Latest / Merryn Talks Money / Art Laffer Has a Prescription for Britain’s Economic Woes

Transcript

Art Laffer Has a Prescription for Britain’s Economic Woes · Merryn Talks Money

0:02
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
0:08
Speaker 2: Hello, Maren Talks Money.
0:09
Speaker 1: Listeners, We are recording an episode of Maren Talks Money
0:12
Speaker 1: in front of an audience the morning after Rachel's Reeve's
0:15
Speaker 1: UK Budget. I want you to join us for quassas
0:17
Speaker 1: and conversation. We've got Helen Thomas of Blonde Money as
0:20
Speaker 1: one of our guests. We've also got John Steppitt. You're
0:22
Speaker 1: gonna love it. Well, you might not love it. It'll
0:24
Speaker 1: be right after the budget, but you'll find it interesting
0:26
Speaker 1: at the very least. Find the registration link in the
0:29
Speaker 1: show notes.
0:30
Speaker 2: Space is limited, always limited, so.
0:32
Speaker 1: Sign up soon. Now on to today's show, which may
0:35
Speaker 1: well cover some of those very same topics. Welcome to
0:49
Speaker 1: Maren Talks Money, the podcast in which people who know
0:51
Speaker 1: the markets explain the markets.
0:53
Speaker 2: This week I am speaking with Arthur Laffer.
0:55
Speaker 1: Arta is an American economist famous for his work on
0:58
Speaker 1: supply side economics and the invention of the Laffer curve.
1:02
Speaker 1: We'll come back to that, actually, because it's not really
1:03
Speaker 1: the invention of the concept.
1:05
Speaker 2: It's the invention of the curve, isn't it. So we'll
1:07
Speaker 2: come back to that.
1:07
Speaker 1: This illustrates the relationship between tax rates and government revenue.
1:11
Speaker 1: In the late seventies, he founded Lafer Associates is an
1:14
Speaker 1: economic research and consulting firm as well as LA for
1:17
Speaker 1: investments and investment management firm. We might come back to
1:20
Speaker 1: that too. Recently, Art has co authored a book called
1:23
Speaker 1: Prosperity through Growth, Boosting Living Standards in an Age of
1:27
Speaker 1: Autocracy and AI this is a primer for reviving the
1:31
Speaker 1: UK economy. Not everyone agrees with that, by the way,
1:33
Speaker 1: but I think we're going to talk about the ideas
1:36
Speaker 1: that he and his co authors put forward in that book,
1:37
Speaker 1: and we're going to get us take on the UK
1:39
Speaker 1: economy and the US economy as well. Arthur, welcome to
1:43
Speaker 1: Marin Talks Money.
1:44
Speaker 3: Thank you very much.
1:48
Speaker 2: Let's go on to defining the Laugher curve.
1:51
Speaker 1: So this idea that there is a relationship between tax
1:55
Speaker 1: rates and the amount that you raise and there is
1:57
Speaker 1: a point at which you have put up a tax
1:58
Speaker 1: rate by too much and revenue and you will then
2:00
Speaker 1: start to fall. That's an idea that it has been discussed,
2:03
Speaker 1: You know that thousands of years because it is absolutely obvious, right,
2:07
Speaker 1: or it seems as to me. But what you did
2:10
Speaker 1: was you do a curve that gives us more of
2:13
Speaker 1: a sense of how it really works.
2:15
Speaker 3: More than that. In the sixties and seventies, they were
2:18
Speaker 3: literally looking at no relationship with if you raise tax
2:21
Speaker 3: rates by ten percent, revenues would rise by ten percent.
2:23
Speaker 3: Now everyone knows they didn't know it then. They really
2:26
Speaker 3: didn't and they just used that everywhere. So they were
2:29
Speaker 3: always overestimating revenues for tax increases and underestimating revenues for
2:34
Speaker 3: tax declines. And that's true. It's been around forever though,
2:37
Speaker 3: as you say, it's in the Mukadema by IMN Caldoon.
2:41
Speaker 3: By the way, I also didn't name it the laugh
2:43
Speaker 3: for curve. That was Judwinisky of the Wall Street Journal
2:45
Speaker 3: who did. And again I love the name. I just
2:47
Speaker 3: love it, and I love to keep it myself.
2:49
Speaker 2: Look at this modesty. You didn't name your own current.
2:52
Speaker 3: Now, yeah, I know, but I'm trying to get some
2:55
Speaker 3: sort of victimhood there so you feel sorry for me
2:57
Speaker 3: in the days that follow. But if you look at it,
3:00
Speaker 3: it's really important to the relationship between tax rates and
3:03
Speaker 3: total revenues. A lot of things come between those two. Now,
3:06
Speaker 3: it's true when you raise tax rates, you do increase
3:10
Speaker 3: the amount of revenue per dollar of tax base. That's true,
3:13
Speaker 3: but it's also true that when you raise tax rates
3:16
Speaker 3: on a tax base, you cause that tax base to
3:18
Speaker 3: be less attractive and you shrink the tax base. Now
3:21
Speaker 3: you may shrink it because people work less hard because
3:24
Speaker 3: they invest less, but you also shrink it because people
3:26
Speaker 3: move offshore, because people change the composition their income, the
3:30
Speaker 3: volume of their income, the timing of their income, and
3:33
Speaker 3: also they use tax shelters Marin. And that's probably the
3:36
Speaker 3: biggest slip TwixT the cup and the lip here between
3:40
Speaker 3: tax rates and total revenues. And that's why it's such
3:42
Speaker 3: a powerful concept, especially today. When Gordon Brown raised your
3:46
Speaker 3: tax rate in Britain from forty P to fifty P,
3:50
Speaker 3: revenues actually fell, the economy, people left the country, they
3:53
Speaker 3: fell and all that. And that was a classic case
3:57
Speaker 3: of the lapper curves.
3:58
Speaker 1: Stick with that for a moment because that looked like
4:01
Speaker 1: clear evidence. At the latter CEV we say it's common sense.
4:04
Speaker 1: Not everyone believes it. I'm holding up the book for
4:06
Speaker 1: the pups of the video. Everyone go by the book.
4:08
Speaker 1: One of the things that you say in the beginning
4:10
Speaker 1: of this is that these aren't opinions that lafa cev
4:14
Speaker 1: is not an opinion, it's a provable truth. So you
4:17
Speaker 1: have tens and tens of years worth of American tax
4:21
Speaker 1: data which you can use in a very granular way
4:24
Speaker 1: to show that it's not an opinion, it's a reality.
4:28
Speaker 3: Thank you. That's true. It's exactly true, and no one
4:30
Speaker 3: should care about your opinion or my opinion. This is
4:33
Speaker 3: about facts, not how we feel. What happens when you
4:35
Speaker 3: raise tax rates in the rich. We know what happens now.
4:38
Speaker 3: This is from my prior book of two and a
4:40
Speaker 3: half years ago. Taxes have consequences, which is the entire
4:44
Speaker 3: history of the US income tax. We have every single
4:46
Speaker 3: tax return for every year, okay, and every single time
4:49
Speaker 3: we raised the highest tax rate on the top one
4:51
Speaker 3: percent of income earners, three things happened. The economy underperformed,
4:56
Speaker 3: tax revenues from the rich from the top one percent
4:59
Speaker 3: dropped all not rows, and the poor got hammered. Every
5:03
Speaker 3: time we've cut tax rates on the rich, the economy
5:06
Speaker 3: is outperformed, tax revenues from the rich have gone up,
5:09
Speaker 3: and the poor have found jobs, output, employment, production, and
5:12
Speaker 3: had their lives improved. So those are the facts, and
5:15
Speaker 3: I go through it with the States as well. In
5:17
Speaker 3: the opening section of the book. Here, it's just blast
5:20
Speaker 3: set you barn. It is facts, and it is facts
5:23
Speaker 3: in Britain, it's in facts in all these other countries.
5:25
Speaker 3: It's just shocking, and yet politicians invariably ignore it because
5:30
Speaker 3: they want to virtue signal rather than do what's good
5:33
Speaker 3: for the poor. If you want to use the poor
5:35
Speaker 3: create growth, that's the answer, okay.
