Latest / OneLegUpAlex Media / One Leg Up on Tariff Updates With Fmr. Senator and Reagan Economic Advisor Phil Gramm 5-28-25

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One Leg Up on Tariff Updates With Fmr. Senator and Reagan Economic Advisor Phil Gramm 5-28-25 · OneLegUpAlex Media

• 0:04
  Speaker 1: Here's your host is Alex deren.
• 0:10
  Speaker 2: Well, in the effort to have one leg up our
• 0:12
  Speaker 2: news for you once again here on the one lie
• 0:15
  Speaker 2: Gup Network with Alex Garrett. It's interesting the timing of
• 0:19
  Speaker 2: my next conversation with former Senator Congressman Philgram. Yes, he
• 0:25
  Speaker 2: served in the Senate and the Congress, was an economic
• 0:28
  Speaker 2: advisor to President Reagan. So we get into that in
• 0:31
  Speaker 2: this conversation. But before we do, I want to break
• 0:36
  Speaker 2: the news tea if you haven't heard that a US
• 0:38
  Speaker 2: Trade court has blocked President Trump's tariffs, remember the Liberation
• 0:43
  Speaker 2: Day tariffs from going into effect, asserting the present oversteps
• 0:48
  Speaker 2: of authority by imposing across the board tariffs on imports
• 0:51
  Speaker 2: from nations that sell more the United States than they buy.
• 0:56
  Speaker 2: So the timing of this is interesting because I'm inspired
• 1:01
  Speaker 2: now to really release this conversation I had a few
• 1:03
  Speaker 2: days ago with Senator Phil Graham, and you might remember
• 1:08
  Speaker 2: that name from the eighties. We talk about that economic
• 1:11
  Speaker 2: prosperity time, and we also talk about, in addition to
• 1:15
  Speaker 2: what the tariffs and all the cuts to different services
• 1:19
  Speaker 2: like medicaid and all that, how that will impact everyone
• 1:22
  Speaker 2: in America.
• 1:24
  Speaker 1: We also go into his book.
• 1:27
  Speaker 2: The Triumph of Economic Freedom, Debunking the Seven Great Myths
• 1:31
  Speaker 2: of American Capitalism by Phil Gram and American Economists. Professor
• 1:36
  Speaker 2: and co director of the Program on the American Economy
• 1:40
  Speaker 2: and Globalization at the Mercadis Center at George Mason University
• 1:46
  Speaker 2: in Virginia, Professor Donald J. Boudre. So, we got to
• 1:51
  Speaker 2: talk to the former Senator of Phil Graham about this
• 1:55
  Speaker 2: book about the seven great myths he liked to highlight,
• 1:58
  Speaker 2: and such an in depth conversation. I'm excited to release
• 2:02
  Speaker 2: this now here on the One look Up Network because
• 2:06
  Speaker 2: you know, it's not often you get a senator on
• 2:08
  Speaker 2: your podcast, former or president. So always seizing the opportunity
• 2:13
  Speaker 2: to talk to these great minds that have been in
• 2:16
  Speaker 2: DC and continue to be in DC.
• 2:20
  Speaker 1: One way or another.
• 2:21
  Speaker 2: And clearly Senator Philgram has his eye on everything going on.
• 2:25
  Speaker 2: So let's get to that conversation right now with former
• 2:28
  Speaker 2: senator from Texas.
• 2:29
  Speaker 1: Oh great, thank you. I'm glad to be here and
• 2:33
  Speaker 1: I appreciate having me.
• 2:35
  Speaker 2: I'm very honored to have you. You actually served multiple
• 2:38
  Speaker 2: terms in Congress TOD both at the Senate and House
• 2:40
  Speaker 2: of Representatives, and now you're writing So talk about, first
• 2:44
  Speaker 2: of all, your time in Washington, because I barely get
• 2:47
  Speaker 2: to day to talk to a senator. So what was
• 2:48
  Speaker 2: your time in Washington like?
• 2:50
  Speaker 1: Well, I was electors of the House as a Conservative Democrat,
• 2:57
  Speaker 1: and during that first two years in office, I offered
• 3:05
  Speaker 1: a bipartisan budget with David Stockman that we call the
• 3:12
  Speaker 1: Bipartisan Conservative Budget. And then Reagan was elected President. Stockman
• 3:18
  Speaker 1: became omb director and our budget became the core of
• 3:23
  Speaker 1: the Reagan budget, and I became the primarier author of
• 3:29
  Speaker 1: the budget in the House, and we put together a
• 3:32
  Speaker 1: bipartisan coalition and we passed the Reagan Economic Program at
• 3:39
  Speaker 1: one point by one vote, and once we had gotten
• 3:46
  Speaker 1: that vote, in seven or eight other people changed votes,
• 3:50
  Speaker 1: but it was close, and then the Democrats threw me
• 3:55
  Speaker 1: off the Budget Committee for co author and the Reagan Program.
• 4:00
  Speaker 1: The President invited me to join the party, so did
• 4:03
  Speaker 1: the Republican leadership. But I felt if I just changed
• 4:08
  Speaker 1: parties that there might be people in my district that
• 4:12
  Speaker 1: feel that I'd flown false colors or somehow betrayed them.
• 4:18
  Speaker 1: So I resigned from Congress and ran for re election
• 4:23
  Speaker 1: as a Republican and no Republican never got more than
• 4:27
  Speaker 1: thirty six percent of the vote by district, so it
• 4:31
  Speaker 1: looked like an uphill battle, and it was. I had
• 4:35
  Speaker 1: nine Democrat opponents, but I managed to win the race
• 4:39
  Speaker 1: without a runoff pleaded.
• 4:42
  Speaker 2: And then you go to Senate and you become chairman
• 4:44
  Speaker 2: of the Ranking Committee. First of all, all the chairs
• 4:48
  Speaker 2: that we see day day out in the Senate hearings
• 4:51
  Speaker 2: and huven House hearings, they have a lot of pressure
• 4:53
  Speaker 2: on them. Did you feel a lot of pressure as
• 4:54
  Speaker 2: the chair of the Ranking Committee.
• 4:57
  Speaker 1: No, it was a subjec I phil. I knew a
• 5:01
  Speaker 1: lot about it. I've been an economist. I talked for
• 5:05
  Speaker 1: twelve years money in banking. In fact, had Texas A
• 5:09
  Speaker 1: and M. And one of my students was Jeb Hensling,
• 5:14
  Speaker 1: who went on and became Chairman of the Banking Committee
• 5:17
  Speaker 1: in the House. So it was a good time to
• 5:22
  Speaker 1: be in Washington. Eight years with Reagan were great and
• 5:27
  Speaker 1: I had a good working relationship with both Bushes and
• 5:33
  Speaker 1: with President Clinton. So it was a good period. People
• 5:38
  Speaker 1: see me and they say, gosh, I'm sure you'ld lad
• 5:41
  Speaker 1: you that red race, and so I always smile and
• 5:46
  Speaker 1: explain to him that, well, you know, I enjoyed it.
• 5:50
  Speaker 1: It was a good job, and I felt like I
• 5:56
  Speaker 1: was doing something important. Everybody who's ever served in Congress
• 6:02
  Speaker 1: thinks things when they all the day they left. I
• 6:05
  Speaker 1: try to avoid that thinking, but it's tempting to think
• 6:10
  Speaker 1: that way.
• 6:11
  Speaker 2: You know a lot of senators. It's a difficult decision
• 6:14
  Speaker 2: to retire. So when you decided to retire, what was
• 6:16
  Speaker 2: the motive? What was the what was the next streat?
• 6:20
  Speaker 1: I think it was two things. Alex One. I decided
• 6:26
  Speaker 1: when I went that when I turned sixty that I
• 6:32
  Speaker 1: was going to look at doing something else. And by
• 6:37
  Speaker 1: the time I turned sixty, everything I'd gone to Washington
• 6:42
  Speaker 1: to do, we'd achieved. The inflation rate was totally under control.
• 6:49
  Speaker 1: In fact, from the time we brought inflation under control
• 6:53
  Speaker 1: until it got out of control during the Biden administration,
• 6:58
  Speaker 1: we had forty years price stability. The Reagan program produced
• 7:04
  Speaker 1: twenty five years of strong prosperity. And so the day
• 7:11
  Speaker 1: that I announced I wasn't gonna run again, the Buzget
• 7:14
  Speaker 1: was balanced, we had no inflation, the economy was booming,
• 7:20
  Speaker 1: the Soviet Union was dead, and so I figured, if
• 7:24
  Speaker 1: you ever gonna leave while you're ahead, this is it,
• 7:29
  Speaker 1: but it was a hard decision. I thought it would
• 7:31
  Speaker 1: make a difference when I left, and I said on
• 7:36
  Speaker 1: the day that I announced, I wasn't running again. All
• 7:40
  Speaker 1: the battles i'd fought mostly we'd won, We're gonna have
• 7:44
  Speaker 1: to be fought again. And certainly that's turned out to
• 7:46
  Speaker 1: be true.
