Bob Murphy and Dave Rubin critique government overreach during the pandemic, arguing that mass surveillance, arbitrary business closures, and bailouts disproportionately benefit Wall Street while crushing small businesses. They contend that zero-interest rates inflate asset bubbles, regulatory hurdles like FDA delays hinder innovation, and price controls cause shortages, whereas allowing market mechanisms ensures resource allocation. Ultimately, they warn that these policies exacerbate inequality and fuel socialist support, advocating instead for deregulation to unleash private sector ingenuity and avoid the economic devastation of prolonged shutdowns. [Automatically generated summary]
Transcriber: nvidia/parakeet-tdt-0.6b-v2, sat-12l-sm, and large-v3-turbo
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Messaging During a Rough Time00:05:00
We need to roll back the state.
We spy on all of our own citizens.
Our prisons are flooded with nonviolent drug offenders.
If you want to know who America's next enemy is, look at who we're funding right now.
Every single one of these problems are a result of government being way too big.
Hey, what's up, everybody?
Welcome to a brand new episode of Part of the Problem.
I have a guest today who I'm very excited to talk to, one of my favorite people and my favorite economists out there.
Of course, it is Bob Murphy, who is an author of several fantastic books.
He's also a senior fellow at the Lidwick von Mises Institute, and he is host of the Bob Murphy Show, which if you haven't checked out already, is just one of the best podcasts out there.
It's different than any other podcast in this space.
Bob goes super depth into different issues and really always has a point of view and different arguments that are unlike things you're going to hear anywhere else and have really made me rethink certain issues and learn new things about a lot of different topics.
So very happy to have you with me, Bob.
How are you?
We're doing okay.
This is pretty rough time for everybody, I'm sure.
Yeah, it's no, there's a lot of people who are really going through just very, very difficult times.
I know that, you know, all across the country in really an unprecedented way, people are, you know, have family members who are sick.
People can't visit family members who are sick.
I know that's going on in my family right now with my wife's family.
And then, of course, the economic stuff where I know there are a lot of people who have lost their jobs, a lot of people really uncertain about the future.
And yeah, it's pretty crazy.
Hey, Dave, can I do my public service announcement about the masks?
It also backs the government, so you should like it.
Sure, absolutely.
So let me just clarify, just because I'm still talking, like I talked to my mom a few days ago and she hadn't known this.
So just with the messaging that was coming out, and my wife has background lung issues.
And so we were really, really trying to make sure like I didn't get this thing and bring it into the household or whatever.
And with the initial messaging, they were saying, they were explicitly saying masks have not been found to be effective.
Don't go get masks.
Wash your hands for 20 seconds.
Sing a song.
Here's a song that's appropriate.
And so that led me to believe that you got it from touching.
And also like the lady, that clip where she's saying, don't touch your mouth.
And then she licks her, you know, that thing.
So besides that just being funny, that underscored the idea that the way you get this thing is you touch somebody who's sick and then you forget and then you, you know, you put your eyes or your hand.
But no, of course masks help.
And that's the whole reason.
So whether it's this because they wanted to reserve the masks for the healthcare workers or just bureaucracy or what have you, but yeah, the messaging, especially like from the CDC up front, they've gotten, I think, better and more and more, you know, independent experts have done podcasts and things.
So I think more of the public knows this.
But anyway, I just want to mention for those out there, especially like older people or who have background issues, that if you need to go out to the store for some reason, because someone said, oh, don't worry, masks, don't do it.
No, they do something.
What that means is the mask is not foolproof, especially if you don't know how to do one of those N95 masks because you're not a trained professional to get the suction and everything.
But certainly putting it on is better than nothing, which is last thing I'll say, Dave, which is why they were so concerned about making sure the healthcare workers got it, right?
So there was sort of a paradox that you, oh, yeah, you and the public don't don't bother buying these things because we need to reserve it for the healthcare workers who are dealing with coronavirus patients.
Well, that doesn't make any sense then.
Yeah, that seems to not be, that seems to be a little bit contradictory.
No, I was we were I was talking about this with uh I had Scott Horton on the other day, and he was saying that there's actually there's studies that kind of demonstrate that even the shittiest mask does something.
Like even if even like some like homemade thing that you made out of cloth or something like that is better than nothing.
Speaking of which, some of the hospitals from I think it's with CDC guidance are telling doctors and nurses how to make masks at home, like using household items and stuff.
So clearly, yeah, it's better than nothing.
And if you have like do show notes, links, I can send you.
There's a review of all the literature on this stuff from that slate star Kodaks guy, if you're familiar with him.
But he went through the, you know, just going through all the different studies like Scott Horton was alluding to.
So, I mean, with all these things, you know, academics are very careful to cover their bases and, you know, the preponderance of the evidence and this stuff.
But yeah, other things equal, certainly having a barrier in front of your face is better than not.
Yeah, it's and but who would imagine that the government would get it wrong when they really when we really were relying on them?
Federal Reserve Economic Warnings00:15:32
Yeah.
I will say, like, I think, you know, in the midst of all this and how bad everything is, one of the good things is that I think a lot of like normal, non-electological people now realize, oh, wow, we can't trust the people in charge, you know, to even get us good advice on something like that.
I mean, that's.
Yeah, well, that's, that's kind of like the silver lining, maybe, is that at least there's no question.
I was on, um, I recorded with Jimmy Dore last night on his show.
You know who Jimmy Dore is?
He's like a real left-wing guy, but one of their best, one of the best left-wingers, you know, in the country, really hates war, really hates, you know, the deep state and corruption and stuff like that.
And he basically agreed with me.
And I think his, his co-host did too, that it's like, look, this is a demonstration of government failure, monumental failure all across the globe.
And so that's what we have going for us.
The other thing, though, that is, you know, the negative part is that people are also saying, and this was their position, it's like, well, at this point, we need, you know, emergency UBI.
We need Medicare for all.
I mean, people are, you know, so, you know, you know, kneecapped by this whole situation that obviously the government has to step in to help them.
So that's the maybe the issue for us going forward.
So obviously I want to get your thoughts on all everything about this and the economy and all this.
But, you know, I just read, I didn't have this piece of information when I was on with Jimmy Dore.
I just read this morning, and this could be wrong, but I heard someone say that it's basically this whole stimulus plan in total is going to add $80,000 of debt per household that they owe back in the national debt.
And so that kind of puts the crummy $1,200 that you might be getting into a little bit of perspective.
What do you think about the whole government stimulus bailout craziness?
So, yeah, I mean, it is a weird situation where the government at various levels is ordering people not to go to work.
And so, you know, I can see how this is a situation where just like if the government takes your land, that they're supposed to give you compensation for it.
So, I mean, it's, I can understand someone who normally is against, you know, government handouts and things like that saying this is a weird, this isn't really a handout.
But yeah, the way this thing's structured, like you're saying, clearly it would have been cheaper or for the same amount of money, they could have given a lot more direct relief to households if they had done it that way.
So I guess given that they're going to spend trillions of dollars on so-called stimulus, it would be better if they just did targeted, you know, direct things to households.
The problem, yeah, with this stuff is that it's they're not creating more resources.
You know what I'm saying?
Like, like that doesn't make us richer, the fact that the federal government is borrowing money and sending it out to people.