5:38
Speaker 1: But one of the reasons why politicians are able to
5:40
Speaker 1: ignore it and pretend that it doesn't exist is because
5:43
Speaker 1: it's imprecise. You can't say the leaf of curve proves
5:47
Speaker 1: to us that income tax at this level is the
5:50
Speaker 1: correct level. This is the correct level above this, that
5:52
Speaker 1: this happens in a below it that happens.
5:54
Speaker 2: And there is also a sense.
5:55
Speaker 1: That it shifts right depending on politics, depending on whether
5:59
Speaker 1: it's woar time or peace time, depending on how people feel,
6:01
Speaker 1: depending on vibes, right, it could shift around.
6:04
Speaker 2: With that. Well, it's a very clear idea.
6:07
Speaker 1: It's hard to make it precise enough to persuade a
6:10
Speaker 1: politician to be clear on it.
6:11
Speaker 3: I don't think you're right on that. I really don't
6:13
Speaker 3: you're correct. All of those statements you say are true,
6:16
Speaker 3: but they aren't materially very true. Now, it's true, the
6:20
Speaker 3: smaller the tax base, the more likely it is that
6:22
Speaker 3: you're in the prohibitive range of the Laffer curve. The
6:25
Speaker 3: longer you're willing to wait, the more likely it is
6:28
Speaker 3: you're in the Laugher curve. The elasticities do change to
6:31
Speaker 3: respond to this. That's all true, but we have very
6:33
Speaker 3: precise measures of how these effects are. Now. All of
6:37
Speaker 3: these other effects undoubtedly do impact it, but they don't
6:40
Speaker 3: change the direction merit.
6:42
Speaker 2: No, no, no, I didn't mean that.
6:43
Speaker 1: I just mean that it's hard to say sety two
6:45
Speaker 1: percent is the correct rate for income time.
6:48
Speaker 3: Raising correct reefs. Let's take Rachel Reeves right now. Let's
6:51
Speaker 3: talk about her tax increase. Now, I have not seen
6:53
Speaker 3: the budget, so I don't know if she did, but
6:55
Speaker 3: I assume she's going to raise taxes in her budget.
6:58
Speaker 3: I assume that's going to case. We know that it's
7:00
Speaker 3: the wrong thing to do in Britain. We know that
7:02
Speaker 3: with perfect certainty. Britain has been declining in its growth,
7:06
Speaker 3: Britain's declining in its revenue. It's been declining in its
7:09
Speaker 3: ability to provide a good living for the poor, the
7:12
Speaker 3: minority of the disenfranchised. We know all of that, and
7:14
Speaker 3: we know it's because of the disincentives in part of
7:17
Speaker 3: the tax codes, of regulatory policy and monetary policy, and
7:21
Speaker 3: of trade policy. And yet she goes and does the
7:23
Speaker 3: wrong thing, period and they all cheer and whoop as
7:27
Speaker 3: they pass it through. And it's not just the Labor Party,
7:30
Speaker 3: it's the Conservative Party too. By the way, you can
7:32
Speaker 3: go back and look at them, you can look at
7:33
Speaker 3: all these others. They want a virtue signal him for
7:36
Speaker 3: the poor. I'm going to raise tax on the ridge. Yeah,
7:39
Speaker 3: that's the elephant in the living room. If you want
7:41
Speaker 3: to help the poor, you've got to create job opportunities
7:44
Speaker 3: and economic growth so they can earn income. And they
7:47
Speaker 3: all know that, the numbers all show that, and yet
7:50
Speaker 3: they go the wrong direction. And by the way, it's
7:52
Speaker 3: no different here except for Trump. Trump has been very
7:55
Speaker 3: good on this. But Biden and all these people, I mean,
7:58
Speaker 3: they're just crazy there, going against all data and against
8:02
Speaker 3: all logic, and they push the thing and then stand
8:06
Speaker 3: on stage and I'm here for the poor. And it's
8:08
Speaker 3: this posturing that that really bothers me.
8:11
Speaker 2: It does slightly fail doesn't.
8:12
Speaker 1: It as though for some time now the tax system
8:14
Speaker 1: in the UKA is being used less as a revenue
8:16
Speaker 1: raiser than a virtue Signala.
8:18
Speaker 3: Exactly, that's exactly true, thank you, And it's wrong. It's
8:22
Speaker 3: just wrong because these are real people, maren that, they
8:24
Speaker 3: are people and children and lives and happy. You're destroying
8:27
Speaker 3: their futures. You're ruining a whole generation of people who
8:31
Speaker 3: are just like you and me and have hopes and aspirations.
8:33
Speaker 3: Every single brit I know loves the National Lottery. They
8:37
Speaker 3: all want to be rich, and the greatest way of
8:40
Speaker 3: being rich is not having a lottery. For God's say,
8:43
Speaker 3: he says, cutting tax rates and allow them to fly
8:45
Speaker 3: with their own wings and with their own skills. But no,
8:47
Speaker 3: they don't do that. But then they provide the lottery
8:50
Speaker 3: to give the people who don't work hard the chance
8:52
Speaker 3: to become super rich. But they all want to be rich,
8:55
Speaker 3: and yet the government hates the rich, and their policies.
8:58
Speaker 1: Would be much better for everyone to be better, often
9:00
Speaker 1: a couple of people to be super RECOI exactly, it
9:02
Speaker 1: doesn't work for us.
9:03
Speaker 2: Now, So let's go back a little.
9:05
Speaker 1: So let's pretend our country was not the mess up
9:08
Speaker 1: that it is, and we were starting from scratch with
9:11
Speaker 1: the taxes. What we want, presumably is a very broad based,
9:16
Speaker 1: reasonably flat taxes.
9:19
Speaker 2: Is that right?
9:20
Speaker 1: And if we were looking only at income tax where
9:22
Speaker 1: would you pitch it?
9:23
Speaker 3: What I would do is I'd have the lowest possible
9:25
Speaker 3: tax rate on the broadest possible tax base. The reason
9:28
Speaker 3: for that is the lowest rate is so you provide
9:30
Speaker 3: people with the least incentives to evade, avoid, or otherwise
9:33
Speaker 3: not report taxable income. And you have the broadest base
9:36
Speaker 3: with the least deductions, exemptions, exclusions or credits, write offs, whatever,
9:40
Speaker 3: those things are loopholes, so that they don't have easy
9:43
Speaker 3: places to go into to avoid paying taxation. Now, I
9:46
Speaker 3: did Jerry Brown's flat tax here in the US a
9:49
Speaker 3: long while ago, and the number week came out with
9:51
Speaker 3: a static revenue flat tax. It came out to about
9:54
Speaker 3: eleven point eight percent. If you got rid of all
9:57
Speaker 3: federal taxes and replace them with two flat rate taxes,
10:01
Speaker 3: one on business net sales that's your vats, and one
10:04
Speaker 3: on personal on adjustin gross income. Those two taxes, that's it.
10:07
Speaker 3: No other taxes. Starting with the first dollar to the
10:10
Speaker 3: last dollar. It came out to eleven point eight percent.
10:12
Speaker 3: I rounded it up for Jerry to twelve just to
10:14
Speaker 3: make sure, and he was scared because politicians don't understand
10:18
Speaker 3: all this stuff. He rounded up to thirteen percent. And
10:21
Speaker 3: we could replace every tax, every federal tax in the US,
10:24
Speaker 3: with that, every single one. Marin. Can you imagine what
10:27
Speaker 3: the economy would look like. No one would have to
10:30
Speaker 3: file a tax return. If you earn one hundred bucks,
10:33
Speaker 3: the company sends in thirteen bucks into the treasury gives
10:36
Speaker 3: you eighty seven bucks. That's it.
10:38
Speaker 2: Bank.
10:39
Speaker 3: No, you don't even have file returns or any There
10:41
Speaker 3: are no lawyers, no accountants, nor deferit income specialists. There
10:44
Speaker 3: are no tax dodges, there are no loopholes, there are
10:46
Speaker 3: no schemes. All of that stuff just disappears. I mean,
10:50
Speaker 3: it's just amazing how high we could fly with those wings.
