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Sept. 18, 2023 - Doug Collins Podcast
34:56
Getting A Better Handle On Economics
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You want to listen to a podcast?
By who?
Georgia GOP Congressman Doug Collins.
How is it?
The greatest thing I have ever heard in my whole life.
I could not believe my ears.
In this house, wherever the rules are disregarded, chaos and mob rule.
It has been said today, where is bravery?
I'll tell you where bravery is found and courage is found.
It's found in this minority who has lived through the last year of nothing but rules being broken, people being put down, questions not being answered, and this majority say, be damned with anything else.
We're going to impeach and do whatever we want to do.
Why?
Because we won an election.
I guarantee you, one day you'll be back in the minority and it ain't gonna be that fun.
Hey everybody, welcome back to the podcast.
Today is a learning lesson.
Today is a day in which I want you to take close attention to what could come if we do not get a handle on our understanding of economic situations.
We have a guest today who's wrote in a book about street economics, understanding the basics, that capitalism is a good thing, it's not a bad thing, actually going to work means something.
These are all kinds of things that we need to actually get a hold of, and if we don't get a hold of them soon, then we're going to continue in a spiral economically that's not going to And for those people out there saying, well, the government will help us.
The government will help us.
Folks, realize the government only gets money out of your pocket.
They're only helping other people with money that they either print or get it out of your pocket.
Got to get a better handle on this because if we don't, this is going to lead us down a path in which the world is, many places in the world are already going to.
So Axel Kaiser today is here with his book on street economics.
You will not want to miss some good stuff.
And this will be an episode to share with young people.
They need to hear this.
They're not hearing it anywhere else.
So they need to understand this and hear this.
And then just check it out.
All I ask is listen to the podcast and then go check it out.
That's all you have to do.
So today, going to be a great lesson in economics right here, right after the break on the Doug Collins Podcast.
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One of the things you hear me on the podcast always talk about is people not understanding basic economics.
And basic economics are the fact that, you know, free market works.
Capitalism is a really good plan.
It's risen more people out of poverty than anything else.
But we have a lot of people and especially younger generations who are losing that economic purpose.
Today, I promise you we're not going to be boring.
I promise you we're going to get right to the point because I have Axel Kaiser here on the discussion of a new book that they have discussing Yeah, thanks for having me.
Well, it is, you know, one of the things that I see all the time is this just complete, as a member of Congress, I saw a complete lack of understanding of economics in members of Congress.
So it does not shock me when I see the issues that are going on and why, you know, more and more Americans.
There was a poll that I got when we were discussing, getting ready for your podcast, and it was from 2019 Gallup Poll.
68% of baby boomers had a positive view of capitalism, while 32% had a positive view of socialism.
But among millennials and Gen Zers, it was 52 and 49, basically saying capitalism and communism are the same.
Alex, please tell me this is not true.
Well, we all know it's not true, but the problem is that the new generations did not live through the Cold War.
They don't have this enemy called Soviet Union that we were very afraid in the past.
And they are being taught by their teachers and professors that, you know, socialism is a good idea.
So what do you expect?
And they know nothing about economics.
And that's why I wrote this book, so everyone could understand.
It has no footnotes, no graphs, no math.
It has very simple examples because, you know, average people, but even in the elites, you said the politicians, but also historians, intellectuals, you know, Hollywood people, They know nothing about economics.
They all love to be rich and to enjoy the fruits of capitalism, but at the same time they speak in favor of socialism, equality and redistribution.
And this has a huge influence on how people view the world.
So I think with basic knowledge in economics, you cannot be a socialist.
It's as simple as that.
Well, it's as simple as that, but you go back to something.
And look, I'm a father of three.
My kids are late millennials, if you would.
They're not Gen Zers.
One's real close, but they were born in the early 90s, from 92 to 98. But they were raised under my household where they learned work and ethics and how the economic world works.
However, it is still listening to them sometimes and then also listening to their friends There's this whole process that there's no longer a starting point of building economic growth.
They want to go right into a top paying job, paying top money, all the time off in the world, work at home.
And it's like, where do you go to the blame here?
And I know you said the Cold War, and I agree with you completely.
They don't understand, you know, having an enemy in communism.
They think Venezuela is a fun place, you know, all this kind of other stuff.
But What has caused this?
Is it education?
Is it parenting?
I mean, before we get into specifics of economics, why do you think there's been this sort of turn in the thinking that I am entitled to something?
Well, it's ideology, basically, because if you really take a look at what has been going on in the United States, I would say since FDR, The progressive movement and the progressive ideology has taken over all institutions and it has become more and more aggressive.