And so I think that they really do need to figure out a way to, you know, to really, quote, rescue the economy that, you know, the issue is getting people to be able to go back to work or at least more people.
And by the way, I don't just mean like, oh, yeah, this, you know, forget about it.
And some people just have to hole up in senior citizen centers.
I mean, it could be a new world, at least for a long time, until there's herd immunity and ultimately a vaccine.
You know, like I'm sure, Dave, you know, like Trader Joe's is having people line up like far apart from each other.
So there's lots of stores around here, at least, are developing where you can just do drive, you know, drive-through or curbside pickup and things like that.
So, you know, that it might look like that, but clearly, I mean, it's the only way this is going to be solved, not just the government taxing money and then sending out that money back to people or borrowing it and sending it out to people.
They got to get people back to work.
That's really the issue.
I guess another way of putting it is even a lot of free market types are treating this like the problem is, oh, if people can't go spend money, well, then how's the economy going to work?
And obviously, so one way I've been trying to walk through this in my head is suppose a year ago, you know, before all this stuff, if there had just been a craze going through the world about, you know, what people really need to save more.
Let's not go out to restaurants so much.
Let's not go out to the movies so much.
Let's not go to Starbucks, you know, get a cure to get home and build up like three months worth of savings, you know, from getting rid of that discretionary activity that you could get rid of and then go back to your normal lifestyle.
If suppose that were taking off, I mean, you could see Paul Krugman or somebody warning that's going to cause a depression, but that's not what you and I would have said, Dave.
We would have said, no, just resources get reallocated.
So I guess what I'm saying is in and of itself, the fact that there's this virus and the appropriate thing could be very short-term, you know, significant restrictions of public activities or whatever, just try to get a handle on it, or at least to get more information and see if that's working.
To me, I'm okay with that in principle.
And maybe something analogous to that would have happened in a free society.
And I don't think that would have caused a global depression.
Right.
So do you, no, I mean, I think there's a good point there.
And I've wondered if maybe there could be some economic silver linings that come from this whole thing.
I mean, don't get me wrong.
I'm very concerned about what the economy is going to look like.
But I wonder what effect this could have on, say, like the savings rate in this country.
Like maybe people will be a little bit more concerned about an emergency and people will be a little bit more incentivized to save.
Of course, as you know, and this is one of the things like I really learned from the Austrian school economists is that then the government comes in and ruins all these incentives by bringing interest rates right back down to zero.
So it's like every time that there might be a situation where people would be like, you know what?
I really should have a little bit of money stocked away just in case because, hey, something could happen.
We never saw this coming.
Something else could happen that we never see coming.
And then of course the federal government's going to do everything they can to crush that incentive to save.
So, you know, that it seems like anytime there is a potential silver lining, the feds do everything they can to eliminate that potential.
But I wonder, I'm curious, like how can I ask you?
Oh, exactly.
And not even just saving cash, but also like people are realizing now, wow, it's good to have, you know, a month worth of toilet paper in your pantry and things like that.
I mean, I think everyone's realizing this system that we relied on, or put it this way, I think a lot of Americans knew that what their government was doing was not cool, but it was like, you know, but still we got Best Buy.
You know, you go to Whole Foods, you got this, you know, it's okay.
This is like we're living in the Roman Empire and these are the, you know, there's benefits from that.
And then now I think this, what this is showing is, no, you can't even rely on that stuff.
Not only are these people doing stuff that is immoral, they can't even ensure that this system is going to work properly.
And these crises are going to keep recurring.
Let me just clarify what, though, just so no one misunderstood.
I do think the economy is going to be bad, but I'm saying it's not because of people scaling back, going to work for a month or two.
Like, like, or especially, because the thing is, I don't know what it's like, maybe it's more severe where you are, Dave, but like I'm in Massachusetts right now, and we went out the other day and we were on lockdown.
I mean, the governor had ordered, I don't know if he called it, well, it was just like non-essential businesses, and there were like bars open and stuff.
So, I think a lot of the community, a lot of the business owners were saying, well, we're going to open and whether, you know, is a cop going to come here and point a gun at me because I'm, you know, maybe they will eventually.
I think actually they will.
And maybe in some states they have started doing that.
But my point is, is just that it's, I think it's not so much restricting some of the more discretionary activities, but the stuff that the government is doing and the Federal Reserve is doing that that's really going to hurt.
In other words, all these things that they're doing in just normal times, Dave, you and I would have been horrified by all the various measures, you know, like borrowing, like you say, borrowing $80,000 worth per household and new debt.
And the Federal Reserve added, it's like $700 billion, just like in the last week or something to its balance sheet.
And by the way, the Fed had already been inflating again since last September.
It had added about 300 billion just because of so-called repo operations.
So it's not like everything was great.
Oh, and then this virus hit.
So that's another element in this too, is that I think the bubble, the stock market collapsing and things like that, that that was already pumped up to a high level.
And this was just the thing that the shock that made it all start coming down.
Right.
So then the question that I'd be wondering is that, you know, if the Austrian economists are correct, which I believe they are, and a lot of people like yourself and, you know, people at the Mises Institute and, you know, have been saying that, well, look, we're basically have been, you know, building up another bubble and it's due to burst.
Like this really could happen at any time now.
Is it possible that this is the event that triggers that or whether it's the actual shutdown or the Fed's response to the shutdown?
Is it going to get to a point?
I mean, now they're talking about, you know, I mean, we might be running a $2 trillion deficit with back to interest rates at zero for, I mean, an indeterminate amount of time.
Who knows how long?
And how, like, how much more of this can we actually get away with before people don't want to buy our debt?
Yeah, it's great questions.
So, yeah, I was, as you know, look with all the rounds of QE, I was saying they're blowing up a bubble.
And then I was pretty sure that there was going to be something by this coming summer because of the yield curve inversion last summer, right?
And that's not a particularly Austrian thing.
I think the Austrian school explains why a yield curve inversion signals a recession, as it were, but that correlation, lots of financial analysts know about that.
So lots of people last summer, just for your listeners or your viewers, Dave, who don't know.
So the yield curve is in this context means the yields on treasuries of different maturities.
And so a yield curve inversion means that the short-term treasury yields are higher than the long-term ones.
And so that so that's typically rare in modern times with fiat money.
But that happened last summer.
And when that happens, usually within about a year, there's a recession.
So I already thought, okay, that's the signal.
You know, the Fed had started raising rates.
They started backing off.
And that's typically what happens in these boom bust cycles.
The Fed lowers rates, blows up a bubble.
They get nervous because of price inflation or whatever.
Asset prices are getting too high.
And then they back off, raise rates, and then there's a turn.
So I think partly what happened here is it's funny.
A lot of us were warning, you know, warning for years.
Oh, you guys, you know, you're chicken little.
But the federal funds rate was basically 0% for seven years in a row.
You know what I mean?
So technically, that was the textbook playout that they had the rates really low and there wasn't a crash and then they started raising rates and then the yield curve inverted.
So, you know, so that was normal.
As far as your other question, I mean, so obviously the stock market came down.
And at first, when it was just when it was tanking like 15% in a few days, when this was still just something that everyone was concerned about, but it wasn't like changing your way of life.
At that point, I thought the market drop, and I was arguing this, was more than was justified by just restrictions from goods coming from China or something.