10:53
Speaker 3: It would just be great.
10:54
Speaker 1: There any accountant listening to this, any tax specialists, most
10:58
Speaker 1: of the legal profession they're listening to and they're.
11:00
Speaker 2: Going, please, no, don't do this to us. Imagine the unemployment.
11:04
Speaker 1: You're not just talking about a low taxes and you're
11:07
Speaker 1: talking about a simple taxes.
11:09
Speaker 2: The awful lot of people who don't want.
11:11
Speaker 1: A simple taxis tax code that's longer than the complete
11:13
Speaker 1: work through Shakespeare that works with them.
11:16
Speaker 3: Yeah, let me Also, it's just like all those people
11:17
Speaker 3: who love COVID nineteen, the undertakers, the morticians, the people
11:21
Speaker 3: who ran hospitals, they love COVID nineteen. Even though it
11:25
Speaker 3: killed lots and lots and lots of people. They loved
11:27
Speaker 3: it because it provided them with jobs output employment. By
11:30
Speaker 3: the way, they can go straight to hades if you
11:32
Speaker 3: forgive my French and you can get good jobs that
11:35
Speaker 3: create wealth rather than good jobs to dodge im moral
11:38
Speaker 3: government policies. I just cannot allow myself to be swayed
11:43
Speaker 3: by people who do makeshift projects that don't help the world.
11:46
Speaker 3: Forgive me for that.
11:47
Speaker 2: So how do we get an economy like that of
11:51
Speaker 2: the UK? I think the UK we are. This is
11:54
Speaker 2: a disaster on every single level.
11:57
Speaker 1: As you say, we barely grown, not just as the
11:59
Speaker 1: financial crisis, but actually sent several years before the financial crisis.
12:02
Speaker 1: We have got every single kingdom that you suggest that
12:05
Speaker 1: the book, by the way, everyone talks about the five
12:07
Speaker 1: kingdoms of growth and taxation, government spending, monetary policy, regular
12:11
Speaker 1: trade policy.
12:12
Speaker 2: All of these are wrong.
12:13
Speaker 1: And I would add to that, by the way, Arthur,
12:15
Speaker 1: if you didn't mind me adding a kingdom, I would
12:16
Speaker 1: add energy policy because of cheap energies.
12:19
Speaker 2: Drivers, I would add a six to that. So you
12:22
Speaker 2: know we have all those We've done them all wrong.
12:24
Speaker 1: We've got this appalling deficit, unbelievably awful level of public debt,
12:30
Speaker 1: a level of taxation that is already I would say,
12:32
Speaker 1: very clearly on the wrong side of your curve. We
12:36
Speaker 1: have a budget coming up where we have rumors all
12:38
Speaker 1: over the place that she's going to break every manifested
12:40
Speaker 1: promise and the son add to two p to the
12:43
Speaker 1: basic rate of income text five P to the top
12:45
Speaker 1: rate sects. We hear all these kinds of things. This
12:48
Speaker 1: is going in the wrong direction. How an earth do
12:51
Speaker 1: you get an economy in a state like this to
12:55
Speaker 1: a position where it can conceivably introduce a low, flat,
13:01
Speaker 1: broad based rate of times.
13:03
Speaker 2: I don't want to be transition field like hell.
13:05
Speaker 3: Transitions are not bad. They are not They're really good,
13:08
Speaker 3: they're really easy. But let me just say this. I
13:11
Speaker 3: worked with one of your prime ministers very closely, a
13:13
Speaker 3: young lady named Margaret Thatcher from nineteen seventy on through
13:17
Speaker 3: the whole term. There she dropped the highest tax rate.
13:20
Speaker 3: Now I'm obviously picking and choosing and cherry picking, but
13:23
Speaker 3: ninety eight percent on the income dropped it down to
13:26
Speaker 3: forty percent. You can see what happened during there. We
13:29
Speaker 3: moved towards it. A north star that you describe is
13:32
Speaker 3: something to guide us the direction we should be moving there.
13:36
Speaker 3: Now with the US, with Ronald Reagan, we cut the
13:38
Speaker 3: highest marginal income tax rate from seventy eight percent, seventy
13:41
Speaker 3: percent to twenty percent to twenty eight percent. Excuse me.
13:45
Speaker 3: We caught the corporate rate from forty six percent to
13:47
Speaker 3: thirty four percent. We went from fourteen tax brackets to
13:50
Speaker 3: two tax brackets. We got rid of all the deduction's exemptions, exclusions,
13:55
Speaker 3: so it was revenue neutral. Marrin. Now, what we've done here,
13:59
Speaker 3: what I would like to Don and Britain, is you
14:01
Speaker 3: can make these tax codes revenue neutral, so there is
14:05
Speaker 3: no fear of losing revenues and all you have is upside. Now,
14:09
Speaker 3: this is really a very easy way to do it
14:11
Speaker 3: within the States here because we have so many deductions, exemptions.
14:14
Speaker 3: If you get rid of those at lower the rates,
14:17
Speaker 3: you can do it so that the static revenue is
14:19
Speaker 3: the same, but you now have all the incentives working
14:21
Speaker 3: in the right direction. And Britain can do that too,
14:24
Speaker 3: it really can. And then once it starts, Miren, once
14:28
Speaker 3: the growth model starts, it hits the wind at your back.
14:31
Speaker 3: It's like Thatcher, It's like Reagan. Once you starts, then
14:34
Speaker 3: they start doing all these things. They privatized all these companies,
14:37
Speaker 3: they sold them off, they deregulated, they had the trade
14:39
Speaker 3: policy of the inflation. All of that happens, and it's
14:42
Speaker 3: a virtuous cycle rather than a death spiral. And that
14:45
Speaker 3: I think is what Britain can do if they get
14:47
Speaker 3: the right person. It happened with Thatcher, It's happened with Reagan,
14:50
Speaker 3: it happened with Kennedy. We've had four or five episodes
14:53
Speaker 3: in the US where it really happened. It lasts only
14:56
Speaker 3: for a generation, but hell, I'm eighty five. I'll take
14:58
Speaker 3: a generation generation.
15:00
Speaker 2: Because they forget, you mean.
15:02
Speaker 3: Yeah, they do. They forget and then they start virtual
15:04
Speaker 3: signaling again. There's nothing wrong with being rich. There is
15:07
Speaker 3: something very wrong with being poor. People who are poor
15:10
Speaker 3: and need to have their opportunities increased. They need to
15:13
Speaker 3: become ridge. They need to have more income. Rich people
15:16
Speaker 3: are fine. Poor people need to be having the opportunities
15:19
Speaker 3: provided to them. And that's why I did enterprise zones,
15:22
Speaker 3: which I did in the seventies here and I did it,
15:24
Speaker 3: and Reagan put it through you. Reagan and Jack Kemp
15:26
Speaker 3: did where we have tax free zones in the inner
15:29
Speaker 3: cities where these people are the poorest of all. So
15:32
Speaker 3: they have no income tax, no VAT tax, nothing in
15:35
Speaker 3: the inner city. You have to live there, live there
15:37
Speaker 3: in your primary residence, and also work there and no
15:40
Speaker 3: income tax and no VAT. And you can imagine how
15:43
Speaker 3: the jobs would be created, and these people would be
15:45
Speaker 3: able to earn their way into prosperity, which is what
15:47
Speaker 3: everyone wants. No one wants handouts, Amaron, They really don't.
15:51
Speaker 3: They'll take them because they have to, but it's much
15:54
Speaker 3: better to earn an income. I mean. Jack Kennedy put
15:57
Speaker 3: it as so well. He said, the best form of
15:59
Speaker 3: welfare is still a good high paying job, and jobs
16:03
Speaker 3: are created because of returns on capitol and returns on labor.
16:06
Speaker 2: That's all, yeah, But.
16:07
Speaker 1: You do have an incentive problem with welfare systems across
16:12
Speaker 1: Very often you can earn as much on welfare as
16:14
Speaker 1: you can earn an ad because we have an oversupply
16:17
Speaker 1: of loved You do.
