
Speaker 1 (30:15):
Well, look, just remember this number if you don't remember
any other number fifty years ago. If you look at
the income levels fifty years ago, in real purchasing power
justed for inflation, as compared to the day, sixty six
percent of Americans today have real purchasing powers that would
(30:42):
have put them the top twenty percent fifty years ago.
That's pretty astonishing, and you can really see it if
you go back. I'll just give you an example. The
lady who works for me who tie to all the book.
As we were writing it, she said, well, you know,
(31:05):
I know everything you say is true, but it seems
so hard to make ends meet. And so I said, well,
Muriel's a name Uriel. Maybe it's because your ends are
so far apart. I said, you just bought your first house.
How does it compare with the first house your mother
(31:28):
and foreign lived in. Her answer, my first house is
better than any house they ever lived in, including the
one they live in now. That would have been true
in my case. So yeah, it's hard to make ends
meet when you live in a world where people have
(31:51):
the abundance we have and whether they want and expect
and get ultimately if they work or more.
Speaker 2 (32:00):
You know, it am about purchasing power. And I think
of all the credit card debt and all this other
stuff that people go through daily. How do we ease?
As an economy economic advisor? How do you eat? How
would you help people ease all of that? I mean
they do. We do have a sense of like, well
we can pay this off in months from now, right,
but it doesn't always work that way.
Speaker 1 (32:20):
Well listen, uh. I often get asked because people know
my background, do I have people come out to mind?
I live out in the country and people come out
to fix things. They're always breaking. And so people ask
me my financial advice and not tell them get out
(32:41):
of debt, don't buy anything except the house. Would you
borrow money if you can't afford a new car, buy
a used car, And for God's sakes, don't go out
bore money to buy furniture stuff like that if you
(33:02):
can just get and I explained to them, you almost
pay for some them twice when you borrow money to
buy it. So and you know, we want other thing
we look at in the book, which is very important.
I think it is what causes people to have to
(33:24):
be poor and or to what causes some people to
make a lot of money and some people not to
make much. And there are a lot of factors, but
the two biggest are do they work or do they
not work? And then secondly how sharp are they're too?
(33:45):
How well educated are they. But there are a lot
of other factors that you just don't think about that
we didn't think about that we started looking at the
data for the book. For example, the declivity of college
graduates to marry each other is a major source of
(34:07):
income inequality, because if you have a couple that both
have college degrees, they're in the upper middle income. They're
in the upper income quintile immediately when they get married.
(34:27):
And unlike the world I grew up in, where the
doctor married a nurse and the banker married a secretary,
are a secretary, Today a banker marries the lawyer that
does legal work for the bank. A doctor marries a
lawyer or another doctor. And so the just free choices
(34:51):
people make is a major source of income an equality.
High achievers who work hard tend to marry each other
and therefore you multiply the effect.
Speaker 2 (35:05):
Talk about this, and I mentioned it a little earlier,
but it just as you're talking about this, it's going
back to my in my brain here there's this push
to destroy capitalism. Hey tell me that will that push
will fail in capitalism will av for eternity because we
need it, right, we need this system.
Speaker 1 (35:23):
Well, look, capitalism is the goods that lay into golden egg.
But capitalism requires a government that protects private property, creditors rights,
and enforce its contracts and works to prevent either uh
(35:51):
and works to enforce the law a set rule of law.
But the stim works better when people have more freedom
to decide what they want spend their money on instead
of government making the decision. And when government subsidizes electric
(36:15):
cars enforces general motors to subsidize electric cars by charging
higher and higher prices for gas powered cars. It's deciding
for you what kind of vehicle you're going to have.
So the more you let people decide how to spend
(36:37):
their own money, since they have skin in the game,
they do a better job than government. Where governments spending
your money and not their money. And secondly, letting businesses
within the rule of law operate those two things create
(36:58):
what we call American receptionism. And we have less government
control than anybody else, but we could have so much
better government. I remember one day, it was nineteen eighty four.
I was sitting next to President Reagan, and we were
celebrating Morning in America, which was the theme of the
(37:20):
campaign in nineteen eighty four. And our program had been successful,
and we had stopped the inflation, the economy was booming,
defense was strong. The President landover and said, can you
imagine how good things would be in this country if
we really had good government? In other words, it's all
(37:44):
of the good things we'd done were very small compared
to what could be done.
Speaker 2 (37:49):
And that's the same man who's quoted as saying, you know,
and it's on tape, the most dangerous thing you can
hear is I'm the government. I'm here to help.
Speaker 1 (37:58):
So I feel like that exactly. God knows that's true.
God knows that's true.
Speaker 2 (38:02):
And yeah, you were in government. So how did you
try and change it to make it for the people
a little more than maybe your colleagues did or do
now in the current set.
Speaker 1 (38:11):
Well, look, I went to Washington very skeptical of government,
and I left Washington, skeptical of government. I thought the
most important thing was to make government small, and I
viewed dealing with the deficit as crimping the fuel line
(38:37):
to the corborator of big government. And then if we
could control spending, we could control government. It was spending
to me, was about more than deficits, about more than finance.
It was about freedom. A small government is a better government.
(39:00):
Remember what Thomas Jefferson said, If we can prevent the
government from wasting the income of the people under the
pretense of caring for them, they will be happy, and
the government is best at governance. Least I believe that's true.
Speaker 2 (39:18):
Today, I'm going to not show off, but I'm going
to try and see your thought on this. Because in
the first term, there were all these different tax rates.
Do we do tax a flat tax for everybody? And
I often thought that a flat tax wouldn't make it. It'd
be great for the small business because they can afford
(39:38):
the fifteen percent. But if we did it truly economically equal,
you do twenty percent corporation, fifteen percent flat, I mean
fifteen percent for the smaller corporations and small businesses. How
do we help the small business? I guess my point,
and b would those tax levels work? Could we tax
the corporations all higher than the small businesses?
Speaker 1 (40:00):
Well, look, the most important thing in a tax code,
in my opinion, is eliminating all the ways that government
dictates what people are spending their money for through the
tax code. And I think the way that you do
(40:23):
that is by eliminating all of these provisions of the
tax code that give special treatment to all these different things,
and take the money you save by eliminating those deductions
and lower rates. And quite frankly, there are very few
(40:46):
deductions that have any justification whatsoever. I mean in a
new tax code that we're a tax bill that we're
debating in commerce deductive bill of interest on auto loans.
Give me a break.
Speaker 2 (41:04):
Also, why take until ten pm on Sunday night to
try and get to go pass that's insane thing?
Speaker 1 (41:09):
Making my Social Security tax free. We would be so
much better off if we eliminate the deductibility of our
mortgage interest payments and simply lower rates. Give me a
simple flat rate, eliminate all the special provisions in the
(41:33):
tax code and let me pay the one the rate
and move on. I think we would be so much
better off. The system would be so much more efficient,
and you've got the differential treatment of real estate, the
differential treatment. We have alternative minimum taxes, so you give
(41:58):
tax breaks and you take them about. I'd like to
just illuminate them and have and lower the rates flatter
the better would suit me, all right. I Getting rid
of deductions is really important.
Speaker 2 (42:14):
I gotta ask you about this because another economic situation
we've been dealing with and seeing is the cutting to everything.
I mean, doges in their cutting, cutting, cutting. I don't
exactly agree with every cut they made. However, getting one
of the waste in certain areas has been helpful. But
my question you is is Elon an economists that should
be working as a small business owner or is it
(42:34):
just a small bus owner and let the economists do
the work of the cutting? Like is he right now?
Speaker 1 (42:40):
I think he's done a good job. I think Congress
is now the problem. I mean, look, forty over forty
percent of people that get welfare benefits aren't even defined
as being poor. In Medicaid, we give higher reimbursement for
(43:06):
adults working age adults than we do for children and
disabled people. How does that make any sense? States Tax hospitals,
and then the hospitals build Medicaid for the tax, and
(43:29):
so it's it's, it's, it's it's very in the private sector,
we would call it fraud and we need to stop it.
