The Economy: What's Next?

0:00And we are pleased to have with us today the brilliant economist and anarcho-libertarian philosopher, Dr. Walter Block, a nationally important person who teaches at Loyola University in New Orleans. You can also catch him at WalterBlock.com and I'm going to introduce him by reading something from his recent writing, radical libertarianism applying libertarian principles to dealing with the unjust government late one night in Washington DC a mugger wearing a ski mask jumped into the path of a well-dressed man and stuck a gun in his ribs give me your money he demanded indignant the affluent man replied you can't do this I'm a United States congressman in that case replied the Robert, give me my money! Dr. Block? Yes, yes. I love that, Dr. Block. Thank you. Oh, you're very kind. Thank you. How are you doing? Oh, hanging in there. That's good. So what's going on in America right now? Well, lots of interesting things. We're having a little depression. We're having a little oil spill. Yes, yes. So you would classify this as a depression right now? I think so, yeah. And why? Why is that? Well, according to the government

1:12The unemployment rate is only, what is it, 9.8%, they keep changing it a little bit, but according to independent statistics, the real number is 22%, which is starting to sound like 1930s-level depression. And what was the unemployment rate in the 1930s? Well, it varied, but it was up in the 20s. And there are some unemployment rates even now, they're in the 30s and 40s, like, say, teenage black males. And of course, in the 30s, the United States had no national debt, correct? And we were an exporter, in other words, we were able to feed ourselves, we didn't import food.

1:59Well, I don't think there's any problem with that, although they did have the smooth I congratulate Obama for not doing that. I'm sure his union types would love nothing better than that, although we do have the Jones Act, speaking of the BP oil spill, which is sort of like that. The idea is that the Jones Act requires that only U.S. ships do that.

2:32Do certain things off our coasts, like help with oil spills. And so all these big giant ships that have offered to come suck the oil up at the source have been refused entry under the Jones Act, which Obama has not lifted, correct? Absolutely correct. And, of course, Bush, for all his faults, lifted it, I think, two days after Katrina. And I didn't know he did that. Yeah, he did. Bless him. On the other hand... On the other hand, he... On the other hand, we don't want to let Bush off too easily, because FEMA played roughly the role of the Jones Act, namely FEMA wouldn't allow all sorts of like hospital ships and people to come and help us, FEMA turned them away, FEMA turned truckloads of ice and orange juice away from Kentucky and Tennessee, and turned away ships also, so there is a similarity between the Bobsy twins, Bush and Obama, their skin might be a different color, but Deep down, I see a lot of similarities between them.

3:32Yes, and the libertarian offers a different avenue to approach government, correct? Yes, slightly different. And how would you describe that for people that aren't familiar with the libertarian philosophy? Well, you know, that government is best which governs least, with one way to... I just made that up myself. I was going to say, hmm, that sounds oddly familiar. No, no, no, I just created that. Well, you have an article that libertarianism is neither left nor right. Can you explain that? Well, yes. People try to pigeonhole libertarians into the left-right spectrum, and typically the political scientists will give you a quiz, and they'll say, well, are you far left, moderate left, in the middle, far right, or middle right, or moderate right?

4:22And there's no place for libertarians to go, because on certain issues, libertarians are more leftish, or lefties are more libertarian. On other issues, righties, conservatives, are more libertarian. And on foreign policy, they're both very different than libertarians, at least of the wrong poor variety. For example, on economics, conservatives, right-wingers are not all that bad, like if you look at the Wall Street Journal, sometimes called the Wall Street Journal. in the street journal. They're pretty good on economics, or at least they're not awful. And if you look at some of the lefty blogs, they're not that bad on, say, legalizing prostitution or pornography or freedom of the bedroom, although the feminists are not noted for that.

5:11So I think libertarians are neither of the left nor of the right. We're sui generis or We believe in freedom across the board. The government should stay out of the bedroom and the bathroom and the pharmacy. The government should also stay out of the kitchen and the counting house. Pretty much the government should stay out of a lot of things. How would you characterize a Thomas Jefferson in terms of his libertarianism? Well, he was pretty good. He was a little weak on slavery. But apart from that, and pretty much everyone in the 18th century was a little weak on, and I don't mean to deprecate the evils of slavery by saying a little weak, I'm just being silly here, he was horrible on slavery. But apart from that, Thomas Jefferson was pretty libertarian. He was one of the people who would certainly agree with that government is best, which governs least.