And so you go to school, you go to universities, you go and see CNN or whatever, mainstream media.
Everything you get is this sort of ideas that you are entitled to things for free, that the rich have to pay for everyone, and that the state is going to provide you with a decent life, even if you do nothing for yourself.
And this is unfortunately the opposite to what the United States is all about.
And it's much more similar to what we have in Latin America.
I travel all the time in Latin America.
And I tell you, I'm a good friend also of Javier Ville, who is going to become the next president in Argentina.
And Argentina is a society that has been ruined by the entitlement mentality.
You know, Eva Perón, who is a very famous character there.
We know it because Madonna did this musical, Don't Cry For Me Argentina, with Evita.
She used to say that where you have a need, you have a right.
And this is a mentality that destroyed Argentina.
And unfortunately, the same is happening, not to the same extent, but the logic is similar in the United States and in Europe.
And now you have government spending out of control.
And if you take a look at the federal budget, it's two thirds is what you could call entitlements and social rights and things like that.
So if you really wanted to get serious about cutting spending, you would have to tell people, you know what?
You have to stand on your own feet and not expect government from paying everything for you because this is not sustainable.
But that's not politically viable.
Yeah, but you say that, and I'm going to play this off, but you're so cruel.
That's just mean.
I mean, when are we going to get out of this that my happiness is dependent upon somebody else or otherwise you're mean for thinking that?
Yeah, well, there are two sides that we have to attack.
One is we have to try to make people think.
That's what I'm trying to do with the book.
You know, think about stuff like when the government gives you something, where does the money come from?
And people don't do that.
And not because they are necessarily stupid or they are, you know, Ignorant.
Partly it's because they're ignorant.
It's because they don't think about it.
It's as simple as that.
And if you, you know, face them with the quest, challenge them with the question of, you think it's fair that other people have to pay for your life, like they're forced to support you?
You think it's fair that you take away money from People who are working in order to fund your existence, people will tell you no.
90% of people will tell you that's not fair.
But the debate is never framed in those terms.
And politicians pretend to be generous because they are giving away other people's money.
And then socialism and this redistributionism feels good.
Because you are saying that you're a good person.
It's like virtue signaling.
You are claiming to be a good person while assuming no cost for what you are defending.
It's a different matter if you open a bank account and you tell all people, you know, you believe in solidarity and redistribution?
Okay, there is a bank account.
Come and put the money you want to redistribute from your own income.
Then no one would do it.
Because people love to feel good about themselves.
And so we have to fight this on both levels, on economics, so people understand basic issues in economics, and on the emotional level, which is basically winning the moral case for the free market and against government redistribution.
This can be done.
The problem is that we don't have enough public intellectuals doing it.
Yeah, and I think that's one of the interesting things.
How do you go back, you know, because we started off with the poll talking about socialism, capitalism among millennials and Gen Zers basically being about equal.
Another part of that is I think you mentioned on those mainstream media.
Why is it Again, because I guess it makes us feel good, this ideology of feel good, that the real prospect of what's going on in these socialist communist kind of countries everywhere from Venezuela.
And again, Venezuela is an interesting, and I'd love to get your take on it, especially your emphasis of Latin America and South America, because you go back 20 plus years, Just a little over 20 years, Venezuela was the booming economy that everyone was fascinated by.
It was the next big thing, if you would.
And then through the change of regime and through really basically two elections and a mood of the country I mean, took it from the gym, so to speak, to basically the gutter of that area.
And did it shock you looking at that, how quickly that took place?
I've talked to folks from there who said, don't think it couldn't happen anywhere.
Look how fast it happened here.
Look, I've been to Venezuela many times, and I've been, you know, I can't go now because I'm on a blacklist, so I couldn't do it.
But I... Yeah, I mean, it's risky.
Tell the truth, get blacklisted.
Yeah, I mean, it's an honor to me to be on a blacklist.
But, you know, the thing is that Venezuela, when you take a look at the Fraser's Economic Freedom Index, you know that in Canada, the Fraser Institute is a think tank.
They do that every year, and it's very...
Very well known.
And you take a look, Venezuela was the freest nation in Latin America in 1975, in economic terms, along with Costa Rica.
It was 13 in the world, in terms of economic freedom.
13. And it was the most prosperous nation in Latin America, arguably.
And what happened then is that they started to decline, and even before Chávez came to power in 1999, because he won the 1998 election, Venezuela had lost already most of the positions in the economic freedom ranking.
It was around 80 or something like that in the world.