And so I kind of thought, yeah, this was the thing that pricked the bubble.
But now that I've seen how much has developed and what the government's done in response, I suppose it's possible that those investors back then realized this was a bigger deal than I did at the time.
So that one.
So I guess that's my long way of saying, Dave, that certainly those of us who thought they blew up a bubble, I mean, what more needs to happen than you saw how fast the thing burst.
But I could see the defenders of the orthodoxy saying, no, you, yeah, you guys were warning, but you got lucky in the sense that this virus came along, that you weren't predicting a virus, which is obviously true.
Yeah.
And also that that will be blamed if it does break the bubble.
I mean, this is so, you know, we lose in that way as well.
Oh, but UAU had asked me about the treasury.
So right now, I mean, it's amazing.
Yields on short-term treasuries are negative, you know, meaning that people are like paying the government to lend them money.
But it's hard to, for me, it's like to disentangle that from what the Fed is doing.
And so, but so surely though, or clearly what happens in the panic right now, people still rush to U.S. Treasuries is a so-called safe haven.
But I think the dollar is more dominant.
And I think the way you can see that is that's why the Fed was engaging in all these so-called repo operations.
So repo stands for repurchase agreement.
So that's where someone has treasuries and they put it up as collateral in order to borrow actual cash on a short-term basis, like sometimes just overnight.
And so that's the market that the Fed has been backstopping since last September.
And that's why they added 300 billion in extra, you know, to their to their balance sheet to try to get more reserves into the system.
So, I mean, that wasn't about the virus.
So I think you do see at least in the very short term that people were realizing cash was much better than treasuries even in that sense or certain segments of the public.
So the way I think this would play out eventually is at some point, yeah, the yields on treasuries are going to start rising.
And then like it'll, so the treasury will be the thing that people start doubting its abilities, but the Fed, I think, will be the last bastion.
So I think the Fed can inflate out of this particular one and kick the can down the road.
But then at some point, even the dollar is going to be suspect.
But I want to be clear because I know some people are throwing around the term hyperinflation right now.
I think that's premature.
I think right now everybody is so panicked that the dollar is actually, you know, they're cranking out dollars and everyone's gobbling them up.
Just like, you know, people want toilet paper and canned goods and bottled water and they want dollars right now.
So is it possible that what this is really going to do is just make the crash when it does occur even worse than we already wanted it because we're just going to kind of blow up the bubble even more?
Well, I think it's going to be kind of like the 08-09 situation, but just worse, right?
Where they're, you know, if they had done nothing, you know, you know, it would have been bad.
The Fed comes in and does all this stuff.
And that, you know, kicked the can down the road, but it wasn't like we were all thinking how great the economy was in 2011.
Right.
You see what I'm saying?
So I think it's going to be like that.
I think, yeah, the Fed, what it's doing is going to prevent unemployment from going up as high as it otherwise would have.
And it's certainly going to keep the treasury yields down because now the Fed's a backstop there soaking it up effectively like the Fed's printing money to lend to the government so they can they can spend borrowed money.
I mean, that's it's an indirect mechanism, but I mean, that's partly what's going on with all this stuff.
So, yeah, I think the Fed doing what it's doing will make the next two years, at least on paper, not be as bad as they otherwise would be.
But at the exp, but they're not going to be good.
And in the absolute sense, they're going to be bad.
But then, yeah, by doing that, it makes the it just pushes the real crisis down the road.
It makes it that much worse.
Because again, it's sure with the, I mean, what maybe this is a way to put it, what the Fed's trying to do.
So, this is an analogy I came up with.
Setting Dangerous Government Precedents00:06:17
The big criticism of Trump, right?
And this one, I think the critics have a good point, is that early on, he was acting like nothing was wrong, right?
Like, his big thing was, let's not change our behavior.
Let's come out of it.
Whereas, you know, the people were concerned, like, no, we need to change our behavior.
The current situation is not, you know, look at what it's yielding us.
And so, the Fed, by doing what it's doing, it's kind of like trying to keep the markets from changing their behavior.
You know what I'm saying?
Like, no, no, no, that makes that makes sense to me.
And I do think that, you know, Trump might just be lucky in the fact that he's running against Biden, it looks like, who is just like out to lunch in many ways.
But I did think when they had those clips that a lot of them were sharing of Trump saying, you know, this is no big deal.
It's the flu.
It's not, I was like, man, this could be his downfall.
Like that, that's really bad.
I remember when John McCain, do you remember this when John McCain had that quote in 2008?
He said, the fundamentals of the economy are strong.
And this got used against him a lot, which, you know, is fair because, you know, when you had like, you know, Jamie Diamond and all those bankers going to George W. Bush and saying, if you don't bail us all out, the whole economy will tank and, you know, people, which I think they were overplaying it, but saying that, you know, people won't be able to get money out of their ATMs.
And basically, the United States of America is over as we know it.
Well, you can either say that or you can say the fundamentals of the economy are strong, but it seems hard to say both.
And Donald Trump to say, oh, this is no big deal.
And then be like, I'm shutting down, you know, huge parts of the entire country.
Well, you can only have one or the other.
It can't be both.
And so I think, you know, maybe Trump can get away with it because he can just say contradictory things and it doesn't seem to stick to him.
But that could be a real weakness for him.
I don't know.
Yeah.
I mean, let me just say this before I forget.
I think a lot of even like libertarian types, they're acting like we're on the bomb squad and we're rushing to defuse the bomb.
And I think the bomb already went off.
So I don't know if you get what I mean.
And I don't mean to be like pessimistic or something, but maybe you can even read in my body language that I'm just really knocked back by all this.
Like it's just amazed me how fast they unrolled all this stuff.
I mean, there's things like, I don't know if you heard the case in New Jersey.
It was at a Wegmans and like some guy, the employee asked the guy to stand back and he coughed on her and was like, so I had coronavirus.
Now he's being charged with terrorism.
Yeah.
Like a terrorist.
So obviously he shouldn't have done that.
Like, you know, and that's, that's the problem with these things is where, you know, they get their foot in the door with someone being a complete jerk.
And so the public, no one's going to have sympathy for that guy.
But like that's a slippery slope because now, you know, with drones and stuff, if somebody breaks curfew, you could, they could charge the person with terrorism.
Yeah.
You see what I mean?
I'm not saying they've done that, but I'm saying that that's the principle.
If you're saying it's not that far away.
By violating the public health protocols as established in this situation, you know what I mean?
You are endangering other, you know, like you're committing a crime.
No, this is this is such a problem.
You're absolutely right.
And this is why it's evil, but it's like genius that they always kind of pick on someone who you're not going to feel any sympathy for.
So, okay, this is somebody who intentionally coughed on someone, but you have to kind of ask yourself, what precedent is this setting?
And so, what about a person who just coughs?
Like isn't intentionally coughing on somebody?
It's just like they cough and they were a little bit close.
Now, is that person a terrorist for coughing?
I mean, like, this is this is really scary stuff.
And it's really, it freaks me out even more than the economic stuff, just how much people are willing to not only accept, but cheer on government suspending rights.
I mean, you know, maybe you feel like it's necessary.
It's that extreme of a moment that, you know what, the government, we need this given, even maybe some like Austro libertarian ANCAP person could say, look, I wish we lived in an anarcho-capitalist society where private property owners could make these decisions, but you know what?
