August 16, 2024 • 15 mins
"Tim the Lawyer" Sandefur joins Armstrong & Getty to talk about a lawsuit filed by a pair of visitors to a Disneyland property.
Plus, as VP Kamala Harris announces her economic policies, Tim explains why government price controls just don't work.
Listen to The Armstrong & Getty Extra Large Interview below...
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Episode Transcript
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Speaker 1 (00:00):
He armstrong and Yetty.
Speaker 2 (00:09):
I remember why Tim the lawyer's name came up yesterday
we're talking about that amazing story of that poor guy.
Sheh and his wife are at a Disney property.
Speaker 1 (00:19):
He says that they.
Speaker 2 (00:21):
Told the waiter, look, my wife has peanut allergy or
fruit allergy or something like that really bad. So we
got we can't have anything that's touchingnuts or whatever. Anyway,
she ends up getting some food that's got the allergic
stuff in it, and she dies. She actually dies at
one of these Disney properties. So he's looking into suing.
Not for very much money. It was a fifty five
(00:41):
thousand dollars, so it's not like one of those you know,
you owe me ten million dollar things. But anyway, found
out that because he had Disney Plus like I do,
like you do, like everybody watched the Mandalorian does, because
he signed up for Disney Plus and clicked I agree
on the agreement thing at ten thirty at night once
(01:03):
without reading a word of the agreement. He had agreed
to no trials by jury that go after Disney in
any way whatsoever I did. I agreed to that by
watching Disney Place. Who knew that? And just all these
agreements that we all click on every single week on
something we haven't got the slightest idea what's in there
(01:23):
that needs to be fixed.
Speaker 3 (01:25):
That just one of several.
Speaker 4 (01:26):
Topics we can't wait to discuss with Tim Sanderfurr, vice
president for Legal Affairs at the Goldwater Institute, author of
a number of fabulous tomes, including, and this will come
up in a little while, the right to earn a living,
which is all about economic freedom.
Speaker 3 (01:42):
Tim, welcome, How are you, sir?
Speaker 5 (01:44):
I'm just fine, Thanks for having me back.
Speaker 1 (01:45):
Is there some course?
Speaker 2 (01:46):
Is there some sort of way we can do away
with these agreements that we all click on that are
one hundred pagees long, and we'd have to hire a
lawyer and spend a lot of money to figure out
what the hell they mean.
Speaker 5 (01:55):
Well, so, the legal term for that kind of a
contract that they call it a contract of adhesion, which
is when somebody holds out this document says take it
or leave it. Just if you want the thing, you
got to agree to it. There's no negotiation, just go
with it. And judges tend to be pretty skeptical of
contracts of adhesion because it is a dangerous kind of
(02:17):
situation where a person might not know what they're getting
into when they sign the agreement. And so I think
if you were to try and argue, as Disney is,
arguing that because you agreed to a completely different service,
one that had nothing to do with the injury that
actually occurred, because you agreed to arbitration there, now you
can't have a trial over here for this other thing,
(02:38):
I honestly think that's a hard argument to persuade a judge.
And now, of course it depends on the state. California
courts are very hostile to arbitration. They really don't like
the idea that you can be required to go to
arbitration instead of a court of law. But there are
lots of advantages to arbitration, including for people who are
suing a business. Arbitration is faster, it's overseen by people
(03:01):
who are knowledgeable legal you know, judges and lawyers who
know what they're doing and tend to be experts in
like personal injury and business and things like this, whereas
a jury is made up of just the twelve people
who showed up for jury duty that day. So there
are advantages to going by through arbitration, but forcing somebody
(03:22):
into arbitrations because they agreed to a completely different service
at a completely different time by a boilerplate contract of adhesion.
I think judges are going to be really skeptical of
that attempt.
Speaker 1 (03:33):
Joe used the example yesterday.
Speaker 3 (03:35):
I was about to lay that out.
Speaker 4 (03:37):
I was going to say, my daughter has just started
law school, has already learned, well, she's actually working in
the law for several years.
Speaker 3 (03:43):
That it depends is the all purpose answer for every question.
Speaker 1 (03:47):
It's legal.