And uh. Then going back to this fact that the
census undercounts income, if we just counted all transfer payments
(43:50):
as income, we would dramatically reduce the number of people
who are eligible for all these means tested programs. And finally,
I cannot understand the opposition to forcing people to work
in return for getting welfare benefits. I don't get it.
(44:13):
If you can't sell that to your constituents, you're in
the wrong line of work in everybody. Of course, I
represented a great district and I represented the greatest state
in my opinion. And the idea of a work yeah,
(44:38):
the idea of a work requirement for welfare makes so
much sense. I doubt they're fifteen percent of the people
in Texas, they're all on welfare. I would oppose a
mandatory work requirement. And yet we're talking about not even
(44:59):
having work requirement going to effect until twenty twenty nine.
I mean, give me a break. Talk about phony reform.
That's phony reform.
Speaker 2 (45:12):
So how do we do that? I want to want
to medicate thing because I'm in the disabled community. A
lot of my friends have dealings with medicaid, and I
of course want to protect that for all those disabled community.
So how do we How would you advise or how
should we advise people who are making these cuts to
go about it where the disabled community is protected.
Speaker 1 (45:32):
Well, First of all, able bodied people want to work,
and if they don't work, they shouldn't get the benefit.
We should take care of people who really need the benefit,
and in seeing whether they need the benefits, we should
look at what they're already getting the government and how
(45:52):
valuable it is. And we should prevent states from ripping
the system off. In Californa, you can make one hundred
and two thousand dollars a year and still get medicaid. Now,
to me, that's just general rosting with somebody else's money
(46:15):
that we ought not to tolerate. And giving medicaid to
illegal immigrants I think is wrong Illegally.
Speaker 2 (46:30):
I don't usually talk like this because I like taking
a positive but I agree with you. I think it's
disgusting that people who are here illegally are getting a
lot more benefits than those with disabilities. I mean, we
need to make capitalism work for Americans, not for those
who are not here ilegal. Look this room.
Speaker 1 (46:47):
I am very pro legal immigrants. Charottkay. Yes, we got
room in Americas for people who want to come here
and work, and God bless them and may more come.
But we don't have room in America for people who
want to come and live a somebody else's effort senogram.
Speaker 2 (47:07):
How do we do it where people want to be
legal can actually have a fair or shot at it?
Meaning I feel like the fees are too much to
become a legal citizen. Should we drop the fees a
little bit? Or how should that work?
Speaker 1 (47:20):
Well? I think that first of all, we need to
make it clear that the problem we lead legal immigration
is it's illegal, well enforced the law, but we need
to have an immigration system where we allow people to
(47:40):
come here who have skills that the country needs. And
as I look at how you would measure this, and
I look back at my ancestors, I don't think anybody
that came to America, that is my ancestor, would have
ever qualified any kind of H one B program based
(48:03):
on having talents that America needed. But we don't run
the country based on what benefits thegrams. We've been and
run the country based on what benefits the country. And
I think we'll have a vigorous legal immigration program and
let people come here who've got skills we need. And
(48:29):
everywhere you see the contribution of immigrants, from Jonah Salt,
who was a first generation American, to the in center
of fracking, the number of businesses started by immigrants or
(48:51):
their children, and the academic achievement of immigrant children. They
all say to me, we need more legal numbers. But again,
I think when people come here legally that accept in
absolutely emergency situations, they shouldn't qualify for government welfare because
(49:17):
then you're providing incentives that encourage people to come here
to live off the fat of the land. We've got
too many hard working people to be taking their money
to subsidize people that just don't want to work. And
I don't mind saying it. I'm not sensitive about it.
(49:39):
As I used to say when I was in the Senate.
I don't apologize. In fact, I love all Americans, but
I love Americans that work best.
Speaker 2 (49:50):
All right, I want to ask this then, because obviously
we want hard working Americans to go back and disable
things real quick. Because I'm curious about this. How do
we encourage other example, people to start working more. I mean,
there's got to be more encouragement, right for example, of
people to keep working and work hard.
Speaker 1 (50:09):
Well, I think letting people keep more of what they
are exactly. It starts with control expending. People are worried
about the birth rate, how low it is, and you've
got people who want to subsidize people they have babies.
Talk about terrible ideas. Look, people have babies when they
(50:30):
think the future's blanked. Okay, what happened Why we have
the post war baby? Well, partly because people came home
and they were hurry to start their lives. But also
they look to the future and things look bright in America.
Economic growth and a strong job opportunities. Those are the
(50:56):
kind of things that encourage people to want to have
a family because they have confidenced in the future. And
also legal immigrants and we again maybe because I live
in the country, I see this. This country is a
long way from being full. Now. I live outside San Antonio,
(51:21):
and everybody in the world was to move here, and
so every road in town is under construction. They're building
out there were people are voting with their feet to
leave California and New York and Illinois come to Texas.
Speaker 2 (51:38):
And that's probably why I mean, you are a conservative Democrat.
Now there's progressive Democrats in Texas. No one ever thought
that was going to happen.
Speaker 1 (51:46):
When I ran for Congress, I had never really met
a Republican until I was a dull anyway, and I
didn't think party didn't mean anything to me, but more
when I got to Washington, I discovered it meant a
lot to a lot of people. And then I was
(52:07):
at the wrong party. And so I fixed it by
resigning and running in as a Republican. And I'm proud
to say since I did that, there's never been another
Democrat elected to the Congress in my district.
Speaker 2 (52:25):
That's huge syneagram, I got to say. Because you were
in the Reagan era on both sides, in the Senate
and the House, the Tip O'Neill Reagan dynamic. Were you
a front Did you have a front row seat of
that or not?
Speaker 1 (52:38):
I had a front row seat to it. I worked
with with Tip O'Neill on welfare reform. I'm on a
social security reform Uh, Look, they disagreed about how to
make America greater, but they didn't disagree on wanting to
(52:59):
make kid greater or belief fundamentally in this system. Senator
Bird from West Virginia and I fought over every budget,
but yet we shared a basic belief that the American
system was the best system and that it would worked.
(53:20):
He wanted more government than I did. I wanted more
freedom than he did. But we worked together on many
issues and we were close friends. And he was always
good to me and I was. I tried to do
the same in his case.
Speaker 2 (53:38):
Senator I have to asked this because we started with
you talking about how you did the spending bill and
you help get that signed the bipartisan I feel like today,
especially on the Democratic side, if you sign a bipartisan bill,
you're not for the party. Like what Schumer was not
wrong to sign the recent bill, yet he got a
lot of flack and actually a lot of protests about it.
(54:02):
Did that disappoint you seeing that the fellow Democrats did
not have is back in signing something by partisan.
Speaker 1 (54:08):
Well, look, I think you did the right thing. I've
been in the Senate about four months and there was
an amendment to have an oil import fee. Okay, And
so I'm from the biggest oil producing state in the
country to time, and so I figure, you know, first
(54:33):
of all, I'm not going to be for this, and secondly,
I'm going to have to defend this vote. So the
best thing to do, I thought, was to get out front.
So I was the first person to stand up and
opposed it. I led the opposition to it, and I
spent nine months in Texas defending that vote, and the
(54:56):
Houston Business Journal called me the third centator Massachusetts. But
I went all over the state and defended that vote,
that it was bad for Texas, it was bad for
America because we used more oil and all of our
refineries and chemical plants than we produced, and if we
(55:19):
had to pay a premium for imports, that we would
end up hurting Texas and hurting America. And in the
final analysis, I finally said, look, I've gone all over
the state. I defended that vote. But if you want
(55:39):
someone who is a protectionist, don't move from me, because
I'm not going to do it. I understand the issue,
and it's just something I'm not going to do. And
it never was an issue in one of my campaigns.
Speaker 2 (55:59):
As because now I don't think we have to worry
about imports. We have so much oil in the country.
Do you remember any.
