Carol Roth | The War On Small Business & How To Win It | OAP #25
Chase Geiser is joined by Carol Roth.
Carol Roth is a “recovering” investment banker, entrepreneur, TV pundit and host, and New York Times bestselling author of The Entrepreneur Equation. She has worked in a variety of capacities across industries, including currently as an outsourced CCO, as a director on public and private company boards, and as a strategic advisor. She advocates for small business, small government, and big hair.
Her Book, "The War On Small Business"
For years, government bureaucrats have been looking for ways to destroy small businesses. With coronavirus, they finally had their chance.
In 2020, the American economy suffered the biggest financial collapse in history. But while Main Street suffered like never before, the stock market continued to reach new highs. How could this be? The answer is that government had slapped oppressive restrictions on small businesses while propping up Wall Street and engineering a historic consolidation of power and wealth.
This isn’t a new problem. During the last financial crisis, Washington bailed out large banks, saying they were “too big to fail.” When the federal government finally pushed out the CARES Act in 2020, it clearly favored the wealthy and well-connected, showing that small businesses were too small to matter. People across the political spectrum constantly complain about the tyranny of big business, and they’re not wrong. However, too many think government is the solution. In reality, government is the problem.
In The War on Small Business, entrepreneur Carol Roth unveils the many abuses of power inflicted on small businesses during the COVID-19 pandemic. Small business owners were thrown in jail for trying to make a living. Individual rights were discarded. Big government did what it does best—intentionally protect the rich and powerful. And if Americans don’t wake up and stop it, politicians will continue to produce policies that intensify their war on small business and all that stands in the way of centralized power and control.
EPISODE LINKS:
Chase's Twitter: twitter.com/realchasegeiser
Carol's Twitter: twitter.com/caroljsroth
Carol's Book: https://bit.ly/TheWarOnSmallBusiness
PODCAST LINKS:
Anchor: https://anchor.fm/oneamerican
Patreon: https://www.patreon.com/IAmOneAmerican
And again, your flexibility and all that great stuff.
It's been a little bit of a whirlwind, as you can imagine last couple of weeks.
So it's a good thing.
Congratulations on your uh new book.
I um I've been summing through it and I really enjoy it.
I uh got the final version of it this morning so that I could uh kind of um peek in and see what's going on before we spoke.
Cool, cool.
Yeah, it's been uh it's been the reception too, it's been really good.
There's uh there have been some challenges along the way in terms of marketing y stuff, but uh the the actual critical reception has been good.
Yeah, that's good.
So um I noticed that a lot of the book um is sort of an analysis on what happened last year.
Uh so what was it like putting this thing together in such short notice?
Um yeah, so I was actually approached by HarperCollins to do a deep dive onto sort of the economic impacts of the last year, and this is the book that came out of it.
Um, and you know, when I agreed to it, I didn't realize that it would be such a Herculean task because I had written another book and I'm a pretty quick writer, but things changed so quickly, and you know, more information kind of came out along the way that I wrote like three and a half different books during the course of the pandemic, and this last sort of iteration ended up being like 160,000 words, and my publisher was like, eh, no, you can't do that.
Um so we called it back to the around 90,000.
But as you as you know from having the book, um, it's you know, very highly sourced, so you can't go more than a couple of paragraphs without having a a source that's listed.
And it was just um just a really a big challenge.
But at the end of the day, you know, I'm glad I'm glad I had a productive pandemic.
And uh I'm glad that I have this for the history books because we're already seeing the media and government try to rewrite what has happened, um, particularly from an economic standpoint, particularly from what's happened to business from this sort of you know giant wealth transfer that we've seen from Main Street to Wall Street.
So to have an accurate historical record that's there day one, uh, I think is going to be really important for years to come.
Yeah, um during the pandemic, my family uh we did movie night every night and we would watch a different movie, and uh everyone took turns picking which movie we would watch, and you couldn't veto, so it was kind of cool.
And uh one of the movies that we watched was The Big Short.
And in the end, there's that scene where um I think it's Ben Rickert uh um basically says, Did you know that every 1% unemployment goes up, 40,000 Americans die?
And they're like, Oh, we didn't know that.
And I was like, man, I wonder if that was just Hollywood.
And I looked it up and there was a study in the 80s that showed that every 1% unemployment goes up, 36,000 Americans die.
And um, you know, with the population increase, I'm sure it's closer to 40,000 now than it was in the 80s.
And so it's so crazy to me how this whole thing was justified as to save lives.
And uh people don't consider the echo the health impacts of uh locking everybody down, not only because of suicides and stress-related heart attacks, but also because people were reluctant to get tested for cancer or screened during this time.
So it's crazy how um we sort of threw out the baby with the bathwater, I think, in a lot of the ways that a lot with a lot of the things that we did last year.
Yeah, and I would offer as well um that I don't need to convince people whether they thought we should have lockdowns or not.