Speaker 4 (03:47):
But the idea that I would I would get Disney
Plus to watch the Mandalorian. Then I go to Disneyland
and Goofy beats me into Wacoma with a steel rod,
and that's not actionable because I signed that.
Speaker 3 (03:58):
That's to pay where that happens, I guess.
Speaker 5 (04:02):
Yeah, Well, for one thing, you cannot waive your liability
for intentional or reckless harm. So Disney is not allowed
to say you're never allowed to sue us if Goofy
beats you up with a metal rock.
Speaker 1 (04:18):
Oh good.
Speaker 5 (04:21):
They can require you to go to arbitration instead of
a legal court. If you have a dispute over Disney
Plus as part of the user agreement, and you do
have what lawyers call the duty to read before clicking
the button. It is you are legally bound by these things,
and you have to be honest because otherwise modern industry
would collapse.
Speaker 1 (04:39):
Duty to read. But so like you, you don't have kids.
Speaker 2 (04:42):
But if you had kids, you go to the jumpatorium
like I do, or they jump on the trampolines and
you have to sign a waiver before your kid can
jump on the trampoline. And you go over to the
waiver and it's like thirty pages long, and I and
every other parent there just scroll to the bottom clicks
I agree, and your kids put on their socks and
they go jump. As a lawyer, would you read all
that stuff or what would you do?
Speaker 5 (05:03):
You absolutely have to read all this now, I will
say there's actually a case directly on that issue from
New Jersey from a few years ago where the kid
wanted to go to the skateboard park. Mom goes, takes
the kid to the skateboard park. They require him to sign.
The parent to sign this waiver, and the court said
that the waiver was not binding because you cannot expect
a parent to resist the begging of a child. Well,
(05:29):
it's so ludicrous. It's like oh, I don't have any
responsibility at all because I can't control my kids.
Speaker 4 (05:34):
No, you don't understand. It's the begging doctrine goes back centrist.
So I'm picturing tim I'm picturing the alternative. There we
are at the jumpatorium, and I'm reading this pages of contract.
Speaker 3 (05:45):
Now, I say, oh wow.
Speaker 4 (05:47):
Sun, paragraph thirteen highly problemly, give me a second. Here,
I bust out my cell phone. I called her legal department. Oh,
some turns out there a subsidiary of paramount Attractions. Anyway,
I need legal police, your legal department. Yeah, wait, thank
you very much. Then you know an hour later, yeah, yeah, yeah,
paragraphs thirteen specifically, you'll get back to me.
Speaker 3 (06:05):
Okay, all right, son, we've got to wait a while.
Speaker 2 (06:07):
I mean, come on, we're going to go go back
home because I am not happy with fourteen C. I mean,
that's just so, that's so unrealizing. You just said you've
got to read that stuff. Nobody's ever going to do that.
Timo's imposs yack.
Speaker 5 (06:18):
You know what they call that deck, They call that
responsible citizenship. That that's your obligation when you're handed a
big contract to read it before you sign it. So
you know what you're doing.
Speaker 1 (06:29):
So this is this nothing?
Speaker 2 (06:30):
Well, you're you're a libertarian, So this is one of
the reasons your name came up yesterday. I was thinking,
so is this a free market solution in theory that
we parents would not click I agree, and we would
not jump there, And so the jumpaitorium across the street
that doesn't have such a long agreement thing would get
more business? Is that the only hope.
Speaker 5 (06:49):
That the answer is mostly yes. Now, the reason why
it's not entirely yes is because, as I said, you
cannot waive your liability for reckless or intentional harm to somebody.
So you cannot put into that contract I'm allowed to
shoot you in the head or something, you know, but
you can waive liability for an accident. I mean, that's
everybody knows that there are risks associated with thing, and
(07:10):
and the person who chooses that has to bear that.
Speaker 1 (07:13):
Well, yeah, it's funny.
Speaker 2 (07:14):
I'm on both sides of this issue, actually, because the
reason they need to have those long legal agreements is
because of stupid rulings that have come out. And yes,
my kids jumping on a trampoline and sometimes when you
jump on a trampoline you break your arm, and it's
not the fault of the damn business. It's just something
that comes with jumping on trampoline. So you shouldn't be all.