Speaker 1 (56:06):
One of the reasons I got into government. I was happy,
I had two little children. I've just been promoted to
full professor. And I woke up one morning and I
was an adult, and I didn't like what was happening
in the country. And I knew that we weren't running
(56:28):
out of oil and gas, and that we were capable
of producing a lot more of it. And so I
wrote an article for the Wall Street Journal on the subject,
and then I started speaking out on the subject, and
that's how I got involved in running for public office.
Speaker 2 (56:51):
Senator is this has been really enlightening, And I want
to touch on the House house side one more time
because you had that experience there under Speaker O'Neill and whatnot.
I feel like today's speaker is always under fire, whether
it's McCarthy, whether it was Paul Ryan on Trump's first term,
whether it was Bainter and Obama's friendship. You know, all
(57:12):
these speakers have come under fire for a long time.
But can Speaker Johnson last I feel like he's doing
well for the House. What do you think, Well, I
like you.
Speaker 1 (57:23):
I think he's doing a good job. It's tough when
you've got a very small margin. You know, he can
only lose four Republicans since the Democrats go to vote.
You know, if he wanted to raise the flag in
the morning, most of them would vote against it, just
(57:46):
for portisanship. And that's one of the reasons I respect
humor on the continuing Resolution for not shutting the government down.
That was the political thing to do, but the wall.
But in any case, I think the Speaker is doing
(58:09):
the best he can, and I think he's a skill person,
and I just I like his basic approach. He looks
like a good man trying to do a good job,
and I want to seem be successful. On the other hand,
(58:31):
I want the House to reform some of these welfare programs.
We're going to end up there was a country in
deep financial trouble if we don't start setting higher standards
and spending money.
Speaker 2 (58:46):
Well, that's what I was gonna say, because you probably
had a very low spending cap when you were running
the co writing this bill. Now, spending I feel like
it's always through the roof. How do we get here
Senator Graham, where spending is literally through the roof.
Speaker 1 (59:00):
Well, what cause every time we vtn a spending bill,
all the groups are looking over the congressman's left shoulder,
sending letters back home, emails, text messages, whether he cares
about the old, the poor, the sick, the died, the
bicycle rider. And too often nobody's looking over the right shoulder,
(59:26):
sending communications back home saying whether he cares about the
future of the country and the working people. And so
you get this imbalance. And I think that's what's happening
in the House now on Medicaid reform. And you know,
(59:49):
it's increasingly we're making these welfare benefits middle class entitlements,
which is very, very deep Andrews, I'm very dangerous. Welfare
ought to go to people who are needy, and if
they're able bodied and work aids, they ought to work
(01:00:11):
to get it. And I don't understand Republicans they won't
vote for that. Uh.
Speaker 2 (01:00:18):
That is as someone who's been asked some of the
disability has been asked, why do you work? I feel
like I can resonate with that response because I want
to work and make a living and do things. You know,
But that's another point for another day. I see also
you're very interested in the interest rates. So I got
to end with this three different options. You keep throwing power,
(01:00:38):
you fire drom, pollow power, or do we abolish the Fed?
Are you going to abolish for the FED person?
Speaker 1 (01:00:45):
No, Look, I believe in an independent FED. I don't
think the Fed did a good job during the pandemic.
I think they're paying and they let the money explode
in a year where government spent more in two years
(01:01:07):
than he ever spent three and in a two year period.
But I think they have done a better job in
dealing with the inflation. But whether they've done a good
job or a bad job, we don't want to turn
the Federal Reserve Bank over to the president. We don't
(01:01:30):
want politicians, whether Democrats or Republicans, controlling the money supply.
Whenever that happens, you have big problems.
Speaker 2 (01:01:42):
And Secretary beston good job so far as treasury or
what are you thinking of his life?
Speaker 1 (01:01:47):
Well, I don't know what kind of problems he faces
in trying to get his views across. It's fortunately, and
I've considered this when anyone has ever talked to me
about going back into government, as an appointed official. There
(01:02:12):
are only two jobs in the executive branch of government.
There are clerks and there's the president. And some clerks
have fancy titles and garner a lot of respect and
do great service to the country. But in the end,
(01:02:32):
there's only one president, and you either do what he
wants to do in the end or you leave. And
so in evaluating the performance and Secretary of the Treasury,
I had to take that into account, and so I
(01:02:54):
think that he has been more responsible on terraff send
anybody else. But that's that's easy. That's easy. In this administration.
The question is how do we get out of this mess.
We're in it now and whining about it does no good.
(01:03:18):
What policy is going to get us out? And again,
I think the only policy is to negotiate a way
out of it, lowering tariffs in America in broad and
then everybody would benefit. But I don't think that's where
President Trump intends to go. But from everything I can tell,
(01:03:44):
the Secretary of the Treasury would like to go in
that direction, or at least that's how I read it.
It's hard, you know, it's so tempting when you're in
government and in high public office and in public resp
on's ability to stand in judgment of people who are
there now not try not to do it. You know,
(01:04:08):
there's this natural tendency, especially that old geezer like me,
to say things went to hell today I left Washington. Well,
they had partly gone to hell before I left. But anyway,
we have a great country. It's worthy of being served,
(01:04:29):
and it can be greater. And one of the reasons
I want to be sure to plug the book one
more time, The Triumph of Economic Freedom. You can buy
it on Amazon, any other or any bookstore, is if
you read this book, you'll understand our country better and
(01:04:50):
you'll realize that we have even a greater country than
you thought. And that's reassuring.
Speaker 2 (01:04:59):
And I think that and that book should be set
right to the opposite of AOC and receed to leave
like all these folks that seem to want to do
away with capitalism and do away with this structure, send
the book to remind them why we have it, Senator Grant,
is that.
Speaker 1 (01:05:15):
Look, the Bible says you shall know the truth, and
the truth will make you free. But doesn't they you
how to get to the truth. What we try to
do in this book. I'll leave it to you as
to how successful we work is we try to get
the facts straight. And I think again, if you read
(01:05:37):
the book and you even if you don't agree with
the conclusions of the book, that you will find that
you've got reason to doubt what you do believe. And
if you begin as I did and do with the
belief that our system is the best in the world
(01:06:00):
and we're lucky to have it and we need to
make it better, you will find that America is better
than you thought.
Speaker 2 (01:06:11):
I'll leave it right there with you, Senatorgram, but please
come back as things progress, and I'd love to have
your thoughts on more things as we move along here.
Speaker 1 (01:06:19):
Well, listen, I've enjoyed talking to you and I appreciate
your passion on these things out. The ability to communicate
with people very important.
Speaker 2 (01:06:32):
Well I try that on and off the microphone. So
thank you. Take care, Sentigram, God bless you. Thanks so
much for joining me.
Here's your host is Alex deren.
Speaker 2 (00:10):
Well, in the effort to have one leg up our
news for you once again here on the one lie
Gup Network with Alex Garrett. It's interesting the timing of
my next conversation with former Senator Congressman Philgram. Yes, he
served in the Senate and the Congress, was an economic
advisor to President Reagan. So we get into that in
(00:31):
this conversation. But before we do, I want to break
the news tea if you haven't heard that a US
Trade court has blocked President Trump's tariffs, remember the Liberation
Day tariffs from going into effect, asserting the present oversteps
of authority by imposing across the board tariffs on imports
from nations that sell more the United States than they buy.
(00:56):
So the timing of this is interesting because I'm inspired
now to really release this conversation I had a few
days ago with Senator Phil Graham, and you might remember
that name from the eighties. We talk about that economic
prosperity time, and we also talk about, in addition to
what the tariffs and all the cuts to different services
(01:19):
like medicaid and all that, how that will impact everyone
in America.
Speaker 1 (01:24):
We also go into his book.
Speaker 2 (01:27):
The Triumph of Economic Freedom, Debunking the Seven Great Myths
of American Capitalism by Phil Gram and American Economists. Professor
and co director of the Program on the American Economy
and Globalization at the Mercadis Center at George Mason University
in Virginia, Professor Donald J. Boudre. So, we got to
(01:51):
talk to the former Senator of Phil Graham about this
book about the seven great myths he liked to highlight,
and such an in depth conversation. I'm excited to release
this now here on the One look Up Network because
you know, it's not often you get a senator on
your podcast, former or president. So always seizing the opportunity
(02:13):
to talk to these great minds that have been in
DC and continue to be in DC.
