Don't Give Up! The Full Steve Forbes Interview on Socialism, Innovation & America

[00:00:00] Speaker 1: I've failed. For years, I made the case for free markets. Yet now. [00:00:04] Speaker 2: From New York City to Seattle, the reach of democratic socialists just keeps on growing. [00:00:09] Speaker 1: Don't people voting socialists understand economics at all? Socialism always fails. Only markets create the environment that lets people prosper. [00:00:20] Speaker 3: When you get the right environment, and this country's done it better than anyone else, of giving a chance for people to be creative, experiencing liberty, [00:00:29] Speaker 1: humanity moves forward. Steve Forbes uses his magazine to point that out, and I've made short videos with him. But he has much more to say. In this extended interview, we cover how entrepreneurs achieve what government doesn't. But first, I gave him a hard time. I used to love your magazine. It was a bastion of capitalism in a world where almost everyone but the newly wise me who figured out, "Gee, this does work better." All there was was your magazine. And then, what, you stepped aside as main editor? Because now there's all kinds of silly articles about the benefits of the minimum wage. How free trade hurts us. [00:01:16] Speaker 3: Steve Forbes: Not really. One of the things we do online in reaction to the web, the internet, which blasted everything we knew about traditional print media, was we went to a contributory system several years ago. Normally a magazine, we'd do 800, 1,000 articles a year. And now we have over 1,500 contracted contributors. And so we do about 100,000 pieces a year. And we also don't stamp out intellectual diversity. There's not enough diversity in every other magazine. [00:01:52] Speaker 1: Steve Forbes: Hey, you know, we'll run our own show. That's what freedom's all about. Steve Forbes: Capitalism is failing us. A conservative case for taxing the rich. [00:02:03] Speaker 3: Why do you publish this stuff? Steve Forbes: Well, it's one of 100,000 pieces. And I publish every day making the case. I've had fights, but that's what intellectual diversity is about. I'm willing to do it with anybody. Forbes does do it with anybody. If you have a bad marketplace, guess what? [00:02:21] Speaker 1: Wealth disappears in thin air. He travels places to make the case for capitalism. Why should anybody listen to you? You're a plutocrat. Your ancestors grew up in a castle. Your father was rich. Steve Forbes: Okay. Well, let's start that. [00:02:39] Speaker 3: First of all, why should they listen to me? At least you're forced to listen to me right now. So I've got an audience of at least one. That's the nice thing about, again, a free society. You can go out there and make your case. My grandfather was one of 10 children, grade school education, came to this country in the early 1900s, always wanted to be a business writer. When he came to New York, he pounded on a lot of doors. Back then, there were lots of newspapers and magazines. Couldn't get a job. So he did something. He took a risk. Went to an editor one day and said, I'll work for you for free for several weeks. If I show you my worth, I'll trust that you'll hire me. Now, my grandfather had no idea whether the guy would just take his free labor and then toss him out when he asked for a salary. But he knew if he continued to do the same old thing, he was going to have the same old disappointment. So he got the job. And then he was so full of energy and ambition, he went to another editor using a nom de plume, as we call it now, a different name, and got a job there. Probably one of his happiest moments was when the two editors got in an argument as to who had the best business writer. It was my grandfather. When he started Forbes magazine back in 1917, not a propitious time, world war and the like, it took off. But one of the things also we learned as youngsters, great success in the 20s, the magazine company nearly went bust during the Great Depression, advertising down 80%. Kept it alive through his freelance earnings and other measures he took. He couldn't even cash his own paychecks because there wasn't money in the bank. As an aside, my father got his first business lesson. During the summer, he would work in what they call the mail cage, where the mail would come in and you'd open it up and see what came in that day. And nearby was the controller's office. And each afternoon, my grandfather would come down to get the report on the receipts of the day, invariably during the depression, disappointing. One day, comes down, the controller says, "Mr. Forbes, I have great news. We had a profit last month." My grandfather said, "Young man, I don't give a damn what your books show. How much money do we have in the bank?" First lesson on cash flow. But the question, you come from...? And so he created a business, my father did. And here I am working today. And one of the things I'm doing is trying to do my bit to help create an environment, make the case why free enterprise means more opportunity for people. We'll see how it works out. But if you don't try, then don't complain when you don't like what happens. [00:05:18] Speaker 1: You took over the magazine from your father, who is very different from you. He rode a motorcycle with Elizabeth Taylor and Geraldo Rivera. The happy millionaire was eccentric, fun-loving, and constantly in the news at parties or entertaining royalty. You're a stuffy businessman. You're the opposite. [00:05:36] Speaker 3: Oh, you're sounding like my children. No. Coming from you, that's, wow. But no, our father, I have four siblings, taught us, do things your own way. When you try to imitate others too much, you end up getting in trouble and find out what works for you. On motorcycles, I'm still too young to ride a motorcycle because I know what would happen if I did. And in terms of the parting and all of that, that also had, he had Scottish blood, a purpose. It put the company on the map. It put Forbes above so many other bland companies and helped get advertising. It helped get business in. To him, the distinction between personal and business was artificial, and if he could use motorcycling to help the image of the magazine for young entrepreneurs, he did it because he liked it, but it also served a commercial purpose. He didn't write them off, but he realized that it all melded together. So he did things his way in this crazy environment where you get what Schumpeter calls creative destruction almost seeming on a monthly basis. [00:06:50] Speaker 1: We're doing it our way. When you go, you have a kid who might take it over from you? I have five [00:06:56] Speaker 3: daughters. One of them is very much involved in the business. A couple of others help out from time to time in a very substantial way. So we'll have to see what the future unfolds. One might take it over? One might take it over. Fortunately, she's smarter than her father, so that'd be a good thing. [00:07:13] Speaker 1: You and I went to school together. One year apart, though we didn't know each other. And had I known you, I would have thought you strange. You started a conservative magazine. I mean, I didn't have coherent political opinions until I was in my 30s. Why'd you think you knew better? [00:07:35] Speaker 3: Well, one of the things about youth and free enterprise is that if you get an idea and want to do something, you have an opportunity to go do it. A friend of mine who was a year behind me and another fellow got the idea of starting a magazine which would give a fair-sighted view of business, which was then, as it is today, goes through cycles, highly unpopular. You know, business-caused wars and all that kind of stuff. [00:08:04] Speaker 1: It was the 60s. I was trying to be a hippie. And you were a conservative already. [00:08:11] Speaker 3: Well, I was politically probably being described today as left of center. I like people like Hubert Humphrey, Democrat. But I also, growing up the way I did, saw the virtues of free enterprise. And when I was in college in 1967, I was then a sophomore, Forbes did its 50th anniversary issue. We were founded in 1917. It was on the theme of the rise and fall of companies over a half century. And it's remarkable, even when you take large companies, how many go by the wayside. You didn't stay with it. It