I just need to convince people that the treatment was unequal.
You know, we spent you know more than six trillion dollars last year, you know, saving different entities, and that doesn't even account for what the Federal Reserve pumped into the markets to prop up the stock market and and transfer value um from you know these smaller entities and savers and retirees and people who have dollars to these big companies.
Um, but uh, you know that there was nothing that was done for the the small business on the same scale or scope.
You know, they got a fraction of that money.
So if you want to say, well, we need to take action, quote unquote, for the good of society, there is under the constitution a concept called eminent domain where the government can take your property, you know, for society, but they have to Compensate you appropriately.
So although the only hurdle you have to jump over if if you're somebody who believed that something needed to be locked down to say, well, why was it these businesses?
Because it wasn't based on data and science.
It was based on cloud connections.
And why were they the ones that then weren't compensated appropriately for doing so?
And I think that's you know, the big issue here is when you're looking, we weren't all in it together.
We didn't have the same stakes, we didn't have the same outcomes, and it wasn't based on free market principles, it was based on central planning.
And that is the big point of contention here and what it's doing is it's taking our economy that was divided in half before the pandemic, half of the economy just about was the 30.2 million small businesses, and half is like 10 to 15,000
big businesses, and it's transferring more power to and more concentration to these handful of big guys, and that's taking away wealth creation opportunities and economic freedom from average Americans.
And you would think everyone would be on board that that's not a good outcome that we want to have happen by government mandate.
Do you think that was something that was done intentionally, or do you think it's just sort of a bad side effect of the decisions that were made?
So I try to lay this out in the book as a choose your own adventure.
And uh and I don't want to corner you into saying something you don't want to say or anything like that.
And I don't know.
I'm just asking because you're the expert.
It's important.
And so I lay out a case where you could say the government is incompetent.
I could lay out a case where they say, well, the small business are just too small to matter, so it wasn't necessarily intentional, but they were just more of like the canon butter.
And I lay out a case where you could say that it was completely intentional and that this has been going on for a long time and it really benefits the politicians to have a handful of these big players to deal with instead of all these small independent guys.
And I again, I don't really care which of the three that you choose because the outcome is the same.
And unfortunately, people are very, you know, focused and honed in on intentions, and that's you know where we get in trouble.
You know, they say the road to you know, where is paved with good intentions, and so much of policy is driven by the fact that they think that you know these central planners are going to step up and save society, and this Milton Friedman uh always used to say, you know, where are you gonna find these angels to organize society for you?
So, you know, whether it's you know, incompetence of structure, whether it's just you know small businesses didn't register, whether it's an intentional attack, you can make that decision based on you know very detailed cases that I lay out, but the outcome is the same no matter what.
And so that's what should bring people together, regardless of you know where you are on the political spectrum.
Nobody should want to see those outcomes.
Well, and it's interesting that you bring up uh Milton Friedman because there was a chapter uh in your book or a section in your book rather on how greed is good in capitalism.
And it made me think of Milton Friedman because you you know he's famous, he's got YouTube videos of doing QA's with college kids and uh some of his responses are kind of viral.
And um, one of them, one of the questions was about greed and you know, is it moral for people to be greedy?
And he's like, You think people aren't greedy in Russia?
He's like, Do you think people aren't greedy in these communist nations?
It's like we need to deal with the fact that humans are naturally greedy, and then ask the question, what systems are best to operate with knowing that greed exists, you know, and it seems like capitalism is the best because when Henry Ford wants to make as much money as possible, he finds a way to make cars as affordable as possible.
Yeah, and I I have a saying around this that um you know, capitalism actually is the only system that harnesses people's greed, where socialism or you know, any of the other isms that you want to say basically just pretends that it doesn't exist, and that's the differential.
Like if you actually think that people are fundamentally greedy, then capitalism is the only system that has those inherent checks and balances as companies try to seek profit, and I you know lay out lay out the case for that in the book as well.
So uh, are you concerned um with the increase in size of the M1 money supply last year?
Do you think that we're gonna see some real inflation with that?
Or do you do you buy the argument that it was, oh, it was just liquidation of savings accounts?
No, so yeah, I mean, obviously, I'm very concerned.
Um, what the Federal Reserve has done, um, not just in the last year, but you know, starting really with the Great Recession in terms of printing money, holding down its interest rates, putting assets on their balance sheet, you know, all of these things that are interconnected, and as you said now, um the M1 and M2 money supply.
Um, you know, this this is like a crazy experiment.
We don't know exactly how it's gonna end.
We just know that you know when you interfere in the market, you know, at the behest of a handful of people, they never think through all the consequences, and then we end up paying the price.
So, you know, we could have um stagflation, something I've been talking about for a long time where the economy stagnates, but you still have you know price increases and wage increases, um, which is something that doesn't happen very often, but you know, we saw it like in the 70s, 80s time frame, and you could be an outcome here.