Speaker 5 (07:31):
Alternative to the alternative to letting businesses wave their liability
is you don't get trampolines at all.
Speaker 1 (07:36):
Right, right, right, right?
Speaker 4 (07:38):
So then if if Goofy were to beat me down
with a metal rod, that's one case. If Dumbo, for instance,
saw a mouse and panicked and trampled me, that that
would be entirely different.
Speaker 5 (07:49):
It would be an entirely different matter, because it depends.
Now here's another important point is that a lot of
time I mentioned California cups really hate arbitration, and the
reason why is because they tend to think that arbitration
favors the evil big business and that's bad and we
need to protect people against evil big business. And yet
the same people who are hostiles of arbitration are often
perfectly fine with administrative agencies holding hearings of their own.
(08:14):
Where they are the people in the government agency is
the judge as well as the prosecutor. They're perfectly fine
to that. They don't see that as unfair. They just
see arbitration is unfair. That's really inconsistent and drives me crazy.
Speaker 3 (08:26):
Well, that's because they don't have principles.
Speaker 4 (08:28):
They take on and put on and take off their
principles like windbreakers on the left. It's in a third
of California law, as you know, exists to enriched trial attorneys.
But Tim Sandafer of the Goldwater Institute joins us. Tim
has been a leading voice of economic freedom for decades
now in the United States.
Speaker 3 (08:46):
We're all getting old. Tim, I don't know if you've noticed.
Speaker 4 (08:49):
Help us understand why this policy of ending corporate greed
and gouging is so stupid.
Speaker 5 (08:57):
Yeah, it really is stupid, and it is incredibly counterproductive.
Price controls equal shortages. And the reason why is because
you have to understand how prices work. People have this
idea that prices are just sort of arbitrarily slapped on
things and that it's just greedy people putting numbers on things,
and that's not what prices actually are. Prices are signals.
(09:17):
When you see a price tag, think of it as
something like the sphedometer in your car. It's just measuring something,
that's all. It's not somebody trying to rip you off.
It's telling you how much resources how much work, how
much raw materials and things go into a product as
compared to the other things that the labor or raw
materials could have been used for. That's all a price is.
(09:39):
So when a price goes up and then you come
in with the government and prohibit people from charging what
the thing actually costs, all you're doing is silencing that signal,
which causes confusion throughout the entire economy and has terrible
ripple effects. And it is absolutely true that you cannot
just control the price of one thing. If you try
to control the price of one thing, then people are
(09:59):
going to turn the resources into some other thing, and
then you have to control the price of that also. So,
for instance, if you were to try to limit the
price that milk could could be sold at, the dairies
are not going to make back the money that they
need to keep operating if they sell milk, so instead
they'll start making cheese and they'll start charging more for
the cheese. So then you have to control the price
of cheese. So then they start making yogurt, So now
(10:20):
you've got to control the price of yogurt. And it
keeps going on and on like that. So it's a
terrible idea that causes shortages because if I don't know
that I can make a whole bunch of money by
making them selling plywood, then I'm not going to make
and sell the plywood. And now people can't get the plywood.
And the reason why is because I didn't get the
signal because the government prohibited people from telling the truth
(10:42):
about what the prices are. And that's that's all price
controls are is It inrohibits people from telling the truth
about what things actually cost. And the reason the government
does that is because it's the one at fault for
raising the prices to begin with, and it doesn't want
people to know that, so it tries to silence it
by blaming businesses for charge what things are actually worth
when the government is the one responsible for making your
(11:04):
dollars worth less to begin with.
Speaker 4 (11:07):
Well, and it's one hundred or maybe ten thousand times
more complicated, as anybody who's ever read eye pencil could
tell you. Because that dairy farmer that you used as
an example, what if all of their costs stay the same,
but because of some sort of shock in oil prices,
the trucks that bring their milk to market become much
much more expensive to use. Then the government is involved
(11:27):
in trucking prices and shipping prices, and soon gasoline prices
and the rest of it. It's doomed, and everybody actually right, Yeah,
you know, I offered up a paraphrasing of your explanation
of why gouging quote unquote gouging is not a bad thing.