got merged, submerged. So a lot of lessons, real-life valuable lessons in that. And we see it all the time. In free markets, a homegrown solution to a personal problem can create jobs. The series I'm doing with Free to Choose, their education subsidiary, isit.org, are little biographies, three to four minutes on people who created the modern world. And what's amazing about these individuals, they're from the most unlikely backgrounds. Margaret Rudkin, mother, had a sick child in the 30s. One of the things he couldn't do is eat processed bread. The doctor mentioned maybe there's some kind of wheat that maybe he'd be able to ingest. So a long story short, after a lot of effort, experimentation, she created modern whole wheat bread. Made with real cracked wheat. Soon found herself in the bread business. When she decided to name on it, she named it after a farm, Pepperidge Farm. Pepperidge Farm, wheat bread. She then goes overseas to Belgium, finds a chocolatier there, great chocolate, Milano cookies and the like. And then she does visit Switzerland and we get, [00:09:54] Speaker 4: we get goldfish crackers. Goldfish crackers, the snack that smiles back. Now, what planner would have planned [00:10:01] Speaker 3: that? Or just pick another one, John Deere. He was a blacksmith in Vermont, had a hard time making it. That's the wonderful thing about freedom. You can pick up stakes and move in those days, move west, move to Illinois. At the time, the soil there looked nice, but it stuck to the plows. So it was kind of useless. Every few feet, the farmer had to scrape the dirt off, the soil off the plow. And he remembered his mother, a seamstress, used this particular kind of steel needle to get through thick fabrics. So we went to a sawmill, gets a blade there of steel, and he invents after some trial and error, the steel plow. Turned what seemed like worthless soil into a bread basket for the world. We did a brief bio of George Eastman. Eastman realized that to expand his business, he must expand his market by inventing a camera that everyone could use. When markets are allowed to operate, they always turn scarcity into abundance. And he took photography, which in the 1880s was very clumsy, very, very expensive. You had to have a separate tent with, put goo on a plate and all that kind of stuff, do a photograph. And he ultimately came up with a camera that anyone and everyone could use. Kodak, because he said that's a name that I'll have no trade problems with, and created this as a global company. And everyone became a photographer. And unfortunately, digital came along and the company saw it, but didn't know how really to respond to it effectively. And in 2012, Kodak filed for bankruptcy. My father liked to say, if you think you've arrived, you're ready to be shown the door. Again, these things are unplanned. You can't see the future. You have to have an environment where people can find these things, seemingly simple things. Our handhelds, which we now take for granted. The supply chains that made that possible was made possible by the box containers, invented by a guy named Malcolm McLean, a North Carolina trucker who was angry that he'd drive up to the ports in New Jersey and New York, wait hours for things to load and unload. Because in those days, you had to do it physically. So you had a lot of breakage. You had a lot of theft. And after a lot of trial and error, he comes up with a box. It sounds easy to do containers, but the design took a lot of effort and what might work and what might not work. The cost of shipping items fell by as much as 95%, which made it possible to develop these elaborate supply chains, which made it possible to give people today a supercomputer in the palm of their hand. And so again, you want an environment where these kinds of [00:12:49] Speaker 1: people have a chance and we benefit. And yet, you and I are failures. For the last dozens of years, we've, through your magazine, through my videos, tried to convince people about the benefits of free enterprise and the problems caused by complex big government. And more people seem to be embracing it. We are going to use the power of government to lower prices. [00:13:18] Speaker 5: They call market competition immoral. The absolute pursuit of profit at all human, environmental, and social cost. That is not a redeemable system. [00:13:29] Speaker 3: Nobody will ever convince me that that is morally or economically acceptable. Capitalism, free enterprise, free markets, whatever you call it, is a moral system, precisely because success comes from meeting the needs and wants of others. Go to the old Soviet Union, go to Cuba, go to North Korea, and compare the opportunities here today with what you can find in other countries. That's one reason why, in high tech, people want to come here, because they can flourish here, whereas they get crushed by regulation elsewhere. [00:14:01] Speaker 6: Ruffalo tweeting out, "It's time for an economic revolution. Capitalism today is failing us, killing us, and robbing from our children's future. Capitalism has led a lot of people down. Capitalism has [00:14:15] Speaker 3: done just the opposite. Famines in the world. Deaths from famines down 99 percent in the last 60 years. The standard of living, 10 times better than it was 50 years ago around the world, in terms of health care, longevity, as well as earnings." [00:14:33] Speaker 7: I think having it be so impossible for people to tell stories and having it be such an exclusive and rarefied novel position to be in to find yourself doing so, is capitalist hell. [00:14:44] Speaker 3: Capitalist hell. If the opportunity to live in America is hell, why hasn't she left it and gone to a paradise like Cuba? In terms of writing, thanks to high tech, everyone now is a writer. Everyone now is a publisher. You're having more stuff out there than ever before. People are complaining, "Too much noise out there," because everyone has a voice. It hates women, and it hates marginalized voices, and it's racist. Women have never had more opportunity today than they've had before. You look at colleges, more women are in the colleges now than there were a higher proportion than men. So, she's complaining about a non-existent problem, and when there are discriminations, there are laws there to deal with it. [00:15:31] Speaker 1: He wrote the Freedom Manifesto: Why Free Markets Are Moral. Why are free markets moral? [00:15:37] Speaker 3: You succeed by needing the needs and wants of other people. Unless the government is behind you, you have to persuade somebody that what you're offering is worth their while imparting resources. And it's also humane. You may not love your neighbor, but you sure want to sell to your neighbor. It also brings people working on a common objective, even if they don't realize it, what we now call supply chains. All around the country, all around the world. People working on things that may never see the other people working on something else. But out comes the products and services that we live with. And so, without people knowing it, it has you interested in other people. You may lust for the money. But if I want to sell something to you, I have to say, "John, this is a great thing for you." This is the sales pitch. Marketing. It's about getting to know people. A perfect system? No. Because as Madison pointed out, we're humans, so we're not perfect. We get that in another world, but not this one. It's a way of enabling humanity to move forward by taking energies that we've seen many times in history, every day, going the wrong direction, going in a direction where it enhances the life standards of everyone. [00:16:52] Speaker 1: They're so optimistic. It makes me think of what Charles Murray said. [00:16:56] Speaker 8: It's so bad in terms of my hopes for this country. I don't see how you energize a new generation to recover that. The good news is that old people are habitually too pessimistic. [00:17:14] Speaker 3: But you're optimistic. Because we've seen time and time again, when you get the right environment, and this country's done it better than anyone else, of giving a chance for people to be creative, experiencing liberty, humanity moves forward in doing creations. Imagine today, bring somebody back who died, say, 40 years ago, and explain the internet to them. You couldn't