Speaker 1 (02:20):
One way or another.
Speaker 2 (02:21):
And clearly Senator Philgram has his eye on everything going on.
So let's get to that conversation right now with former
senator from Texas.
Speaker 1 (02:29):
Oh great, thank you. I'm glad to be here and
I appreciate having me.
Speaker 2 (02:35):
I'm very honored to have you. You actually served multiple
terms in Congress TOD both at the Senate and House
of Representatives, and now you're writing So talk about, first
of all, your time in Washington, because I barely get
to day to talk to a senator. So what was
your time in Washington like?
Speaker 1 (02:50):
Well, I was electors of the House as a Conservative Democrat,
and during that first two years in office, I offered
a bipartisan budget with David Stockman that we call the
(03:12):
Bipartisan Conservative Budget. And then Reagan was elected President. Stockman
became omb director and our budget became the core of
the Reagan budget, and I became the primarier author of
the budget in the House, and we put together a
(03:32):
bipartisan coalition and we passed the Reagan Economic Program at
one point by one vote, and once we had gotten
that vote, in seven or eight other people changed votes,
but it was close, and then the Democrats threw me
(03:55):
off the Budget Committee for co author and the Reagan Program.
The President invited me to join the party, so did
the Republican leadership. But I felt if I just changed
parties that there might be people in my district that
feel that I'd flown false colors or somehow betrayed them.
(04:18):
So I resigned from Congress and ran for re election
as a Republican and no Republican never got more than
thirty six percent of the vote by district, so it
looked like an uphill battle, and it was. I had
nine Democrat opponents, but I managed to win the race
(04:39):
without a runoff pleaded.
Speaker 2 (04:42):
And then you go to Senate and you become chairman
of the Ranking Committee. First of all, all the chairs
that we see day day out in the Senate hearings
and huven House hearings, they have a lot of pressure
on them. Did you feel a lot of pressure as
the chair of the Ranking Committee.
Speaker 1 (04:57):
No, it was a subjec I phil. I knew a
lot about it. I've been an economist. I talked for
twelve years money in banking. In fact, had Texas A
and M. And one of my students was Jeb Hensling,
who went on and became Chairman of the Banking Committee
(05:17):
in the House. So it was a good time to
be in Washington. Eight years with Reagan were great and
I had a good working relationship with both Bushes and
with President Clinton. So it was a good period. People
(05:38):
see me and they say, gosh, I'm sure you'ld lad
you that red race, and so I always smile and
explain to him that, well, you know, I enjoyed it.
It was a good job, and I felt like I
was doing something important. Everybody who's ever served in Congress
(06:02):
thinks things when they all the day they left. I
try to avoid that thinking, but it's tempting to think
that way.
Speaker 2 (06:11):
You know a lot of senators. It's a difficult decision
to retire. So when you decided to retire, what was
the motive? What was the what was the next streat?
Speaker 1 (06:20):
I think it was two things. Alex One. I decided
when I went that when I turned sixty that I
was going to look at doing something else. And by
the time I turned sixty, everything I'd gone to Washington
(06:42):
to do, we'd achieved. The inflation rate was totally under control.
In fact, from the time we brought inflation under control
until it got out of control during the Biden administration,
we had forty years price stability. The Reagan program produced
(07:04):
twenty five years of strong prosperity. And so the day
that I announced I wasn't gonna run again, the Buzget
was balanced, we had no inflation, the economy was booming,
the Soviet Union was dead, and so I figured, if
(07:24):
you ever gonna leave while you're ahead, this is it,
but it was a hard decision. I thought it would
make a difference when I left, and I said on
the day that I announced, I wasn't running again. All
the battles i'd fought mostly we'd won, We're gonna have
to be fought again. And certainly that's turned out to
(07:46):
be true.
Speaker 2 (07:48):
But clearly you haven't really lost touch with it, because
here you are. We're gonna talk about tariffs in a
little bit, because you still got an eye on this.
You have this great new book out by the way
called The Triumph Economic Freedom, debunking the seven Great Myths
of American capitalism. And of course we're all for capitalism
in these parts on the podcast, so thank you for
writing about it. But before we get to that, you're
(08:11):
retired at sixty. Do you honestly feel some senator, some
commersmen stay beyond their time? I mean, is there?
Speaker 1 (08:17):
Well, I didn't. I didn't. I didn't stop working. I
retired from the Senator char I wanted to work for
a big bank in New York, and then I went
to work for private equity firm. I still work. I
lie and tell people I have a young wife who
wants money, and he would put me in a cheap
nursing home. But the truth is, I like working. I
(08:41):
learned something every day. I like being around young, smart people.
And as I tell my wife, she says, how much
is enough? And I say, well, some morning I'm gonna
get up. I'm not gonna want to get on that plane.
And when that happens, that's when I'm walk quick. But uh,
in any case, I do now write a lot. Issues
(09:06):
come up that I don't think my viewpoint is being
heard on, and so I've written maybe over the years
one hundred and fifty articles in the Wall Street Journal
since nineteen seventy three, when I wrote the first one
as the young professor of Texas. They and am and
(09:28):
so don't. I'm not a regular writer with a journal,
but they publish a lot of my stuff. I'm grateful
and it gives me a chance to weigh in on
the issues. I try to stay out of the personalities.
But needless to say, today there are a lot of
issues out there that I care about, and many of
(09:53):
those issues are the issues I wrote about in the
book The Triumph of Economic Freedom, Debunking the Seven Great
miss of American Capitalism.
Speaker 2 (10:06):
Well, what let's start with this then, because obviously are
going to go into the myths. But the tariffs are
on my mind a lot. I mean they were, but
they're on my mind because I do feel like we're
doing it wrong in a sense. Right we should just
be going after enemies, not so much our allies. Or
maybe you disagree. Where are we getting it right? Where
(10:26):
are we getting wrong with the tariffs here?
Speaker 1 (10:28):
Well, I think we're getting wrong pretty much across the board.
Tariffs are taxes on American consumers. So I'm not saying
you don't hurt foreigners by imposing tariffs, but you hurt
Americans a lot more. And tariffs drive up prices. They
(10:52):
force you to buy at home things you could buy
cheaper abroad. They disrupt theistic production. And we just put
this to the tests. Eight years ago, when President Trump
came into office, he raised tariffs for the first two years,
(11:16):
we cut taxes and we reduced regulatory burden, and the
economy grew, reaching a thirteen year high growth in twenty eighteen,
and in the middle of that year, Trump imposed his tariffs,
and the objectives of the tariffs, as he stated them,
(11:36):
was to bring down the trade depsit, to increase manufacturing
domestically to increase economic growth and to raise total employment
and agriculture, I mean in manufacturing as a percentage of
total employment. It failed every one of those tests. The
(12:01):
trade depths that went up, not down. And it went
up because the economy was strong from deregulation and tax cuts,
and so foreigners rushed in to invest in the American economy,
drove up the value of the dollar, made imports cheaper,
and so we ran a trade depthsit. Industrialization actually fell
(12:26):
in twenty nineteen before the pandemic. Genp fell in twenty
nineteen from the level in twenty eighteen, and employment and
manufacturing as a percentage of total employment continued to fall
at roughly the same rate it had fallen for the
(12:49):
previous fifty years. So the tariffs in the first term
achieved no positive objective, and now we've been posted tariffs
many times of that level. It's disrupted the production process
in America. Remember that sixty one percent of all imports
(13:13):
or component parts used in American production of goods and services.
They're not fined, they're not final goods that people consume.
And so when you impose high tariffs, as the president did,
you make those inputs more expensive, and you disrupt the
(13:35):
production process and then you get retaliation. And the net
result is we created tremendous uncertainty, We disrupted millions of
businesses of production process, and we did great damage to
(13:57):
the world trading system that gave us eighty years of
prosperity in peace. So I think it was a bad decision.