I use the example of chain saws after a hurricane,
(11:48):
but I wasn't nearly as eloquent or knowledgeable as you
would be.
Speaker 3 (11:50):
Can you give us the thirty second version of that?
Speaker 5 (11:53):
All that the prices do, when the prices go up
and people start charging one hundred dollars to use a
chainsaw because of the hurricane, all.
Speaker 3 (12:00):
That does is signal.
Speaker 5 (12:01):
But there's a lot of demand for hurricanes, a lot
of demands for chainsaw, and so all the chainsaw companies
see that signal and they're like, oh gosh, we need
to ship a whole bunch of chain saws down to
Florida or whatever. So then they do. Now, if you
prohibit that, if you prohibit people from sending that signal,
if you silence the truth about prices, which is what
price controls do, then the chainsaw companies never see that message.
(12:21):
They might as well sell their chainsaws in Nebraska or
Washington State. So you got a whole bunch of chainsaws
in Nebraska and washingtons in state, and you don't get
them down in Florida, where you actually need them, because
the prices weren't allowed to go up, so nobody got
the signal that that's where they need to send their chainsaws.
This it's a simple matter, but it gets obscured because
politicians want to fool you into thinking that businesses are
(12:42):
evil and greedy when they're the ones that are out
there printing money as if it's no problem at all
making all of your dollars worth less, which means people
have to charge more to get what things are worth.
And then the government doesn't want to admit that it's
the one at fault. Harris, for example, having been the
tie breaking vote in favor of the Print the Money Act,
and so she wants to confuse people about that by
(13:03):
blaming businesses and silencing the truth about price.
Speaker 2 (13:06):
You know, that's one of many economic principles that the
first time I ever heard, I was like, oh, okay,
and that makes one hundred.
Speaker 1 (13:13):
Percent sense and changed my mind completely.
Speaker 2 (13:17):
It troubles me that a lot of this stuff polls
so well, the punishing, gouging or whatever.
Speaker 5 (13:23):
Unfortunately, government gets away with it all the time. You
asked about whether it's legal, and I'm sorry to say
that courts have allowed various forms of price controls since
at least eighteen seventy six. So unfortunately, there are ways
that the government can do this for Just take one
example is so called march in right. This is a
provision in federal patent law that says that if the
(13:44):
government decides it wants to, it can allow some other
company to use your patent without your approval. And most recently,
the Biden administration is proposed using this power to impose
price controls by saying, well, this is medicine costs too much.
We're just going to base we eliminate the patent rights. Well,
if you eliminate the patent rights, nobody's going to invest
money in developing new kinds of medicine. What a terrible idea,
(14:07):
truly killing the golden goose. And yet that is being
put forward as modern advanced economic thinking by a bunch
of people who would shrunk basic economics if they had
ever bothered to take it.
Speaker 4 (14:18):
Well, We'll be looking to pummel these ideas with both
of our fists, all four of our fists, in the
days and weeks to come, and we hope we can
stay in touch.
Speaker 1 (14:26):
Tim.
Speaker 4 (14:26):
This is it's frustrating me that a lot of this
is not counterintuitive, but it takes a while to explain
to people. Once you do, the light bulb goes on
and it's very easily understood. But for whatever reason, it
takes a little explaining and that's tough in politics. But
great to talk to you, Tim.
Speaker 3 (14:41):
Thanks a million, thanks guys.
Speaker 4 (14:43):
Tim Sander for our vice president for Legal Affairs at
the Goldwater Institute.
Speaker 3 (14:47):
Look for his books and read them. They're terrific.
Speaker 2 (14:49):
That explanation for why gouging is good in an emergency
for instance, like that, you know, changed my mind instantly.
Speaker 1 (14:57):
It's like, oh, yeah, that makes perfectly good sense.
Speaker 2 (15:00):
Really thought about it since same as when my dad
explained to me, well, socialism doesn't work as socialism sounded
good to me as a child when I was like ten,
And then he said, but then nobody would work very
hard if everybody gets the same result.
Speaker 1 (15:11):
Oh yeah, you're right, And then that.
Speaker 2 (15:12):
Was it, and I would just wish we could get
that information out to more people.