do it. They'd have no idea what you're talking about. Yet we take it for granted. There was a time back in the '60s when there was a big strife in Boston over bussing. Buses for black students to get to the newly integrated schools were met with racial violence. Somebody asked a historian, "What would Abraham Lincoln say about the busing controversy?" The historian replied, Lincoln's first words would be, "What is a bus?" And if you allow people to progress, they will do it, again, from the most unlikely background sources. Most new ventures don't succeed, but Tom Sowell put it very well. [00:18:16] Speaker 9: I don't ask what is the cause of poverty. Everybody is born poor and ignorant. The question is, what factors allow some groups to get from that position? [00:18:25] Speaker 3: We have more knowledge, more information, and that's how you get a higher standard of living. Whether you experiment in the marketplace, whether you experiment in the laboratory, always trying to find new things. And that's why planning doesn't work, because if we already knew it, we'd already be doing it. We'd already know it. And so it's the new stuff that enables us to move ahead. [00:18:47] Speaker 1: The rest of your book title on why free markets are moral, government isn't. What do you mean government isn't? Government was created to be moral, to help the people. [00:18:57] Speaker 3: Government was created to keep order. Unfortunately, a lot of governments saw it as their duty to fleece the population. They thought that the way you got ahead was by conquering and looting other lands. And so human progress was very slow. And amazingly, the extraordinary history of the American colonies. And Britain, amazingly, had sort of a haphazard approach to the colonies. Sometimes they paid attention, put on restrictions. Other times they just sort of ignored it. And so we're here on our own. And the people who came here, whether for commercial reasons or religious reasons, whatever, were people who had an ambition and a desire to have something better. And so as a result, when the clash came between Britain and France for the control of North America starting in the late 1750s, guess what we had here? Land. In Britain, only two out of ten men owned land. In this country, seven out of ten free men. In terms of taxes, the British Treasury noted when they were trying to put taxes on us that we paid only two percent. They calculated what an Englishman paid. Voting, two out of six voted in Britain. Most colonies, four out of six. Amazingly, each colony had its own militia, which provided the backbone for the army in the revolution. Everyone knew how to use the musket. Our soldiers were three inches taller than the average British soldier or Hessian soldier. So we were already on the way to entrepreneurship, free enterprise. Franklin marveled. He said when we reached two and a half million, he said we're going to double every 25 years. We almost did for 150 years. We planted something here that took British freedoms and expanded them. One key to prosperity is money you can rely on. In terms of money, thanks to Alexander Hamilton, the middle of the revolution, Wintry Knights, writing about what kind of financial system we should have here. By the way, one of the things that I wish people who analyze strategies and power and all that would recognize is that if you have a sound currency, that is a source of power. Look at the Dutch, 1500s, still part of Habsburg. They finally declared their independence in 1581. But they had a sound currency. They became the financial center of the world. And London did. Britain in the 1690s was a sort of a third rate power. But with the sound currency, obviously a lot of other factors. But the sort of lackadaisical style of their government compared to the absolute monarchs in Europe, you had room where you could get the industrial revolution and the sound money. And so Britain, with the fourth of the population of France, beat France in the global wars of the 1750s and 60s. And even when they lost us, they still were a major power. Studying the past is not memorizing dates, but realizing or trying to find out what went right and what went wrong and why, what made it possible. And sometimes when things go well, we forget what made possible those things going well. We forget who today reads about the terrible inflation of the 70s, how dispiriting they were. We hear occasionally about gas lines. We have no idea what was going on. [00:22:25] Speaker 10: Gasoline shortages are spreading across the country. Gasoline lines and closed gas stations are becoming increasingly common. [00:22:32] Speaker 3: That's gone in a memory hole. And when we conquered it in the early 80s, people thought this was fantastic. Now, today, nobody remembers. So that's why education is important. It's not just creating new knowledge, but not forgetting knowledge that already existed. And then, then, then we can move ahead. But now today, many schools don't even teach basic civics. So people who apply for citizenship end up knowing more about civics than American citizens do. [00:23:05] Speaker 1: This year, we'll celebrate America's 250th year. What made this country more successful than any other? [00:23:14] Speaker 3: This country is more successful than any other because we had more liberty than any other. We had a belief coming out of England, coming out of the Dutch, coming out of philosophers of the past, that freedom was a God-given right and people could come here. You didn't have to be religious and you have a chance to move ahead. And the social stratification, yes, we have classes and all that kind of stuff, but really fluid compared to what you had in Europe and Asia and elsewhere. Here, your birth was not an obstacle. It was something to put in the past and move ahead. And if you didn't do well in one place, you could pull up stakes and move in another and have another go at it. Failure here was not stigmatized as you have in other societies. Conformity was not overwhelming as you had in other societies. You could find a way around it. When universities started to go left, guess what rose up? We forget this. Think tanks coming out with libertarian ideas and other strange things in academic circles. And so again, you get blocked one area, this country, you find another way to get around it. [00:24:28] Speaker 1: Popular message now, again, is tax the rich. [00:24:32] Speaker 11: Tax the rich! [00:24:36] Speaker 1: California's talking about this wealth tax. Washington already passed one. [00:24:40] Speaker 12: The Washington State House has passed the so-called Millionaire's Tax. [00:24:44] Speaker 1: It's funny, the Starbucks founder went to Florida, as have lots of people. [00:24:50] Speaker 11: Moved to Florida just one day after the Millionaire's Tax passed the House. [00:24:53] Speaker 1: You would think they would notice that. Why don't they? [00:24:59] Speaker 3: This is a result of long-term inflation, long-term debasement of the dollar. Going back to the '70s. Now, when you think of a hyperinflation like Germany had in the early '20s, we think dramatically overnight, more lawlessness, breakdown of social trust, disaster. Here, you can have a slow-motion version. And so what you have, when you don't trust the currency anymore, this is one of the factors that gets completely overlooked, is that trust falls down. You saw things like the Wall Street movement. You see it today in anger at the billionaires. [00:25:37] Speaker 13: You can't earn a billion dollars. [00:25:41] Speaker 3: That's right. [00:25:42] Speaker 13: You just can't earn that. That's exactly correct. [00:25:45] Speaker 3: People are angry. People see people doing well. Many of them through seemingly speculation and not honest, hard work. These guys do well and get better. And we're left behind struggling. And so you get the resentment. And so you look for scapegoats. You know, back in Roman times, when you had inflation, they blamed Christians. The lions loved it, but didn't solve the inflation problem. In the medieval times, witches were blamed, amazingly. In the '20s, you had Jewish merchants and bankers blamed. In the '70s, the evil Arab oil producers. Today, it's corporations and billionaires who are causing all these problems. So they're playing on the resentment that they caused by