Um, you know, we could just have you know a massive devaluation of the dollar and lose status as the reserve currency.
Counterpoint to that is I'm not sure at this point what replaces it.
So like that that's our saving grace is we're the skinniest kid at Vatcamp, but that's not really a way to you know go through our policy.
We're supposed to be a leader here.
So I we will eventually pay the price.
And the problem is it's kind of like driving your card towards the edge of a cliff is like you know that it makes sense to stay far away from it, and as you get closer, people go, well, see, I still didn't fall off the edge of the cliff, like it's fine, it's not a big deal.
But at some point, like you just go with that extra little bit because you had that false confidence that you were getting close but you didn't know where it was, and eventually you fall off and there's nothing you can do about it.
And so I am very concerned um, you know, in terms of you know what that ends up looking like.
But what we do know that has happened, which you know, everyone should already be concerned about, and part of the things that I'm trying to educate on with this book, is that they've already made it incredibly difficult for people to um you know obtain and retain wealth.
And I know you and I were just going back on Twitter uh before we jumped down here about this, but all of the the areas that they have jumped into in terms of making it harder to create wealth for the average American, has um, you know, is is highly connected to the actions of the Federal Reserve.
So whether it's you know the inability to purchase a house or having to compete with BlackRock, who's getting basically free taxpayer money to be able to compete with you on that, um, the artificial bump in the prices of stocks so that you have to take more risk to earn return on your money,
to you know, own a small business, which they're shutting down by mandates, and then obviously making it harder for small businesses to compete with these big businesses that have access to debt capital and other capital, um, you know, and so on and so forth, that they're already having a big impact.
And unfortunately, it's getting blamed on capitalism when it's entirely not capitalism that's causing these issues, it's central planning that's causing these issues.
Yeah, that's really interesting.
And you know, I've often wondered because it's so complicated to consider, but I've often wondered the extent to which these um major corporations like the Amazons of the of the world are um integrated with the government because you know we've had a lot of conversation around censorship since you know, given all the political upheaval that's been going on the last year or so in the United States and uh with the election and everything.
And um, you know, there's an argument that you know, hey, if we if we force these platforms to host voices, then we're violating their freedom of speech um rights to choose who they want or who they don't want on their platform.
And I started thinking on this line.
I'm like, you know, it's you could almost make the case that some of these major corporations aren't really private.
First of all, they're probably traded, but second of all, there's there's there's such behemoth in the market that they really respond to government inquiry.
Like if you if if anybody in the private sector wants to get a meeting with Zuckerberger to get Zuckerberg to speak, you're gonna have to pay hundreds of thousands of dollars, right?
Uh, but when Congress asks him nicely to Come uh talk about Facebook, he shows up and it's like who's it's almost as if the government sort of because of their leverage of their regulation leverage, their ability to threaten antitrust regulations on these major corporations can really kind of steer the ships of these of these businesses in a way that they can't, a small business.
Yeah, I actually think it's the opposite.
I actually think the big businesses are working the governments, um, and you know, they have the money and the the clouts and the power behind the scenes, and so I think they're using that to do everything from shaping regulation um to creating these anti-competitive barriers.
You saw Mark Zuckerberg came out and said, please regulate us more.
Amazon's like, oh yeah, I think we should have the $15 minimum wage.
Like they're pushing these things because they know that that's anti-competitive.
Um, one of the things that I talked about in the book, you know, as an example of this is what happened coming out of the Great Recession with Dodd Frank, which was legislation that was meant to reign in the big banks after they took on you know far too much risk and ended up, you know, over upending the economy in a way that affected all of our lives.
And uh, you know, they got a bailout, they were told they were too big to fail, taxpayer money, but then they got the slap on the wrist.
They got r regulation, right?
That's good, guys.
That we we got that regulation on them.
But what did the regulation do?
It it basically took the average number of small community banks starts from like an average of a hundred a year to three.
It took a bunch of existing small community banks and uh put them out of business because the smaller banks are the ones that lend to small businesses.
Small business lending just went down, you know, the toilet basically.
And then the big businesses with all this extra access to free capital from the Federal Reserve intervention, uh, were able to continue lending, and big business lending went through the roof, and you know, these big guys didn't have the competition.
So we were supposed to be raining in the big banks.
We gave them free reign, and that's the cycle that that is enabled over and over again, you know, which is why um you know these big powerful businesses in Kahoots with government is a bad thing.
And again, I have nothing against big business as a concept.
Like if you get there on your own through competing in the market and you have you know better innovation, whatnot, like good for you.
But the place that we're at right now is a place that we're where it doesn't look like a free market, it looks like cronyism.
And so they're getting the playing field, you know, significantly tilted in their direction, and that's the part that everybody should take issue with because we're no longer in anything that really resembles a free market.
So what's the solution?
Because it's it's not it's not politically um uh convenient for our leaders to really pull back government spending because that means pulling back government programs and then pulling back government programs can often mean disgruntled constituents, right?