Speaker 4 (15:18):
Oh when Joe Getty Academy's open coast to coast to
educate your youngsters. That's lesson number one enroll now Armstrong
and Getty
He armstrong and Yetty.
Speaker 2 (00:09):
I remember why Tim the lawyer's name came up yesterday
we're talking about that amazing story of that poor guy.
Sheh and his wife are at a Disney property.
Speaker 1 (00:19):
He says that they.
Speaker 2 (00:21):
Told the waiter, look, my wife has peanut allergy or
fruit allergy or something like that really bad. So we
got we can't have anything that's touchingnuts or whatever. Anyway,
she ends up getting some food that's got the allergic
stuff in it, and she dies. She actually dies at
one of these Disney properties. So he's looking into suing.
Not for very much money. It was a fifty five
(00:41):
thousand dollars, so it's not like one of those you know,
you owe me ten million dollar things. But anyway, found
out that because he had Disney Plus like I do,
like you do, like everybody watched the Mandalorian does, because
he signed up for Disney Plus and clicked I agree
on the agreement thing at ten thirty at night once
(01:03):
without reading a word of the agreement. He had agreed
to no trials by jury that go after Disney in
any way whatsoever I did. I agreed to that by
watching Disney Place. Who knew that? And just all these
agreements that we all click on every single week on
something we haven't got the slightest idea what's in there
(01:23):
that needs to be fixed.
Speaker 3 (01:25):
That just one of several.
Speaker 4 (01:26):
Topics we can't wait to discuss with Tim Sanderfurr, vice
president for Legal Affairs at the Goldwater Institute, author of
a number of fabulous tomes, including, and this will come
up in a little while, the right to earn a living,
which is all about economic freedom.
Speaker 3 (01:42):
Tim, welcome, How are you, sir?
Speaker 5 (01:44):
I'm just fine, Thanks for having me back.
Speaker 1 (01:45):
Is there some course?
Speaker 2 (01:46):
Is there some sort of way we can do away
with these agreements that we all click on that are
one hundred pagees long, and we'd have to hire a
lawyer and spend a lot of money to figure out
what the hell they mean.
Speaker 5 (01:55):
Well, so, the legal term for that kind of a
contract that they call it a contract of adhesion, which
is when somebody holds out this document says take it
or leave it. Just if you want the thing, you
got to agree to it. There's no negotiation, just go
with it. And judges tend to be pretty skeptical of
contracts of adhesion because it is a dangerous kind of
(02:17):
situation where a person might not know what they're getting
into when they sign the agreement. And so I think
if you were to try and argue, as Disney is,
arguing that because you agreed to a completely different service,
one that had nothing to do with the injury that
actually occurred, because you agreed to arbitration there, now you
can't have a trial over here for this other thing,
(02:38):
I honestly think that's a hard argument to persuade a judge.
And now, of course it depends on the state. California
courts are very hostile to arbitration. They really don't like
the idea that you can be required to go to
arbitration instead of a court of law. But there are
lots of advantages to arbitration, including for people who are
suing a business. Arbitration is faster, it's overseen by people
(03:01):
who are knowledgeable legal you know, judges and lawyers who
know what they're doing and tend to be experts in
like personal injury and business and things like this, whereas
a jury is made up of just the twelve people
who showed up for jury duty that day. So there
are advantages to going by through arbitration, but forcing somebody
(03:22):
into arbitrations because they agreed to a completely different service
at a completely different time by a boilerplate contract of adhesion.
I think judges are going to be really skeptical of
that attempt.
Speaker 1 (03:33):
Joe used the example yesterday.
Speaker 3 (03:35):
I was about to lay that out.
Speaker 4 (03:37):
I was going to say, my daughter has just started
law school, has already learned, well, she's actually working in
the law for several years.
Speaker 3 (03:43):
That it depends is the all purpose answer for every question.
Speaker 1 (03:47):
It's legal.
Speaker 4 (03:47):
But the idea that I would I would get Disney
Plus to watch the Mandalorian. Then I go to Disneyland
and Goofy beats me into Wacoma with a steel rod,
and that's not actionable because I signed that.