So yes, it happened quickly with Chávez, but you had a long-term trend of destroying free market institutions in Venezuela and you had government You know, increasing in size and the intervention of government was larger and larger.
So when Travis came to power, Venezuela was not anymore what it had been decades before his arrival.
So I think You had many decades where you had this sort of disease like cancer and then Chavez was a metastasizing of this cancer and they destroyed democracy and now you have this horrible dictatorship.
But it's incredible to see a country like Venezuela Having been one of the freest countries in the world in terms of economic freedom, now is the last one in the ranking.
It's 162. It's the least economically free country in the world and you have over 90% poverty rate.
It's a catastrophe and 8 million people have left because you don't have anything to eat there, basically.
It's a tragedy, but that's socialism.
Yes, meanwhile, Chile, in 1975, we had this socialist experiment and the communist government of Salvador Allende.
So Chile was one of the least economically free countries in the world.
But then we had the free market reforms in the 70s and 80s, and then they continued in the 90s, and we became The freest economy in Latin America.
And so we took, I mean, we went to the position that Venezuela had in the 70s.
We did that 30 years later.
And, you know, Chile has the best economic indicators in the region.
And in all social indicators, we are above everyone else, mostly.
And so we are now Well, not now, but recently we were the 13th economy in terms of economic freedom in the world.
The exact same position that Venezuela had 50 years ago.
And so, now we are rich.
We were poor.
Now we are rich because we abandoned socialism.
Venezuela abandoned free market institutions and embraced socialism, and they are extremely poor and they are ruined.
It's really interesting to contrast both cases.
Do you see any concerning elements now?
It's always said that you go through tough times, it breeds tough people.
You go through easy times, it breeds soft people.
Are you sensing anything?
Because I sense that in America.
I sense that in the US, especially with the statistics we're talking about in the economies and stuff.
Do you sense that in Chile now that Chile is doing well?
Do you see a softening of that or maybe even hopefully a doubling down saying, hey, this is good.
We can make it better.
No, we're destroying it, unfortunately, because socialist ideas have prevailed in the battle of ideas.
In the end, this has to do with how people think.
And in order to win the political fight, you need to win the minds and hearts of people.
And that's why culture and media and schools and universities are so important.
But universities and media were taken over by far-left activists in Chile, something similar to what I see here in the United States.
And so they started to change how people think about the economy and the role of government.
And unfortunately, that led to politicians destroying free market institutions.
And now we have experienced 10 years of zero, practically per capita, growth and rising unemployment.
And now we have a recession even, and we have a Marxist president, Gabriel Boric, who is a very good friend of Nicolás Maduro in Venezuela and Díaz-Canel in Cuba and so on.
And so the country, we lost it.
The country has been destroyed by these ideologies, again, because they managed to persuade a lot of people and they supported far-left politicians.
I have some hope that now they are seeing the results, there will be a reaction against this socialist agenda.
But I'm not very hopeful because it's very easy to destroy and it's very hard to build.
And you can destroy in one year what you built over a decade.
Well, the old saying is it takes someone with a degree to be an engineer and build something, but it only takes one idiot with a hammer to tear it down.
Exactly.
And I think that is the thing that concerns me is that we're not seeing any of this reported.
And I think this is to become, not just government's acceptance, and we can take this, and one of the things you talk about in the book, and folks, we're talking about the street economy, it's 15 economic lessons everyone should know, Axel Kaiser here with us on this, is that when public institutions Disregard debt and give more to entitlements.
In other words, making people feel good about themselves, whether it actually helps them or not.
And then you tack on the media buying into that as well.
That's just a recipe right there for, you know, moving away from freedom and moving more to independence.
Absolutely.
And the problem is that you do not only create these structures that keep people dependent from politicians, giving them money and stuff.
But you also destroy the ethics, the work ethic.
And you can see studies that have been done in Sweden, for instance, and the Nordic countries, and how the welfare state in these nations have had a dramatic social effect in terms of making people dependent on government and not wanting them to go...
I mean, they don't want to go to work anymore.
And so even in countries with a strong work ethic, like Nordic countries, you have this terrible effect and then you have generations that live from welfare.
And this is happening also in the United States.
It's your grandfather lives on welfare, your parents and then you live on welfare.
And this has dramatic consequences in terms of You know, your development as a person, but also in terms of crime, in terms of family destruction, in terms of all of that.
And so I think the welfare state is truly evil and people who pretend to be doing a favor To, you know, the poorest in our society.
They are not doing that.
On the contrary, they are destroying their lives and they are giving them, you know, some money and food and whatever.