So, you know, I I'm sort of of the position that the spending is the problem, and the more we spend, the more you borrow from the Fed, and the more we borrow from the Fed, the more they print, the more they print, the poorer poor people get, and the richer rich people get, right?
It makes sense to me, but I spent hours and hours researching and reading about it.
Yeah.
And so, so uh how do we how do we solve this problem?
Like what are some practical things that we can do to um to correct so we don't have to just you know wait for the world to end in order to start a new one?
Yeah, this is uh this is the multi-trillion dollar question, guys.
Um, you know, certainly on a small level, you obviously vote with your dollars and support small businesses.
I get a lot of people who tell me how much they care about small business and then you know, do all of their shopping through Amazon.
And again, there's nothing wrong with Amazon.
It Amazon enables 1.9 million medium and small business on their platform.
But if you want that to be your only choice, then you know, that's fine.
But if you don't, maybe you'll be thinking through that when you're thinking about how to allocate out your dollars.
That's a very easy thing.
Um, I think we need to push for a lot of reigning in.
Um, one of the things I've been suggesting is you know, using our legal system more effectively.
We've had so many laws, and and I have the exact numbers in the book, so I'm gonna try and remember them off the top of my head, but look in the book to get the exact numbers.
But there were more than a million laws that were passed at the state level in like a 50-year period that didn't even include the last 20 years, and like a hundred or two hundred of them have been challenged in court.
Um, now on the federal level, it's something like like was like 12 to 15,000 laws and 20,000 regulations, I think.
And again, same kind of thing, like I like a tiny little like sprinkling been challenged in court.
We need to start challenging these things that are in the way and subjugating our individual rights, and you know, put put the kibosh on them and also at least put up the roadblock to say if you're a politician, like don't think about going down this road because it will be challenged.
Um, I think we need to put boundaries around what it is these people in government can be doing.
I mean, my God, the moral hazard there, and that includes the Fed.
Like the fact that they've been able to do what they've been able to do at the scope and at you know, the duration is insane.
And so, you know, I know a lot of people are abolish the Fed, but then you have the government becomes in charge of these things and potentially an even worse outcome.
So I think clear boundaries are a lot more appropriate than just like wholesale, like let's get rid of it and then worry about the monster that like replaces the monster that exists.
I think that's a good first step.
And then I think we need to think hard about how we can take free market principles and apply them to start bringing down government power.
Um, I did not talk about this in the book because again, of a lack of words that my editor was let me have, but you know, something like social security.
If you believe in a social safety net and you feel like people aren't responsible enough to be able to save for themselves, you could have the government mandate uh a provident fund.
So instead of you taking your payment and your employer's payment and paying it to the government, who then goes out and spends that money and leaves an IOU in its place, and that IOU doesn't mean anything because it's basically an IOU on other taxpayers' money because the government doesn't produce goods and services.
Um instead, like what if you paid in and you own that money?
And instead of getting like some crappy like government IOU that has next to no interest, you could invest it in the stock market or invest it in a home or those kinds of things and be able to have like you know, ownership over this money that you're putting away.
And then for the people who need the extra help, um, okay, maybe a portion of that employer money goes to fund the accounts of people who aren't currently working.
So we, you know, we have a benefit.
There's a little bit of a social thing, but we have more free market tenants in there.
We have more transparency, you get to direct that money, you have ownership, and it takes away the government's ability to be in the middle of that process and to spend it and whatnot.
So the the outcome is I would actually argue better, but at minimum exactly the same, but it takes that entire piece out of the government purview.
Wouldn't that be a better outcome that's much more aligned with capitalism, but still has a social safety net?
So I think it's like a lot of us have identified the same problems, like whether you're a progressive or a conservative or like someone in the middle like me, but it's just the solutions and and people need to get on board that like more government is not the solution to all of these problems that the government has created, and it certainly is not going to be the answer to wealth creation for more people.
So basically are you saying that in lieu of social security mandates, you could you could have a portion of uh American income go directly into uh like say uh a list of accepted index funds, or you can spend it on property, or you can spend it on higher education, but you cannot spend it on you know uh a Lamborghini, right?
You have to you have to fund your own account, and this is the account is your social security for whatever, you know.
I like that a lot.
I like that.
Right.
So, like, I mean, that's you think business would like it too because it would it would pump money right into their um I mean you would think that would be you know an obvious thing that you know, and again, not taking away the social safety net, you can still have the employer part of the employer funding go to to help out people.
But like for me personally, like if you said to me, okay, Carol, so we still have to fund like all these like people who are in Social Security who like we've conzi schemed already.
So like would you if we took your employer match to take care of those people, but you gotta keep your money that goes in, like would you opt out of the system?
And I'd be like, yeah, go for it.
Like take my take the employer money, deal with that.
Because like you know, there's nothing in there.
So like why wouldn't you do that?