Speaker 3 (03:58):
That's to pay where that happens, I guess.
Speaker 5 (04:02):
Yeah, Well, for one thing, you cannot waive your liability
for intentional or reckless harm. So Disney is not allowed
to say you're never allowed to sue us if Goofy
beats you up with a metal rock.
Speaker 1 (04:18):
Oh good.
Speaker 5 (04:21):
They can require you to go to arbitration instead of
a legal court. If you have a dispute over Disney
Plus as part of the user agreement, and you do
have what lawyers call the duty to read before clicking
the button. It is you are legally bound by these things,
and you have to be honest because otherwise modern industry
would collapse.
Speaker 1 (04:39):
Duty to read. But so like you, you don't have kids.
Speaker 2 (04:42):
But if you had kids, you go to the jumpatorium
like I do, or they jump on the trampolines and
you have to sign a waiver before your kid can
jump on the trampoline. And you go over to the
waiver and it's like thirty pages long, and I and
every other parent there just scroll to the bottom clicks
I agree, and your kids put on their socks and
they go jump. As a lawyer, would you read all
that stuff or what would you do?
Speaker 5 (05:03):
You absolutely have to read all this now, I will
say there's actually a case directly on that issue from
New Jersey from a few years ago where the kid
wanted to go to the skateboard park. Mom goes, takes
the kid to the skateboard park. They require him to sign.
The parent to sign this waiver, and the court said
that the waiver was not binding because you cannot expect
a parent to resist the begging of a child. Well,
(05:29):
it's so ludicrous. It's like oh, I don't have any
responsibility at all because I can't control my kids.
Speaker 4 (05:34):
No, you don't understand. It's the begging doctrine goes back centrist.
So I'm picturing tim I'm picturing the alternative. There we
are at the jumpatorium, and I'm reading this pages of contract.
Speaker 3 (05:45):
Now, I say, oh wow.
Speaker 4 (05:47):
Sun, paragraph thirteen highly problemly, give me a second. Here,
I bust out my cell phone. I called her legal department. Oh,
some turns out there a subsidiary of paramount Attractions. Anyway,
I need legal police, your legal department. Yeah, wait, thank
you very much. Then you know an hour later, yeah, yeah, yeah,
paragraphs thirteen specifically, you'll get back to me.
Speaker 3 (06:05):
Okay, all right, son, we've got to wait a while.
Speaker 2 (06:07):
I mean, come on, we're going to go go back
home because I am not happy with fourteen C. I mean,
that's just so, that's so unrealizing. You just said you've
got to read that stuff. Nobody's ever going to do that.
Timo's imposs yack.
Speaker 5 (06:18):
You know what they call that deck, They call that
responsible citizenship. That that's your obligation when you're handed a
big contract to read it before you sign it. So
you know what you're doing.
Speaker 1 (06:29):
So this is this nothing?
Speaker 2 (06:30):
Well, you're you're a libertarian, So this is one of
the reasons your name came up yesterday. I was thinking,
so is this a free market solution in theory that
we parents would not click I agree, and we would
not jump there, And so the jumpaitorium across the street
that doesn't have such a long agreement thing would get
more business? Is that the only hope.
Speaker 5 (06:49):
That the answer is mostly yes. Now, the reason why
it's not entirely yes is because, as I said, you
cannot waive your liability for reckless or intentional harm to somebody.
So you cannot put into that contract I'm allowed to
shoot you in the head or something, you know, but
you can waive liability for an accident. I mean, that's
everybody knows that there are risks associated with thing, and
(07:10):
and the person who chooses that has to bear that.
Speaker 1 (07:13):
Well, yeah, it's funny.
Speaker 2 (07:14):
I'm on both sides of this issue, actually, because the
reason they need to have those long legal agreements is
because of stupid rulings that have come out. And yes,
my kids jumping on a trampoline and sometimes when you
jump on a trampoline you break your arm, and it's
not the fault of the damn business. It's just something
that comes with jumping on trampoline. So you shouldn't be all.
Speaker 5 (07:31):
Alternative to the alternative to letting businesses wave their liability
is you don't get trampolines at all.