their own policies. [00:26:28] Speaker 11: Five bucks to you is like six million dollars to billionaire Jeff Bezos. That is how rich that guy is. [00:26:37] Speaker 3: People feel, oh, the billionaires can pay more. If you have the right environment, environment of freedom, guess what happens? People move up and you don't get the kind of resentment we have today. Most people normally wouldn't care how much money Bill Gates has or what Jeff Bezos buys in a 5,000-foot yacht or whatever. They want to know, am I having a chance to improve my lot in life, that I can realize the American dream. And then if you want to pass something on to, instead of your kids, to your favorite dog or whatever, you have the freedom to do so. [00:27:10] Speaker 12: A proposed tax on California billionaires is rattling Silicon Valley, with many threatening to leave the state. It's just five percent. You're a rich guy. [00:27:19] Speaker 3: Why not pay five percent? Well, one, they confuse income with other assets. Who cares? You've got the money. Well, if you don't care, then you get a stagnant economy. Already, the top income earners, as you know, in California, pay almost half of the state's income tax. In terms of wealth, again, you destroy capital like that, and guess what happens? It's going to flee. It doesn't get created, and it just poisons the atmosphere. And so, as a result, you're going to get stagnation and less prosperity. But it's so alluring, you think, oh, it's just five percent, like it's taken five percent out of your checking account. No, you're going to depress prices of assets when you have forced sales. This also allows government to become more intrusive. Oh, what's that asset you might have in your cellar? We have to send inspectors in to find out where you're hiding the art or the jewelry or whatever. It's an excuse for intrusiveness. You're just a rich guy who wants to protect his stuff. I may have done well in life. I got a good start in life. But what I want is a world in which, as Abraham Lincoln put it, all people have a chance to improve their lot in life. And that means creating an atmosphere where people can get ahead through work and ambition and starting businesses because if business succeeds, that only means we have a higher standard of living. [00:28:44] Speaker 13: The benefit from this tax is going to outweigh, you know, maybe a couple of people moving out of the state. [00:28:49] Speaker 3: Well, what is moving out of California is not just people. That's happening. Remarkably, for the first time since California came into the union, they're having out-migration. It's a great state to be in, but not one you get overtaxed and overregulated and oppressed by the government. In terms of billionaires, they're already moving out. It's not just people moving out. It's capital. It's savings. And the money to invest in new businesses, new job creation. And if it wasn't for Silicon Valley, California would be in desperate condition today. And already a lot of high-tech is moving to places like Utah and Texas and elsewhere. [00:29:28] Speaker 1: A congressman who sometimes is reasonable wrote Kana about the California wealth tax. Only by California standards. [00:29:35] Speaker 3: The wealth can't just be in the hands of the few. Wealth is in the hands of everyone. The standard of living of a typical American today is light years ahead of what it was or 50, and certainly 100 years ago. In terms of wealth gaps, again, the way you cure that is allow people to create wealth, which one of the biggest obstacles to creating wealth in this country is the income tax code. Punishes you from the get-go. How does raising your taxes by X percent impede that? Because taxes are a price and a burden. The tax you pay on your income is the price you pay for working. Tax on capital gains, the price you pay for taking risks that work out. And the tax on profits if you're in business. Tax you pay for being successful. And when you have a high price on that, guess what happens? You get less of it. We should have learned that from the 1970s when inflation was ratcheting up people into higher, higher tax brackets. We had a stagnant decade. [00:30:34] Speaker 1: People do leave, especially wealthier people. This is what's happened in Washington state. [00:30:40] Speaker 3: When people are not well treated, they're going to go elsewhere. And Washington once had the advantage, even though it was fairly environmentally minded and people loved the lifestyle around Seattle and great agriculture and the rest of the state, apples and the like. No cold winter. And guess what? They had no income tax. But for reasons that Schumpeter talked about back in the 1940s, he said the very success of capitalism brings about classes of people who don't realize what made it work. And they become, in essence, hostile to it or ashamed of it. And as a result, Washington now has been for years, they've been pushing one tax or another. The voters don't like it. They voted down a progressive income tax. So now they call it an excise tax or some such to get around it. And so as a result, they're driving people out. And I wouldn't be surprised if they keep these stupid taxes in, especially Seattle. You're going to see the Seattle Mariners, which are now finally a competitive baseball team, leave because why, if you play a game there, you're going to pay an extra eight, nine, 18% on your income. Who needs that? [00:31:52] Speaker 1: Why do these rich people need so much money? Why don't they want to help? Don't you want to help the need? Yes. [00:31:59] Speaker 3: And one of the things about the United States, we're the most commercial nation ever invented, but also the most philanthropic nation ever invented. And people think, ah, philanthropy on one side, commerce on the other side, what they don't realize, they're two sides of the same coin, meeting the needs and wants of others. Research shows the American people, when they have more, they give more. Whether it's a cash or hours of volunteering, it's usually about 2% of GDP on cash. Sometimes it goes up a little bit, down a little bit, but fairly constant. Back in the 1970s, when we had a high rate of 70% and Reagan started to cut those rates, a lot of philanthropic institutions thought this is going to hurt giving. And what they found was, guess what? Charitable giving went up, reached record levels. We're a generous people. When people have more, they will give more in a whole variety of areas. [00:32:55] Speaker 1: Politicians in blue states say, oh, they're just going to warm places, Florida, Texas. But they're leaving California and Hawaii, and they're going to Idaho, so it's not the weather. [00:33:08] Speaker 3: No, what they want is an environment, a weather, you might say, that does not punish people who want to get ahead, who do not want to crush you with endless regulations. And so freedom works. And again, that's the great thing in this country. You can see what works and doesn't work, which is how we got the first welfare reform bill back in the 1990s. The experimentation there was in Wisconsin, not known as a conservative bastion. And they showed that having work requirements and the like worked. And so he passed a national welfare reform bill and signed by a Democrat when he realized Bill Clinton that it was popular and eventually his vetoes were going to be overridden. But it got done. We can see what works out there. And that's why these profound movements in population, people want opportunity. That's why people moved west. That's why California, before it went off the rails, was such a desirable place. Huge, great weather, I mean, fantastic scenery, intoxicating. I go out there and say, oh, this is pretty nice. Why would people leave? Many of them feel they have to leave because they don't see the opportunity. So it's good for neighboring states, Arizona, Nevada. You look at Idaho, Montana, Wyoming, Utah. Those states, the real estate prices have gone bonkers. People are moving in. Florida, real estate prices have gone up because people are moving in. In California, they finally have a referendum that looks like coming this November. With bipartisan support, it'll finally reduce the powers of the state in terms of allowing lawsuits to block development. Why does housing cost so much more in California? Because it's impossible