So I feel like if you were to explain it to people, you could get over that hurdle and you can make that happen, and you could give that to people in terms of ownership.
Now the problem is politicians don't want that, because that takes away their power, and why are they politicians because they want power?
It's not to take care of you, they don't give a crap about you.
So it's like it's just kind of, you know, it's the same thing.
Had this discussion with somebody about um free market health care.
They're just like, you know, man, like, you know, how many things would be solved if we had universal health care?
And I was like, well, no.
There would be a lot of problems if we had that.
We we should have a system where everybody has access to health insurance and and and the like, and it should be the same way you access anything else.
And it's ridiculous that health care is tied to your job.
And again, that tilts the playing field towards the big guys who can cut these deals with the insurance providers and get these, you know, Cadillac plans and whatnot.
But if we said enough's enough with that, big guys put put your people into the same, you know, public market that everybody else has, and you really had that big underwriting pool and the people in government the same thing.
And me and you, like we all were in the same, you know, free market where we had free choices, then everybody should have access to it.
You have the government out of the way, you don't balloon up the cost and you know create rationing.
Um, and then you remove the issue that we all agree is the issue.
So it's it's about taking the free market tenants and trying to apply them to problems.
And you can only do that when you have that fundamental understanding of government being the problem and what it is that they have done in terms of this country and frankly, many others around the world throughout history.
Yeah, and people talk about how greedy sort of the small business push is, and it drives me nuts.
And I'll give you an example.
You you brought up healthcare, and it made me think of um uh my wife and I. So my wife and I had a daughter in January, and I'm a small business owner.
So congratulations.
Thank you.
And so we have um our uh I have my own insurance for our family through my business, right?
But it's my business, it's not my job.
Right.
So between premiums and out-of-pocket expenses this year.
Um, because there was our baby was born premature and there was a C-section and all this stuff, everything's fine.
But uh we're gonna spend $18,000 in premiums this year.
And then on top of that, we're gonna spend close to $30,000 out of pocket in terms of max uh out of pockets on our policies.
Because I didn't anticipate we were gonna have an emergency, so I, you know, high out of pocket.
So that's almost $50,000 just in healthcare for me as a sole proprietor, right?
So in order to spend $50,000, I have to make a hundred grand because of the income taxes.
And so it's like people don't understand that like corporate income tax or corporate taxes, the the big guys don't care.
They snuff out the guys like me who have to make a hundred grand just to keep his family alive, uh you know, and then not to mention pay a mortgage and actually have a life and and you know, live.
So it's I I really wish that because the word corporate is associated with people think of you know massive buildings with cubicles and millions and millions of dollars when they hear the word corporate, but corporations include small businesses, it's it's it's the little guy, and I and it's a and you mentioned this in your book too.
It's 99.9% of them, right?
I mean, it's the most of the business entities are small business.
And on the flip side of that, just because you're corporate doesn't mean you're free market.
So like you know, these these things just like private is a part of it, but it's not the full story.
And so you have to really you know take the time to understand the story, which is part of what I'm trying to do and and educate people about.
Yeah.
So what are your thoughts on um sort of the dynamic between uh China and the United States in terms of trade?
Because one of my concerns is that you know, the these really big players benefit obviously a lot from the very cheap labor in China and the low cost pro uh production in China.
Yeah.
Um, in a way that small businesses really can't because there's not the scale to import uh at the level that these big players do.
And you know, I think we've seen a turn in small businesses towards service-based business because there's less uh upfront investment required, there's less overhead.
Um what what do you think the solution is in terms of what we do what we should be doing with our trade with China?
Because I'm a little bit radical on this.
I I tend to think that we should just cut it off.
And I know that that that's reckless, okay, and it could be rash, but I I'd love to hear your thoughts as someone who's kind of looked into all this in a in a more extensive way than I have.
Yeah, so this is one of my favorite chapters in the book, chapter 12, and um it's a lot of people's favorite uh as well as chapter five about the Fed, those seem to be like two of the like really standout chapters.
Um, so you have to understand that the problem with China is the same like any other central planning issue we've gotten into, where the government thought they were so smart and oh, or you know, China's got all these people and we're gonna turn them into capitalists and we're gonna get all this great trade.
But China is a communist country at the end of the day, they don't value individual rights, human rights, and that includes property rights.
So when you have a player who is coming without the same set of guidelines that's required for free market capitalism, you can't have free trade because it's not you're playing two different games.
And so that's my problem as a free marketer.
Yes, I want to have open and free trade and be able to access it, but you need to have the rules the same.
So they blew that in the beginning by not requiring that up front, and they you know march China right into permanent um normalized trade relations and then right into the World Trade Organization, and they basically exported capitalism to them.
Like they moved from full communism to embrace more, not full, but more capitalism to their huge benefit at the same time that we went more central planning.
Okay, we're gonna we're gonna make the rules of the game and you're gonna follow them.