• 7:48
  Speaker 2: But clearly you haven't really lost touch with it, because
• 7:50
  Speaker 2: here you are. We're gonna talk about tariffs in a
• 7:51
  Speaker 2: little bit, because you still got an eye on this.
• 7:53
  Speaker 2: You have this great new book out by the way
• 7:56
  Speaker 2: called The Triumph Economic Freedom, debunking the seven Great Myths
• 8:00
  Speaker 2: of American capitalism. And of course we're all for capitalism
• 8:04
  Speaker 2: in these parts on the podcast, so thank you for
• 8:07
  Speaker 2: writing about it. But before we get to that, you're
• 8:11
  Speaker 2: retired at sixty. Do you honestly feel some senator, some
• 8:14
  Speaker 2: commersmen stay beyond their time? I mean, is there?
• 8:17
  Speaker 1: Well, I didn't. I didn't. I didn't stop working. I
• 8:21
  Speaker 1: retired from the Senator char I wanted to work for
• 8:24
  Speaker 1: a big bank in New York, and then I went
• 8:27
  Speaker 1: to work for private equity firm. I still work. I
• 8:31
  Speaker 1: lie and tell people I have a young wife who
• 8:34
  Speaker 1: wants money, and he would put me in a cheap
• 8:36
  Speaker 1: nursing home. But the truth is, I like working. I
• 8:41
  Speaker 1: learned something every day. I like being around young, smart people.
• 8:46
  Speaker 1: And as I tell my wife, she says, how much
• 8:49
  Speaker 1: is enough? And I say, well, some morning I'm gonna
• 8:53
  Speaker 1: get up. I'm not gonna want to get on that plane.
• 8:56
  Speaker 1: And when that happens, that's when I'm walk quick. But uh,
• 9:00
  Speaker 1: in any case, I do now write a lot. Issues
• 9:06
  Speaker 1: come up that I don't think my viewpoint is being
• 9:12
  Speaker 1: heard on, and so I've written maybe over the years
• 9:17
  Speaker 1: one hundred and fifty articles in the Wall Street Journal
• 9:20
  Speaker 1: since nineteen seventy three, when I wrote the first one
• 9:24
  Speaker 1: as the young professor of Texas. They and am and
• 9:28
  Speaker 1: so don't. I'm not a regular writer with a journal,
• 9:33
  Speaker 1: but they publish a lot of my stuff. I'm grateful
• 9:37
  Speaker 1: and it gives me a chance to weigh in on
• 9:41
  Speaker 1: the issues. I try to stay out of the personalities.
• 9:46
  Speaker 1: But needless to say, today there are a lot of
• 9:48
  Speaker 1: issues out there that I care about, and many of
• 9:53
  Speaker 1: those issues are the issues I wrote about in the
• 9:56
  Speaker 1: book The Triumph of Economic Freedom, Debunking the Seven Great
• 10:02
  Speaker 1: miss of American Capitalism.
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  Speaker 2: Well, what let's start with this then, because obviously are
• 10:10
  Speaker 2: going to go into the myths. But the tariffs are
• 10:12
  Speaker 2: on my mind a lot. I mean they were, but
• 10:15
  Speaker 2: they're on my mind because I do feel like we're
• 10:18
  Speaker 2: doing it wrong in a sense. Right we should just
• 10:20
  Speaker 2: be going after enemies, not so much our allies. Or
• 10:24
  Speaker 2: maybe you disagree. Where are we getting it right? Where
• 10:26
  Speaker 2: are we getting wrong with the tariffs here?
• 10:28
  Speaker 1: Well, I think we're getting wrong pretty much across the board.
• 10:32
  Speaker 1: Tariffs are taxes on American consumers. So I'm not saying
• 10:39
  Speaker 1: you don't hurt foreigners by imposing tariffs, but you hurt
• 10:44
  Speaker 1: Americans a lot more. And tariffs drive up prices. They
• 10:52
  Speaker 1: force you to buy at home things you could buy
• 10:55
  Speaker 1: cheaper abroad. They disrupt theistic production. And we just put
• 11:03
  Speaker 1: this to the tests. Eight years ago, when President Trump
• 11:10
  Speaker 1: came into office, he raised tariffs for the first two years,
• 11:16
  Speaker 1: we cut taxes and we reduced regulatory burden, and the
• 11:20
  Speaker 1: economy grew, reaching a thirteen year high growth in twenty eighteen,
• 11:27
  Speaker 1: and in the middle of that year, Trump imposed his tariffs,
• 11:32
  Speaker 1: and the objectives of the tariffs, as he stated them,
• 11:36
  Speaker 1: was to bring down the trade depsit, to increase manufacturing
• 11:42
  Speaker 1: domestically to increase economic growth and to raise total employment
• 11:51
  Speaker 1: and agriculture, I mean in manufacturing as a percentage of
• 11:55
  Speaker 1: total employment. It failed every one of those tests. The
• 12:01
  Speaker 1: trade depths that went up, not down. And it went
• 12:04
  Speaker 1: up because the economy was strong from deregulation and tax cuts,
• 12:10
  Speaker 1: and so foreigners rushed in to invest in the American economy,
• 12:14
  Speaker 1: drove up the value of the dollar, made imports cheaper,
• 12:18
  Speaker 1: and so we ran a trade depthsit. Industrialization actually fell
• 12:26
  Speaker 1: in twenty nineteen before the pandemic. Genp fell in twenty
• 12:35
  Speaker 1: nineteen from the level in twenty eighteen, and employment and
• 12:40
  Speaker 1: manufacturing as a percentage of total employment continued to fall
• 12:46
  Speaker 1: at roughly the same rate it had fallen for the
• 12:49
  Speaker 1: previous fifty years. So the tariffs in the first term
• 12:54
  Speaker 1: achieved no positive objective, and now we've been posted tariffs
• 13:00
  Speaker 1: many times of that level. It's disrupted the production process
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  Speaker 1: in America. Remember that sixty one percent of all imports
• 13:13
  Speaker 1: or component parts used in American production of goods and services.
• 13:20
  Speaker 1: They're not fined, they're not final goods that people consume.
• 13:25
  Speaker 1: And so when you impose high tariffs, as the president did,
• 13:30
  Speaker 1: you make those inputs more expensive, and you disrupt the
• 13:35
  Speaker 1: production process and then you get retaliation. And the net
• 13:41
  Speaker 1: result is we created tremendous uncertainty, We disrupted millions of
• 13:48
  Speaker 1: businesses of production process, and we did great damage to
• 13:57
  Speaker 1: the world trading system that gave us eighty years of
• 14:01
  Speaker 1: prosperity in peace. So I think it was a bad decision.
• 14:06
  Speaker 1: It was ill advised. It's not going to work. And
• 14:10
  Speaker 1: the sooner we can negotiate our way out of it,
• 14:13
  Speaker 1: the better off we will be. And if we don't
• 14:17
  Speaker 1: do that, if we let anything like the level of
• 14:21
  Speaker 1: tariffs that have been announced going to effect, I just
• 14:25
  Speaker 1: don't see how we're going to avoid a recession.
• 14:28
  Speaker 2: Well, I'm going to say two things here. Do you
• 14:30
  Speaker 2: think President Trump is wanting us to get into a recession?
• 14:35
  Speaker 2: I mean people are saying us intentionally. Do you believe that?
• 14:37
  Speaker 1: Or no? No, of course I don't believe. Look, President
• 14:41
  Speaker 1: Trump believes in tariffs. He's always believed in him. But
• 14:47
  Speaker 1: you know people, a lot of people believe in things
• 14:50
  Speaker 1: that aren't so. And you know, we have experience with tariffs,
• 14:56
  Speaker 1: both their impact economically and politically. For a long period
• 15:04
  Speaker 1: of time, we've dealt with them in America for three
• 15:08
  Speaker 1: hundred years, and they've never worked. So I don't know
• 15:13
  Speaker 1: that there's a lesson in the second or thirtieth kick
• 15:16
  Speaker 1: of a mule. But these were bad decisions, and now
• 15:23
  Speaker 1: the administration is trying to negotiate its way out of it.