to build it. In Texas, a few weeks, a few months, you can get a development done. California, it's years and time is money. New York's governor recently said this. [00:35:08] Speaker 14: I need people who are high net worth to support the generous social programs that we want to have in our state. There are some patriotic millionaires who stepped up. Okay, cut me the checks. But maybe the first step should be go down to Palm Beach and see who you can bring back home. [00:35:24] Speaker 3: Governor Hochul, I think, may be realizing she might not get reelected and therefore is getting herself ready maybe for a new job, like writing comedy skits for Saturday Night Live. Here we have New York, overtaxed, overregulated, people leaving. And she and the mayor of New York want to enact new taxes, more regulations. It's patriotic. They should come back from Palm Beach. And she says, come back so we can fleece you some more. Picking people's pockets is not patriotic. It's just taking a percentage of their money. Yeah. And their version of a flat tax is 100%. You want people to be able to have a chance to concentrate on moving ahead. You don't punish people who earn more. You don't punish people who are successful. So it's very basic. States that have a benign environment are prospering. Now, whoever would have thought, for example, 40 or 50 years ago, when New York had the largest population in the country, Empire State. Surprised they kept the name Empire State. Whoever would have thought that Texas, which a lot of pundits said, oh, Texas is like a third world country. It's just dependent on a few minerals like third world countries, cows and oil, would now be moving in to be the most populous state far ahead of New York and center of high tech, center of these other industries, center of music, culture, whoever would have thought it. So that's, again, you have an environment, inviting environment. So the summers in Texas are not the [00:37:01] Speaker 15: most benign in the world. The heat is on in central Texas. The scorching heat can be unbearable [00:37:07] Speaker 3: and dangerous. Dallas, you bake. In Houston, you sweat everything away. But they're booming because people love the atmosphere of freedom. With jump in new jobs, Florida is booming. You see the same thing in Florida. Once retirement, just go there for vacation, grow some oranges, some cows. They do cattle in Florida. And Florida was once about one eighth the size of New York in population. Florida now has a far bigger population. And to show how New York's going off the rails, how unpatriotic New York is, New York's budget is bigger than Florida's, even though Florida has almost three times as many people in Florida. Are people starving? Are the schools falling apart? No, they're booming. And New York is struggling. Case closed. New Jersey is almost as bad as New York, and you still live there. New Jersey's trying hard to catch up to New York. But you haven't moved. I'm staying and fighting, at least for a while longer. One of the amazing things is, once upon a time, New Jersey was probably the most dynamic state in the country. And then they put in an income tax designed to reduce high property taxes. Today, New Jersey has the highest property taxes in the country and one of the worst state income taxes in the country. A lot of people more are starting to see the light. And you see it in the real contrast between blue states and red states these days. This is the virtue of American federalism. We look at the blue states, they're raising taxes, losing population, wondering why businesses are fleeing. And in red states, you have the opposite phenomenon. A great banker once said, "Capital goes where it's welcome, stays where it's well treated." And so we find capital not only in terms of money, but in terms of people moving to states like Texas, Florida, Tennessee, North Carolina, more and more hospitable climb. [00:39:08] Speaker 1: But I bet if you ask those people, should there be a law to do this and protect this group? Should everyone chip in to support these needy people? And should there be rules to protect us from this and [00:39:20] Speaker 3: that? They're all for it. Well, not all. And we have to remember, James Madison, Father of the Constitution that once observed, we are not angels. We do need laws and we do need government. And the question is, how much? And it's one thing to put in a law, you don't go 100 miles an hour in a school zone, quite another to tell us what to drive, where to drive and when to drive. And I think you're seeing a real reaction to the administrative state. But the Supreme Court finally has gotten off on this, made some very good decisions. Whatever you may think of this administration, at least on the regulatory side, they're making some progress. [00:39:59] Speaker 4: We have regulations that are so old and nobody uses them, but they stymied a lot of production, [00:40:04] Speaker 3: a lot of jobs. People talk about manufacturing. It wasn't trade that did in manufacturing. It was the thousands of regulations. I mean, in the past 25 years, we put 1,400 major regulations on manufacturers, which is why you got washing machines that took three hours to do the dishes rather than one, and why they were intent on making sure every good thing about life, whether it's air water, water, air conditioners, lawn mowers, and the like, don't work well anymore with these regulations [00:40:35] Speaker ?: to save us. [00:40:35] Speaker 3: But you're exaggerating. They eventually work well. And we don't want to have them use- Oh, eventually work well? When you look at one of the great things about free enterprise, is that you get what they call the learning curve, constant improvements. And it comes from experience. One of the things they wrecked was the automobile industry. [00:40:54] Speaker 4: We're officially terminating Joe Biden's ridiculously burdensome, horrible actually, cafe standards. Gave all sorts of problems to automakers. [00:41:03] Speaker 3: So instead of getting these improvements each year, where things become cheaper and cheaper, and better and better, we had the opposite: more expensive, less efficiency. Cars are better now. They are better, but we'd have had more variety, we'd have had even more improvements, and they would have been cheaper. Now, what is it? $50,000? Pick a number. It should have been half that. And with the normal things, starting with Henry Ford, who turned a toy for the rich into something every working person could afford, what we have today, instead of these things going down in price, they're going up in price. And you look at energy, what they did to the energy industry. Real terms, we haven't made much progress. And one of the things the key to progress is cheaper and cheaper energy. One of the great virtues of this country is individuals are allowed to own minerals underground, which is not true of other countries. So we have this great wildcat industry, and so we got fracking, which immensely turned around energy production. Other countries like Britain and Poland, they have plenty of natural gas and oil that can be reached through horizontal drilling. But with government there, it's very hard to do. In fact, in Britain, they blocked development more in the North Sea. So these are self-inflicted wounds. One of the things we have to do and work on is never give up and go for more deregulation, more tax cuts. And so we can do what we've did for most of our existence, and that is pioneer newer, newer, better things. And one of the great areas that I think we're going to see finally some progress, it's going to be a race, is health care. Are we going to go the way of the Europeans? That's a contribution the British people have made [00:42:43] Speaker 1: to the world. Health care is a human right for all. Poor, rich, you're going to get quality care. It's better, I'm told. People like it. You know, they don't have to worry how they're going to pay. [00:42:52] Speaker 3: Well, they may not pay, but they don't get very much. Or when they get it, they get it very, very late. Long wait times here in Canada have become normal. It reminds one of the old saying in the Soviet Union, the health care is free, but you can't get any. And you go in Canada. And so they don't ration it by price, allocate it by price. They do it by not