It was ill advised. It's not going to work. And
the sooner we can negotiate our way out of it,
the better off we will be. And if we don't
do that, if we let anything like the level of
(14:21):
tariffs that have been announced going to effect, I just
don't see how we're going to avoid a recession.
Speaker 2 (14:28):
Well, I'm going to say two things here. Do you
think President Trump is wanting us to get into a recession?
I mean people are saying us intentionally. Do you believe that?
Speaker 1 (14:37):
Or no? No, of course I don't believe. Look, President
Trump believes in tariffs. He's always believed in him. But
you know people, a lot of people believe in things
that aren't so. And you know, we have experience with tariffs,
both their impact economically and politically. For a long period
(15:04):
of time, we've dealt with them in America for three
hundred years, and they've never worked. So I don't know
that there's a lesson in the second or thirtieth kick
of a mule. But these were bad decisions, and now
the administration is trying to negotiate its way out of it.
(15:27):
But the President appears to still want to end up
with a ten percent across the board tariff that's three
hundred percent higher than the tariff was on the day
Trump is elected. And so that if we ended up there,
obviously we'd be better often if we had the tariffs
(15:48):
going to effect that the President proposed. But if we
ended up there, we're going to still have a lot
of economic disruption. And as we know from Walmart, you
name it, businesses are making it clear that we're call schooling,
they're going to actually the prices. Yeah, and that's going
(16:10):
to be death politically in the off your election, which
is what seventeen months away.
Speaker 2 (16:19):
Senator I got to say this. You know, other countries
at corner the way House were wanting to come to
the table with tariffs. Why would countries want to get
tariffs on their own countries because they think they can
get one over Trump? Is that why? Or why why
would they want to meet with him about being tariffed.
I'm not sure about that.
Speaker 1 (16:36):
You've got to realize that there are a lot of
miss out there. One of those misses is that we
have the lowest tariffs in the World's not true. Every
EU country has a lower average tariff weight that we do.
Japan has a lord average tariff right than we do.
(16:58):
What I would like to see administration due is sort
of turn up Sal's era into a silk purse by
negotiating a reduction in American terrorists and trade barriers for
foreigners doing the same. Then everybody would benefit. And you've
(17:20):
got to realize we have a lot of some of
the worst protectionist measures in the world. We have in
America we pay twice the world place for sugar. Take
food out of children's mouths so that forty three hundred
sugar producers can be well off. We have in the
(17:42):
Jones Act a prohibition against foreign carriers of goods that
travel among states, and as a result, it costs more
to ship oil from Houston to New York than from
Saudi Arabia to New York. As a result, we ship
(18:06):
it from Saudi Arabia. So there are a lot, we
have a lot, a lot of bad provisions that this
is an opportunity to get rid of while opening markets
for US products aboard.
Speaker 2 (18:21):
All right, let's get into the other myths of capitalism,
because you know, I'm getting tired of those that protest
down in Wall Street, Like it's just it's almost like
they don't know what they're protesting half the time, or
if they do, it's a little outlandish. So what are
the myths are you trying to debunk for those even
younger than I am, to try and under them understand
(18:44):
their benefits of capitalism.
Speaker 1 (18:45):
Well, first of all, the book is based on the
fact that how we assess the facts really depends on
sort of the the views we start with, how do
we think the world works. For example, if you took
(19:07):
the Republican leader of the Senate the Democrat leader of
the Senate, they're going to differ on virtually every issue
of the role of government the free society. And as
tempting to say, well one's a liberal, one's a conservative,
But if you ask them in the Industrial Revolution, at
(19:29):
the birth of capitalism, what happened, Schumer is going to
say that what happened is the capitalist got rich and
the worker was impoverished. Soon is going to say everybody
benefited from the Industrial Revolution. If you ask what caused
(19:50):
the depression? Or was America's manufacturing capacity hollowed out by
the growth in post war trade, or you're brought up
to We look at five historical periods, the birth of
capitalism in the Industrial Revolution, the progressive era of regulations,
(20:18):
the depression, the postwar expansion in trade, the financial crisis,
and then we look at poverty and inequality because we
found that those seven areas are areas where people that
have different views have different assessments of what happened. And
(20:41):
let me just start with the first myth. We call
it the genesis myth. Well, what happened? What happened in
the Industrial Revolution? Will even Carl Marx, who is the
most avid of the most avid opponent of capitalism, begins
(21:04):
his analysis by noting that in one hundred years capitalism
has raised the living standards of people more than all
the other generations combined. The question for him is did
the worker benefit or did the capitalist benefit? And fortunately
(21:29):
for us, us being the people of this earth. In
the nineteenth century, governments, especially in Britain and the United
States started collecting and reporting data on what was actually happening.
And so what that data shows is that for one
(21:52):
thousand years prior to roughly eighteen hundred, there was no
real economic growth to the world. People pretty much lived
as their grandparents had lived. And then in one hundred
year period, per capita income of Great Britain and America
(22:14):
was flat for one thousand years, and then all of
a sudden bam takes off. And this was capitalism. If
you look at the data on wages, income, mortality, literacy,
the availability of nutrition, by all those measures, it was
(22:39):
a worker's revolution. People were better off in that one
hundred year period. The well being of working people grew
faster than any other one hundred year period in world history.
So the myth is that you had these people that
(23:02):
were impoverished living in the cities. Well, by our standards,
everybody in eighteen hundred was impoverished. And what happened is
you had the landed gentry who were losing their workers,
and they were writing all this literature or funding those
(23:24):
who were and so they portrayed the industrial revolution with
all of its problems, as if workers were impoverished in
the cities and had a glorious life in the country.
The truth is they went to the cities because the
(23:48):
cities promised a better life and more opportunity and greater freedom,
and they found both. And we go through each of
the my let mean, now you just turn to poverty,
the myth that capitalism calls it poverty or caused poverty
(24:09):
in America, Well, there is something that just is anomaly
that you got poor people in the richest country in
the world, in the land of milk and honey, in
the land of fertile fields and boundless forest. But basically,
(24:32):
if you look at the data that is available, one
of the reasons that it appears that we have so
many poor people is that we don't when the Census
measures income, it doesn't count two thirds of all transfer
(24:53):
payments is income, and so as a result, it says
that the bottom twenty percent of income earners aren't about
or half about twenty nine thousand dollars a year of income.
But if you count all transfer payments as income to
people who receive them, and that includes a check from
(25:18):
the Treasury and a refundable tax credit, that the Census
doesn't count his income debit card to buy food at
the grocery store. The Census doesn't count his income. Medicate
housing subsisties over one hundred of the federal, state and
local programs. Bottom line is, if you add up all
(25:42):
the subsisties, average income the bottom twenty percent of income
recipients is about sixty five thousand dollars a year. And
the amazing thing is that the bottom sixty percent of
Americans have pretty s or incomes whether they work or
(26:02):
they don't work. And as our welfare programs exploded in
the mid sixties, the number of welfare recipients who were
able bodied, prime work age who worked decline from sixty
seven percent to thirty six percent. So what the poverty
(26:23):
program did is it basically it substituted an eliminated want
at the price of idleness. And so in each one
of these periods we go through and look at how
much opportunity there is. What are the chances if you're
born in a poor family, go up there, you're going
(26:45):
to live in a poor household if you work low.
Speaker 2 (26:49):
You know, I'm ready mentioned that a lot of you know,
people in the you kind of infer about the middle
class as well, that you know, a lot of people
are making middle class income. And this is why when
people when politicians say they want to raise our taxes,
it's a complete light. It only will be raised from
the top. They're going to raise middle class working taxes too.
(27:10):
I mean, it's almost like they're trying to take from
everybody at the middle class on the top to give
to the poor. And I don't know if that's the
best way about it. I just say, give more opportunity
to those at the bottom, right.