But in the end, they are condemning them to never be able to live this situation of dependency and, you know, lack of personal dignity.
It would be much better to have high economic growth rates so that they could go to work and make a living for themselves and not being there at home every day drinking beer and watching television.
And this is what's happening everywhere.
So you want to ruin someone.
I mean, I don't know any parent who would say, oh, I will give money to my child until he's 50 or 60 or whatever, so he doesn't have to work.
That's the way you destroy someone's character.
That's the way you destroy someone's ethics and someone's personality.
It's horrible.
It's the worst thing you can do.
Yeah, I mean, the worst thing you can ever do is take away the dignity of work.
No matter what that work is, dignity in work.
There's dignity in doing something.
There's dignity in no matter what your job is.
And to take away that sense of accomplishment, that sense of doing something, is the underlying defeat in, I think, this process.
You hit on it.
I want to touch on it a little bit more, though.
What just bothers me, and I talk about it a lot on the podcast, I've talked about it in public life for a long time, and that is this area of what makes you feel good doesn't heal you.
And this idea that you're helping the poor and middle class by, quote, income equality or making everything, is actually, I mean, they're not reporting, but it's actually making it far worse.
Talk about that, and especially for the generation, because here's where I see a little bit of hope.
For a generation that has been raised on, you know, everything ought to be fair and equal and everything else.
When you're starting to see this, my concern is they're seeing the inequities, but they're wanting to double down on what I would call stupid to fix it instead of saying, no, what's causing it is what you're wanting to do.
How can we break that cycle?
Well, I think to understand basic economics, again, it's really important.
My book has become a best-selling book in every country that has been published, in Latin America and Spain, even in Germany.
And now it's coming out in Poland.
I have discovered that young people want to know and want to learn about economics.
The problem is that mostly this discipline is debated by experts using a language that no one understands.
And sometimes even the economists who debate these things don't understand basic economics.
But if you really understood that wealth creation is a process that benefits everyone, Then you wouldn't be worried about inequality because, by definition, if you have equality before the law and you have private property and, you know, liberty, some people are going to do better than others.
But that doesn't mean that this is a zero-sum game where you are making money at the expense of others.
You are creating wealth that are benefiting You know, neighbors and other people and you are hiring workers and you are giving them the possibility of earning an income for them and their families.
And also you're paying taxes for people who care about that.
And so there is no way that in a market economy you can become rich if you are not creating something of value.
For the rest of the people.
And, you know, studies show that billionaires have an equivalent of 2% of what they have created in terms of wealth for everyone else.
So, like, if you take Elon Musk, for instance, and you see the amount of money that he has, which is invested in factories and things like that, it's not, you know, built under the mattress.
Then it's more or less 2% of what he has created for everyone else.
So that's the way we benefit in a market society.
And if we manage to explain this, and I've had a lot of success doing that with young people, then we can be hopeful.
I like Milton Friedman because he used to do this in a very effective way.
To explain the market economy, you know, and he would do free to choose and he would write popular books and he, you know, would be on television.
He would debate anyone and he would win all the debates.
And so he created, I think, a movement.
He wasn't alone, but he was the main face that ended up with Reagan and trying to do something about big government.
But if you don't have that, Then you are lost, because everything they're going to see is the Paul Krugmans and Joe Stiglitz of the world, and that's the recipe for disaster.
I agree.
The statement that is true, that many leftists and Democrats and others especially, I'll just say that in general, although we found some more closeted Republicans who believe that government is an answer as well, but this idea that capitalism has brought more people in the world out of poverty than anything else.
They want to debate that, but it's really not debatable, is it, Alex?
It's not.
There has never been fewer people under the poverty line than now, despite the fact that the global population multiplied by a factor of 10 in the last 150 years.
And even so, as a percentage of the population, you have really the lowest in terms of people living under the poverty line.
So this is not debatable.
If you think about this fact, for instance, China in 1950, 1950, under the communist dictatorship of Mao, had the exact same per capita income that Europe had in the 15th century.
In the 15th century.
So we're basically basically starving.
But then when Deng Xiaoping came along, he said, okay, we are going to open up the economy.
And only with that space of freedom and, you know, enabling Space for, you know, private property and market institutions.
China managed to Lift up 800 million people from poverty who are not living under the poverty line anymore.
This is the best example of what capitalism is all about.
And if you go back 200 years in the West, in 1850 Norway, one of the richest countries in the world right now, had a per capita income that is similar or even lower than Bangladesh today, which is a very poor country.
And so how do you explain that Norway, Germany, England, all of these countries became very prosperous?