having it available for people, rationing. So instead of waiting a couple of few weeks to get an appointment here, you get months and months and you have unnecessary suffering, unnecessary deaths, and you don't get the innovation that we need. I'm in an age where I don't want to wait 10 or 12 years for a new drug. I want it next week. Thank you very much. And I think we're going to come to an environment- But you can't have it next week because of our government saying you've got to wait 10 years. Yes, and that's why we don't have real free enterprise in health care. We have more than other countries, which is why we still produce more new medical devices, more new drugs than the rest of the world. Once upon a time, by the way, Europe was a great font of new medication, new drugs. And then as the government became more and more powerful, the well dried up. So you still get some from Switzerland and some other areas, but a fraction of what it used to be. And so the key thing we have to be focusing on in this country is not fall into that trap, but really start to play on some favorable forces that we should be pushing. One is most companies now have high deductible plans, no more dollar for dollar coverage. So people are paying out of pocket more than they did ever before. And so they want to know, what does that procedure cost? And still today, you go to a hospital or a clinic and you ask in advance what something costs, you're going to get a very strange look. What's it to you? And because you're covered by insurance. And so what you're seeing now is the beginnings of a consumer market. And I think what you're going to see unfold in this one, we've got to fight on is where in terms of health care, we'll have more of the equivalent of education savings accounts or 401ks where the money goes into account, but you own it, not the employer. You take it with you when you move, you decide. And one of the things I think you're going to start to see happening, especially with the Medicaid is a version of what they have in Singapore. In Singapore, they have a big tax for health care, but instead of the money going into the government coffers, it goes into your account. And so you choose the policy, you choose the hospital. And as a result of that competition, what you have there is health care at one third proportionally the cost of here in the United States. Good doctors, obviously good outcomes. And they do have a safety net system for anyone who falls through the cracks. But through competition, you don't get a race to the bottom. What you get is people figuring out how to do something better. And we see little glimpses of it here with, for example, cosmetic surgery, a booming business here, unless it's a result of disease or accident, it's not covered by insurance. So when if you want a procedure done, you might ask friends if they keep their mouth shut, who might be who might be do a good job. But as a result, we don't get the kind of inflation there that we get it with else elsewhere in medicine. LASIK surgery costs far less today than it did 20 years ago. Why? Because it's not covered by insurance. And so you get some standouts like the surgery center of Oklahoma, they do surgeries on knees and everything else. And they don't take insurance. You pay cash, but everything is listed online, what the procedure would cost so you don't get bills three years later wondering what this was all about. And if the costs go above the stated price, they eat the overage. And as a result, they have board certified surgeons, outcomes as good or better than other hospitals. But again, about one third the cost, because they don't have all the overhead and everything else that you have in a system where there's no discipline in the marketplace. The lousiest motel in the world, or in the United States, wouldn't dare put you in a room with another guest with a curtain in between And the guest is sick. And yet we think, oh, in the hospital, I got a private room. How great is that? That's perverse. These should all be private, just for infections rate. But the hospitals know they get their money from the insurers and from its all third party. And but that's beginning to change. And if we allow that change to come, you will see the beginnings of a real consumer market, which will mean we will get things faster and better and turn what looks like an industry that's going to bankrupt us all into the most dynamic industry in the world because everyone wants good health. It is starting to change. Why would it change when somebody else is paying the bill? Because employers pay a bill and now employees are paying the bill thanks to high co-pays, high deductibles. Suddenly they're having, what does this cost? Can I get it better somewhere else? They want prices. Pricing transparency won't come from so much from laws from the top, although those will be helpful, especially hospitals that flout the law. It'll come from the pressure. And I'm a little surprised the Republicans haven't been more on this, that here we want you in charge, not third parties. Congratulations. So is Trump more good or evil? Trump is overall still doing more good. Now, one of the nice things about a democracy and leaders who pay attention, they realize the way they approached it was a big mistake. Kristi Noem is out. Her right hand is a person is out. And so it's changing. I don't know whether it's going to help in the election, but that policy has changed. I don't have a hesitation in [00:49:01] Speaker 16: asking those who make the most amount of money in the city or the most profits in the city to pay a [00:49:05] Speaker 1: little bit more. I have a new mayor in my town. What do you think of him? Well, since this is a family [00:49:15] Speaker 3: enterprise you have here, he's a disaster. He is a true believer in communism. He's now acknowledged at least he's socialist. It's the belief that the government must control anything and everything. And even this idea of communal housing, how a guy like that got elected, I don't know. That vision is more popular than ours. No, the vision was you had a candidate who had baggage, who never made the case for making some fundamental reforms because he really didn't do it when he was governor. So this young guy comes along and says, I'll give you affordability. And young people say, well, that sounds pretty good. And no one really challenged him on it. No one really challenged him on the statements he's made in the past. And now they're finding out that one of the things as mayor, you've got to do basic things like clean up the streets. So this kind of incompetence I think is going to be telling. And he's just all theatrics. But he is profoundly a bad man in terms of philosophy and the smugness of his assumptions. New York's going to pay a price. But fortunately, the city, I think, will survive. As one comedian once put it, Broadway's not going to move to Scarsdale, at least not yet. The city will come back. I'm old enough to remember the '70s, when the city went bust and all but name. And guess what happened? It pulled itself together. [00:50:40] Speaker 1: Right now, $7 million is exempt from the state tax. Mumdami says he'll cut that to $750,000. [00:50:47] Speaker 3: Yes. And what that does means in New York, given the high prices, thanks to regulation, he's after the middle class. And that's why all this chatter about, oh, we're going to tax the rich, is really code for, we're also coming at where the real money is, and that is the middle class. And so you own a house, Mumdami is after you. Instead of a 16% rate, which is outrageous, he wants to raise it to as high as 50%. So you create something, he wants to take it, and he'll destroy it. If you want to get ahead, forget it in New York. And that's why New York, which has once been a font of ambition, people come here ready to move and try to get ahead, [00:51:31] Speaker 1: they're going to be emasculated. But it's only just that after you die, your heirs who did nothing shouldn't get a billion dollars. [00:51:40] Speaker 3: You say they would do nothing. Some of them don't, and some of them do. I'd rather entrust it to them than to a government bureaucrat, where it goes to waste. Who's going to help the poor? How much have we spent on poverty programs? And how much did that really help people get on their feet? And