We don't.
The government's the only one in this emergency we need this.
Like I can wrap my head around that, but aren't people a little concerned that we've now set the precedent that because the government says something is an emergency, they can shut down whatever they want to and enforce it by law.
I mean, what, what can they, they could decide climate change is an emergency.
They could decide maybe there's some virus that isn't really a threat like this, but they can decide.
You know, like, what about when the next Ebola or the next, you know, SARS or swine flu, those ones that we all just kind of worked through, what about when that comes up?
Is this now the new normal that we're going to revert to this or accept the government crackdowns?
This stuff really freaks me out.
Yeah, I mean, I think the best analogy is 9-11 with this stuff where, you know, that was a real thing.
It wasn't like, you know, there was no issue there.
You know, oh, come on, everyone's freaking out over nothing.
That should happen.
And by the way, you could be super conspiratorial and say Dick Cheney planted charges or something.
Okay.
Just like people, some are saying this was a bioweapon that the U.S., okay, fine, but it's not that it's just nothing.
Right.
But then, but you're right, the responses to it, not that, you know, just like with the terrorists, they, you know, know your client.
I mean, they, that, the, the ability to fight terrorism, Americans let their government just get into all kinds of stuff, like looking at your bank records and you can't take out too much money at any one time from the bank.
I mean, the way they, the pretext for a lot of that stuff was anti-money laundering to make sure you're not funneling money to terrorist groups.
And they couldn't have done a lot of that stuff, you know, as aggressively as they did had it not been for 9-11.
So I think it's the same thing here that, yeah, in principle, they would love, I mean, it just, I mean, I've been saying for a while that, oh, the, they have flying killer robots, you know, like Obama's secret kill list.
I mean, just say it in those words.
They have fly, the government right now has flying killer robots that they say they can just kill people on their secret kill list with.
But yet, you know, I knew, okay, in some dystopian future, those things are going to be flying around, you know, domestically.
And I've already seen stories about how they're thinking about deploying drones to see who's not armed, just surveillance so far.
Secret Kill List and Drones00:06:45
But I mean, obviously we can see this stuff.
So it, you know, they, they dropped a hammer very quickly, you know, things that I would have thought that I thought were coming in my lifetime, but I didn't think they were coming this year.
Yeah.
Yeah.
And you see it just on the on the kind of smaller levels up to the really big levels, but it's the way it always seems to work is that there are, I mean, this is, I think it was Henry Kissinger and Geithner both said some version of the same thing where like, you know, a crisis is an opportunity to get things through that you couldn't get normally.
And you see it like it's all these little pet projects and things that they wanted already.
And then they see, okay, this is my opportunity.
And this is why, you know, like the good thing is that it is out there for a lot of people to see.
But like in this Bill in this bailout package that just got put together where they have things like, you know, the Democrats are sticking in like diversity quotas and things like that.
Like, okay, that's not scary on the level of the stuff that me and you are talking about, whether we agree with it or not.
But you just see that they're like, this has nothing to do with the actual problem.
And you're just kind of sneaking in your little power grab here and there to get whatever it is you can.
You know, there were things about businesses that cut carbon emissions being, you know, like given more money.
And you're like, well, what the hell does this have to do with coronavirus?
I mean, it's obviously, you know, just an excuse.
And that's all around us.
Yeah.
And like what the Fed has been doing has just been astonishing to me that they, so it was like two Sundays ago, they had their emergency meeting, you know, surprise announcement, and it wasn't in the main press release.
The main press release said, oh, in addition to these measures, there are other measures designed to keep credit flowing to households.
Go see this press release.
So you had to click the link and there was another one.
And then at the bottom paragraph, it mentioned how they got rid of reserve requirements for the banks, right?
So in the grand scheme of thing, not a big deal, but I mean, just a little, oh, yeah, by the way, no more reserve requirements back to March 26th.
And I mean, no fanfare, just little things like that.
And the stuff they've done recently now, I mean, the Fed has gotten into their, they're able to buy corporate debt.
They're going to have asset-backed securities that have student loans and credit cards.
I mean, the Fed now, just for your listeners, in case they didn't know this, I mean, historically, the Fed could just buy government debt because they, I mean, that was the, you know, the quid pro quo.
That was, you know, the part of the reason the government would give the Fed its privileges was because it basically run the printing press to lend to the government, especially in wartime.
But that, but because they saw the potential for corruption, you know, the Fed could go by, go around and buy specific assets.
Obviously, there's a huge role for corruption or scope for corruption, but yet after the housing bubble crash, the Fed got into buying mortgage-backed securities.
And it's never going to stop doing that.
You know what I mean?
That's there forever.
Just like after 9-11, they have the TSA.
It doesn't matter how many spot checks they do.
I don't know if you know this, Dave, but like the government's own accountability office.
They do tests to put guns through.
Everything gets through.
TSA doesn't stop anything, like even on their own tests.
It was like 90% or something like that got through.
It was outrageous.
It was like so big, I assumed it had to be wrong.
And I went and looked and it's like, yeah, it was like 90 plus percent of the stuff gets through on their own controlled experiment to see if they're catching stuff.
But yet the TSA, it's never going to go away.
And so I'm saying with this stuff that, yeah, the Fed doing all this because of this particular thing that, you know, no matter how bad it may or may not be, it's, we're going to get through the worst of this within 18 months.
You know, well, people are saying there'll be a vaccine at the very least in 18 months.
So, I mean, there's no reason, whatever the Fed's doing right now, that they should still be holding asset-backed securities that have credit card debt and student loans 18 months from now.
I'm guessing they will.
I don't think they're going to give that power up.
So, yeah, there's lots of, you know, and I don't know how much to make it.
Like, is it all these guys were in the cigar-filled room and then they said, release the coronavirus?
You know, I'm not saying that, but, but what I am saying is as you, yeah, they had their things they've wanted to do for a while.
And then this, this is the opportunity to take advantage of it.
Yeah, that's, I, I mean, I, who the hell knows what the scenario is, but the second one seems most likely to me that they, they see this and that people who are, you know, power brokers, you know, normally, they see an opportunity like this and it's, and their eyes get wide and they're like, okay, now we can really move forward with a lot of stuff that they've wanted to do, I think, probably for a very long time.
And just to show that that's, there's nothing crazy about that or like, oh, I mean, there's lots of people right now who weren't going to be able to make their rent payment.
And now this is a good, oh, yeah, I can't.
Because you know what I'm saying?
And so you could say, like, oh, I always would have loved to not make my rent and not get evicted, but now I can get away with it.
You know what I mean?
So it's like things, whereas before I couldn't have gotten away with it.
They would have kicked me out of my building.
So I'm just saying, like, the idea that the people in power are using this, that's not a crazy thing.
I think everybody, you know, something like this happens.
And oh, yeah.
And I mean, the big example in my lifetime, at least, that's just kind of undeniable is the war in Iraq.
That it's just that all these people who were openly advocating for war in Iraq before 9-11, all the neocons were pissed off that they didn't overthrow Saddam in George H.W. Bush's war.
They were all like advocating.
They were criticizing Clinton for being too easy on Iraq when he was just bombing them and setting up the embargo and all that stuff.