16:18
Speaker 3: Not need to interview you. I would interview you and
16:21
Speaker 3: get your because you're exactly right on all this, and
16:24
Speaker 3: it's so damned hobbyist Marin, it's so damned obvious. Yet
16:27
Speaker 3: these people avoid it like the plague, and they claim
16:30
Speaker 3: it's going to be catastrophic, the cutt and welfare. Ever,
16:33
Speaker 3: my foot, it will be getting rid of this because
16:36
Speaker 3: you create jobs is not going to hurt you at all.
16:39
Speaker 3: Everyone will be better off, the poor, the rich, the middle,
16:42
Speaker 3: all the left, the right, East coast, west coast, North, South,
16:45
Speaker 3: up down. Everyone will be better off. A rising tide
16:48
Speaker 3: that raises all boats.
16:50
Speaker 1: Now, the pushbank you would get in the UK from
16:52
Speaker 1: pretty much every politician would be okay, Butler's trust, okay,
16:57
Speaker 1: butt Bond, talk about look at the next budget and
17:00
Speaker 1: they'll say if she does not put up taxes very significantly,
17:03
Speaker 1: which I think you would say, is that with a
17:05
Speaker 1: terrible idea, because it just makes the economy even worse,
17:08
Speaker 1: makes growth even lower, makes it even harder to pay
17:10
Speaker 1: back the debt. But what most people would say is
17:12
Speaker 1: if she doesn't put up taxes forty fifty sixty billion,
17:15
Speaker 1: whatever it is, the bond market will punish the UK
17:18
Speaker 1: and then our interest bill goes up and there were
17:20
Speaker 1: even more trouble than we were before in hello fiscal crisis.
17:23
Speaker 3: Can I respond to that if I could?
17:24
Speaker 2: Absolutely?
17:25
Speaker 3: The first place, she never got a policy and she
17:27
Speaker 3: was thrown out so quickly before even she in quasi
17:30
Speaker 3: could get a chance to put it in. And all
17:32
Speaker 3: that my telling you this, and I know you won't
17:35
Speaker 3: believe me, and I know they don't believe me. If
17:37
Speaker 3: her policies had been put in, she would have increased
17:40
Speaker 3: tax revenues enormously.
17:42
Speaker 1: But isn't the key point that she didn't have time.
17:45
Speaker 1: If Rachel Reeves were to follow your advice, she probably
17:47
Speaker 1: she may also not be given the time.
17:49
Speaker 3: Yeah, she might. I don't think it will take time
17:51
Speaker 3: for the effects to occur. To be honest with you,
17:53
Speaker 3: these people are waiting at her moving out of Britain
17:55
Speaker 3: all over the place in Abodati find Brits all over
17:57
Speaker 3: the world except in Britain. And the thing about trust
18:00
Speaker 3: is she didn't prepare the environment. I don't think now
18:03
Speaker 3: I'm talking politics now where I'm really ignorant. But she
18:06
Speaker 3: didn't prepare the groundwork to get it there, to get
18:08
Speaker 3: it so that you could go to each of these
18:11
Speaker 3: different groups and get buy in on their part. Now
18:13
Speaker 3: with US at the US, with Reagan and with Trump,
18:16
Speaker 3: we got all these different groups to get buy it.
18:19
Speaker 3: For example, in the one where we dropped the highest
18:21
Speaker 3: tax rate from fifty percent to twenty eight percent, we
18:25
Speaker 3: raised the lowest rate from twelve and a half to
18:27
Speaker 3: fifteen percent. We cut the corporate rate from forty six
18:31
Speaker 3: to thirty four percent. We did all the deductions, when
18:33
Speaker 3: we did all the lobbying with all the groups, we
18:36
Speaker 3: passed that bill in the Senate in the US by
18:40
Speaker 3: a vote of ninety seven to three. Now let me
18:44
Speaker 3: say that again, every comedy in the US Senate voting
18:47
Speaker 3: for it except for three of them. That was Simon
18:50
Speaker 3: in Illinois, Eleven in Michigan, and Merkland, Montana. But Teddy
18:54
Speaker 3: Kennedy voted for it, Tall and Pink Bill Browdley voted
18:56
Speaker 3: Joe Biden voted for it. Al Gore voted for it.
18:58
Speaker 3: All these guys because they were primed as to how
19:01
Speaker 3: it would work. They love America, they love good budgets.
19:04
Speaker 3: And it was past ninety seven to three. If you
19:07
Speaker 3: do your groundwork well politically, you go through and explain it,
19:11
Speaker 3: and you go through the numbers with all these people.
19:13
Speaker 3: They're not dumb, they're smart. But build up this consensus
19:16
Speaker 3: and then put the bill in and make them co authors.
19:19
Speaker 3: It's amazing how far you can go if you give
19:22
Speaker 3: other people credit.
19:23
Speaker 2: You let people put their name on stuff.
19:25
Speaker 3: Let them put their names on it. And that's what
19:27
Speaker 3: Liz Trust did not do. And she called it the
19:29
Speaker 3: blob and all this other sort of stuff. And the
19:32
Speaker 3: blob doesn't make blob people feel good about their role
19:35
Speaker 3: in life. You know what I'm saying. No American has
19:37
Speaker 3: ever made better off by pulling a fellow American down.
19:40
Speaker 3: Every American's made better off if any one of us
19:42
Speaker 3: is made better off. This is not rich versus poor,
19:45
Speaker 3: Black versus white, old versus young, male versus female. Hate
19:49
Speaker 3: never wins. Love always wins. These tax codes should be
19:54
Speaker 3: tax codes that the rich think are right and that
19:56
Speaker 3: the poor think are right. Maren, If you make ten
19:59
Speaker 3: times as much as I do, you should pay ten
20:01
Speaker 3: times as much in taxes as I do, but not
20:03
Speaker 3: a thousand times as much. Yes, And once you start
20:06
Speaker 3: exploiting one group and making a class warfare. You're done.
20:09
Speaker 3: It's cooked, it's fried, it's baked. It'll never work. And
20:12
Speaker 3: you've got hateful people all over the place, and I'm
20:15
Speaker 3: sick and tired of hate.
20:35
Speaker 2: Now, Arther, let me take this from the other side.
20:37
Speaker 1: We spent a lot of time so far talking about
20:39
Speaker 1: taxes which are too high, that on the wrong side
20:41
Speaker 1: of the curve. Are there any taxes that you look
20:44
Speaker 1: at that you think, actually, we can get these a
20:46
Speaker 1: bit higher, these are too low. I'm thinking specifically of
20:49
Speaker 1: land taxes. There's quite a big lobby group in the UK,
20:52
Speaker 1: and I know there is in the US as well,
20:53
Speaker 1: for the land value tax for Georgism. Is there anything
20:56
Speaker 1: that you can see a type of tax that could
20:59
Speaker 1: go up?
21:00
Speaker 2: I'm still raise more revenue.
21:02
Speaker 3: When I was over there last week, one of the
21:05
Speaker 3: podcasts asked me if you were Rachel Reeves and you
21:07
Speaker 3: had the choice of doing little bity taxes all over
21:10
Speaker 3: the place of raising the principle, what would you do
21:12
Speaker 3: if you forced me to that choice. I'd raise one
21:14
Speaker 3: of the three primary taxes. Yeah, all right. When it
21:18
Speaker 3: came out, laughers in favor of raising one of the
21:20
Speaker 3: three primary tax, which is not quite the correct I'm not.
21:23
Speaker 2: Going to use that headline.
21:25
Speaker 1: I'm not going to use that headline. I'm just interested
21:27
Speaker 1: in looking and looking at the bottom of.
21:29
Speaker 3: The curve, rid of all of your little diddley taxes
21:32
Speaker 3: and put them all into the two taxes there. It's
21:34
Speaker 3: what I do. I get rid of all these little
21:36
Speaker 3: squirrely taxes, all of this, that, and the other thing.