• 15:27
  Speaker 1: But the President appears to still want to end up
• 15:30
  Speaker 1: with a ten percent across the board tariff that's three
• 15:35
  Speaker 1: hundred percent higher than the tariff was on the day
• 15:39
  Speaker 1: Trump is elected. And so that if we ended up there,
• 15:44
  Speaker 1: obviously we'd be better often if we had the tariffs
• 15:48
  Speaker 1: going to effect that the President proposed. But if we
• 15:52
  Speaker 1: ended up there, we're going to still have a lot
• 15:55
  Speaker 1: of economic disruption. And as we know from Walmart, you
• 16:01
  Speaker 1: name it, businesses are making it clear that we're call schooling,
• 16:06
  Speaker 1: they're going to actually the prices. Yeah, and that's going
• 16:10
  Speaker 1: to be death politically in the off your election, which
• 16:14
  Speaker 1: is what seventeen months away.
• 16:19
  Speaker 2: Senator I got to say this. You know, other countries
• 16:22
  Speaker 2: at corner the way House were wanting to come to
• 16:24
  Speaker 2: the table with tariffs. Why would countries want to get
• 16:27
  Speaker 2: tariffs on their own countries because they think they can
• 16:31
  Speaker 2: get one over Trump? Is that why? Or why why
• 16:33
  Speaker 2: would they want to meet with him about being tariffed.
• 16:35
  Speaker 2: I'm not sure about that.
• 16:36
  Speaker 1: You've got to realize that there are a lot of
• 16:39
  Speaker 1: miss out there. One of those misses is that we
• 16:43
  Speaker 1: have the lowest tariffs in the World's not true. Every
• 16:47
  Speaker 1: EU country has a lower average tariff weight that we do.
• 16:52
  Speaker 1: Japan has a lord average tariff right than we do.
• 16:58
  Speaker 1: What I would like to see administration due is sort
• 17:02
  Speaker 1: of turn up Sal's era into a silk purse by
• 17:08
  Speaker 1: negotiating a reduction in American terrorists and trade barriers for
• 17:15
  Speaker 1: foreigners doing the same. Then everybody would benefit. And you've
• 17:20
  Speaker 1: got to realize we have a lot of some of
• 17:24
  Speaker 1: the worst protectionist measures in the world. We have in
• 17:27
  Speaker 1: America we pay twice the world place for sugar. Take
• 17:33
  Speaker 1: food out of children's mouths so that forty three hundred
• 17:37
  Speaker 1: sugar producers can be well off. We have in the
• 17:42
  Speaker 1: Jones Act a prohibition against foreign carriers of goods that
• 17:50
  Speaker 1: travel among states, and as a result, it costs more
• 17:57
  Speaker 1: to ship oil from Houston to New York than from
• 18:02
  Speaker 1: Saudi Arabia to New York. As a result, we ship
• 18:06
  Speaker 1: it from Saudi Arabia. So there are a lot, we
• 18:10
  Speaker 1: have a lot, a lot of bad provisions that this
• 18:13
  Speaker 1: is an opportunity to get rid of while opening markets
• 18:17
  Speaker 1: for US products aboard.
• 18:21
  Speaker 2: All right, let's get into the other myths of capitalism,
• 18:23
  Speaker 2: because you know, I'm getting tired of those that protest
• 18:28
  Speaker 2: down in Wall Street, Like it's just it's almost like
• 18:32
  Speaker 2: they don't know what they're protesting half the time, or
• 18:34
  Speaker 2: if they do, it's a little outlandish. So what are
• 18:37
  Speaker 2: the myths are you trying to debunk for those even
• 18:40
  Speaker 2: younger than I am, to try and under them understand
• 18:44
  Speaker 2: their benefits of capitalism.
• 18:45
  Speaker 1: Well, first of all, the book is based on the
• 18:49
  Speaker 1: fact that how we assess the facts really depends on
• 18:59
  Speaker 1: sort of the the views we start with, how do
• 19:03
  Speaker 1: we think the world works. For example, if you took
• 19:07
  Speaker 1: the Republican leader of the Senate the Democrat leader of
• 19:11
  Speaker 1: the Senate, they're going to differ on virtually every issue
• 19:14
  Speaker 1: of the role of government the free society. And as
• 19:18
  Speaker 1: tempting to say, well one's a liberal, one's a conservative,
• 19:23
  Speaker 1: But if you ask them in the Industrial Revolution, at
• 19:29
  Speaker 1: the birth of capitalism, what happened, Schumer is going to
• 19:35
  Speaker 1: say that what happened is the capitalist got rich and
• 19:40
  Speaker 1: the worker was impoverished. Soon is going to say everybody
• 19:46
  Speaker 1: benefited from the Industrial Revolution. If you ask what caused
• 19:50
  Speaker 1: the depression? Or was America's manufacturing capacity hollowed out by
• 20:00
  Speaker 1: the growth in post war trade, or you're brought up
• 20:04
  Speaker 1: to We look at five historical periods, the birth of
• 20:09
  Speaker 1: capitalism in the Industrial Revolution, the progressive era of regulations,
• 20:18
  Speaker 1: the depression, the postwar expansion in trade, the financial crisis,
• 20:26
  Speaker 1: and then we look at poverty and inequality because we
• 20:31
  Speaker 1: found that those seven areas are areas where people that
• 20:36
  Speaker 1: have different views have different assessments of what happened. And
• 20:41
  Speaker 1: let me just start with the first myth. We call
• 20:44
  Speaker 1: it the genesis myth. Well, what happened? What happened in
• 20:48
  Speaker 1: the Industrial Revolution? Will even Carl Marx, who is the
• 20:54
  Speaker 1: most avid of the most avid opponent of capitalism, begins
• 21:04
  Speaker 1: his analysis by noting that in one hundred years capitalism
• 21:11
  Speaker 1: has raised the living standards of people more than all
• 21:14
  Speaker 1: the other generations combined. The question for him is did
• 21:21
  Speaker 1: the worker benefit or did the capitalist benefit? And fortunately
• 21:29
  Speaker 1: for us, us being the people of this earth. In
• 21:34
  Speaker 1: the nineteenth century, governments, especially in Britain and the United
• 21:38
  Speaker 1: States started collecting and reporting data on what was actually happening.
• 21:47
  Speaker 1: And so what that data shows is that for one
• 21:52
  Speaker 1: thousand years prior to roughly eighteen hundred, there was no
• 21:58
  Speaker 1: real economic growth to the world. People pretty much lived
• 22:02
  Speaker 1: as their grandparents had lived. And then in one hundred
• 22:06
  Speaker 1: year period, per capita income of Great Britain and America
• 22:14
  Speaker 1: was flat for one thousand years, and then all of
• 22:17
  Speaker 1: a sudden bam takes off. And this was capitalism. If
• 22:23
  Speaker 1: you look at the data on wages, income, mortality, literacy,
• 22:32
  Speaker 1: the availability of nutrition, by all those measures, it was
• 22:39
  Speaker 1: a worker's revolution. People were better off in that one
• 22:46
  Speaker 1: hundred year period. The well being of working people grew
• 22:51
  Speaker 1: faster than any other one hundred year period in world history.
• 22:56
  Speaker 1: So the myth is that you had these people that
• 23:02
  Speaker 1: were impoverished living in the cities. Well, by our standards,
• 23:08
  Speaker 1: everybody in eighteen hundred was impoverished. And what happened is
• 23:14
  Speaker 1: you had the landed gentry who were losing their workers,
• 23:20
  Speaker 1: and they were writing all this literature or funding those
• 23:24
  Speaker 1: who were and so they portrayed the industrial revolution with
• 23:31
  Speaker 1: all of its problems, as if workers were impoverished in
• 23:39
  Speaker 1: the cities and had a glorious life in the country.
• 23:44
  Speaker 1: The truth is they went to the cities because the
• 23:48
  Speaker 1: cities promised a better life and more opportunity and greater freedom,
• 23:54
  Speaker 1: and they found both. And we go through each of
• 23:59
  Speaker 1: the my let mean, now you just turn to poverty,
• 24:04
  Speaker 1: the myth that capitalism calls it poverty or caused poverty
• 24:09
  Speaker 1: in America, Well, there is something that just is anomaly
• 24:16
  Speaker 1: that you got poor people in the richest country in
• 24:19
  Speaker 1: the world, in the land of milk and honey, in
• 24:23
  Speaker 1: the land of fertile fields and boundless forest. But basically,
• 24:32
  Speaker 1: if you look at the data that is available, one
• 24:37
  Speaker 1: of the reasons that it appears that we have so
• 24:40
  Speaker 1: many poor people is that we don't when the Census
• 24:48
  Speaker 1: measures income, it doesn't count two thirds of all transfer
• 24:53
  Speaker 1: payments is income, and so as a result, it says
• 25:00
  Speaker 1: that the bottom twenty percent of income earners aren't about
• 25:05
  Speaker 1: or half about twenty nine thousand dollars a year of income.