And then as soon as 9-11 happens, they're like, well, obviously this means we need to go to war with Iraq.
It's like, okay, but you did want this before 9-11, and there's no evidence 9-11 had anything to do with this.
So my guess is you're just jumping at the opportunity.
And that's a real deal, you know, a war that killed hundreds of thousands of people.
I mean, this is that's about as bad as anything is.
Yeah, and like on the just to give another example that, like, on the Fed, so not this most recent thing, but like a couple of weeks or at this, you know, maybe three or four weeks ago at this point, I'm losing track, but they announced a $1.5 trillion issue in the repo markets.
And by the way, so there is some subtlety there.
It like if the Fed's just lending money and then they get it back.
So, I mean, that's not the same thing as like just giving money to somebody, but certainly to have someone backing you up and being able to lend up to 1.5 trillion, you know, that certainly helps you out.
But what they were doing is for I think it was one month and three month repos as opposed to just overnight or, you know, like two weeks or something.
And the way like the CNBC articles were talking about it is to say, ah, in moves that certain investors had been clamoring for for months, the Fed finally now expanded.
You know what I mean?
So that kind of stuff.
CDC FDA Testing Concerns00:05:09
Nothing too sinister about that.
But yeah, there's certain things that people wanted.
And now this is the crisis that they can go ahead and do that.
Whereas in other contexts, people might have said, well, wait a minute, I'm not sure that's a good idea.
What do you think?
And I know you've talked about before, you had an episode with Tom Woods.
I think it was back around the time of Ebola.
It was early in Tom Woods' show, like in the first few hundred episodes, I believe, where you guys did an episode about how in an anarcho-capitalist society, things like this could be handled.
And, you know, like, obviously, I mean, I think we've seen a lot of, like, I know before there was any government, any government mandate or anything like that, my wife's grandfather was very old.
He's like 96 and has been in bad health, but he's just the toughest old Italian on the planet.
So every literally every time, like six different times, I've been like, oh my God, he's he's definitely going to die now.
And then he bounces back and he's absolutely fine.
He's 96 and, you know, thank God for the moment doing okay.
But he was at is at a like a nursing home and they shut down all visitation.
And this was before there was any government, you know, like mandate to do so.
It's just that a private company was like, well, look, all these people are at very high risk.
We just can't risk.
And it's really, it's horrible.
It's like heartbreaking because they can't see their grandfather.
You know, my wife, my mother-in-law can't see her father.
And it's really, it's awful.
But you understand why they had to do this because they have to protect these people.
And if one case of coronavirus gets in there, this is, it would be a disaster.
So do you, you know, do you think it seems to me like probably there would be a lot of voluntary, you know, private property owners deciding that like, okay, we're going to have to shut down, you know, restrict people from moving in and out of here the way they do norm during normal times.
Do you think that would be a big part of like the kind of free society's response?
Oh, definitely.
And before we get like too hypothetical, let me just mention before I forget, I mean, there's plenty of clear examples right now in the real world where it was government policies that were preventing the private sector from helping.
So the huge one is testing.
I mean, up front, you know, the CDC and FDA were denying labs.
And I understand that I think like in principle, the idea is, oh, well, because you don't want some fly-by-night company sending people corona tests that don't work, you know, and they think they're fine and they're not, or, or they say that they're sick and they're not.
But clearly, I mean, there were reputable labs that had tests that were good and the FDA wasn't letting them.
So that was, you know, early on, one of the problems that people will say is that the U.S. was slow in getting on ramping up the testing.
And so that clearly far from me saying, oh, yeah, that's because Trump was asleep at the wheel.
No, it's because the CDC and FDA were actively preventing people from doing it.
There's also crazy stuff too.
We were talking about the hospital situation of the masks.
So in case some of your listeners don't know, I mean, it's like these doctors and nurses are like on the front lines and they're being told to wear bandanas and stuff like that, which is like, you know, telling troops to go take Normandy and giving them butter knives.
It's nutty.
And so, and I, I mean, I'm directly involved.
Like I know a guy, he has some, what they're called, K-95, KN-95 masks that there's, you know, similar.
And it's like various hospitals will not take them, like these other types of masks, because they don't meet the guidelines.
But instead, they're telling people, here's how you make stuff with household supplies.
So, I mean, it's, you know, really, there's some a lot of crazy stuff like that.
Also with the private testing, there was companies coming up that were going to have like mailing kits to your home.
And we, you know, we were looking into that ourselves.
And then all of a sudden, the FDA ruled you can't do that.
Right.
So, I mean, it's, there's lots of things that in this actual crisis, things that they're criticizing the government for for being slow on that the private sector was literally barred from from stepping in and helping with.
But yeah, so to answer your question, I think, yes, in a Rothbardian world, the one thing that's significantly different is property boundaries are owned by the private owners and they can set whatever rules they want.
So in principle, any kind of quarantining rules you wanted in theory could be implemented.
They would have the legal right to do that.
Whereas now there might be issues of discrimination or something.
So that airports and whatever, they could set up whatever kind of screening they wanted.
Just more generally, yeah, I think you're right that had it not been for government measures that people would have been concerned.
Nursing homes and stuff obviously would have taken countermeasures.
And then I think a lot of people would have just stopped going to restaurants and whatnot because they would be worried.
And so in order to bring the, you know, entice customers back, those businesses would have to demonstrate to them, no, look, it's safe.
And so they would, you know, revamp and come up with some way to, you know, get people to come in.
So I, like we said, having just takeout or having, you know, curbside pickup or like we say what Trader Joe is doing, they're spacing people out.
I mean, there's lots of things they could do.
And I think, yeah, there would just be a lot more creativity.
Market Creativity vs Regulations00:15:42
The last thing I'll say is, I mean, there's a, there's a trade-off, right?
That the, you know, the more people who just stay in their houses and don't go out, the less the virus spreads.
But then, of course, you know, that hurts other things too.
And you can't stay at home if you don't have toilet paper.
Well, you need people to be making toilet paper.
You know, so obviously it can't just be nobody goes to work for three months.
Otherwise, we're all be dead.
Right.
Except for like Owen Benjamin with his goats and whatever.
But Owen's going to be fined.
Yeah.
So yeah, you're like, who's the crazy guy now?
Right.
But, you know, so obviously it's not an either or.
And then so that's something in terms of, well, how do you do appropriate trade-offs where that's something that the market is great at, right?
That you, you know, that's the top-down planners, they don't know what the right trade-off is.
You know, in terms of essential businesses, like, okay, yeah, you want banks open.
And you want grocery stores of, okay, but then you also need to have the factories open that are making the paper towels, right?
And so you need to have the guy driving the truck that takes it.
So it's, you start saying, well, who's essential or not?
I mean, you could say, okay, I guess the nail salons aren't essential.
But I mean, it's hard to really say what's clearly non-essential.
Since I brought that, if you mind, let me just mention one other thing, Dave, that part of what concerns me with all this is you've got stocks crashing.
They say only essential businesses.
Well, that's going to give a huge advantage to like the established firms, right?
Because they're going to be big and they're the ones, oh, they're getting bailouts too.
So I think among other things that's going to happen here is you're going to just see that people who already are on top are just going to crush sole proprietorships and small businesses that normally would be the challenging thing.