21:38
Speaker 3: People focus on doing business and paying tax once and
21:42
Speaker 3: for all and having it collected by the government directly
21:45
Speaker 3: from the companies. That's the way I go back. I
21:47
Speaker 3: think land taxes are really bad. There are three types
21:50
Speaker 3: of taxes that for this discussion. One are income, sales
21:54
Speaker 3: and value added taxes. There's a total GDP. Then there's
21:57
Speaker 3: what we call turnover taxes, which are on transactions, and
22:02
Speaker 3: then they're wealth taxes. For every one percent transactions tax
22:06
Speaker 3: is equivalent to about a four percent on the income
22:10
Speaker 3: taxes or the broad based tax, and every one percent
22:13
Speaker 3: on a wealth tax is equivalent to three and a
22:15
Speaker 3: half percent on the transaction tax or twelve or thirteen
22:19
Speaker 3: of the others. Wealth taxes are extraordinarily bad because the
22:22
Speaker 3: value of the asset falls and the people are all
22:25
Speaker 3: poor in property taxes here. Every one percent increase in
22:29
Speaker 3: the property tax rate all right, reduces property values by
22:33
Speaker 3: about twelve and a half percent. Now that's getting big.
22:36
Speaker 3: So if you have two, three four percent property taxes,
22:40
Speaker 3: you're really dropping the value of assets. And then it
22:43
Speaker 3: doesn't work. I think your tax system on property is
22:46
Speaker 3: probably better than ours by a substantial amount. But i'd
22:50
Speaker 3: get rid of all these little diddly things all over
22:52
Speaker 3: the basis clean that. Get your leaf blower and blow
22:55
Speaker 3: them all out of here, put them in the garden.
22:57
Speaker 1: That you're demanding a level of honesty and straightforward and
22:59
Speaker 1: as a life of complication and fight on tag system
23:01
Speaker 1: that I do not think how politicians are anyway.
23:03
Speaker 3: But you and I working together and do we can
23:07
Speaker 3: get it. And we've gotten in a lot of other countries.
23:09
Speaker 3: We did it in Argentina under menim and maybe we'll
23:12
Speaker 3: do it under my lay. I've been down there a
23:13
Speaker 3: couple of times. I love it. I think there's a
23:15
Speaker 3: chance we did it. And I did it in Chile
23:18
Speaker 3: back in the seventies with Sarajo, Dicostro and Ralph Luda's
23:21
Speaker 3: Pinochet period. Yes it wasn't democratic, but we got it
23:24
Speaker 3: the best economy in South America for thirty five years.
23:27
Speaker 3: Really amazing. Under Thatcher, we did it pretty well. We
23:30
Speaker 3: did it under Reagan, and we did it. We're doing
23:32
Speaker 3: it under Trump. Come and join the club. Let's have
23:35
Speaker 3: a big dance hall together, and all of us love
23:37
Speaker 3: each other and lower taxes and all of us become
23:40
Speaker 3: rich together.
23:41
Speaker 2: That's what the dream is having. Like I'm in the microwave. Look,
23:44
Speaker 2: let's look at the let's look at some of the
23:47
Speaker 2: other things.
23:47
Speaker 1: So the next thing we got to You've got these
23:49
Speaker 1: groups that we were talking about elia UK government spending.
23:52
Speaker 1: I don't think we need to talk about that, Like
23:54
Speaker 1: we can just agree that maybe there should be less
23:55
Speaker 1: of it, Yes, I think we could, Okay, And then
23:58
Speaker 1: we can look at UK Reagan's re policy regulation. I
24:00
Speaker 1: think again we can probably just agree, could be hardly, don't.
24:04
Speaker 1: And then UK monetary policy, perhaps we can disagree on that.
24:07
Speaker 2: It could be less awful.
24:08
Speaker 3: It could be less awful, but it needs to be
24:10
Speaker 3: less awful. Britain is not a country like the US
24:14
Speaker 3: or like some of these others. Britain has to worry
24:16
Speaker 3: about its trade accounts and it has to worry about
24:18
Speaker 3: monetization and currency boards to do it. It's much more
24:22
Speaker 3: subject to the vagaries of the world economy than is
24:25
Speaker 3: the US. We are a big elephant. Britain's not as
24:28
Speaker 3: big an elephant. It's like Argentina thinking they can have
24:31
Speaker 3: their own separate currency. They can't. Now Britain is much
24:34
Speaker 3: better than that. But Britain needs to be very careful
24:37
Speaker 3: to make sure they get things like stable coins. If
24:39
Speaker 3: you like the crypto world, I would suggest that Britain
24:42
Speaker 3: try to put in something like stable coins in the
24:44
Speaker 3: British pound and make it to the dollar or to
24:46
Speaker 3: the pound. And they could do this like tether and
24:48
Speaker 3: some of these others that they could really take advantage
24:51
Speaker 3: of the monetary policy of cryptocurrencies and circumvent all this
24:55
Speaker 3: political garbage out of the Bank of England and the
24:58
Speaker 3: Federal Reserve. Excuse me, it's not just you. We are
25:00
Speaker 3: equally as guilty in that as you are. But you're
25:03
Speaker 3: guilty too.
25:04
Speaker 2: What do you mean by political garbage?
25:05
Speaker 3: Well, the Bank of England should not be independent. Who
25:08
Speaker 3: gets blamed for inflation in Britain? The government does not
25:11
Speaker 3: the Bank of England and so they're not held responsible
25:13
Speaker 3: for the things they cause. And you always want to
25:16
Speaker 3: align authority with responsibility with accountability, and they don't in Britain.
25:20
Speaker 3: It's just not right now the government.
25:22
Speaker 2: That's the case across the world right.
25:24
Speaker 1: The central banks are remarkably undemocratic organizations that they put
25:27
Speaker 1: in place policies that shift wealth around the place are
25:29
Speaker 1: effectively fiscal policies in the end rather than month, and
25:32
Speaker 1: they're not accountable and not accountable in any way for this.
25:35
Speaker 3: That's in your right, And you're right again, you're the
25:37
Speaker 3: expert on this one. Not only do you see it,
25:39
Speaker 3: I think you're lecturing me on it being correct.
25:41
Speaker 2: I reckon I should get that Nobel price.
25:43
Speaker 3: Yeah, you can have the one I don't have. How
25:45
Speaker 3: about that one?
25:45
Speaker 2: Excellent? There we go, right, listen. Okay, so that's a
25:49
Speaker 2: matter of pe policy.
25:49
Speaker 1: Out of the way, the living room perfect, And we
25:53
Speaker 1: agreed on energy policy.
25:54
Speaker 2: Make it cheaper. So that takes us to trade policy.
25:58
Speaker 3: Yes it does.
25:58
Speaker 2: Now this isn't interesting.
25:59
Speaker 1: A big believer in free trade, and I think that
26:03
Speaker 1: you also believe that Trump is a big believer in
26:05
Speaker 1: free trade. And what we have here is effectively a negotiation.
26:09
Speaker 1: Is tariff policy is a negotiation to bring us to
26:11
Speaker 1: a much less mucin tillist world over maybe a four
26:15
Speaker 1: or five year period.
26:16
Speaker 2: Is that right?
26:17
Speaker 3: One hundred percent? You've got every word of my thoughts
26:20
Speaker 3: completely encapsulated in that conversation.
26:23
Speaker 1: Okay, let me ask you this, then, are there limits
26:25
Speaker 1: to free trade? If we look back over the last
26:28
Speaker 1: decade when we live in a world that we talked
26:30
Speaker 1: about it being a globalized world of free trade, and
26:32
Speaker 1: of course it was nothing of the sort, because some
26:34
Speaker 1: economies were running a mucintilist policy, a very self interested policy,
26:38
Speaker 1: and other economies such as say, for example, the UK
26:40
Speaker 1: in the US were running what they believe to be
26:42
Speaker 1: real free trade policies, and that of course has led
26:45
Speaker 1: to serious disadvantages for the economies that were operating actual
26:49
Speaker 1: free trade policies.
26:50
Speaker 2: How do we work our way through that?