• 25:10
  Speaker 1: But if you count all transfer payments as income to
• 25:13
  Speaker 1: people who receive them, and that includes a check from
• 25:18
  Speaker 1: the Treasury and a refundable tax credit, that the Census
• 25:23
  Speaker 1: doesn't count his income debit card to buy food at
• 25:29
  Speaker 1: the grocery store. The Census doesn't count his income. Medicate
• 25:33
  Speaker 1: housing subsisties over one hundred of the federal, state and
• 25:37
  Speaker 1: local programs. Bottom line is, if you add up all
• 25:42
  Speaker 1: the subsisties, average income the bottom twenty percent of income
• 25:47
  Speaker 1: recipients is about sixty five thousand dollars a year. And
• 25:53
  Speaker 1: the amazing thing is that the bottom sixty percent of
• 25:58
  Speaker 1: Americans have pretty s or incomes whether they work or
• 26:02
  Speaker 1: they don't work. And as our welfare programs exploded in
• 26:07
  Speaker 1: the mid sixties, the number of welfare recipients who were
• 26:12
  Speaker 1: able bodied, prime work age who worked decline from sixty
• 26:18
  Speaker 1: seven percent to thirty six percent. So what the poverty
• 26:23
  Speaker 1: program did is it basically it substituted an eliminated want
• 26:32
  Speaker 1: at the price of idleness. And so in each one
• 26:36
  Speaker 1: of these periods we go through and look at how
• 26:39
  Speaker 1: much opportunity there is. What are the chances if you're
• 26:42
  Speaker 1: born in a poor family, go up there, you're going
• 26:45
  Speaker 1: to live in a poor household if you work low.
• 26:49
  Speaker 2: You know, I'm ready mentioned that a lot of you know,
• 26:52
  Speaker 2: people in the you kind of infer about the middle
• 26:55
  Speaker 2: class as well, that you know, a lot of people
• 26:57
  Speaker 2: are making middle class income. And this is why when
• 27:01
  Speaker 2: people when politicians say they want to raise our taxes,
• 27:06
  Speaker 2: it's a complete light. It only will be raised from
• 27:08
  Speaker 2: the top. They're going to raise middle class working taxes too.
• 27:10
  Speaker 2: I mean, it's almost like they're trying to take from
• 27:12
  Speaker 2: everybody at the middle class on the top to give
• 27:15
  Speaker 2: to the poor. And I don't know if that's the
• 27:18
  Speaker 2: best way about it. I just say, give more opportunity
• 27:21
  Speaker 2: to those at the bottom, right.
• 27:23
  Speaker 1: Yeah, Look, just remember this that if you took every
• 27:29
  Speaker 1: pin of every building there that the government does not
• 27:35
  Speaker 1: already take in taxes, you couldn't fund the government of
• 27:40
  Speaker 1: the United States and the States in twenty twenty two
• 27:46
  Speaker 1: for a week. Okay, They're just not enough mega rich
• 27:52
  Speaker 1: people to pay for government. In the end, the middle
• 27:58
  Speaker 1: income Americans and upper middle income Americans, where most people
• 28:04
  Speaker 1: are in the strata of income distribution, they're the people
• 28:09
  Speaker 1: who pay these taxes. And another point that we make
• 28:15
  Speaker 1: in the book on inequality is that the way the
• 28:19
  Speaker 1: Census measures income by not counting transfer payments or most
• 28:25
  Speaker 1: of them, and by not counting taxes as income lost
• 28:31
  Speaker 1: is they say the ratio of the top twenty percent
• 28:35
  Speaker 1: of income owners to the bottom twenty percent of income
• 28:39
  Speaker 1: recipients is sixteen point seven to one. But if you
• 28:43
  Speaker 1: count all transfer payments is income gain and all taxes
• 28:47
  Speaker 1: income lost, it's forty one, not sixteen point seven to one.
• 28:53
  Speaker 1: Now you say forty one is too much A very
• 28:56
  Speaker 1: different debate. And we look at all all of these
• 29:00
  Speaker 1: studies Picketty in France. You know, how does he show
• 29:06
  Speaker 1: this incredible inequality? Well he shows in three ways. One
• 29:11
  Speaker 1: doesn't count any government transfers his income. Two he doesn't
• 29:15
  Speaker 1: take taxes into account, and three he makes up an
• 29:20
  Speaker 1: income for uper income people like Warren Buffett as to
• 29:25
  Speaker 1: what their income would be if they sold all their
• 29:29
  Speaker 1: assets every year and paid taxes on it. Well, a
• 29:34
  Speaker 1: needless to say, by that definition, if your income was
• 29:41
  Speaker 1: what your car's worth, your house was worth, your pension's worth,
• 29:45
  Speaker 1: and you had to pay income on tax on that
• 29:48
  Speaker 1: every year, you would be paying a low rate today
• 29:51
  Speaker 1: as compared to what you would pay. Then well what
• 29:54
  Speaker 1: does that tell you? And finally we look at mobility.
• 30:00
  Speaker 1: You know, how likely are people to rise? How likely
• 30:04
  Speaker 1: are people to do better than their parents?
• 30:07
  Speaker 2: And by the way, this was such a thing in
• 30:09
  Speaker 2: the thirties because always saw in the movies with rags
• 30:12
  Speaker 2: to riches stories, right, and I feel like that's right exactly.
• 30:15
  Speaker 1: Well, look, just remember this number if you don't remember
• 30:19
  Speaker 1: any other number fifty years ago. If you look at
• 30:25
  Speaker 1: the income levels fifty years ago, in real purchasing power
• 30:29
  Speaker 1: justed for inflation, as compared to the day, sixty six
• 30:35
  Speaker 1: percent of Americans today have real purchasing powers that would
• 30:42
  Speaker 1: have put them the top twenty percent fifty years ago.
• 30:46
  Speaker 1: That's pretty astonishing, and you can really see it if
• 30:51
  Speaker 1: you go back. I'll just give you an example. The
• 30:56
  Speaker 1: lady who works for me who tie to all the book.
• 31:01
  Speaker 1: As we were writing it, she said, well, you know,
• 31:05
  Speaker 1: I know everything you say is true, but it seems
• 31:09
  Speaker 1: so hard to make ends meet. And so I said, well,
• 31:13
  Speaker 1: Muriel's a name Uriel. Maybe it's because your ends are
• 31:18
  Speaker 1: so far apart. I said, you just bought your first house.
• 31:25
  Speaker 1: How does it compare with the first house your mother
• 31:28
  Speaker 1: and foreign lived in. Her answer, my first house is
• 31:34
  Speaker 1: better than any house they ever lived in, including the
• 31:38
  Speaker 1: one they live in now. That would have been true
• 31:42
  Speaker 1: in my case. So yeah, it's hard to make ends
• 31:47
  Speaker 1: meet when you live in a world where people have
• 31:51
  Speaker 1: the abundance we have and whether they want and expect
• 31:56
  Speaker 1: and get ultimately if they work or more.
• 32:00
  Speaker 2: You know, it am about purchasing power. And I think
• 32:02
  Speaker 2: of all the credit card debt and all this other
• 32:04
  Speaker 2: stuff that people go through daily. How do we ease?
• 32:08
  Speaker 2: As an economy economic advisor? How do you eat? How
• 32:11
  Speaker 2: would you help people ease all of that? I mean
• 32:14
  Speaker 2: they do. We do have a sense of like, well
• 32:16
  Speaker 2: we can pay this off in months from now, right,
• 32:18
  Speaker 2: but it doesn't always work that way.
• 32:20
  Speaker 1: Well listen, uh. I often get asked because people know
• 32:27
  Speaker 1: my background, do I have people come out to mind?
• 32:30
  Speaker 1: I live out in the country and people come out
• 32:33
  Speaker 1: to fix things. They're always breaking. And so people ask
• 32:37
  Speaker 1: me my financial advice and not tell them get out
• 32:41
  Speaker 1: of debt, don't buy anything except the house. Would you
• 32:46
  Speaker 1: borrow money if you can't afford a new car, buy
• 32:51
  Speaker 1: a used car, And for God's sakes, don't go out
• 32:58
  Speaker 1: bore money to buy furniture stuff like that if you
• 33:02
  Speaker 1: can just get and I explained to them, you almost
• 33:04
  Speaker 1: pay for some them twice when you borrow money to
• 33:08
  Speaker 1: buy it. So and you know, we want other thing
• 33:14
  Speaker 1: we look at in the book, which is very important.