So, I mean, you see that in general, like with regulations or whatever, that the big companies can comply more easily.
So I think here it's going to be that on steroids where small business sort of like literally are going to be prevented from going to work.
It's going to be illegal for them to compete with these big firms.
And then on top of all that, the Fed's coming in and it's going to have a lien on all that stuff.
So it's like, this is a great way to transfer a lot of stuff at basement prices over to a bunch of people who own the banks.
No, absolutely.
And this is going to be a disaster for inequality, which I think sometimes even libertarians, particularly the more kind of like, you know, libertarianism ink types, but they always, it's like, if you talk about inequality, their knee-jerk response is just kind of that like inequality doesn't matter because in a free market, you know, which is true in a free market, but we're not in a free market.
And the whole system that we live under isn't is really, you know, the government robbing regular people to give money to cronies.
I mean, and it seems to me like every single aspect of this crisis is going to help the bigger companies and hurt the mid-sized and smaller companies, like everything from just the very crisis itself.
I mean, you know, which is just going to, you know, it's going to hurt the companies who are just getting by, obviously, more so than the ones who are huge companies.
And then everything from the bailouts to the government spending going up always seems to make its hands into the politically connected more so than average people.
I think that obviously the low interest rates always seem to kind of, you know, give an advantage to speculators and the Wall Street casino connected people.
And it screws over, you know, people on fixed incomes and savers and stuff like that.
So I agree.
I agree with you completely that it seems like every inch of this is we're going to come out of this with worse inequality than we already have.
And if nothing else, I think libertarians should realize that even if you don't in theory think there's anything wrong with inequality, you could at least realize that it makes a whole bunch of people advocate for socialism and that's not so good.
So anything that is exacerbating that inequality, especially if it's not, you know, legitimately created is not a good thing.
I think that's for sure.
Yeah.
And I mean, too, like it's, you know, there's going to be desperate people I know around here.
They're deploying the National Guard and stuff.
And on the one hand, you say, oh, they're just doing it as a power grip.
Right.
But I think they're also doing it because they know there's going to be looting.
And, you know, I mean, everyone's staying at home and people are desperate.
They're going to go out and start, you know, smashing in windows and stuff from storefronts where the owners are sitting in their house under law.
So yeah, it could get ugly.
And I thought of another example, too, in terms of like the free market.
One of the issues with why it's the shick thing to flatten the curve and all that stuff, it's because of the hospital capacities.
Idea being that if we could spread out, you know, the amount of cases going to the hospital per week, fewer people will die, right?
Because that's a big thing that we need to have the, you know, the ICU beds and so on.
And my understanding is Ford was retooling.
I'm like, look, we're ready to crank out these ventilators.
And the FDA was making, and then to go through the hoops, it's going to take like 45 days for them to be up and running.
And it's stuff like that where I don't.
think would happen in a market economy.
You know what I mean?
We know this, we see this problem is coming.
There's plenty of people.
They're not making cars right now.
They want to help.
Everyone's mobilized to do this.
I was hoping, and I guess we'll still see what happens.
I hope when all is said and done, the analogy I'm using is like World War II, Dave, where, yes, FDR greatly expanded the role of government.
That was not a free market response to situation, but there's also a sense in which why did the U.S. win that?
Because their private business just cranked out so many tanks and battleships and stuff.
Like they just outproduced the other powers.
They dwarfed them.
And that's how it was.
And clearly, I would say that's because of U.S. ingenuity and its relative free market economy, even though it wasn't a free market in the 1940s.
So likewise here, I was hoping that Trump, the one good thing about him is if somebody could get his attention and say, just deregulate, waive all these regulations and just let them go, that he would have done that.
And I think he is doing that somewhat, but still, like I said, it's my understanding is that Ford should be cranking out these ventilators and stuff is having to do like a whole month delay with jumping through hoops and things like that.
So that's what I was hoping is that is that Trump would, so yeah, go ahead and throw a bunch of money at it, but at least get rid of the, let them, let the private businesses step in and build these things.
Just like in World War II, it was like the private companies retooled and FDR kind of made his peace with them when he realized I need them to be cranking out stuff.
Yeah.
Yeah.
No question about that.
And another good point that I had Tom on the show the other day.
Tom, what's you heard of him?
Young nuket, keep your eye on this guy.
He's going place.
But he mentioned, which I hadn't even thought of before, but you know, that because there's just so many government rules and regulations, it's hard to keep track of all of them.
But the fact that it's like, well, look, one of the big problems is they're saying there's not enough room at these hospitals.
There's not enough beds.
They're bringing in these ships and they're turning the Jabbit Center in New York into like a giant hospital and all these things.
And he was like, well, you kind of have to look at the certificate of need legislation that's all around the country that's basically limits the amount of hospitals that can be built.
And as Tom put it, he goes, you know, none of us know exactly how many hospital beds there should be in the country.
Like obviously 300 million would be too much and a thousand would be too little, you know, and it should be somewhere in the middle.
But there's pretty much no question that the certificate of need legislations, they make it less than it would be.
Like there would be more if you have these laws that are limiting the amount of hospitals that can be built.
So also quite possibly if those laws and rules didn't exist, there would be more hospital, you know, the more the hospitals could accommodate more people.
Yeah, I think they're actually trying what I'm about to tell you here.
I don't know if it's in California.
I forget, but like few, nobody's staying in hotels right now.
And so you could, you know, it wouldn't be so hard just to convert them.
Again, it wouldn't be like, you know, where you want to go get brain surgery or something when all of a said and done.
But in terms of, oh my gosh, we have two weeks to get ready for this huge wave.
Yeah, I mean, that would be something.
And, you know, there's, there's regulations that maybe they're waiving them in certain instances.
But yeah, clearly, if it were just a technological problem, we had time to get ready for this.
In other words, even though, like in the beginning, it was a small number of cases, but I'm saying once everybody knew, whoa, this could be big, there was still time to get ready.
And yet, I think, yeah, there were, like you're saying, there's a lot of regulations in place, particularly in the medical sector.
It's like the financial sector and the medical sector are so heavily regulated that was styming the efforts.
And so, you know, unfortunately, I think more people are going to die than would need to.
And so it's, and I, it's, you know, people don't, you don't want to make this ideological or whatever, but I really do think this is an open and shut case where it's, it's clear that there are plenty of government regulations right now that are, that are hurting.
Yeah.
No, I mean, I think you're right.
I think there's no question about that.
So what do you think, you know, short of we live in an anarcho-capitalist society, like dealing with the society that we actually live in now, what do you think like would be the best response from the government?
Obviously, you just touched on some of it right there with like the like massive deregulations.
Let people, let these companies help, let them do it, get, try to get rid of the red tape.
I've been flowed, I was, you know, saying, well, if we're going to spend all this money anyway, maybe, you know, how about repealing the income tax for a year?
How about repealing taxes on people's retirement accounts and let people access their funds if they need to, things like this.
You know, like, what do you think of those ideas or what do you think the government could be doing within reason?
Yeah, so certainly I'm always in favor of tax cuts.
And hey, we could say this is our chance.
We could push through the tax cuts that we've always wanted with this crisis.
And so, you know, that's certainly that would apply here.
Because, yeah, part of the problem, you asked me this before, and I forgot to bring this point up.