And you're right.
I mean, it that helped big companies who were able to take advantage um from either an export or import standpoint, but doesn't help the small guys.
So, yes, we imported some deflation, but that came with you know wage suppression, it came with less small business innovation here in the United States, um, and a whole host of other issues, including the big intellectual property theft issue,
because again, they don't value intellectual property and I go into this whole thing about Shenzai, uh, which I may have botched this the uh the articulation of that name, the the pronunciation, but you know, basically this is part of the Chinese culture.
They are replicators, they are not innovators, that's what they do.
And so you know, they have no qualms about going on to Alibaba or AliExpress or you know, whatever the platform is, finding a small business and basically in some cases, and I have an example in the book, taking the person's daughter who's modeling the little baby outfit, using that as their picture, and then knocking it off and selling it and just you know, completely doing that.
So we've created this really big issue where the trading is not equal, and it's not about a trade, a traditional trade imbalance, it's not about exporting importing, because that doesn't matter if you know we're on the same wavelength.
What does matter is that we can't access China without having the appropriate partners in China.
So they you know, they we can't have ownership there, like they can have ownership here.
Um, they are violating intellectual property protection, which we don't have on the other side, so on and so forth.
So all these issues where the trade isn't the same.
And yeah, I feel like if we cannot make that trade the same, the first thing I would have done, um, and I've talked about this on TV for years, is I would go after since they're actively filing um patents around the world, which is hilarious from an entity that supposedly doesn't value property rights, right?
Now they're trying to protect intellectual property, um, is that I would go after their IP and I would just make it an all-in-void.
And I would limit the ability um for people who are communists, not gonna say Chinese because they're Chinese Americans and Chinese from all over the world.
But if you are comp part of the communist party, like you can't invest here.
Like I the same rules that they have set up, I would mirror those until we can get to a meeting where there's something that actually looked like free trade that would benefit both parties equally.
But yeah, that's probably not going to happen.
So it's a good intellectual exercise.
But and I think you know, that was kind of the road that Trump was going down.
But again, I he went in like the tariff route instead of the IP route.
And then, you know, I talk about this in the book.
There were things like if you had a wall candelabra and it had like three sconces on it, it was tariff exempt, but if it had two, it wasn't, or you know, like whatever it was, it made no sense.
So that's not a good outcome either.
We want to have the government out of the way, we want to have a free play, uh free and fair playing field, but it needs to have those rules set up, and the rules should be real like easy.
It shouldn't be that level of specificity.
When you get into that level of specificity, you're always gonna have picking of winners and losers, and that's you know, the big problem here.
That makes sense.
So I have to ask.
Yes.
Your criticism of the Federal Reserve coupled with your advocacy for decentralization.
Yes.
Do I want to put everything down?
Is this the question?
What are your thoughts on cryptocurrency?
Yeah, so gosh, cryptocurrency is fascinating.
Um, so first of all, I'm old.
Um, so look these let these young looks fool you.
I'm an old.
So you know, there's part of me where I'm just like still figuring it all out and and didn't like was busy with other things when it kind of came to be, and and I'm a little a little behind the curve in a sense, in terms of like investing.
Um, but from uh like an intellectual standpoint, I find it to be very interesting.
I completely understand the thesis.
Um, you know, obviously, as you mentioned, completely aligned with decentralization, getting back at the Federal Reserve, whatnot.
I think that the structures, at least as far as I can tell, that have been created, um, you know, whether it's Bitcoin or Ethereum or whatever it is, um, so if you think of it as a currency, and a currency usually has you know, three requirements, it's a unit of exchange, it's uh store of value, um, and uh why am I completely uh you know medium of exchange, unit of account, and store value.
There you go.
I blended to a lot of things.
What's the difference between a unit of account and a store of value?
So a unit of account is like basically this is worth X units.
So we all know a unit of account is dollars, like nobody's putting you know Bitcoin as like the unit of account these days, right?
So like it's not it doesn't mean anything, or even like a measurement, like 12 inches, like we all know what 12 inches are is, right?
Like we don't know what a Bitcoin is, it's like all kinds of things.
So since it's so volatile, it's not really a unit of count.
Medium of exchange, it's a little bit clunky still, you know.
We we haven't had a way like most people like if I had to pay for something in Bitcoin, like it would probably take me like multiple hours to like get everything set up and figure it out, right?
I can help you out in 10 minutes.
Was that yeah, but you know what I'm saying?
Like the average.
Yeah, like if this is not something that's like an easy thing to do, and a lot of people don't take it.
And a store of value um needs to have some stability around it, and obviously, you know, things are kind of wild and and all over the place.
So I think it it's finding its way.
What's fascinating to me is like I see it more almost as like an alternative asset class than necessarily replacement for currency, because it it's fighting the same issue that we all have, right?
We have a market that's denominated in dollars, we have an IRS that is um you know, collecting payments in dollars, we have a whole host of powerful people with a vested interest in not giving up their power denominated in dollars, and they have a military attached to them.