• 33:18
  Speaker 1: I think it is what causes people to have to
• 33:24
  Speaker 1: be poor and or to what causes some people to
• 33:30
  Speaker 1: make a lot of money and some people not to
• 33:33
  Speaker 1: make much. And there are a lot of factors, but
• 33:36
  Speaker 1: the two biggest are do they work or do they
• 33:40
  Speaker 1: not work? And then secondly how sharp are they're too?
• 33:45
  Speaker 1: How well educated are they. But there are a lot
• 33:50
  Speaker 1: of other factors that you just don't think about that
• 33:53
  Speaker 1: we didn't think about that we started looking at the
• 33:56
  Speaker 1: data for the book. For example, the declivity of college
• 34:02
  Speaker 1: graduates to marry each other is a major source of
• 34:07
  Speaker 1: income inequality, because if you have a couple that both
• 34:12
  Speaker 1: have college degrees, they're in the upper middle income. They're
• 34:20
  Speaker 1: in the upper income quintile immediately when they get married.
• 34:27
  Speaker 1: And unlike the world I grew up in, where the
• 34:30
  Speaker 1: doctor married a nurse and the banker married a secretary,
• 34:35
  Speaker 1: are a secretary, Today a banker marries the lawyer that
• 34:41
  Speaker 1: does legal work for the bank. A doctor marries a
• 34:44
  Speaker 1: lawyer or another doctor. And so the just free choices
• 34:51
  Speaker 1: people make is a major source of income an equality.
• 34:57
  Speaker 1: High achievers who work hard tend to marry each other
• 35:01
  Speaker 1: and therefore you multiply the effect.
• 35:05
  Speaker 2: Talk about this, and I mentioned it a little earlier,
• 35:08
  Speaker 2: but it just as you're talking about this, it's going
• 35:11
  Speaker 2: back to my in my brain here there's this push
• 35:14
  Speaker 2: to destroy capitalism. Hey tell me that will that push
• 35:18
  Speaker 2: will fail in capitalism will av for eternity because we
• 35:21
  Speaker 2: need it, right, we need this system.
• 35:23
  Speaker 1: Well, look, capitalism is the goods that lay into golden egg.
• 35:33
  Speaker 1: But capitalism requires a government that protects private property, creditors rights,
• 35:42
  Speaker 1: and enforce its contracts and works to prevent either uh
• 35:51
  Speaker 1: and works to enforce the law a set rule of law.
• 35:58
  Speaker 1: But the stim works better when people have more freedom
• 36:04
  Speaker 1: to decide what they want spend their money on instead
• 36:08
  Speaker 1: of government making the decision. And when government subsidizes electric
• 36:15
  Speaker 1: cars enforces general motors to subsidize electric cars by charging
• 36:24
  Speaker 1: higher and higher prices for gas powered cars. It's deciding
• 36:29
  Speaker 1: for you what kind of vehicle you're going to have.
• 36:33
  Speaker 1: So the more you let people decide how to spend
• 36:37
  Speaker 1: their own money, since they have skin in the game,
• 36:40
  Speaker 1: they do a better job than government. Where governments spending
• 36:44
  Speaker 1: your money and not their money. And secondly, letting businesses
• 36:50
  Speaker 1: within the rule of law operate those two things create
• 36:58
  Speaker 1: what we call American receptionism. And we have less government
• 37:03
  Speaker 1: control than anybody else, but we could have so much
• 37:08
  Speaker 1: better government. I remember one day, it was nineteen eighty four.
• 37:12
  Speaker 1: I was sitting next to President Reagan, and we were
• 37:16
  Speaker 1: celebrating Morning in America, which was the theme of the
• 37:20
  Speaker 1: campaign in nineteen eighty four. And our program had been successful,
• 37:25
  Speaker 1: and we had stopped the inflation, the economy was booming,
• 37:30
  Speaker 1: defense was strong. The President landover and said, can you
• 37:35
  Speaker 1: imagine how good things would be in this country if
• 37:38
  Speaker 1: we really had good government? In other words, it's all
• 37:44
  Speaker 1: of the good things we'd done were very small compared
• 37:48
  Speaker 1: to what could be done.
• 37:49
  Speaker 2: And that's the same man who's quoted as saying, you know,
• 37:53
  Speaker 2: and it's on tape, the most dangerous thing you can
• 37:56
  Speaker 2: hear is I'm the government. I'm here to help.
• 37:58
  Speaker 1: So I feel like that exactly. God knows that's true.
• 38:00
  Speaker 1: God knows that's true.
• 38:02
  Speaker 2: And yeah, you were in government. So how did you
• 38:04
  Speaker 2: try and change it to make it for the people
• 38:06
  Speaker 2: a little more than maybe your colleagues did or do
• 38:09
  Speaker 2: now in the current set.
• 38:11
  Speaker 1: Well, look, I went to Washington very skeptical of government,
• 38:18
  Speaker 1: and I left Washington, skeptical of government. I thought the
• 38:25
  Speaker 1: most important thing was to make government small, and I
• 38:31
  Speaker 1: viewed dealing with the deficit as crimping the fuel line
• 38:37
  Speaker 1: to the corborator of big government. And then if we
• 38:42
  Speaker 1: could control spending, we could control government. It was spending
• 38:48
  Speaker 1: to me, was about more than deficits, about more than finance.
• 38:53
  Speaker 1: It was about freedom. A small government is a better government.
• 39:00
  Speaker 1: Remember what Thomas Jefferson said, If we can prevent the
• 39:04
  Speaker 1: government from wasting the income of the people under the
• 39:10
  Speaker 1: pretense of caring for them, they will be happy, and
• 39:15
  Speaker 1: the government is best at governance. Least I believe that's true.
• 39:18
  Speaker 2: Today, I'm going to not show off, but I'm going
• 39:22
  Speaker 2: to try and see your thought on this. Because in
• 39:24
  Speaker 2: the first term, there were all these different tax rates.
• 39:28
  Speaker 2: Do we do tax a flat tax for everybody? And
• 39:31
  Speaker 2: I often thought that a flat tax wouldn't make it. It'd
• 39:35
  Speaker 2: be great for the small business because they can afford
• 39:38
  Speaker 2: the fifteen percent. But if we did it truly economically equal,
• 39:43
  Speaker 2: you do twenty percent corporation, fifteen percent flat, I mean
• 39:48
  Speaker 2: fifteen percent for the smaller corporations and small businesses. How
• 39:52
  Speaker 2: do we help the small business? I guess my point,
• 39:54
  Speaker 2: and b would those tax levels work? Could we tax
• 39:57
  Speaker 2: the corporations all higher than the small businesses?
• 40:00
  Speaker 1: Well, look, the most important thing in a tax code,
• 40:06
  Speaker 1: in my opinion, is eliminating all the ways that government
• 40:12
  Speaker 1: dictates what people are spending their money for through the
• 40:17
  Speaker 1: tax code. And I think the way that you do
• 40:23
  Speaker 1: that is by eliminating all of these provisions of the
• 40:29
  Speaker 1: tax code that give special treatment to all these different things,
• 40:36
  Speaker 1: and take the money you save by eliminating those deductions
• 40:41
  Speaker 1: and lower rates. And quite frankly, there are very few
• 40:46
  Speaker 1: deductions that have any justification whatsoever. I mean in a
• 40:52
  Speaker 1: new tax code that we're a tax bill that we're
• 40:55
  Speaker 1: debating in commerce deductive bill of interest on auto loans.
• 41:03
  Speaker 1: Give me a break.
• 41:04
  Speaker 2: Also, why take until ten pm on Sunday night to
• 41:07
  Speaker 2: try and get to go pass that's insane thing?
• 41:09
  Speaker 1: Making my Social Security tax free. We would be so
• 41:16
  Speaker 1: much better off if we eliminate the deductibility of our
• 41:22
  Speaker 1: mortgage interest payments and simply lower rates. Give me a
• 41:27
  Speaker 1: simple flat rate, eliminate all the special provisions in the
• 41:33
  Speaker 1: tax code and let me pay the one the rate
• 41:36
  Speaker 1: and move on. I think we would be so much
• 41:40
  Speaker 1: better off. The system would be so much more efficient,
• 41:45
  Speaker 1: and you've got the differential treatment of real estate, the
• 41:52
  Speaker 1: differential treatment. We have alternative minimum taxes, so you give
• 41:58
  Speaker 1: tax breaks and you take them about. I'd like to
• 42:02
  Speaker 1: just illuminate them and have and lower the rates flatter
• 42:07
  Speaker 1: the better would suit me, all right. I Getting rid
• 42:10
  Speaker 1: of deductions is really important.