Speaker 1 (27:23):
Yeah, Look, just remember this that if you took every
pin of every building there that the government does not
already take in taxes, you couldn't fund the government of
the United States and the States in twenty twenty two
(27:46):
for a week. Okay, They're just not enough mega rich
people to pay for government. In the end, the middle
income Americans and upper middle income Americans, where most people
are in the strata of income distribution, they're the people
(28:09):
who pay these taxes. And another point that we make
in the book on inequality is that the way the
Census measures income by not counting transfer payments or most
of them, and by not counting taxes as income lost
(28:31):
is they say the ratio of the top twenty percent
of income owners to the bottom twenty percent of income
recipients is sixteen point seven to one. But if you
count all transfer payments is income gain and all taxes
income lost, it's forty one, not sixteen point seven to one.
(28:53):
Now you say forty one is too much A very
different debate. And we look at all all of these
studies Picketty in France. You know, how does he show
this incredible inequality? Well he shows in three ways. One
doesn't count any government transfers his income. Two he doesn't
(29:15):
take taxes into account, and three he makes up an
income for uper income people like Warren Buffett as to
what their income would be if they sold all their
assets every year and paid taxes on it. Well, a
needless to say, by that definition, if your income was
(29:41):
what your car's worth, your house was worth, your pension's worth,
and you had to pay income on tax on that
every year, you would be paying a low rate today
as compared to what you would pay. Then well what
does that tell you? And finally we look at mobility.
You know, how likely are people to rise? How likely
(30:04):
are people to do better than their parents?
Speaker 2 (30:07):
And by the way, this was such a thing in
the thirties because always saw in the movies with rags
to riches stories, right, and I feel like that's right exactly.
Speaker 1 (30:15):
Well, look, just remember this number if you don't remember
any other number fifty years ago. If you look at
the income levels fifty years ago, in real purchasing power
justed for inflation, as compared to the day, sixty six
percent of Americans today have real purchasing powers that would
(30:42):
have put them the top twenty percent fifty years ago.
That's pretty astonishing, and you can really see it if
you go back. I'll just give you an example. The
lady who works for me who tie to all the book.
As we were writing it, she said, well, you know,
(31:05):
I know everything you say is true, but it seems
so hard to make ends meet. And so I said, well,
Muriel's a name Uriel. Maybe it's because your ends are
so far apart. I said, you just bought your first house.
How does it compare with the first house your mother
(31:28):
and foreign lived in. Her answer, my first house is
better than any house they ever lived in, including the
one they live in now. That would have been true
in my case. So yeah, it's hard to make ends
meet when you live in a world where people have
(31:51):
the abundance we have and whether they want and expect
and get ultimately if they work or more.
Speaker 2 (32:00):
You know, it am about purchasing power. And I think
of all the credit card debt and all this other
stuff that people go through daily. How do we ease?
As an economy economic advisor? How do you eat? How
would you help people ease all of that? I mean
they do. We do have a sense of like, well
we can pay this off in months from now, right,
but it doesn't always work that way.
Speaker 1 (32:20):
Well listen, uh. I often get asked because people know
my background, do I have people come out to mind?
I live out in the country and people come out
to fix things. They're always breaking. And so people ask
me my financial advice and not tell them get out
(32:41):
of debt, don't buy anything except the house. Would you
borrow money if you can't afford a new car, buy
a used car, And for God's sakes, don't go out
bore money to buy furniture stuff like that if you
(33:02):
can just get and I explained to them, you almost
pay for some them twice when you borrow money to
buy it. So and you know, we want other thing
we look at in the book, which is very important.
I think it is what causes people to have to
(33:24):
be poor and or to what causes some people to
make a lot of money and some people not to
make much. And there are a lot of factors, but
the two biggest are do they work or do they
not work? And then secondly how sharp are they're too?
(33:45):
How well educated are they. But there are a lot
of other factors that you just don't think about that
we didn't think about that we started looking at the
data for the book. For example, the declivity of college
graduates to marry each other is a major source of
(34:07):
income inequality, because if you have a couple that both
have college degrees, they're in the upper middle income. They're
in the upper income quintile immediately when they get married.
(34:27):
And unlike the world I grew up in, where the
doctor married a nurse and the banker married a secretary,
are a secretary, Today a banker marries the lawyer that
does legal work for the bank. A doctor marries a
lawyer or another doctor. And so the just free choices
(34:51):
people make is a major source of income an equality.
High achievers who work hard tend to marry each other
and therefore you multiply the effect.
Speaker 2 (35:05):
Talk about this, and I mentioned it a little earlier,
but it just as you're talking about this, it's going
back to my in my brain here there's this push
to destroy capitalism. Hey tell me that will that push
will fail in capitalism will av for eternity because we
need it, right, we need this system.
Speaker 1 (35:23):
Well, look, capitalism is the goods that lay into golden egg.
But capitalism requires a government that protects private property, creditors rights,
and enforce its contracts and works to prevent either uh
(35:51):
and works to enforce the law a set rule of law.
But the stim works better when people have more freedom
to decide what they want spend their money on instead
of government making the decision. And when government subsidizes electric
(36:15):
cars enforces general motors to subsidize electric cars by charging
higher and higher prices for gas powered cars. It's deciding
for you what kind of vehicle you're going to have.
So the more you let people decide how to spend
(36:37):
their own money, since they have skin in the game,
they do a better job than government. Where governments spending
your money and not their money. And secondly, letting businesses
within the rule of law operate those two things create
(36:58):
what we call American receptionism. And we have less government
control than anybody else, but we could have so much
better government. I remember one day, it was nineteen eighty four.
I was sitting next to President Reagan, and we were
celebrating Morning in America, which was the theme of the
(37:20):
campaign in nineteen eighty four. And our program had been successful,
and we had stopped the inflation, the economy was booming,
defense was strong. The President landover and said, can you
imagine how good things would be in this country if
we really had good government? In other words, it's all
(37:44):
of the good things we'd done were very small compared
to what could be done.
Speaker 2 (37:49):
And that's the same man who's quoted as saying, you know,
and it's on tape, the most dangerous thing you can
hear is I'm the government. I'm here to help.
Speaker 1 (37:58):
So I feel like that exactly. God knows that's true.
God knows that's true.
Speaker 2 (38:02):
And yeah, you were in government. So how did you
try and change it to make it for the people
a little more than maybe your colleagues did or do
now in the current set.
Speaker 1 (38:11):
Well, look, I went to Washington very skeptical of government,
and I left Washington, skeptical of government. I thought the
most important thing was to make government small, and I
viewed dealing with the deficit as crimping the fuel line
(38:37):
to the corborator of big government. And then if we
could control spending, we could control government. It was spending
to me, was about more than deficits, about more than finance.
It was about freedom. A small government is a better government.
(39:00):
Remember what Thomas Jefferson said, If we can prevent the
government from wasting the income of the people under the
pretense of caring for them, they will be happy, and
the government is best at governance. Least I believe that's true.
Speaker 2 (39:18):
Today, I'm going to not show off, but I'm going
to try and see your thought on this. Because in
the first term, there were all these different tax rates.
Do we do tax a flat tax for everybody? And
I often thought that a flat tax wouldn't make it. It'd
be great for the small business because they can afford
(39:38):
the fifteen percent. But if we did it truly economically equal,
you do twenty percent corporation, fifteen percent flat, I mean
fifteen percent for the smaller corporations and small businesses. How
do we help the small business? I guess my point,
and b would those tax levels work? Could we tax
the corporations all higher than the small businesses?
Speaker 1 (40:00):
Well, look, the most important thing in a tax code,
in my opinion, is eliminating all the ways that government
dictates what people are spending their money for through the
tax code. And I think the way that you do
(40:23):
that is by eliminating all of these provisions of the
tax code that give special treatment to all these different things,
and take the money you save by eliminating those deductions
and lower rates. And quite frankly, there are very few
(40:46):
deductions that have any justification whatsoever. I mean in a
new tax code that we're a tax bill that we're
debating in commerce deductive bill of interest on auto loans.
Give me a break.
Speaker 2 (41:04):
Also, why take until ten pm on Sunday night to
try and get to go pass that's insane thing?