So, like I just in terms of letting that happen and obviously we saw what's what's happening out of China with their crackdown on on Bitcoin because they want to have a digital currency and they want that to be the focus.
So yeah, like I'm not ruling it out.
I'm just saying that these are some of the barriers to it.
So in terms of it being more of a hard asset, like a hedge against inflation, like gold is or even like something like maybe a collectible like art or wine or or whatnot.
What's interesting is that most of those kinds of things like tend to trade on exclusivity instead of inclusivity.
And so it's wild to think that this is like the first thing I've ever seen that's like meant to be inclusive and still hold that.
So like I think I think that there's something there.
I don't know if you know what the the ultimate winner is has even been thought of yet.
But I think it's interesting.
Like I think it's interesting.
It's nascent.
It's definitely something to watch.
I'm not against people using it as any other um you know kind of alternative asset class and put allocating some capital in that direction I wouldn't make it my whole portfolio from a risk adjusted return standpoint today.
But yeah, I mean it's it's fascinating and and again I think most importantly you know the people who are pushing crypto are the same people who should be supporting you know small business and the gig economy and the creator economy and all these things that are decentralized and basically trying to be an affront to central power.
So I do think that there's a a level of um worthwhile sort of activity in having these communities better come together because I think everybody is fighting the same major battle of decentralization versus central power from their own sort of lane of expertise if that makes sense.
Yeah, that makes sense.
Thank you for sharing that insight.
And, you know, I'm concerned about it, too, from a regulatory standpoint, because I could see the government just, you know, if it gained too much traction, just really hammering down.
And we've seen some sort of bizarre things in the Bitcoin market recently in terms of, you know, Tesla was all in and then all of a sudden they backed off.
Like, it's like, what conversation happened there?
You know?
Right.
Is that a US conversation?
Is that a China conversation?
It's, yeah, it's challenging.
And when Facebook was going to make their own cryptocurrency, they immediately got backlash from the political class, right?
They were doing hearings all the way.
It was Libra they were going to come out with a couple of years ago, and that just sort of disappeared.
Nobody talks about that anymore.
So that's a great point.
I like, I remember I was on like, you know, all the different financial talk shows talking about Libra, Libra, Libra, and you're right, like, that's completely fallen off a cliff.
That's an interesting thing to look into.
But not I bet not coincidentally, right?
Like all these backroom talks that were that you've mentioned, you scratch my my back I'll scratch yours but like stay out of the currency business um I I would be shocked to find that that wasn't an impetus and was something that just fell away organically.
So and I know that I want to be conscientious of your time but I want to ask you what your thoughts are on the United States um departing from the gold standard.
And I also want to ask you what your thoughts are on in terms of the dollar as a fiat and it seems to me that I'm not an expert like you are but it seems to me that what we what we're doing with the dollar is very similar to like a Ponzi scheme and I you know those don't end well.
So what do you think what should should we go have should we have always stayed on the gold standard and what's going to happen now that we didn't yeah so like I guess I probably have a slightly different like mine and I will say like in terms of my expert level on currency versus like other economic areas I'm probably here and there are definitely people that are here.
So I'm just gonna offer like my still lower than you on the middle of the road expert oh I just caveat it because I like to be straight there are a lot of people like to talk out of their behind about things.
I'm real transparent about like what I know and what I don't know.
So my feeling about fiat currency so the the whole concept of fiat is like it's not backed by anything right just backed by faith.
I would offer the argument That everything is backed by faith.
I mean, the reality is that gold is, you know, it's had a social contract.
We've all agreed that it has value for probably as long as like just about anything.
And it has other uses, but its use case value is like a fraction of the overall market capitalization of gold.
So it's not like you know, like it has this very strict value and there's only so much of it.
And you know, like you can mine more, you can make some necklaces, like whatever.
We all agree that there's some value there, but that's social contract.
That's faith.
Again, it's got a long history, so it's got some good things there.
But like, is that any more of a social contract than like a stock market denominated in dollars and IRS taking in money in dollars, you know, millions of companies transacting in dollars in a military that like wants us to have dollars.
So from that standpoint, from just like the fiat and being backed by something.
I mean, the reality is part of the reason we went up the gold standard as I've studied is that we didn't actually have enough gold to back up the money that we had.
We got called on that, and in a flea of panic, it's like, well, we're not on the gold standard, and there's that whole Bretton Woods standard.
And an effort to come back the speculators.
Yeah, so yes, go look up Br Bretton Woods and um, you know, I feel like that was a cover for the fact that we weren't really on the gold standard.
We just all thought we were on the gold standard.
I mean, there were some gold there, but not as much.
So I think the bigger issue, and again, it's it it's it's the principle of it more than sort of like which is the right mechanism that I care about, because like I feel like we could come up with different mechanisms.