• 42:14
  Speaker 2: I gotta ask you about this because another economic situation
• 42:17
  Speaker 2: we've been dealing with and seeing is the cutting to everything.
• 42:19
  Speaker 2: I mean, doges in their cutting, cutting, cutting. I don't
• 42:22
  Speaker 2: exactly agree with every cut they made. However, getting one
• 42:26
  Speaker 2: of the waste in certain areas has been helpful. But
• 42:28
  Speaker 2: my question you is is Elon an economists that should
• 42:32
  Speaker 2: be working as a small business owner or is it
• 42:34
  Speaker 2: just a small bus owner and let the economists do
• 42:37
  Speaker 2: the work of the cutting? Like is he right now?
• 42:40
  Speaker 1: I think he's done a good job. I think Congress
• 42:46
  Speaker 1: is now the problem. I mean, look, forty over forty
• 42:51
  Speaker 1: percent of people that get welfare benefits aren't even defined
• 42:57
  Speaker 1: as being poor. In Medicaid, we give higher reimbursement for
• 43:06
  Speaker 1: adults working age adults than we do for children and
• 43:13
  Speaker 1: disabled people. How does that make any sense? States Tax hospitals,
• 43:22
  Speaker 1: and then the hospitals build Medicaid for the tax, and
• 43:29
  Speaker 1: so it's it's, it's, it's it's very in the private sector,
• 43:35
  Speaker 1: we would call it fraud and we need to stop it.
• 43:40
  Speaker 1: And uh. Then going back to this fact that the
• 43:44
  Speaker 1: census undercounts income, if we just counted all transfer payments
• 43:50
  Speaker 1: as income, we would dramatically reduce the number of people
• 43:55
  Speaker 1: who are eligible for all these means tested programs. And finally,
• 44:01
  Speaker 1: I cannot understand the opposition to forcing people to work
• 44:08
  Speaker 1: in return for getting welfare benefits. I don't get it.
• 44:13
  Speaker 1: If you can't sell that to your constituents, you're in
• 44:18
  Speaker 1: the wrong line of work in everybody. Of course, I
• 44:24
  Speaker 1: represented a great district and I represented the greatest state
• 44:29
  Speaker 1: in my opinion. And the idea of a work yeah,
• 44:38
  Speaker 1: the idea of a work requirement for welfare makes so
• 44:42
  Speaker 1: much sense. I doubt they're fifteen percent of the people
• 44:48
  Speaker 1: in Texas, they're all on welfare. I would oppose a
• 44:53
  Speaker 1: mandatory work requirement. And yet we're talking about not even
• 44:59
  Speaker 1: having work requirement going to effect until twenty twenty nine.
• 45:06
  Speaker 1: I mean, give me a break. Talk about phony reform.
• 45:10
  Speaker 1: That's phony reform.
• 45:12
  Speaker 2: So how do we do that? I want to want
• 45:13
  Speaker 2: to medicate thing because I'm in the disabled community. A
• 45:15
  Speaker 2: lot of my friends have dealings with medicaid, and I
• 45:19
  Speaker 2: of course want to protect that for all those disabled community.
• 45:23
  Speaker 2: So how do we How would you advise or how
• 45:25
  Speaker 2: should we advise people who are making these cuts to
• 45:28
  Speaker 2: go about it where the disabled community is protected.
• 45:32
  Speaker 1: Well, First of all, able bodied people want to work,
• 45:36
  Speaker 1: and if they don't work, they shouldn't get the benefit.
• 45:40
  Speaker 1: We should take care of people who really need the benefit,
• 45:44
  Speaker 1: and in seeing whether they need the benefits, we should
• 45:48
  Speaker 1: look at what they're already getting the government and how
• 45:52
  Speaker 1: valuable it is. And we should prevent states from ripping
• 45:57
  Speaker 1: the system off. In Californa, you can make one hundred
• 46:02
  Speaker 1: and two thousand dollars a year and still get medicaid. Now,
• 46:09
  Speaker 1: to me, that's just general rosting with somebody else's money
• 46:15
  Speaker 1: that we ought not to tolerate. And giving medicaid to
• 46:22
  Speaker 1: illegal immigrants I think is wrong Illegally.
• 46:30
  Speaker 2: I don't usually talk like this because I like taking
• 46:32
  Speaker 2: a positive but I agree with you. I think it's
• 46:34
  Speaker 2: disgusting that people who are here illegally are getting a
• 46:37
  Speaker 2: lot more benefits than those with disabilities. I mean, we
• 46:40
  Speaker 2: need to make capitalism work for Americans, not for those
• 46:43
  Speaker 2: who are not here ilegal. Look this room.
• 46:47
  Speaker 1: I am very pro legal immigrants. Charottkay. Yes, we got
• 46:53
  Speaker 1: room in Americas for people who want to come here
• 46:55
  Speaker 1: and work, and God bless them and may more come.
• 46:59
  Speaker 1: But we don't have room in America for people who
• 47:02
  Speaker 1: want to come and live a somebody else's effort senogram.
• 47:07
  Speaker 2: How do we do it where people want to be
• 47:10
  Speaker 2: legal can actually have a fair or shot at it?
• 47:12
  Speaker 2: Meaning I feel like the fees are too much to
• 47:16
  Speaker 2: become a legal citizen. Should we drop the fees a
• 47:18
  Speaker 2: little bit? Or how should that work?
• 47:20
  Speaker 1: Well? I think that first of all, we need to
• 47:24
  Speaker 1: make it clear that the problem we lead legal immigration
• 47:28
  Speaker 1: is it's illegal, well enforced the law, but we need
• 47:33
  Speaker 1: to have an immigration system where we allow people to
• 47:40
  Speaker 1: come here who have skills that the country needs. And
• 47:46
  Speaker 1: as I look at how you would measure this, and
• 47:48
  Speaker 1: I look back at my ancestors, I don't think anybody
• 47:54
  Speaker 1: that came to America, that is my ancestor, would have
• 47:58
  Speaker 1: ever qualified any kind of H one B program based
• 48:03
  Speaker 1: on having talents that America needed. But we don't run
• 48:10
  Speaker 1: the country based on what benefits thegrams. We've been and
• 48:15
  Speaker 1: run the country based on what benefits the country. And
• 48:19
  Speaker 1: I think we'll have a vigorous legal immigration program and
• 48:23
  Speaker 1: let people come here who've got skills we need. And
• 48:29
  Speaker 1: everywhere you see the contribution of immigrants, from Jonah Salt,
• 48:35
  Speaker 1: who was a first generation American, to the in center
• 48:45
  Speaker 1: of fracking, the number of businesses started by immigrants or
• 48:51
  Speaker 1: their children, and the academic achievement of immigrant children. They
• 48:59
  Speaker 1: all say to me, we need more legal numbers. But again,
• 49:05
  Speaker 1: I think when people come here legally that accept in
• 49:09
  Speaker 1: absolutely emergency situations, they shouldn't qualify for government welfare because
• 49:17
  Speaker 1: then you're providing incentives that encourage people to come here
• 49:22
  Speaker 1: to live off the fat of the land. We've got
• 49:26
  Speaker 1: too many hard working people to be taking their money
• 49:30
  Speaker 1: to subsidize people that just don't want to work. And
• 49:35
  Speaker 1: I don't mind saying it. I'm not sensitive about it.
• 49:39
  Speaker 1: As I used to say when I was in the Senate.
• 49:41
  Speaker 1: I don't apologize. In fact, I love all Americans, but
• 49:46
  Speaker 1: I love Americans that work best.
• 49:50
  Speaker 2: All right, I want to ask this then, because obviously
• 49:53
  Speaker 2: we want hard working Americans to go back and disable
• 49:57
  Speaker 2: things real quick. Because I'm curious about this. How do
• 50:00
  Speaker 2: we encourage other example, people to start working more. I mean,
• 50:03
  Speaker 2: there's got to be more encouragement, right for example, of
• 50:06
  Speaker 2: people to keep working and work hard.
• 50:09
  Speaker 1: Well, I think letting people keep more of what they
• 50:13
  Speaker 1: are exactly. It starts with control expending. People are worried
• 50:18
  Speaker 1: about the birth rate, how low it is, and you've
• 50:21
  Speaker 1: got people who want to subsidize people they have babies.
• 50:25
  Speaker 1: Talk about terrible ideas. Look, people have babies when they
• 50:30
  Speaker 1: think the future's blanked. Okay, what happened Why we have
• 50:35
  Speaker 1: the post war baby? Well, partly because people came home
• 50:40
  Speaker 1: and they were hurry to start their lives. But also
• 50:44
  Speaker 1: they look to the future and things look bright in America.