26:52
Speaker 3: The North Stars free trade moving in that direction? Right,
26:55
Speaker 3: But no matter how much I believe in free trade,
26:57
Speaker 3: I would not sell nuclear weapons to Kim John. I'm
27:00
Speaker 3: just not going to do it, all right, that there's
27:03
Speaker 3: a limit right there. Now, that's obviously extreme. There are
27:05
Speaker 3: all sorts of things that you want to do in
27:08
Speaker 3: oil reserves, this type of stuff, but the market would
27:12
Speaker 3: do a lot better job on these arbitrage conditions and
27:15
Speaker 3: the supply chains then the government does. And I'm reading
27:19
Speaker 3: mean that, for example, we have huge amounts of gold
27:22
Speaker 3: and silver and Fortknox. What the hell is it doing there?
27:24
Speaker 3: It's sitting there. Government when it tries to interfere in
27:28
Speaker 3: free trade accept in the extreme examples of Kim Joe
27:30
Speaker 3: on Onen, that stuff does not do a good job.
27:32
Speaker 3: If you need inventories for critical materials and stuff, private
27:35
Speaker 3: sector can do those inventories better. They know how to
27:38
Speaker 3: do the calculations better than government does. So when you
27:41
Speaker 3: see a problem on trade, and we all see lots
27:44
Speaker 3: of problems on trade, we all do. When you see
27:46
Speaker 3: a problem, the question to ask is not, oh, by God,
27:49
Speaker 3: there's a private sector problem. Let's put the government. The
27:51
Speaker 3: question is would the government solution to this problem be
27:55
Speaker 3: better or worse than the private error being made? Right now,
27:59
Speaker 3: that's the right question question. And in some cases, of course,
28:02
Speaker 3: you're right when you look at it. If I could
28:04
Speaker 3: break free trade and get Russia and the Ukraine to
28:07
Speaker 3: agree on a peace plan, I do it every day
28:09
Speaker 3: of the week and twice on Sunday. I am so
28:11
Speaker 3: happy with the results in the Middle East with Gaza.
28:14
Speaker 3: It was horrible what was going on there. I think
28:17
Speaker 3: Trump did a great job in Africa with the Three Wars.
28:19
Speaker 3: He stopped the Pakistan Afghanistan, and he did it all
28:23
Speaker 3: with trade, all of it with trade. That's the brilliance
28:26
Speaker 3: of Donald Trump's negotiation. Now, is it all moving it
28:29
Speaker 3: towards free trade? No, it isn't. But if it's moving war, god,
28:33
Speaker 3: I do that. Ronald Reagan did the same thing with Gorbachev.
28:37
Speaker 3: We invited them in. It was called peace through strength,
28:39
Speaker 3: invited them into our prosperity. But if it don't come in,
28:42
Speaker 3: we've got a big stick here. We're going to hitch
28:43
Speaker 3: in the head. And that stuff works. And I do
28:47
Speaker 3: understand not going always at all times, in every which way.
28:51
Speaker 3: Free trade negotiations for peace, etc. Is also a very
28:55
Speaker 3: important characteristic of trade negotiations. And I'm not an expert
28:59
Speaker 3: in this. I'm a woos maarn I'm eighty five. When
29:02
Speaker 3: I see negotiations going on, I get all scared. I
29:05
Speaker 3: start crying. I wet myself, I climb and roll in
29:07
Speaker 3: a fetal position. I climb under my bed and cry.
29:09
Speaker 3: Donald Trump does not. Ronald Reagan did not. They didn't
29:13
Speaker 3: do that. They really went at it and they were successful.
29:16
Speaker 3: We got world peace under Reagan with Corbachov, Cosiesion and
29:21
Speaker 3: Bresneff and all that, and it lasted for a long time.
29:24
Speaker 3: And I think Trump's going to do the same thing.
29:27
Speaker 3: And so I am much less harsh on my criticism
29:30
Speaker 3: of Trunk for violating free trade and peanut butter oil
29:34
Speaker 3: because he's really using the trade issues very very effectively
29:39
Speaker 3: to get a lot of other objectives we need desperately
29:42
Speaker 3: in this world. So I support him one hundred percent
29:45
Speaker 3: so far.
29:45
Speaker 2: And what he's done, what would you criticize him for
29:48
Speaker 2: so far?
29:49
Speaker 3: Oh, he's a human And let me just say it
29:51
Speaker 3: this way. You gotta trade Donald Trump seriously, but not literally.
29:56
Speaker 3: Some of the grandiose things he says does or not
30:00
Speaker 3: my style. He's much more like my godfather was, who
30:03
Speaker 3: is Reagan's top and friend in California, head of the
30:06
Speaker 3: kitchen cabinet, barh blah blah. Donald Trump is a CEO,
30:10
Speaker 3: and he's a great CEO. Sometimes he creates unnecessary hostilities
30:15
Speaker 3: by his conversation, but bottom line, I think he's just
30:18
Speaker 3: doing a great job. If he yelled at me, I
30:21
Speaker 3: would cry, and I would, but I wouldn't stop loving
30:24
Speaker 3: his policies and what he does.
30:26
Speaker 1: And passing though, isn't it And we're already getting well
30:29
Speaker 1: into his second term.
30:30
Speaker 2: What happens next?
30:31
Speaker 3: I don't know. I'm eighty five. I don't give it
30:33
Speaker 3: damn to be honest, No I do, I do so
30:38
Speaker 3: do I do? I think that once he's get locked
30:40
Speaker 3: into stone, once he gets through his third first year,
30:43
Speaker 3: which will be in another four months something like that,
30:47
Speaker 3: then we got three years left. He's got another almost
30:50
Speaker 3: year of control of all the House and Senate, and
30:54
Speaker 3: he controls the Supreme Court, he controls the state legislatures
30:57
Speaker 3: mostly and governorships, and he will by then have the
31:00
Speaker 3: Fed under control. They have his own chairman in there,
31:03
Speaker 3: and we'll be able to lock these things into stone.
31:05
Speaker 3: So it's very difficult to undo them. But believe me,
31:09
Speaker 3: when I'm coming up to my one hundred and twentieth birthday, Maren,
31:12
Speaker 3: when I come up there, I expect to see a
31:15
Speaker 3: whole new set of problems that we'll have to re
31:17
Speaker 3: educate the world again on supply set economics. But it works,
31:21
Speaker 3: and economics is all about incentives, and the government can
31:25
Speaker 3: change the attractiveness of activities. And if you tax people
31:29
Speaker 3: who work and you pay people who don't work, don't
31:32
Speaker 3: be surprised if a lot of people stop working. What
31:37
Speaker 3: you need to do to create a prosperous, well functioning
31:41
Speaker 3: society is reward things that are good. We tax speeders
31:45
Speaker 3: in the freeway to get them to stop speeding. We
31:47
Speaker 3: tax smoking to get them to stop smoking. In the
31:50
Speaker 3: same breath, why do we tay it tax people who
31:52
Speaker 3: are an income? Why do we tax people who employ
31:55
Speaker 3: other people? Why do we tax businesses that make wonderful
31:58
Speaker 3: products at low cost and make lots of profits. We
32:01
Speaker 3: don't tax them to get them to stop earning income,
32:04
Speaker 3: or stop employing other people, or stop making great products.
32:07
Speaker 3: But don't think for a second that those same consequences
32:10
Speaker 3: don't occur because our motive is different. That's just crazy stuff.
32:16
Speaker 3: And it goes with regulations, spending, it goes with taxes,
32:19
Speaker 3: it goes with oh, because we're trade, it goes with everything,
32:22
Speaker 3: and it also goes with energy policy, and it goes
32:25
Speaker 3: with privatization of industries.
32:28
Speaker 1: You are such an optimistic man, and I'm sure we're winning,
32:32
Speaker 1: and we're win okay, all right, And Hopefully that will
32:35
Speaker 1: happen to the UK as well, though not maybe not
32:38
Speaker 1: in November. I think we have to go a little
32:39
Speaker 1: lower before baking. That probably got to scrape the bottom
32:42
Speaker 1: before we get.
32:44
Speaker 3: Because you're gonna get ready. I'm ready money.
32:47
Speaker 2: But it's fun.