Speaker 1 (07:36):
Right, right, right, right?
Speaker 4 (07:38):
So then if if Goofy were to beat me down
with a metal rod, that's one case. If Dumbo, for instance,
saw a mouse and panicked and trampled me, that that
would be entirely different.
Speaker 5 (07:49):
It would be an entirely different matter, because it depends.
Now here's another important point is that a lot of
time I mentioned California cups really hate arbitration, and the
reason why is because they tend to think that arbitration
favors the evil big business and that's bad and we
need to protect people against evil big business. And yet
the same people who are hostiles of arbitration are often
perfectly fine with administrative agencies holding hearings of their own.
(08:14):
Where they are the people in the government agency is
the judge as well as the prosecutor. They're perfectly fine
to that. They don't see that as unfair. They just
see arbitration is unfair. That's really inconsistent and drives me crazy.
Speaker 3 (08:26):
Well, that's because they don't have principles.
Speaker 4 (08:28):
They take on and put on and take off their
principles like windbreakers on the left. It's in a third
of California law, as you know, exists to enriched trial attorneys.
But Tim Sandafer of the Goldwater Institute joins us. Tim
has been a leading voice of economic freedom for decades
now in the United States.
Speaker 3 (08:46):
We're all getting old. Tim, I don't know if you've noticed.
Speaker 4 (08:49):
Help us understand why this policy of ending corporate greed
and gouging is so stupid.
Speaker 5 (08:57):
Yeah, it really is stupid, and it is incredibly counterproductive.
Price controls equal shortages. And the reason why is because
you have to understand how prices work. People have this
idea that prices are just sort of arbitrarily slapped on
things and that it's just greedy people putting numbers on things,
and that's not what prices actually are. Prices are signals.
(09:17):
When you see a price tag, think of it as
something like the sphedometer in your car. It's just measuring something,
that's all. It's not somebody trying to rip you off.
It's telling you how much resources how much work, how
much raw materials and things go into a product as
compared to the other things that the labor or raw
materials could have been used for. That's all a price is.
(09:39):
So when a price goes up and then you come
in with the government and prohibit people from charging what
the thing actually costs, all you're doing is silencing that signal,
which causes confusion throughout the entire economy and has terrible
ripple effects. And it is absolutely true that you cannot
just control the price of one thing. If you try
to control the price of one thing, then people are
(09:59):
going to turn the resources into some other thing, and
then you have to control the price of that also. So,
for instance, if you were to try to limit the
price that milk could could be sold at, the dairies
are not going to make back the money that they
need to keep operating if they sell milk, so instead
they'll start making cheese and they'll start charging more for
the cheese. So then you have to control the price
of cheese. So then they start making yogurt, So now
(10:20):
you've got to control the price of yogurt. And it
keeps going on and on like that. So it's a
terrible idea that causes shortages because if I don't know
that I can make a whole bunch of money by
making them selling plywood, then I'm not going to make
and sell the plywood. And now people can't get the plywood.
And the reason why is because I didn't get the
signal because the government prohibited people from telling the truth
(10:42):
about what the prices are. And that's that's all price
controls are is It inrohibits people from telling the truth
about what things actually cost. And the reason the government
does that is because it's the one at fault for
raising the prices to begin with, and it doesn't want
people to know that, so it tries to silence it
by blaming businesses for charge what things are actually worth
when the government is the one responsible for making your
(11:04):
dollars worth less to begin with.
Speaker 4 (11:07):
Well, and it's one hundred or maybe ten thousand times
more complicated, as anybody who's ever read eye pencil could
tell you. Because that dairy farmer that you used as
an example, what if all of their costs stay the same,
but because of some sort of shock in oil prices,
the trucks that bring their milk to market become much
much more expensive to use. Then the government is involved
(11:27):
in trucking prices and shipping prices, and soon gasoline prices
and the rest of it. It's doomed, and everybody actually right, Yeah,
you know, I offered up a paraphrasing of your explanation
of why gouging quote unquote gouging is not a bad thing.
I use the example of chain saws after a hurricane,
(11:48):
but I wasn't nearly as eloquent or knowledgeable as you
would be.
Speaker 3 (11:50):
Can you give us the thirty second version of that?