Part of the issue is depending on how these so-called stimulus measures are designed, if it's tied to you being unemployed, right?
Like they want to extend unemployment benefits.
The issue with that is you're paying people not to work.
And so it's that's and that's the logic behind even some libertarians who like the UBI.
So to be clear, I'm not in general a fan of UBI by any stretch, but I'm just saying that's that's where they're coming from is they're saying if you just give them no strings attached.
In other words, you don't want to say, here you get a bunch of money from us if you don't have a job, but if you go get a job, then we stop sending you the money.
That that's, you know, that has a perverse incentive effect.
Whereas getting rid of taxes, you know, like the getting rid of the payroll tax, for example, which I guess Trump was looking at, like that, that makes it from a, from a firm's point of view, to get rid of the payroll, the employer side of the payroll tax means it's cheaper to go hire a worker, right?
So that's the logic there where it's not merely the government losing revenue to try to help, but it's lining up the incentives the right way.
So that's the downside of what the critics would say, okay, but tax cuts or whatever don't help somebody who's unemployed.
And I get that, but again, the counterargument is, okay, but more people are going to be employed if you reduce taxes.
So that's the idea.
But yeah, getting rid of all those regulations.
One thing before we run out of time here, I just want to mention in terms of, I'm real pessimistic, obviously, with all this stuff just hitting us, but I think one good thing coming out of this is a lot more people are going to start homeschooling.
They were afraid of it before.
They didn't know how it worked.
Now they're kind of being forced to do it.
And they might realize, we don't trust these people running this system.
Not a partisan thing, just in general, realizing that this system is not trustworthy and we ought to take matters into our own hands.
And so I think that's one benefit that's going to come out of this is that more people are going to be homeschooling.
Yeah, I think I actually, I was taking listener questions a couple episodes ago and somebody mentioned something about that where they said like, oh, well, you know, isn't the silver lining of all this that there'll be a lot of kids who aren't at public schools and are home with their families for a while.
And I was like, hey, yeah, fair enough.
That might be, that, that might be a nice thing.
And like you said, a lot of people just that now parents kind of have to, you know, at least try some type of homeschooling for a little bit.
So yeah, maybe that would be a silver lining.
I also, I okay.
By the way, you just reminded me in terms of we were talking about like the trade-offs and the unintended consequences.
That's another one too.
I think his name is Michael Osterhum.
He did Joe Rogan's show.
He's like the guy from the University of Minnesota, their Center for Infectious Policy Research.
And he was making the point early on that he didn't think the school closures were a good idea.
And not because, oh, now kids aren't going to know how to multiply.
He was saying because if the kids are home, then there's a lot of like 20% of the healthcare workers then can't go in because they got to stay home with their kids.
So just little things like that, where even if you put aside economic efficiency and like you're just trying to single-mindedly, you know, have humanity deal with this virus and to minimize the impacts, things that, you know, top-down government rules that seem to make sense, like, oh, yeah, keep kids home so we stop the spread.
Well, now that means there's fewer hospital workers.
So it's not, it's not obvious that's the right thing to do.
Yeah.
Tom was reading from an article in the New York Times where some doctor was basically arguing that the idea of shutting down colleges was kind of insane because you're sending these college kids who are in a very low risk demographic home with their older parents and sometimes grandparents who are in a higher risk area.
And this could have like that.
So again, sometimes these things aren't as straightforward as you think.
You're like, you actually have to think these through and weigh out the different options.
And sometimes it's kind of impossible to know.
I mean, you don't exactly know how to best flatten the curve.
But the other thing, of course, is that I do think that, and I'm curious to your opinion on this, but at what, like if we're just shutting down huge sectors of the economy, whatever is deemed non-essential, you know, somewhat arbitrarily, but whatever, the shutdowns are very real.
I'm starting to wonder like how long we can do this before people are going to start to realize that there's a real cost associated with this too, and that it's maybe impossible to completely weigh out versus the virus.
And don't get me wrong, I'm very concerned about the virus.
I mean, I've, you know, my, my, my parents and my wife's parents are in the higher, you know, demographic ranges.
My wife's mother has MS. My wife's brother, my brother-in-law has an autoimmune deficiency disease.
Also, so I'm like, I have a lot of people I'm worried about in this situation, but there's also a real human cost to shutting down the economy.
It's not just numbers in a stock market.
And I wonder, you know, what do you think about how we weigh out those costs?
Well, just going back to what we said earlier, I think, you know, you allow freedom and then that's, you know, people make their decisions because part of the problem right now is no, a lot of people making those decisions, they're not bearing the consequences if they get it wrong.
And so, and so I think, you know, that's, that's something that at least if you had it more open-ended and let people make their own decisions.
Hand Sanitizer Freedom Debate00:10:30
Like I said, I think there'd be a lot more voluntary campaigns to like just stay home and stuff like that.
And the businesses would figure out how to respond appropriately.
And again, if it were just a market economy, the protective measures that would be put in place, so given people going into work, that's the kind of thing I, you know, if it were a more free market, then certain businesses could stay open, but it wouldn't just be people working in a factory, just, you know, exposed, breathing each other's air.
Like maybe they'd put, you know, more secure measures that, you know, have them get ventilator masks on or something.
You know what I mean?
So it's, it's, I think there's, there's a, a way, it's, it's like, oh, is it safe to drive cars or not?
You know, and it's like, oh, well, there's a whole spectrum of things there.
It's not just banned cars or not.
It's you have cars and they have seatbelts and they have airbags.
So there's lots of stuff that could be done here as a mixture.
Like, so yes, the economy needs to adapt to this thing.
And maybe, yeah, maybe the right thing to do would have been for the first month, everybody stays home.
And we just, you know, get a sense of this thing.
But yeah, as you say, that can't be indefinite.
And it, you know, ultimately the way this is going to happen is going to resolve itself is more and more people are going to get it.
Most of them are going to recover and then they're going to be immune.
And eventually, you know, you'll get some sort of herd immunity.
And finally, hopefully they get a vaccine in the not too distant future.
Yeah.
And I guess hopefully there's just not too much loss of life and, you know, people getting, you know, permanent lung damage and stuff like that along the way.
Because it does seem to me that like, yeah, we're going to have to open back up at some point.
And this virus is going to be with us.
And it'll be interesting to see just like the psychological effects it has on people going forward.
You know, like, are people going to be shaking hands in the next year?
Are people ever going to feel comfortable?
I mean, I know there's definitely a whole lot of new germaphobes that have been created from this, which maybe isn't the worst thing.
So one other thing I wanted to ask you about, because this is something that I've seen a lot of people arguing about online, is the stuff with like price gouging and hoarding and things like this.
And one of the things that I actually thought was really interesting through all of this is, which I had never really thought of before, was the fact that stores themselves, again, just a completely voluntary free market action have been like limiting the number of like rolls of toilet paper you can buy and antibacterial soap and things like this.
Like they're they're almost putting their own foot down, just being like, no, look, you can't take all the soap.
You know what I mean?
Like we need everybody to have some.
But then there's, there's, of course, been some people who were hoarding things and you hear these stories about, oh my God, this awful person was charging like a hundred bucks for Pure L or something like that.