so in terms of government saying they help, that sounds nice, but they end up destroying people's lives. That's why Bill Clinton signed a welfare reform bill. It was destroying people's lives. And that's not right. You want to help people create an environment where people can get ahead. And that means also resources for safety nets. And one of the nice things about when you have a prosperous economy is you can pay attention to things like saving animals from near extinction. You look around the world. Elephants are in trouble. Where are those countries? Very poor. The tiger was once facing real problems. But then with the rise of a middle class in India, guess what happens? They're now concerned about preserving tigers. In this country, the wolf was near extinction. Now it's perhaps thriving to thriving. But only countries with affluence and resources can engage in those things that you think make for a better world and a better life. [00:52:57] Speaker 16: This peer-to-tear tax is specifically designed for the richest of the rich. [00:53:01] Speaker 3: Unfortunately, we've allowed the creation of this cartoonish view of wealth. Remember that Disney character, Scrooge McDuck, who had the money bin and piles of gold? He sat on top and just washed himself in the money. Yeah, in the money. And that's what they think wealth is, that you just go and scoop up the money. Big deal. Well, it could be. He could sit on his wealth. What they don't realize, most of wealth is intangible. It's the value of an asset. And you have an adverse environment, and that value disappears. And that's what they don't realize. Destroy capital, you destroy wealth. And guess what happens? We stagnate. Even if rich is idle, their money is put to work. They have professional managers. They're not keeping it in a cookie jar, so to speak, or a money bin like Scrooge McDuck did. And so it is being put to work. And in terms of investing, it's called new businesses, stocks, bonds, financing things. One of the things we have in the free enterprise system here is the most diverse and deep capital markets in the world. Europe, for example, still is heavily dependent on big banks. And that's why this country creates 75 to 100 new big companies every generation. Europe, even Asia, much the same old, same old. Money in the bank just sits there. Banks don't make money by having it sit in a vault. They make money by putting it to work, investing it, whether it's mortgages, financing a factory, buying a bond, whatever. Otherwise, they go out of business. And most banks do not wish to go out of business. People think there's a fixed amount of money, and if Scrooge has a lot, we have less. That's the old way that wealth is by conquering your neighbor, that it's a fixed pie, whatever comparison you want to use. And so therefore, they don't realize, as Adam Smith tried to teach us 250 years ago, wealth, higher standard of living comes from trading with one another, buying and selling with one another. You may not realize it, but everybody gets something from a transaction. But Scrooge isn't trading. He's sitting in his vault. And that's what they think the rich are, that somehow these things just happen. Amazon just happens. Microsoft just happens. Meta just happens. They don't realize what it takes to make things happen. You remember an essay back in the '50s called iPencil, something as simple as a pencil. What it took to create that, all the ingredients, all the moral materials all around the world to make this simple thing. The supply chains are infinite. That was what the people who believe in government management didn't realize during COVID when they tried to shut everything down. You don't turn on these things like a light switch. And when you disrupt supply chains, it takes a long time to create them and get them back [00:55:57] Speaker 17: again. Globalization has failed the West and the United States of America. The fact is, it has left America behind. It has left the American workers behind. There are allies, but they take advantage of us [00:56:13] Speaker 3: economically. Other countries are taking advantage of us. One of the things that's happened since World War II, after the horrors of the '30s and '40s, was that we had a concerted effort among countries to reduce trade barriers. Then suddenly around 20 years ago, that movement kind of ceased. And so we should go back to reducing trade barriers. And if a country is misbehaving, one, we used to have a mechanism to deal with that. But two, you sometimes have to take the sledgehammer, as Ronald Reagan did in the early '80s with the Japanese auto manufacturers and the motorcycle manufacturers. They're selling a lot in this country. They weren't building in this country. And so he said, "We're going to put tariffs on." He did for a while. The Japanese realized that they should make sense to build here. And guess what happened? They found out American workers could make as good cars as the workers at home. You look at states like Tennessee, South Carolina, Alabama, booming auto facilities. So you're in favor of tariffs? What Reagan did was he used it laser-like for one specific abuse. And then he pulled them off. Instead of a sweeping tariff, like 10 or 20, pick a number across the board, specific abuse. And he pushed free trade. That's how he got the now criticized free trade agreement with Canada. That eventually morphed in the '90s to include Mexico as well. The Republican Party has changed. [00:57:48] Speaker 4: Tariffs are going to make us rich as hell. It's going to bring our country's businesses back. [00:57:54] Speaker 1: Free trade was not fair trade. They wouldn't vote for free trade now. [00:57:59] Speaker 3: You talk about tariffs. Tariff is another word for tax. Sales tax, excise tax, whatever word you want to use for it. So what happened? People don't like it. It is very unpopular. And polls show that. [00:58:14] Speaker 1: But Republicans are supporting it. Who's supporting it? Republicans haven't stopped Trump from imposing this. [00:58:21] Speaker 3: They are fearful of the base. And they're waiting for public opinion to give them some backbone. And the Supreme Court, by the way, did us a favor by saying tariffs, by executive order, are unconstitutional. And so if you want to impose one, you have to go through established procedures. Tariffs, I think, have slowed the economy down. We'd be in much better shape without them. But you have to go out and make the case. And one of the things in life is if you think you've got people in one direction and then suddenly it gets reversed, you don't say, oh, no, you know, got to start all over. Boo hoo. You go out there and make the fight. Maybe you have to use different tools, different arguments, different ways, but you don't give up. [00:59:05] Speaker 1: You don't give up. I say, oh, no. We made the case. Why can't we convince these people? Because a lot of people have to be- Because a lot of people have to be- Marco Rubio from 2015. We need a president who understands that [00:59:16] Speaker 2: this economic transformation we're undergone is a perfect chance to embrace and reinvigorate the free enterprise economy, not to abandon it. And then four years later- What we need is to restore common good capitalism. Does our country exist to serve the interest of the market? Or does the market exist to serve the interest of our nation and of our people? [00:59:41] Speaker 3: Suddenly, market hostility. You have to then make the point, what is a market? People buying and selling. But why are we losing even with republicans? Because the elites here and around the world haven't delivered the goods. I mean, Europe going bonkers on taxes, not just income taxes. And they wonder why their economies are stagnant. And so we have to show the way. We show the way in the 80s. When Reagan and the rates were cut, guess what happened? 