Speaker 1 (41:09):
Making my Social Security tax free. We would be so
much better off if we eliminate the deductibility of our
mortgage interest payments and simply lower rates. Give me a
simple flat rate, eliminate all the special provisions in the
(41:33):
tax code and let me pay the one the rate
and move on. I think we would be so much
better off. The system would be so much more efficient,
and you've got the differential treatment of real estate, the
differential treatment. We have alternative minimum taxes, so you give
(41:58):
tax breaks and you take them about. I'd like to
just illuminate them and have and lower the rates flatter
the better would suit me, all right. I Getting rid
of deductions is really important.
Speaker 2 (42:14):
I gotta ask you about this because another economic situation
we've been dealing with and seeing is the cutting to everything.
I mean, doges in their cutting, cutting, cutting. I don't
exactly agree with every cut they made. However, getting one
of the waste in certain areas has been helpful. But
my question you is is Elon an economists that should
be working as a small business owner or is it
(42:34):
just a small bus owner and let the economists do
the work of the cutting? Like is he right now?
Speaker 1 (42:40):
I think he's done a good job. I think Congress
is now the problem. I mean, look, forty over forty
percent of people that get welfare benefits aren't even defined
as being poor. In Medicaid, we give higher reimbursement for
(43:06):
adults working age adults than we do for children and
disabled people. How does that make any sense? States Tax hospitals,
and then the hospitals build Medicaid for the tax, and
(43:29):
so it's it's, it's, it's it's very in the private sector,
we would call it fraud and we need to stop it.
And uh. Then going back to this fact that the
census undercounts income, if we just counted all transfer payments
(43:50):
as income, we would dramatically reduce the number of people
who are eligible for all these means tested programs. And finally,
I cannot understand the opposition to forcing people to work
in return for getting welfare benefits. I don't get it.
(44:13):
If you can't sell that to your constituents, you're in
the wrong line of work in everybody. Of course, I
represented a great district and I represented the greatest state
in my opinion. And the idea of a work yeah,
(44:38):
the idea of a work requirement for welfare makes so
much sense. I doubt they're fifteen percent of the people
in Texas, they're all on welfare. I would oppose a
mandatory work requirement. And yet we're talking about not even
(44:59):
having work requirement going to effect until twenty twenty nine.
I mean, give me a break. Talk about phony reform.
That's phony reform.
Speaker 2 (45:12):
So how do we do that? I want to want
to medicate thing because I'm in the disabled community. A
lot of my friends have dealings with medicaid, and I
of course want to protect that for all those disabled community.
So how do we How would you advise or how
should we advise people who are making these cuts to
go about it where the disabled community is protected.
Speaker 1 (45:32):
Well, First of all, able bodied people want to work,
and if they don't work, they shouldn't get the benefit.
We should take care of people who really need the benefit,
and in seeing whether they need the benefits, we should
look at what they're already getting the government and how
(45:52):
valuable it is. And we should prevent states from ripping
the system off. In Californa, you can make one hundred
and two thousand dollars a year and still get medicaid. Now,
to me, that's just general rosting with somebody else's money
(46:15):
that we ought not to tolerate. And giving medicaid to
illegal immigrants I think is wrong Illegally.
Speaker 2 (46:30):
I don't usually talk like this because I like taking
a positive but I agree with you. I think it's
disgusting that people who are here illegally are getting a
lot more benefits than those with disabilities. I mean, we
need to make capitalism work for Americans, not for those
who are not here ilegal. Look this room.
Speaker 1 (46:47):
I am very pro legal immigrants. Charottkay. Yes, we got
room in Americas for people who want to come here
and work, and God bless them and may more come.
But we don't have room in America for people who
want to come and live a somebody else's effort senogram.
Speaker 2 (47:07):
How do we do it where people want to be
legal can actually have a fair or shot at it?
Meaning I feel like the fees are too much to
become a legal citizen. Should we drop the fees a
little bit? Or how should that work?
Speaker 1 (47:20):
Well? I think that first of all, we need to
make it clear that the problem we lead legal immigration
is it's illegal, well enforced the law, but we need
to have an immigration system where we allow people to
(47:40):
come here who have skills that the country needs. And
as I look at how you would measure this, and
I look back at my ancestors, I don't think anybody
that came to America, that is my ancestor, would have
ever qualified any kind of H one B program based
(48:03):
on having talents that America needed. But we don't run
the country based on what benefits thegrams. We've been and
run the country based on what benefits the country. And
I think we'll have a vigorous legal immigration program and
let people come here who've got skills we need. And
(48:29):
everywhere you see the contribution of immigrants, from Jonah Salt,
who was a first generation American, to the in center
of fracking, the number of businesses started by immigrants or
(48:51):
their children, and the academic achievement of immigrant children. They
all say to me, we need more legal numbers. But again,
I think when people come here legally that accept in
absolutely emergency situations, they shouldn't qualify for government welfare because
(49:17):
then you're providing incentives that encourage people to come here
to live off the fat of the land. We've got
too many hard working people to be taking their money
to subsidize people that just don't want to work. And
I don't mind saying it. I'm not sensitive about it.
(49:39):
As I used to say when I was in the Senate.
I don't apologize. In fact, I love all Americans, but
I love Americans that work best.
Speaker 2 (49:50):
All right, I want to ask this then, because obviously
we want hard working Americans to go back and disable
things real quick. Because I'm curious about this. How do
we encourage other example, people to start working more. I mean,
there's got to be more encouragement, right for example, of
people to keep working and work hard.
Speaker 1 (50:09):
Well, I think letting people keep more of what they
are exactly. It starts with control expending. People are worried
about the birth rate, how low it is, and you've
got people who want to subsidize people they have babies.
Talk about terrible ideas. Look, people have babies when they
(50:30):
think the future's blanked. Okay, what happened Why we have
the post war baby? Well, partly because people came home
and they were hurry to start their lives. But also
they look to the future and things look bright in America.
Economic growth and a strong job opportunities. Those are the
(50:56):
kind of things that encourage people to want to have
a family because they have confidenced in the future. And
also legal immigrants and we again maybe because I live
in the country, I see this. This country is a
long way from being full. Now. I live outside San Antonio,
(51:21):
and everybody in the world was to move here, and
so every road in town is under construction. They're building
out there were people are voting with their feet to
leave California and New York and Illinois come to Texas.
Speaker 2 (51:38):
And that's probably why I mean, you are a conservative Democrat.
Now there's progressive Democrats in Texas. No one ever thought
that was going to happen.
Speaker 1 (51:46):
When I ran for Congress, I had never really met
a Republican until I was a dull anyway, and I
didn't think party didn't mean anything to me, but more
when I got to Washington, I discovered it meant a
lot to a lot of people. And then I was
(52:07):
at the wrong party. And so I fixed it by
resigning and running in as a Republican. And I'm proud
to say since I did that, there's never been another
Democrat elected to the Congress in my district.
Speaker 2 (52:25):
That's huge syneagram, I got to say. Because you were
in the Reagan era on both sides, in the Senate
and the House, the Tip O'Neill Reagan dynamic. Were you
a front Did you have a front row seat of
that or not?
Speaker 1 (52:38):
I had a front row seat to it. I worked
with with Tip O'Neill on welfare reform. I'm on a
social security reform Uh, Look, they disagreed about how to
make America greater, but they didn't disagree on wanting to
(52:59):
make kid greater or belief fundamentally in this system. Senator
Bird from West Virginia and I fought over every budget,
but yet we shared a basic belief that the American
system was the best system and that it would worked.
(53:20):
He wanted more government than I did. I wanted more
freedom than he did. But we worked together on many
issues and we were close friends. And he was always
good to me and I was. I tried to do
the same in his case.
Speaker 2 (53:38):
Senator I have to asked this because we started with
you talking about how you did the spending bill and
you help get that signed the bipartisan I feel like today,
especially on the Democratic side, if you sign a bipartisan bill,
you're not for the party. Like what Schumer was not
wrong to sign the recent bill, yet he got a
lot of flack and actually a lot of protests about it.