And libertarians have always kind of, you know, had the, it's like one of the Walter Block defending the undefendable, you know, type things, like where it's like, oh, but price gouging, how could you possibly defend that?
But anyway, I don't know, any thoughts you have on any of that stuff?
Oh, yeah.
The guy, you know, would who bought like $17,000 worth of hand sanitizer and he had it in a storage unit and he was going to sell it on eBay and then eBay wasn't letting him sell it for high prices.
And he was doing the socially correct thing, even though he wasn't doing it to be a nice guy or whatever.
Actually, I saw an interview with him.
It looked like he did have at least a rudimentary understanding of supply and demand and that kind of stuff.
And so he could justify what he was doing.
But I even saw a lot of libertarian types who are okay with like rising prices to ration things.
But they're, oh, but this guy was a jerk because apparently he was like, when he knew this was going to be a thing, he drove around with a truck and like cleaned out all the dollar stores and stuff from the hands in his area.
And then that's how he stocked up.
And yeah, and I see people think, oh, so that's that's the, you know, he's causing the shortage.
If he had been allowed to sell, no, all he would have been doing was rearranging where the hand sanitizer was located.
Right.
And so if you think it through, like you're saying, the dollar stores, they, at that early stage, they weren't limiting the sales.
You know, some guy came in and just bought everything on the shelf.
They let him.
And so had he not done that, I mean, all that would have meant was normal people when this thing, you know, like a week after he had done that, you know, they would have heard this thing.
They would have been scared.
And the first few lucky households, the stores would have cleaned it out.
And so that's, that's the kind of thing to realize that when someone is doing it as a speculative business, that they're, oh, I'm going to buy these things low and then sell them high.
They're ensuring that just real limited quantities get out into people's hands.
You know, so more total people are going to have hand sanitizer if he had been allowed to sell that than if he didn't do what he did.
Because if he didn't do what he did, those dollar stores would have been cleaned out a week later.
But instead of by him, it just would have been by like the first 15 households who got there.
And so if you're a household with five bottles of hand sanitizer, you're probably not going to be selling it on eBay as much.
Whereas if he's got a whole storage unit, that's his business.
That's what he's doing.
Obviously, he's going to be looking at eBay and sending it around.
So my point is just that even in a worst case scenario like that, that's actually what you would have wanted to do.
That there was a limited number of hand sanitizer bottles when the crisis hit.
And how do you ensure that they don't just end up in a few households who happen to get to the store first?
Is there's a real, you know, a shockingly outrageous price.
That's what you and the other thing too is with having prices.
So I agree with you, Dave, that certain retailers, it would just be bad for their name brand.
Like when you go to Walmart, you don't want to see paper towels that cost $20 a roll.
Like you'd forever be mad at Walmart.
So that's why they're not going to do that.
But on the other hand, if you go to the store and now there's no toilet paper, you don't know what that means.
You don't know, okay, can I just get it next Thursday?
You don't know how like the stockpile you have at your house, you don't know how, you know, to much to ration that.
And maybe toilet paper is a hard thing to think of, but like hand sand, you know, you can be more or less liberal with the hand sanitizer.
You can like use soap when you're in the house and not use the hand sand.
And I'm saying if there were at least some stores that did have prices that would always clear the market, so you knew, oh, yeah, you go down that store down the street, those guys are jerks, but you can always get toilet paper.
It's just going to cost you $8 a roll.
You would then have some sense.
You could see the price changing over time and you would know how is it?
Whereas right now, it's just people keep checking up no toilet paper yet.
We don't know what that means.
Is there going to be toilet paper next week?
You know, that kind of stuff.
Yeah.
I also just have never really, I mean, I guess maybe you could paint some scenario where I'd feel bad for someone, but in general, it's like, I don't know.
I mean, you're not talking about like breaking somebody.
You're talking about charging a few more bucks for toilet paper or hand sanitizer.
It's like in these type of times, I think the vast majority of people have no problem paying a few bucks more.
I mean, we've probably all spent more on groceries than we normally do, kind of stocking up and stuff like that.
And also, yeah, it's a self-fulfilling prophecy too, where because of the shortages, like in other words, people who have gone to the stores.
Sorry, let me back up.
I had thought originally when there was all these shortages of toilet paper, it was because the supply chain was screwed up, that like the people making them couldn't get to the factories or the truck.
And no, it's from various sources.
I've heard the supply chains are okay.
It's just, you know, people are just as soon as it shows up, boom, they get cleaned out.
And that makes sense now because, right, if you've been going to the store and you know toilet paper hasn't been there the last four times you've been to the store, if you go and you do happen to see it, you're not just going to grab a roll, you're going to grab like a month's worth because you realize, so, but now if everyone's doing that, that's why it's never in stock.
Right.
So it's kind of like if there were some stores that, you know, price gougers R Us or something that just always had it there, or, you know, eBay allowed you to get it and allowed, you know, someone to charge an unconscious.
Like that would, I think, reassure people.
They wouldn't panic and feel like they had to buy a million rolls at the normal price whenever they saw it because they would know if we get into a pinch, we can go buy.
And like you said, it's not like, oh, well, only the rich people can afford $5 toilet paper.
No, it's just, it's more expensive than it normally would be.
No, the real life example for me of this stuff was Uber in New York City.
And it used to be the case in New York City that you could only get a, you couldn't get a cab when it was raining.
Like when it was raining, it would be impossible to get a cab.
So if you were like in an emergency or you're in a rush somewhere, you're just too bad because everyone's jumped in them and there are no cabs.
And every New Yorker who is like around my age had a situation before where they're literally just walking blocks in a downpour and then have some emergency thing they have to get to.
And it's just, oh my God.
And then Uber came along and would be like, oh, you can always get a car, but they're going to charge you like 50 bucks.
If it was going to be 20 bucks, it'll be like 50 bucks now.
But all it was was an extra option.
It's like you could still walk around in the rain, in the pouring rain all day and not have a ride.
Like that option is still out to you.
But now, if it's that big an emergency, you got to pick up your kid or something like that.
You can, you know, you get price gouged, but at least there's the option of getting it.
And if you really need something, aren't you happy to at least have the option to get it for a little bit more money than nothing?
Yeah.
And that was the thing, like with the guy with the hand sanitizer and eBay wouldn't let him sell.
Those people who were willing to pay, and I don't remember what the price was, it was a high price, don't get me wrong, but there were people willing to pay that.
And then eBay said, no, he didn't send it to him for the regular price.
He just didn't send it to him.
So it's not obvious.
How does that make you better off to know you didn't get ripped up and I don't have hand sanitizer?
So they forced him to hoard instead of price gouging.
So is that really better?
I mean, and certainly, as you said, that's like the, you know, the Missessian, you know, logical deduction that, well, if somebody is willing to pay that, then I could at least say that that person would prefer him to sell it than not sell it at all.
Right.
I mean, maybe I'm sure they'd prefer a lower price, but they would still rather buy it than not buy it at all.
Okay.
Well, I think we'll wrap there.
But it's great to talk to you.
And I really appreciate all of your insights in this situation.
I always appreciate all of your insights, but particularly with all helping me make sense of a lot of this craziness.
And I, of course, wish you and your family the best.
And that goes to everybody listening and watching as well.
Hope everybody's doing okay.
And yeah, we'll be back with a new episode tomorrow.