It was because they embraced market institutions and capitalism.
That's it.
And why?
Because they believed that this was the way to grow, that a lot to do with ideology, again, and narratives and discourse and language and how you view people who create wealth.
There is an interesting book by Didri McCloskey, it's called The Bourgeois Dignity, where she argues that the modern world is the product of industrial revolution, but it was created because people started to see and view merchants and inventors and bankers as respectable people.
And prior to that, they were seen as socially not very respectable because aristocrats didn't work.
Let's say you had other people working for you, but you would do art and politics and things like that.
You wouldn't go to work and lend money or you don't do some sort of commerce or trade that wasn't very well You know, considered by the population.
So we have to speak well about the rich.
We don't have to focus so much on inequality.
Otherwise, you will end up like Latin America.
I tell you, I know the situation in my country very well, in my region very well.
And I'm also German.
And look at Germany.
Germany is now in a process of de-industrialization because it has played this game for too long.
And also because of crazy energy policies that are another way of ideology and virtue signaling.
The greenism that they are implementing in Germany has cost trillions of dollars and it has let the economy of the country in ruins.
And it's still a developed nation, but it's having a very hard time.
It can happen in the United States.
It can, and I think that's the warning here.
Look, I talked to some of the legislators in Germany, and it was sort of funny.
They were talking about how green they had become, but yet they would freely admit they were taking nuclear and other things.
They were taking power from plants in which were not, quote, green.
And it was like, you know, okay, you're not maybe doing it here, but you're taking it from somewhere else.
It just is a problem.
I think the issue that comes out here is It's got to be discussed that there's only so much.
And it's not just taking...
I think the problem we've had with economics is that we believe that there's only one set of pie.
This is the pie.
That's all there is.
And you have to go get your part at the expense of someone else, when the reality is capitalism just enlarges the pie.
And everybody can have a chance at gaining more.
It doesn't limit the size, it gains it.
To me, that seems like a lesson that needs to be taught in our universities and basically to politicians as well.
Yeah, that's why I wrote the book, because I explained exactly that.
I mean, if we were stranded on an island and we had to find food or do something, someone would go fishing, another guy would go, you know, Finding fruits or whatever, you have to work in order to make a living.
And then, if you are smart enough to invent, let's say, some sort of stick, which would be useful to catching fish or whatever, Then you have a capital good.
That's how you call that.
And you can produce more.
And if you produce more, then everyone has more to eat.
And then the other guy maybe came up with an idea of cultivating certain grains or fruit.
And that's how you make the well stock of society larger.
And then everyone benefits.
And so you have more available for everyone.
That means prices go down.
Because, of course, you have more supply, and then, you know, everyone is better off.
I don't know.
It's hard to understand why this is so hard to sell to people, but probably it has to do with the fact, again, that we don't have enough professors, teachers, and public intellectuals saying these things.
And so, in a market of ideas, if your product is not available, well, people will not buy it.
It's as simple as that.
And the socialist rhetoric feels good.
We have to admit that.
It really feels good.
It makes you believe that you're a good person because you are saying, oh, we have to take away from the rich and give it to the poor.
Without really paying any cost for what you are saying because it's not your money on the line and also without having to know really what are the effects of doing this, which is basically destroying capital accumulation and in the end making poor people even poorer.
It's like the minimum wage law.
It's like if you want to really destroy the quality of life of the, you know, Lower skilled people with low qualifications and who didn't go to university and so on.
Minorities.
You have to pass minimum wage laws because that would make them impossible to work flipping hamburgers at the McDonald's.
McDonald's will come and replace them with robots or whatever and they will be on the street living on welfare.
I mean, I don't know any serious economist who would support something like that, but they do it anyways.
And politicians do it anyways.
Well, I think that's the purpose.
You've written the book, The Street Economist, 15 Economic Lessons.
Everyone should know.
I agree.
Everyone should go out and get this book.
This is something that I think is vital to our future.
And I'm not trying to be an alarmist here, but I just think it is.
And when you look at examples like Chile, you look at Venezuela, you look at others around the world, Germany, You look at the European Union and stuff.
This is stuff that's got to get back into a circulation.
Or otherwise, it's not just a regional area.
We're looking at global problems here.
And I think that's going to, you know, again, at the end of the day, it'll only affect, it'll affect most of those at the lower end of the section that they're supposedly trying to help.
Axel Kaiser, thanks for being with us here on the podcast today.
It was a pleasure to have you on.
Thank you.
Thanks for having me.
All righty.
Folks, that's it.
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