50 countries followed suit. So hopefully, when we get the war over and move ahead, we have to, one, have a stable dollar. One hopes Kevin Warsh will start that with the Federal Reserve. The Federal Reserve believes prosperity causes inflation. And then continue the deregulation, unglamorous, but absolutely necessary. It's a tax. So you have a stable dollar, lower tax rates, deregulation. You're going to see things [01:00:44] Speaker 1: really pop, especially in healthcare. Well, I'm glad you're optimistic. I look at how Democrats used to say pro-free market things. A rising tide lifts all the boats. [01:00:56] Speaker 3: 30% of our growth until last year has come from expanded trade. Now, even Republicans won't say these things. Well, you have to remake the case, because what Trump hit on was what happened to manufacturing. Part of it is some of it goes overseas. But most of it was because of what we did in regulation. It's estimated that the average tax on an employee in manufacturing is $29,000. Do you think the Chinese have regulations that cost an employee $29,000 in regulations? Nowhere close. That was self-inflicted. So stop self-inflicting. And by the way, in his first term, when they started to make some progress and reducing the tax rate, manufacturing started to show signs of life again. And by the way, with AI, you're going to see all kinds of manufacturing that we can't even anticipate today. What you're looking at is the VMO driver in action. A revolution is going to happen in transportation. And one of the things that's going to be coming finally is supersonic aircraft. There's some really neat things in terms of overcoming the flaws there. And so stay tuned. By the way, there's a device called ocean gliders made in Rhode Island and elsewhere. They'll come on the market next year that fly about 20, 30, 100 feet above the water and go from New York to Newport in an hour. That's going to revolutionize transportation. So we have these things coming along. Just have the environment to allow. And that's one of the key things why you need free markets. It's not enough to invent. You then have to develop, [01:02:36] Speaker 1: constantly improve. Let's go to your presidential campaign. [01:02:43] Speaker 3: Did you think you could win? You don't start something unless you think you can pull it off. Life doesn't always go in directions you think it would go. You won a couple primaries. Did, but I was headed up an organization called Empower America, founded by Jack Kemp, and noted supply-sider Gene Kirkpatrick and Bill Bennett. We all thought at the time that Jack Kemp was going to run for president in 1996. Then near Christmas in 1994, when you'd normally be getting ready to gear up for a campaign, he called us into his office and shocked us with the announcement he wasn't running. Who do we back now? I looked around. I didn't find a Kemp-Reagan-esque candidate that I thought was enough in that direction. Instead of complaining, I went out and tried it myself. [01:03:31] Speaker 16: We have a chance to take the politics back from the special interests from the PACs and the power [01:03:37] Speaker 3: brokers. Didn't make it, but I think we got some real issues out there. It looked like you got better at it. You got to like it. When you start something, you learn. It's called the learning curve. There's one thing young people have to understand when you leave school. You're not fully formed. You are constantly evolving if you allow it to happen. The classic example is Steve Jobs. If you took his personality, stripped the name, and gave it to anyone who hired people, they'd throw it in the scrap basket. Stealing ideas from people, berating people. Absolutely impossible. Got fired from his own company before the age of 30. But then he learned painfully over the years how to become an effective and inspired leader. One of the greatest ever. But he had to learn that. And that's what people have to understand. You learn. And sometimes it's not very comfortable. But you stick at it, you hopefully move up. [01:04:35] Speaker 1: He based your campaign on simpler taxes and wrote "Flat Tax Revolution," using a postcard on abolishing the IRS. [01:04:44] Speaker 16: We are going to kill it, drive a stake through its heart, bury it, and hope it never rises again to terrorize the American people. We're going to get rid of it. Which obviously didn't happen. It did in some [01:04:56] Speaker 3: other countries, but it hasn't happened here because it hasn't been a candidate. We've had some candidates who sort of advocated it, but not as the front and center and willing to take the flack for it. But people love it. The idea that you could do your tax return either on a postcard or a few keystrokes on the computer. And it's a moral issue. And I hope the candidates take it up. The IRS estimates we spend six billion hours a year filling tax forms. Others say it's even more. The Tax Foundation estimate that we spend now over 500 billion a year in cash and in time with this corrupt, incomprehensible tax code. And just go back 20 years. Imagine if we've taken those trillions of dollars, tens of billions of hours, and used it for something productive like making new products, new services, new medical devices, new cures for diseases, how much better off we'd be. Huge opportunity wasted. So yeah, continue to advocate it. And hopefully we'll do it one day. And I guarantee you, if we do it, other countries will follow suit. And what are the two countries that did? And what happened? Romania still has it. Bulgaria still has it. And the Baltic states. Hardly booming places. Oh, really? Compared to what? Compared to the rest of Europe? You take Lithuania, Latvia, Estonia. They made a sharp comeback from communism. You don't even have to have a flat tax. Just low taxes will go along like Singapore. Doesn't have a formula, [01:06:30] Speaker 1: but the highest rate is 20%. Right. Isn't the bigger issue of the government spending and regulating and the tax burden? Well, the key thing government exists for [01:06:39] Speaker 3: is to serve we the people. In terms of the tax code, it has become so corrupt and incomprehensible, even if you call the IRS hotline, if they deign to answer it, often gives you the wrong answer, but holds you responsible. The code today has over 10 million words. Nobody really knows what's in it. And in terms of compliance, it's hurt because people don't know what the rules are. Even those who should know don't because the thing is just too incomprehensible. Several years ago, a magazine did a survey. They took a hypothetical family's finances, gave the numbers to 46 different tax preparers, people who were considered the best in the field. And you know what they got back? 47 different answers? Almost. Thousands of dollars of difference. This is from people who make their living at it. So it's immoral. And if you want more prosperity, allow people to be able to pay the taxes in a comprehensible, open, transparent manner, instead of all these things that get snuck in in the middle of the night. And most people don't know what's snuck in. And that's not democracy. People criticize guys say we need transparency. Good. Start with the tax code. The reason that the tax code is not going to be fundamentally overhauled, I used to say bury it, but the EPA wouldn't allow it. It's so toxic. Because complexity is a source of power. And they know that you need a tax break, or you want a tax break, or something, or you've got to get hit with something. You come to your congressperson, senator, or whatever. It's a source of power. That's why if you are in the Ways and Means Committee, which is the tax writing committee in the House, that's where bills are supposed to originate on taxes, guess what happens? You say, "I think I'm going to have a reception this afternoon." They all come with their checkbooks because they know the power. That and the appropriations committees are the two biggies in Congress. Has it changed at all for the better? When you don't have a countervailing force, it gets bigger and bigger. Every organization will become bigger if it's allowed to do so. One of the things that happened in this administration, thankfully, is they've cut back on the IRS. People will cheat, hurting poor people. Americans, if you have a tax code, people have trust, they will write the check. What people don't have trust today is that the tax code is fair. They don't trust that the resources will be used for the stated purposes. So get people angry. And believe me, the IRS hasn't stopped audits. But the key thing again, have a tax code that is simple, easy to comply with, easy to comply with, and people will do it. [01:09:25] Speaker 1: Thank you, Steve Forbes. Thank you. 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