Speaker 5 (11:53):
All that the prices do, when the prices go up
and people start charging one hundred dollars to use a
chainsaw because of the hurricane, all.
Speaker 3 (12:00):
That does is signal.
Speaker 5 (12:01):
But there's a lot of demand for hurricanes, a lot
of demands for chainsaw, and so all the chainsaw companies
see that signal and they're like, oh gosh, we need
to ship a whole bunch of chain saws down to
Florida or whatever. So then they do. Now, if you
prohibit that, if you prohibit people from sending that signal,
if you silence the truth about prices, which is what
price controls do, then the chainsaw companies never see that message.
(12:21):
They might as well sell their chainsaws in Nebraska or
Washington State. So you got a whole bunch of chainsaws
in Nebraska and washingtons in state, and you don't get
them down in Florida, where you actually need them, because
the prices weren't allowed to go up, so nobody got
the signal that that's where they need to send their chainsaws.
This it's a simple matter, but it gets obscured because
politicians want to fool you into thinking that businesses are
(12:42):
evil and greedy when they're the ones that are out
there printing money as if it's no problem at all
making all of your dollars worth less, which means people
have to charge more to get what things are worth.
And then the government doesn't want to admit that it's
the one at fault. Harris, for example, having been the
tie breaking vote in favor of the Print the Money Act,
and so she wants to confuse people about that by
(13:03):
blaming businesses and silencing the truth about price.
Speaker 2 (13:06):
You know, that's one of many economic principles that the
first time I ever heard, I was like, oh, okay,
and that makes one hundred.
Speaker 1 (13:13):
Percent sense and changed my mind completely.
Speaker 2 (13:17):
It troubles me that a lot of this stuff polls
so well, the punishing, gouging or whatever.
Speaker 5 (13:23):
Unfortunately, government gets away with it all the time. You
asked about whether it's legal, and I'm sorry to say
that courts have allowed various forms of price controls since
at least eighteen seventy six. So unfortunately, there are ways
that the government can do this for Just take one
example is so called march in right. This is a
provision in federal patent law that says that if the
(13:44):
government decides it wants to, it can allow some other
company to use your patent without your approval. And most recently,
the Biden administration is proposed using this power to impose
price controls by saying, well, this is medicine costs too much.
We're just going to base we eliminate the patent rights. Well,
if you eliminate the patent rights, nobody's going to invest
money in developing new kinds of medicine. What a terrible idea,
(14:07):
truly killing the golden goose. And yet that is being
put forward as modern advanced economic thinking by a bunch
of people who would shrunk basic economics if they had
ever bothered to take it.
Speaker 4 (14:18):
Well, We'll be looking to pummel these ideas with both
of our fists, all four of our fists, in the
days and weeks to come, and we hope we can
stay in touch.
Speaker 1 (14:26):
Tim.
Speaker 4 (14:26):
This is it's frustrating me that a lot of this
is not counterintuitive, but it takes a while to explain
to people. Once you do, the light bulb goes on
and it's very easily understood. But for whatever reason, it
takes a little explaining and that's tough in politics. But
great to talk to you, Tim.
Speaker 3 (14:41):
Thanks a million, thanks guys.
Speaker 4 (14:43):
Tim Sander for our vice president for Legal Affairs at
the Goldwater Institute.
Speaker 3 (14:47):
Look for his books and read them. They're terrific.
Speaker 2 (14:49):
That explanation for why gouging is good in an emergency
for instance, like that, you know, changed my mind instantly.
Speaker 1 (14:57):
It's like, oh, yeah, that makes perfectly good sense.
Speaker 2 (15:00):
Really thought about it since same as when my dad
explained to me, well, socialism doesn't work as socialism sounded
good to me as a child when I was like ten,
And then he said, but then nobody would work very
hard if everybody gets the same result.
Speaker 1 (15:11):
Oh yeah, you're right, And then that.
Speaker 2 (15:12):
Was it, and I would just wish we could get
that information out to more people.
Speaker 4 (15:18):
Oh when Joe Getty Academy's open coast to coast to
educate your youngsters. That's lesson number one enroll now Armstrong
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