• 50:49
  Speaker 1: Economic growth and a strong job opportunities. Those are the
• 50:56
  Speaker 1: kind of things that encourage people to want to have
• 50:59
  Speaker 1: a family because they have confidenced in the future. And
• 51:03
  Speaker 1: also legal immigrants and we again maybe because I live
• 51:12
  Speaker 1: in the country, I see this. This country is a
• 51:16
  Speaker 1: long way from being full. Now. I live outside San Antonio,
• 51:21
  Speaker 1: and everybody in the world was to move here, and
• 51:24
  Speaker 1: so every road in town is under construction. They're building
• 51:28
  Speaker 1: out there were people are voting with their feet to
• 51:33
  Speaker 1: leave California and New York and Illinois come to Texas.
• 51:38
  Speaker 2: And that's probably why I mean, you are a conservative Democrat.
• 51:41
  Speaker 2: Now there's progressive Democrats in Texas. No one ever thought
• 51:44
  Speaker 2: that was going to happen.
• 51:46
  Speaker 1: When I ran for Congress, I had never really met
• 51:50
  Speaker 1: a Republican until I was a dull anyway, and I
• 51:57
  Speaker 1: didn't think party didn't mean anything to me, but more
• 52:01
  Speaker 1: when I got to Washington, I discovered it meant a
• 52:04
  Speaker 1: lot to a lot of people. And then I was
• 52:07
  Speaker 1: at the wrong party. And so I fixed it by
• 52:11
  Speaker 1: resigning and running in as a Republican. And I'm proud
• 52:15
  Speaker 1: to say since I did that, there's never been another
• 52:20
  Speaker 1: Democrat elected to the Congress in my district.
• 52:25
  Speaker 2: That's huge syneagram, I got to say. Because you were
• 52:27
  Speaker 2: in the Reagan era on both sides, in the Senate
• 52:30
  Speaker 2: and the House, the Tip O'Neill Reagan dynamic. Were you
• 52:35
  Speaker 2: a front Did you have a front row seat of
• 52:36
  Speaker 2: that or not?
• 52:38
  Speaker 1: I had a front row seat to it. I worked
• 52:40
  Speaker 1: with with Tip O'Neill on welfare reform. I'm on a
• 52:46
  Speaker 1: social security reform Uh, Look, they disagreed about how to
• 52:55
  Speaker 1: make America greater, but they didn't disagree on wanting to
• 52:59
  Speaker 1: make kid greater or belief fundamentally in this system. Senator
• 53:06
  Speaker 1: Bird from West Virginia and I fought over every budget,
• 53:11
  Speaker 1: but yet we shared a basic belief that the American
• 53:16
  Speaker 1: system was the best system and that it would worked.
• 53:20
  Speaker 1: He wanted more government than I did. I wanted more
• 53:23
  Speaker 1: freedom than he did. But we worked together on many
• 53:27
  Speaker 1: issues and we were close friends. And he was always
• 53:33
  Speaker 1: good to me and I was. I tried to do
• 53:36
  Speaker 1: the same in his case.
• 53:38
  Speaker 2: Senator I have to asked this because we started with
• 53:41
  Speaker 2: you talking about how you did the spending bill and
• 53:43
  Speaker 2: you help get that signed the bipartisan I feel like today,
• 53:47
  Speaker 2: especially on the Democratic side, if you sign a bipartisan bill,
• 53:52
  Speaker 2: you're not for the party. Like what Schumer was not
• 53:56
  Speaker 2: wrong to sign the recent bill, yet he got a
• 53:58
  Speaker 2: lot of flack and actually a lot of protests about it.
• 54:02
  Speaker 2: Did that disappoint you seeing that the fellow Democrats did
• 54:05
  Speaker 2: not have is back in signing something by partisan.
• 54:08
  Speaker 1: Well, look, I think you did the right thing. I've
• 54:14
  Speaker 1: been in the Senate about four months and there was
• 54:18
  Speaker 1: an amendment to have an oil import fee. Okay, And
• 54:24
  Speaker 1: so I'm from the biggest oil producing state in the
• 54:27
  Speaker 1: country to time, and so I figure, you know, first
• 54:33
  Speaker 1: of all, I'm not going to be for this, and secondly,
• 54:36
  Speaker 1: I'm going to have to defend this vote. So the
• 54:40
  Speaker 1: best thing to do, I thought, was to get out front.
• 54:43
  Speaker 1: So I was the first person to stand up and
• 54:45
  Speaker 1: opposed it. I led the opposition to it, and I
• 54:50
  Speaker 1: spent nine months in Texas defending that vote, and the
• 54:56
  Speaker 1: Houston Business Journal called me the third centator Massachusetts. But
• 55:02
  Speaker 1: I went all over the state and defended that vote,
• 55:07
  Speaker 1: that it was bad for Texas, it was bad for
• 55:10
  Speaker 1: America because we used more oil and all of our
• 55:14
  Speaker 1: refineries and chemical plants than we produced, and if we
• 55:19
  Speaker 1: had to pay a premium for imports, that we would
• 55:23
  Speaker 1: end up hurting Texas and hurting America. And in the
• 55:27
  Speaker 1: final analysis, I finally said, look, I've gone all over
• 55:33
  Speaker 1: the state. I defended that vote. But if you want
• 55:39
  Speaker 1: someone who is a protectionist, don't move from me, because
• 55:45
  Speaker 1: I'm not going to do it. I understand the issue,
• 55:49
  Speaker 1: and it's just something I'm not going to do. And
• 55:54
  Speaker 1: it never was an issue in one of my campaigns.
• 55:59
  Speaker 2: As because now I don't think we have to worry
• 56:01
  Speaker 2: about imports. We have so much oil in the country.
• 56:03
  Speaker 2: Do you remember any.
• 56:06
  Speaker 1: One of the reasons I got into government. I was happy,
• 56:11
  Speaker 1: I had two little children. I've just been promoted to
• 56:15
  Speaker 1: full professor. And I woke up one morning and I
• 56:20
  Speaker 1: was an adult, and I didn't like what was happening
• 56:24
  Speaker 1: in the country. And I knew that we weren't running
• 56:28
  Speaker 1: out of oil and gas, and that we were capable
• 56:33
  Speaker 1: of producing a lot more of it. And so I
• 56:37
  Speaker 1: wrote an article for the Wall Street Journal on the subject,
• 56:40
  Speaker 1: and then I started speaking out on the subject, and
• 56:45
  Speaker 1: that's how I got involved in running for public office.
• 56:51
  Speaker 2: Senator is this has been really enlightening, And I want
• 56:54
  Speaker 2: to touch on the House house side one more time
• 56:56
  Speaker 2: because you had that experience there under Speaker O'Neill and whatnot.
• 57:02
  Speaker 2: I feel like today's speaker is always under fire, whether
• 57:05
  Speaker 2: it's McCarthy, whether it was Paul Ryan on Trump's first term,
• 57:09
  Speaker 2: whether it was Bainter and Obama's friendship. You know, all
• 57:12
  Speaker 2: these speakers have come under fire for a long time.
• 57:16
  Speaker 2: But can Speaker Johnson last I feel like he's doing
• 57:18
  Speaker 2: well for the House. What do you think, Well, I
• 57:21
  Speaker 2: like you.
• 57:23
  Speaker 1: I think he's doing a good job. It's tough when
• 57:26
  Speaker 1: you've got a very small margin. You know, he can
• 57:31
  Speaker 1: only lose four Republicans since the Democrats go to vote.
• 57:37
  Speaker 1: You know, if he wanted to raise the flag in
• 57:39
  Speaker 1: the morning, most of them would vote against it, just
• 57:46
  Speaker 1: for portisanship. And that's one of the reasons I respect
• 57:51
  Speaker 1: humor on the continuing Resolution for not shutting the government down.
• 58:00
  Speaker 1: That was the political thing to do, but the wall.
• 58:05
  Speaker 1: But in any case, I think the Speaker is doing
• 58:09
  Speaker 1: the best he can, and I think he's a skill person,
• 58:15
  Speaker 1: and I just I like his basic approach. He looks
• 58:23
  Speaker 1: like a good man trying to do a good job,
• 58:26
  Speaker 1: and I want to seem be successful. On the other hand,
• 58:31
  Speaker 1: I want the House to reform some of these welfare programs.
• 58:36
  Speaker 1: We're going to end up there was a country in
• 58:39
  Speaker 1: deep financial trouble if we don't start setting higher standards
• 58:44
  Speaker 1: and spending money.