(54:02):
Did that disappoint you seeing that the fellow Democrats did
not have is back in signing something by partisan.
Speaker 1 (54:08):
Well, look, I think you did the right thing. I've
been in the Senate about four months and there was
an amendment to have an oil import fee. Okay, And
so I'm from the biggest oil producing state in the
country to time, and so I figure, you know, first
(54:33):
of all, I'm not going to be for this, and secondly,
I'm going to have to defend this vote. So the
best thing to do, I thought, was to get out front.
So I was the first person to stand up and
opposed it. I led the opposition to it, and I
spent nine months in Texas defending that vote, and the
(54:56):
Houston Business Journal called me the third centator Massachusetts. But
I went all over the state and defended that vote,
that it was bad for Texas, it was bad for
America because we used more oil and all of our
refineries and chemical plants than we produced, and if we
(55:19):
had to pay a premium for imports, that we would
end up hurting Texas and hurting America. And in the
final analysis, I finally said, look, I've gone all over
the state. I defended that vote. But if you want
(55:39):
someone who is a protectionist, don't move from me, because
I'm not going to do it. I understand the issue,
and it's just something I'm not going to do. And
it never was an issue in one of my campaigns.
Speaker 2 (55:59):
As because now I don't think we have to worry
about imports. We have so much oil in the country.
Do you remember any.
Speaker 1 (56:06):
One of the reasons I got into government. I was happy,
I had two little children. I've just been promoted to
full professor. And I woke up one morning and I
was an adult, and I didn't like what was happening
in the country. And I knew that we weren't running
(56:28):
out of oil and gas, and that we were capable
of producing a lot more of it. And so I
wrote an article for the Wall Street Journal on the subject,
and then I started speaking out on the subject, and
that's how I got involved in running for public office.
Speaker 2 (56:51):
Senator is this has been really enlightening, And I want
to touch on the House house side one more time
because you had that experience there under Speaker O'Neill and whatnot.
I feel like today's speaker is always under fire, whether
it's McCarthy, whether it was Paul Ryan on Trump's first term,
whether it was Bainter and Obama's friendship. You know, all
(57:12):
these speakers have come under fire for a long time.
But can Speaker Johnson last I feel like he's doing
well for the House. What do you think, Well, I
like you.
Speaker 1 (57:23):
I think he's doing a good job. It's tough when
you've got a very small margin. You know, he can
only lose four Republicans since the Democrats go to vote.
You know, if he wanted to raise the flag in
the morning, most of them would vote against it, just
(57:46):
for portisanship. And that's one of the reasons I respect
humor on the continuing Resolution for not shutting the government down.
That was the political thing to do, but the wall.
But in any case, I think the Speaker is doing
(58:09):
the best he can, and I think he's a skill person,
and I just I like his basic approach. He looks
like a good man trying to do a good job,
and I want to seem be successful. On the other hand,
(58:31):
I want the House to reform some of these welfare programs.
We're going to end up there was a country in
deep financial trouble if we don't start setting higher standards
and spending money.
Speaker 2 (58:46):
Well, that's what I was gonna say, because you probably
had a very low spending cap when you were running
the co writing this bill. Now, spending I feel like
it's always through the roof. How do we get here
Senator Graham, where spending is literally through the roof.
Speaker 1 (59:00):
Well, what cause every time we vtn a spending bill,
all the groups are looking over the congressman's left shoulder,
sending letters back home, emails, text messages, whether he cares
about the old, the poor, the sick, the died, the
bicycle rider. And too often nobody's looking over the right shoulder,
(59:26):
sending communications back home saying whether he cares about the
future of the country and the working people. And so
you get this imbalance. And I think that's what's happening
in the House now on Medicaid reform. And you know,
(59:49):
it's increasingly we're making these welfare benefits middle class entitlements,
which is very, very deep Andrews, I'm very dangerous. Welfare
ought to go to people who are needy, and if
they're able bodied and work aids, they ought to work
(01:00:11):
to get it. And I don't understand Republicans they won't
vote for that. Uh.
Speaker 2 (01:00:18):
That is as someone who's been asked some of the
disability has been asked, why do you work? I feel
like I can resonate with that response because I want
to work and make a living and do things. You know,
But that's another point for another day. I see also
you're very interested in the interest rates. So I got
to end with this three different options. You keep throwing power,
(01:00:38):
you fire drom, pollow power, or do we abolish the Fed?
Are you going to abolish for the FED person?
Speaker 1 (01:00:45):
No, Look, I believe in an independent FED. I don't
think the Fed did a good job during the pandemic.
I think they're paying and they let the money explode
in a year where government spent more in two years
(01:01:07):
than he ever spent three and in a two year period.
But I think they have done a better job in
dealing with the inflation. But whether they've done a good
job or a bad job, we don't want to turn
the Federal Reserve Bank over to the president. We don't
(01:01:30):
want politicians, whether Democrats or Republicans, controlling the money supply.
Whenever that happens, you have big problems.
Speaker 2 (01:01:42):
And Secretary beston good job so far as treasury or
what are you thinking of his life?
Speaker 1 (01:01:47):
Well, I don't know what kind of problems he faces
in trying to get his views across. It's fortunately, and
I've considered this when anyone has ever talked to me
about going back into government, as an appointed official. There
(01:02:12):
are only two jobs in the executive branch of government.
There are clerks and there's the president. And some clerks
have fancy titles and garner a lot of respect and
do great service to the country. But in the end,
(01:02:32):
there's only one president, and you either do what he
wants to do in the end or you leave. And
so in evaluating the performance and Secretary of the Treasury,
I had to take that into account, and so I
(01:02:54):
think that he has been more responsible on terraff send
anybody else. But that's that's easy. That's easy. In this administration.
The question is how do we get out of this mess.
We're in it now and whining about it does no good.
(01:03:18):
What policy is going to get us out? And again,
I think the only policy is to negotiate a way
out of it, lowering tariffs in America in broad and
then everybody would benefit. But I don't think that's where
President Trump intends to go. But from everything I can tell,
(01:03:44):
the Secretary of the Treasury would like to go in
that direction, or at least that's how I read it.
It's hard, you know, it's so tempting when you're in
government and in high public office and in public resp
on's ability to stand in judgment of people who are
there now not try not to do it. You know,
(01:04:08):
there's this natural tendency, especially that old geezer like me,
to say things went to hell today I left Washington. Well,
they had partly gone to hell before I left. But anyway,
we have a great country. It's worthy of being served,
(01:04:29):
and it can be greater. And one of the reasons
I want to be sure to plug the book one
more time, The Triumph of Economic Freedom. You can buy
it on Amazon, any other or any bookstore, is if
you read this book, you'll understand our country better and
(01:04:50):
you'll realize that we have even a greater country than
you thought. And that's reassuring.
Speaker 2 (01:04:59):
And I think that and that book should be set
right to the opposite of AOC and receed to leave
like all these folks that seem to want to do
away with capitalism and do away with this structure, send
the book to remind them why we have it, Senator Grant,
is that.
Speaker 1 (01:05:15):
Look, the Bible says you shall know the truth, and
the truth will make you free. But doesn't they you
how to get to the truth. What we try to
do in this book. I'll leave it to you as
to how successful we work is we try to get
the facts straight. And I think again, if you read
(01:05:37):
the book and you even if you don't agree with
the conclusions of the book, that you will find that
you've got reason to doubt what you do believe. And
if you begin as I did and do with the
belief that our system is the best in the world
(01:06:00):
and we're lucky to have it and we need to
make it better, you will find that America is better
than you thought.
Speaker 2 (01:06:11):
I'll leave it right there with you, Senatorgram, but please
come back as things progress, and I'd love to have
your thoughts on more things as we move along here.
Speaker 1 (01:06:19):
Well, listen, I've enjoyed talking to you and I appreciate
your passion on these things out. The ability to communicate
with people very important.
Speaker 2 (01:06:32):
Well I try that on and off the microphone. So
thank you. Take care, Sentigram, God bless you. Thanks so
much for joining me.
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