It's the allowing the Federal Reserve to continue to devalue the dollar.
It's allowing the US government working with the Fed to continue to devalue the dollar.
Um, you know, us monetizing our own debt and overspending.
Like those are the kinds of things that I have more of a problem with than there not being a store of gold sitting in a vault somewhere.
I know that like back in the day, um, back to Milton, good old Milton Friedman.
Um, you know, he had talked about having some sort of a formula that was based on growth of the economy, that the money supply would grow in sort of direct concert with economic growth and and having something that that was more of a set formula than a bunch of people making decisions and and pulling it in and and being able to do that.
So I think that um what's been done is terrible.
Um it decreases you know the value of of all of our dollars for people who've had dollars.
Um, yet we're still the skinniest kid at Bat Camp.
We're still the reserve currency, but we do need to preserve that because it does it gives us benefits to be that, to be perfectly honest.
Um, and I so I think it it goes back to reigning in, you know, what the Fed does, maybe shifting their mandates and putting some harder uh boundaries around that.
But you know, again, it's it's always like, you know, how do you do this in a way that's not politicized?
And that's like I'm I'm open to suggestions, guys.
Like I'm open to like, you know, what what do we need to do to make sure that like we don't end up with Don Frank where we think we're doing this great thing, and then the outcome means that it actually did the opposite of what we thought it was doing.
And so it's like, you know, what's what real strategic thought from people who really understand this and can kind of put those parameters in that don't have those unintended consequences and have gone through the chess match like 15 times to to work out all the permutations.
So I think that's more of my concern.
But everything, I mean, Bitcoin's fiat, you know, like my collectibles are fiat, like everything's we all agreed that there's some that we've attributed some random value.
If like zombies come and take over the universe and like knock out electricity, we can't access the internet anymore.
Like, I don't know, like seeds are gonna have a lot of value, you know what I mean?
Like it's all it's all kind of based on circumstances and social contracts.
So um, well, gold has had a very long history with a social contract, you know, in in my opinion, it's not really that different from you know any other fiats, if you will.
Yeah, I I guess the difference that I would perceive between traditionally acknowledged fiat versus precious metals and assets that are the difference that I would uh say is that you know when I think of fiat, I think of something that you can print uh infinitely.
And one of the benefits of gold is that it you know it's pretty hard to come by.
Uh and Bitcoin is capped too.
You know, and I agree with you though that the value is still socially described.
So I'm not I'm not contesting that at all.
But you know, there is there is some slight advantage versus the paper currency in that you can't just make more of them.
But that's the point, that's why boy's the point of you put rules around it and you put that you can only make more up to this point of acting, you tie it back to economic growth, it fundamentally does the same thing.
It's I think we're both on the same page that this like you know, making up money by digital entry of the I mean, they're not actually even going through the motions of printing something, right?
They're just literally they just like okay, key stroke, you know, another trillion dollars.
Um of the money's in cat in circulation is cash.
Yeah, so I mean that that's the part that like I think we both care about, and as I said, like I'm sort of um agnostic to the the methodology by which you cap that.
But yeah, the the this sort of infinite access by central planners to do whatever they want is very, very dangerous.
And you're seeing it pop up in this concept um MMT, which is modern monetary theory.
I call it magic money tree because it just like pretends that you can print without any sort of um you know consequences.
And if that were the case, you know, every country would just do that.
You would never have to pay any taxes.
Now, granted, they say taxes helps with the the distribution of wealth and whatever things they've made up, but like we've seen it.
We've seen it like in Zimbabwe, right?
Like you could go out and you can get like a million dollar bill from Zimbabwe that's like worth nothing, or maybe it's worth a collector's item now, but you don't have to.
Well, if you move there, you instantly become a millionaire.
Right, yeah.
So uh where can people find you?
And uh, do you have a copy of your book with you?
I got the Kindle version.
I would hold it up if I had it.
So, okay, so this The War on Small Business.
And my plea on this is please buy this book, not to support me, but to give a voice to advocacy for small business and economic freedom.
Um, I've been talking about it, it's very difficult.
The media is not talking about this.
They they're trying to rewrite it, frankly, and say it didn't happen.
And so if you want to preserve the opportunity for more people to participate in wealth creation and not all be working for like 10 companies, you need to show that this is important and there's a way to do this, is to buy the World Small Business.
You can buy it anywhere.
And if you don't want to support a big business while you're doing it, um, if you uh check out bookshop.org, I think it's backordered because we've set so much business there, but a whole host of other retailers um have it now as well.
And uh I spend most of my time when I'm on the social medias on Twitter and see it under my name here at Carol JS Roth.
So well, thank you so much for coming on.
I've really enjoyed uh our time together.
Uh, and I hope we uh stay in touch.
Let me know if you need anything, and good luck with um your book sales and the next project.
Thanks, Chase.
Thanks for the great discussion, really interesting, and for your advocacy for small business.