• 58:46
  Speaker 2: Well, that's what I was gonna say, because you probably
• 58:48
  Speaker 2: had a very low spending cap when you were running
• 58:52
  Speaker 2: the co writing this bill. Now, spending I feel like
• 58:54
  Speaker 2: it's always through the roof. How do we get here
• 58:57
  Speaker 2: Senator Graham, where spending is literally through the roof.
• 59:00
  Speaker 1: Well, what cause every time we vtn a spending bill,
• 59:04
  Speaker 1: all the groups are looking over the congressman's left shoulder,
• 59:09
  Speaker 1: sending letters back home, emails, text messages, whether he cares
• 59:15
  Speaker 1: about the old, the poor, the sick, the died, the
• 59:18
  Speaker 1: bicycle rider. And too often nobody's looking over the right shoulder,
• 59:26
  Speaker 1: sending communications back home saying whether he cares about the
• 59:31
  Speaker 1: future of the country and the working people. And so
• 59:35
  Speaker 1: you get this imbalance. And I think that's what's happening
• 59:42
  Speaker 1: in the House now on Medicaid reform. And you know,
• 59:49
  Speaker 1: it's increasingly we're making these welfare benefits middle class entitlements,
• 59:58
  Speaker 1: which is very, very deep Andrews, I'm very dangerous. Welfare
• 1:00:05
  Speaker 1: ought to go to people who are needy, and if
• 1:00:09
  Speaker 1: they're able bodied and work aids, they ought to work
• 1:00:11
  Speaker 1: to get it. And I don't understand Republicans they won't
• 1:00:16
  Speaker 1: vote for that. Uh.
• 1:00:18
  Speaker 2: That is as someone who's been asked some of the
• 1:00:21
  Speaker 2: disability has been asked, why do you work? I feel
• 1:00:24
  Speaker 2: like I can resonate with that response because I want
• 1:00:26
  Speaker 2: to work and make a living and do things. You know,
• 1:00:29
  Speaker 2: But that's another point for another day. I see also
• 1:00:32
  Speaker 2: you're very interested in the interest rates. So I got
• 1:00:34
  Speaker 2: to end with this three different options. You keep throwing power,
• 1:00:38
  Speaker 2: you fire drom, pollow power, or do we abolish the Fed?
• 1:00:42
  Speaker 2: Are you going to abolish for the FED person?
• 1:00:45
  Speaker 1: No, Look, I believe in an independent FED. I don't
• 1:00:52
  Speaker 1: think the Fed did a good job during the pandemic.
• 1:00:56
  Speaker 1: I think they're paying and they let the money explode
• 1:01:02
  Speaker 1: in a year where government spent more in two years
• 1:01:07
  Speaker 1: than he ever spent three and in a two year period.
• 1:01:13
  Speaker 1: But I think they have done a better job in
• 1:01:17
  Speaker 1: dealing with the inflation. But whether they've done a good
• 1:01:21
  Speaker 1: job or a bad job, we don't want to turn
• 1:01:24
  Speaker 1: the Federal Reserve Bank over to the president. We don't
• 1:01:30
  Speaker 1: want politicians, whether Democrats or Republicans, controlling the money supply.
• 1:01:38
  Speaker 1: Whenever that happens, you have big problems.
• 1:01:42
  Speaker 2: And Secretary beston good job so far as treasury or
• 1:01:45
  Speaker 2: what are you thinking of his life?
• 1:01:47
  Speaker 1: Well, I don't know what kind of problems he faces
• 1:01:52
  Speaker 1: in trying to get his views across. It's fortunately, and
• 1:02:01
  Speaker 1: I've considered this when anyone has ever talked to me
• 1:02:06
  Speaker 1: about going back into government, as an appointed official. There
• 1:02:12
  Speaker 1: are only two jobs in the executive branch of government.
• 1:02:16
  Speaker 1: There are clerks and there's the president. And some clerks
• 1:02:23
  Speaker 1: have fancy titles and garner a lot of respect and
• 1:02:27
  Speaker 1: do great service to the country. But in the end,
• 1:02:32
  Speaker 1: there's only one president, and you either do what he
• 1:02:36
  Speaker 1: wants to do in the end or you leave. And
• 1:02:42
  Speaker 1: so in evaluating the performance and Secretary of the Treasury,
• 1:02:49
  Speaker 1: I had to take that into account, and so I
• 1:02:54
  Speaker 1: think that he has been more responsible on terraff send
• 1:03:00
  Speaker 1: anybody else. But that's that's easy. That's easy. In this administration.
• 1:03:10
  Speaker 1: The question is how do we get out of this mess.
• 1:03:13
  Speaker 1: We're in it now and whining about it does no good.
• 1:03:18
  Speaker 1: What policy is going to get us out? And again,
• 1:03:23
  Speaker 1: I think the only policy is to negotiate a way
• 1:03:27
  Speaker 1: out of it, lowering tariffs in America in broad and
• 1:03:32
  Speaker 1: then everybody would benefit. But I don't think that's where
• 1:03:38
  Speaker 1: President Trump intends to go. But from everything I can tell,
• 1:03:44
  Speaker 1: the Secretary of the Treasury would like to go in
• 1:03:47
  Speaker 1: that direction, or at least that's how I read it.
• 1:03:50
  Speaker 1: It's hard, you know, it's so tempting when you're in
• 1:03:55
  Speaker 1: government and in high public office and in public resp
• 1:04:00
  Speaker 1: on's ability to stand in judgment of people who are
• 1:04:03
  Speaker 1: there now not try not to do it. You know,
• 1:04:08
  Speaker 1: there's this natural tendency, especially that old geezer like me,
• 1:04:12
  Speaker 1: to say things went to hell today I left Washington. Well,
• 1:04:18
  Speaker 1: they had partly gone to hell before I left. But anyway,
• 1:04:24
  Speaker 1: we have a great country. It's worthy of being served,
• 1:04:29
  Speaker 1: and it can be greater. And one of the reasons
• 1:04:32
  Speaker 1: I want to be sure to plug the book one
• 1:04:35
  Speaker 1: more time, The Triumph of Economic Freedom. You can buy
• 1:04:39
  Speaker 1: it on Amazon, any other or any bookstore, is if
• 1:04:46
  Speaker 1: you read this book, you'll understand our country better and
• 1:04:50
  Speaker 1: you'll realize that we have even a greater country than
• 1:04:54
  Speaker 1: you thought. And that's reassuring.
• 1:04:59
  Speaker 2: And I think that and that book should be set
• 1:05:01
  Speaker 2: right to the opposite of AOC and receed to leave
• 1:05:04
  Speaker 2: like all these folks that seem to want to do
• 1:05:07
  Speaker 2: away with capitalism and do away with this structure, send
• 1:05:11
  Speaker 2: the book to remind them why we have it, Senator Grant,
• 1:05:14
  Speaker 2: is that.
• 1:05:15
  Speaker 1: Look, the Bible says you shall know the truth, and
• 1:05:19
  Speaker 1: the truth will make you free. But doesn't they you
• 1:05:21
  Speaker 1: how to get to the truth. What we try to
• 1:05:25
  Speaker 1: do in this book. I'll leave it to you as
• 1:05:28
  Speaker 1: to how successful we work is we try to get
• 1:05:31
  Speaker 1: the facts straight. And I think again, if you read
• 1:05:37
  Speaker 1: the book and you even if you don't agree with
• 1:05:42
  Speaker 1: the conclusions of the book, that you will find that
• 1:05:46
  Speaker 1: you've got reason to doubt what you do believe. And
• 1:05:51
  Speaker 1: if you begin as I did and do with the
• 1:05:55
  Speaker 1: belief that our system is the best in the world
• 1:06:00
  Speaker 1: and we're lucky to have it and we need to
• 1:06:02
  Speaker 1: make it better, you will find that America is better
• 1:06:06
  Speaker 1: than you thought.
• 1:06:11
  Speaker 2: I'll leave it right there with you, Senatorgram, but please
• 1:06:13
  Speaker 2: come back as things progress, and I'd love to have
• 1:06:15
  Speaker 2: your thoughts on more things as we move along here.
• 1:06:19
  Speaker 1: Well, listen, I've enjoyed talking to you and I appreciate
• 1:06:23
  Speaker 1: your passion on these things out. The ability to communicate
• 1:06:29
  Speaker 1: with people very important.
• 1:06:32
  Speaker 2: Well I try that on and off the microphone. So
• 1:06:34
  Speaker 2: thank you. Take care, Sentigram, God bless you. Thanks so
• 1:06:39
  Speaker 2: much for joining me.