32:48
Speaker 1: So we've talked a lot on the podcast over the
32:49
Speaker 1: last couple of months about the debasement trade, about the
32:52
Speaker 1: general collapse of fit money, and how the endless public
32:56
Speaker 1: debts mean that you can't really trust trust money anymore,
32:58
Speaker 1: can't trust fit money, and so the gold price rise
33:01
Speaker 1: and rise and rise. And you've talked about crypto already.
33:04
Speaker 1: Where do you stand on that you a lot of
33:05
Speaker 1: gold sitting in your portfolio?
33:07
Speaker 3: No, no, of course I don't. I don't have any
33:09
Speaker 3: crypto either.
33:10
Speaker 2: But what I do is I have crypto.
33:12
Speaker 3: I don't. Currency holdings is a long term investment. If
33:18
Speaker 3: you look at bitcoin or some of these other they
33:19
Speaker 3: are a good store of value, but they've had a
33:21
Speaker 3: huge rise, and so is gold. But when you look
33:24
Speaker 3: at my portfolio, my portfolio is from my grandchildren, my
33:27
Speaker 3: great grandchildren, and that's where I'm at. When I look
33:29
Speaker 3: at the world at large, I see cryptocurrencies as being
33:32
Speaker 3: a private solution to a government problem. They are trying
33:35
Speaker 3: to circumvent the bad currencies that have been put into
33:38
Speaker 3: place since nineteen thirteen and going to drive them out.
33:42
Speaker 3: What we should do is have a government that welcomes
33:45
Speaker 3: a private solution to a bad public problem, and that's
33:49
Speaker 3: a bad currency. The pound is terrible. It's gotten so bad.
33:53
Speaker 3: It's gotten so bad mare and that they're now calling
33:55
Speaker 3: it the ounce in other countries. You don't mind my joke. Sorry,
34:00
Speaker 3: I thought it'd be really good.
34:02
Speaker 2: It is quite good. It just took me a beat
34:04
Speaker 2: to get it.
34:05
Speaker 3: But I gotta know you about that.
34:06
Speaker 2: My audiences are cleverer than me that I got it
34:08
Speaker 2: much smoke quickly.
34:08
Speaker 3: Well, you know, when you look at all these currencies,
34:10
Speaker 3: I think these cryptocurrencies, especially the stable coins, are going
34:13
Speaker 3: to replace the currencies. So it's a private solution to
34:17
Speaker 3: a government problem. Do you know what blockchain does to
34:19
Speaker 3: transactions costs? When you send a check, give someone a check,
34:23
Speaker 3: they send it into the bank, it takes seven days
34:25
Speaker 3: to We.
34:26
Speaker 2: Didn't do that in Europe anymore. That's early. In the US.
34:28
Speaker 2: None of us have seen a check in a decade.
34:30
Speaker 3: When you use a credit card, same thing. They go,
34:33
Speaker 3: you can pull your card out and it's all clearing.
34:35
Speaker 3: It's all the double payment problem. Blockchain takes care of
34:38
Speaker 3: that instantaneously. I'm on the board of this one company
34:41
Speaker 3: called soul Meat, which deals with Solana, and it's a
34:45
Speaker 3: phenomenal thing. We can do forty thousand transactions in a
34:48
Speaker 3: second bingo. You don't need banks, you don't need any
34:51
Speaker 3: of this other stuff, you don't need energy. You just
34:53
Speaker 3: need the crypto and you just go in there and
34:56
Speaker 3: do it. You can do it in secrecy because you
34:57
Speaker 3: know of all the code breaking. You can keep it.
35:01
Speaker 3: It's just wonderful stuff. And the government should allow it
35:05
Speaker 3: to come in and replace the pound, will replace the
35:08
Speaker 3: dollar and put us on a very stable value currency.
35:11
Speaker 3: For attorney, why not.
35:14
Speaker 1: So with your longtime confidence in the US, your longtime
35:16
Speaker 1: confidence in everybody and everything.
35:18
Speaker 3: I mean in humans by the way, really.
35:21
Speaker 2: Very gratifying me too.
35:22
Speaker 1: With that confidence, then your long term portfolio for your grandchildren,
35:25
Speaker 1: and one in US equities.
35:27
Speaker 3: That's one hundred percent equity. Not all us, but there
35:29
Speaker 3: a lot of them are. But I like a little
35:31
Speaker 3: bit down there and Argentina. I think some other stuff
35:34
Speaker 3: in the world is cool. I've got a mining company
35:36
Speaker 3: stock which is gold and it's also bitcoin, but I've
35:40
Speaker 3: had it for a while, but it's in Africa, So
35:42
Speaker 3: I have some fun stuff and there. I think I
35:44
Speaker 3: do those just because I'm excited by them. I'm on
35:47
Speaker 3: a lot of boards, and I love being on the
35:49
Speaker 3: boards because I learned so much about this modern world.
35:52
Speaker 3: I'm not modern. If you speak any German Marin.
35:56
Speaker 2: I don't know some of the languages, but no job
35:58
Speaker 2: needs to learn.
36:00
Speaker 3: In nick fun gesternik bin Funfogest, I'm not from yesterday.
36:03
Speaker 3: I'm from the day before yesterday. I'm in the ancient
36:06
Speaker 3: kingdoms of the Goths or whatever it may be. I
36:09
Speaker 3: love love modernity, the technology that's coming through immunology, all
36:13
Speaker 3: the physics that's going through. Oh but much more than
36:15
Speaker 3: AI and the genetic stuff, the crisper, all of that stuff.
36:19
Speaker 3: I'm really into this stuff big time. And it's just
36:22
Speaker 3: such a wonderful world that we're looking out at all
36:26
Speaker 3: these problems that have been falling humanity and animal kingdom
36:30
Speaker 3: for four plus billion years. We're solving My daughter. I
36:35
Speaker 3: can tell you about my daughter for my number four.
36:38
Speaker 3: She lives in Britain, she's a British subject and she
36:41
Speaker 3: got metastatic melanoma force stage. They claimed that she had
36:44
Speaker 3: sixteen weeks left to live. After I stopped crying, we
36:49
Speaker 3: went to work on this. Her roommate at Yale was
36:52
Speaker 3: head of Wisconsin's medical like also used a justin Stepping
36:56
Speaker 3: in London, whose world's expert I went down to went
36:59
Speaker 3: down to Houston Anderson Hospital. There we did. We found
37:03
Speaker 3: this immunotherapy and that Jimmy Carter had used and brought
37:06
Speaker 3: him back out of hospice. That gave it to the
37:09
Speaker 3: tumors who are all stopped growing. They're all killed. Now
37:12
Speaker 3: she has seven legions in her bag. They had to
37:14
Speaker 3: have surgeons remove it, but she's alive because of immunotherapy
37:19
Speaker 3: and they didn't have to cut her all up. And
37:21
Speaker 3: tell me it doesn't make you really optimistic about this world.
37:25
Speaker 2: No, it does. I have a sad story about my father. Amazing.
37:29
Speaker 1: I was going to ask you, Arthur, at the end
37:31
Speaker 1: of this interview, what it was that kept you so
37:33
Speaker 1: optimistic and energetic, But I think we already have the
37:36
Speaker 1: answer to that one.
37:37
Speaker 3: Yeah, And immortality is this Having offspring is the second
37:42
Speaker 3: best thing next to immortality, And I'm so proud and
37:46
Speaker 3: so pleased with my kids, and I just love life.
37:49
Speaker 3: The older I get, the more I love life. And
37:51
Speaker 3: I'm not afraid of dying. I know it's going to
37:54
Speaker 3: happen one of these days. And I figured out how
37:57
Speaker 3: I want to die, Maren. I want to die the
37:59
Speaker 3: exact same my uncle did, peacefully in his sleep, not
38:02
Speaker 3: like the three passengers in the car he was driving.
38:05
Speaker 2: Oh very good, thank you, thank you.
38:07
Speaker 3: I have to thank you.
38:08
Speaker 2: You're definitely giving that one in.
38:10
Speaker 3: You don't mind be having a little humor with you, guys,
38:12
Speaker 3: But it's a deadly serious topic that you're doing. But
38:14
Speaker 3: humor is always important to let it get through. I'm
38:18
Speaker 3: no one's enemy. I know I get all sorts of
38:20
Speaker 3: hate mail and all this stuff, but I'm no one's enemy.
38:22
Speaker 3: I'm just sitting here. If you don't like my advice,
38:24
Speaker 3: throw me out. I've had a lot of experience. I've
38:26
Speaker 3: been going to the Oval office now for fifty five years.
38:29
Speaker 3: I've gone through all of this stuff. If I have
38:31
Speaker 3: anything of any experience that would make you guys better off,
38:35
Speaker 3: it's yours for the taking. And if you don't like
38:38
Speaker 3: what I say, I'll go home. I'll sit out there
38:40
Speaker 3: on the farm, I'll drink my bourbon and forget about
38:42
Speaker 3: all you people.
38:44
Speaker 1: Anyone ever contacted you from the Scottish government to ask.
38:47
Speaker 3: You, yes, the exact thing that several times. And I'm
38:49
Speaker 3: Scott's Irish German, like all of us in Appalasha, I'm
38:52
Speaker 3: fifty to fifty. I'm not I'm much more German, but
38:55
Speaker 3: my kids are all fifty to fifty Presbyterian, Scott's Irish
38:58
Speaker 3: and German. That's Appalasha. And they did and I was
39:01
Speaker 3: what were the people that the lady fish and the
39:04
Speaker 3: lady was salmon, you remember those. And they came to
39:08
Speaker 3: my office and we talked, and I had been advising
39:11
Speaker 3: the Irish government and the tax cuts at the time.
39:13
Speaker 3: And when they found that, they were offended by it
39:15
Speaker 3: and left. And you can see how well they've done.
39:18
Speaker 3: They've done a horrible job, and horrible to my home country.
39:21
Speaker 3: My grandfather. We're all from the Ulster Union, Belfast and
39:25
Speaker 3: Dalwhynie area is where we're from there, and of course
39:28
Speaker 3: we're from Koenigsberg in Germany and eat West Prussia as well.
39:33
Speaker 3: It's a shame what's happening in Scotland. Gordon Brown's about
39:36
Speaker 3: as dour as they get, and he's a cheerful fellow
39:38
Speaker 3: in Scotland. Just joking. You know.
39:43
Speaker 2: Well, I'm in Scotland at the moment while we're speaking.
39:45
Speaker 3: Where are you?
39:47
Speaker 2: I'm in Edinburgh.
39:48
Speaker 3: Do you know Brecon.
39:54
Speaker 2: And a half to us drive away?
39:55
Speaker 3: Ye was up up up the Glenn there to breakon
40:01
Speaker 3: And I was married in the church there up in Edsel,
40:04
Speaker 3: up the tanty road as they say there, And.
40:06
Speaker 2: I know that shit well.
40:08
Speaker 3: I was married there in nineteen sixty three and my
40:11
Speaker 3: first wife was Scottish Highlander. We had four kids, then
40:14
Speaker 3: I got we got the drifted apart, and then we
40:16
Speaker 3: got divorced. I raised the four kids and then we
40:18
Speaker 3: got two more kids.
40:19
Speaker 2: And I know too, so I got one war against
40:23
Speaker 2: the fertility crisis.
40:24
Speaker 3: Yeah, Scotland is such a wonderful place that people are
40:27
Speaker 3: so wonderful, But there's a reason why they populated the
40:30
Speaker 3: rest of the world because they were getting the hell
40:32
Speaker 3: out of Scotland. And that's unfortunately the truth. And Scotland
40:36
Speaker 3: needs to welcome its citizens by providing them with opportunities,
40:40
Speaker 3: and that's just doesn't seem to be in the cards
40:42
Speaker 3: right now.
40:43
Speaker 2: I don't want to end on that note.
40:45
Speaker 3: Can I tell you one story?
40:47
Speaker 2: Yes?
40:47
Speaker 3: Okay, Now this is pretty close to being literally true.
40:51
Speaker 3: About every seven days in a year on average, there's
40:55
Speaker 3: a country that celebrates its independence from Britain. Now think
41:01
Speaker 3: of that. Now, that statement says two things. Number one,
41:05
Speaker 3: it says how Britain has lost all this stuff, but
41:08
Speaker 3: it also says how much Britain once had and we
41:12
Speaker 3: can reverse that flow in terms of prosperity. I am
41:16
Speaker 3: never been more excited about a country becoming prosperous and
41:20
Speaker 3: reclaiming its authenticity. It's authorship of the capitalist revolution and
41:26
Speaker 3: of industrialization and prosperity and elimination of poverty than Britain did.
41:32
Speaker 3: And it was all by the way in Greyfriars Churchyard.
41:34
Speaker 3: You remember that John Knox and the Church of the
41:38
Speaker 3: Covenant there and you look there and false Loon Fuda,
41:41
Speaker 3: y spach Maas and my lug and it's all the
41:44
Speaker 3: birthplace of Adam Smith, the Revolution, the grave of.
41:46
Speaker 2: Adam Smith right there.
41:48
Speaker 1: We do a show every year, Arthur, I'm found I'm
41:50
Speaker 1: going to send you an invitation to this. Every summer
41:53
Speaker 1: we do a show at Pameo House, which is Adam
41:56
Speaker 1: Smith's house in Edinburgh where he died, where he lived
41:59
Speaker 1: with his mom or ald On pull him.
42:00
Speaker 2: I don't know. One of them was poor for a
42:02
Speaker 2: long time.
42:02
Speaker 1: Where you did the second the final editions of Wealth
42:04
Speaker 1: Ofmasons and Moral Sentiments. Every year during the Edinburgh Fringe
42:08
Speaker 1: Festival we do a show there and we get on
42:11
Speaker 1: an economist, a comedian, politician.
42:13
Speaker 2: We both and you can you can be the whole
42:16
Speaker 2: lot and we chat.
42:18
Speaker 1: We try and recreate the fill of Adam Smiths salons
42:20
Speaker 1: and we just chat.
42:21
Speaker 2: It's great fun and you're going to come to.
42:23
Speaker 3: And I'd love to and that we can have a
42:24
Speaker 3: little session there in Great Friars Churchyard. We do sit
42:28
Speaker 3: down there with Jenny, get us from the whole thing,
42:29
Speaker 3: and it's just so much fun. It's just so cool.
42:33
Speaker 3: I love it there and we need to reconstitute the
42:36
Speaker 3: prosperity the Britain one's head and it's just such a
42:39
Speaker 3: wonderful country and I just love being there. And if
42:44
Speaker 3: there's anything I can do to help you re establish
42:46
Speaker 3: and recreate the prosperity and the elimination of poverty in
42:50
Speaker 3: the country, I'd be more than happy to do anything.
42:52
Speaker 3: I can.
42:53
Speaker 2: I'm hoping that this podcast may have made a start.
42:55
Speaker 3: Let's hope.
42:56
Speaker 1: So thanks, thank you so much for joining us stakedn'teppreciate
43:00
Speaker 1: it more my pleasure. Thanks for listening to this week's
43:07
Speaker 1: Maren Talks Money. If you like us, show, rate, review,
43:09
Speaker 1: and subscribe wherever you listen to podcasts, and keep sending
43:12
Speaker 1: your questions or comments some Merrior Money at Bloomberg dot net.
43:14
Speaker 1: You can also follow me and John on Twitter or X.
43:17
Speaker 1: I'm at marins w and John is John Underscore Step X.
43:20
Speaker 2: This episode was hosted.
43:21
Speaker 1: By Me Maren's Unset Webbers, produced by some Mesadi and Moses,
43:24
Speaker 1: and sound designed by Blake Mabel's and Robert Williams. A
43:27
Speaker 1: special thanks, of course to Art Laffer, who I believe
43:30
Speaker 1: is also on X or Twitter at Arthur Laffer.
43:33
Speaker 2: I think so you can find him there.
43:34
Speaker 1: He may not know you can find him there, but
43:36
Speaker 1: I know you can find him there