6:07And all of our founding fathers, with the exception of Hamilton, were very much in favor of people being free. And free to make their own mistakes, free to succeed without the government reaching into their pockets and their bedrooms and everything else. And now we see the government even wanting to have electronic health records come 2014,

7:02and other sorts of things. It usually doesn't turn out to be for our own good. For example, one of my favorite topics, I don't know that this is relevant, but I'll just shoot it out there, is some 40,000 people die on the nation's highways every year. And my most recent book is in favor of privatizing highways and roads and streets. And the excuse that the National Highway Traffic Safety Administration will give is,

7:57When we come back, I'd like to talk about what the average person can do to protect themselves in this depression that we're living in, and whether or not you as an economist Do you have any ideas of how they might... I'm not looking for investment advice, but just some practical advice that people can do, like buy silver, hide it in the bed, dig a hole in the backyard, hide your wealth from the government, anything you want to share with the audience, and more, coming back with Dr. Walter Block, and I'm just going to follow up with what we went out on the break where I was wondering, Dr. Block, if you have any advice as to what people might do in terms of economics regarding One advice is to move to a freer country. The U.S. sometimes we think of ourselves as the freest country, but there are, according to calculations of which is the freest country, we're only about sixth or seventh.

9:10Who's freer? Countries that are freer are Hong Kong, New Zealand, Switzerland, Singapore, one or two others. I don't remember. But you can look it up. One of my books is on that. on that, Economic Freedom in the World is called, so that's one possibility, move to a freer country. Assuming you can't do that or don't want to. Right, the language difficulty, although New Zealand, they speak funny English, but it is English. Yes, the Kiwis. And also Switzerland, they speak English there. The suggestions that you mentioned about burying silver in your backyard sound pretty good to me. That's what I thought. Gold, although Obama's buddy FDR declared gold illegal in the thirties, and I don't know whether Obama will do that or not, but that's a possibility.

10:01Yeah, so that requires people to voluntarily give it back. I think I might want to nullify on that. I did want to ask you your opinion on that, because I think it was Greenspan in 66 said that the only way the federal government could protect itself against the people is to declare gold illegal. Well, I don't know. It's hard to predict what's out of the bed Obama will get out on. But, you know, Greenspan in the 60s was very good. He was associated with Ayn Rand. He favored the gold standard. And then later on, he sort of went off into the other end of the spectrum.

10:49Particulary Western Europe. We've seen Greece go through some tough times and we know that Portugal, Spain, Italy and others will manifest itself very soon I do believe. For example I guess in Greece they are selling off or leasing off at least portions of some of their islands. I read that Wyoming which owns the Grand Teton National Forest is considering and leasing off part of that. This is basically the payoff central bankers, correct? Well, that's one way to look at it. I just have to put in a plug for Portugal. They did legalize drugs, so... Well, good. There you go. Watch out what you say about Portugal. Well, but I mean financially. I mean, they're... No, no, no. You're quite right. And what's to prevent that from happening in the U.S.? And how about we do what Iceland did, which is tell them, no, I don't think so.

11:38Well, Murray Rothbard has always talked about reneging on government debt. People who lend government money are aiding and abetting an evil force and deserve very little, if anything. Well, that leads to this, though, and I can't cite where it is, but I know in the Constitution, part of the Constitution is that the debt of the federal government shall not be questioned. Isn't that an interesting little clause they put in? So how do we get around that one? Because I think we should default. Yes, Tom Woods has got a new book out called Nullification, where he makes great play of the Tenth Amendment, which says that those powers not specifically given to the government are reserved to the states, and the government has been hogging up all these attributes for lo these many years.

12:27So repudiation of federal debt might work out through Nullification a la Tom Woods. We had him on as a guest earlier today and he told us to tell you hello. Oh, well, I'd say hello back, but he's already gone. But I'll be seeing him soon at the Mises Institute, they're having a week-long seminar. And are there seminars that people in New Orleans that are interested in your views on the economy can attend? Do you have anything upcoming? Well, as you know, because you attended when Ron Paul came here. I sure did, along with the thousand-something people, which the Times picking didn't cover. Well, I guess it was unimportant. I guess ten people in the front of City Hall, front page news, twelve hundred kids enthusiastically screaming for Ron Paul, and sound money system doesn't make the news.

13:16Right. Well, as you know, we do have a libertarian program here at Loyola, New Orleans. If people would email me, I'll put them on a list to notify them of events that are coming up. The email address is WBlock, like around the block, at Loino, L-O-Y-N-O, Lewis Oliver Yellow New Orleans dot E-D-U for education. So if anyone out there in radio land emails me and says, put me on the list to be notified of Lipitern events, I will certainly do just that. Alright, now we do have a caller on the line with a question for our guest. Let's go to a Mandeville, Michael. Good morning. Hey guys, just calling from the kitchen of bitching this morning. I just wanted to ask you this question, Dr. Block.

14:02I noticed that there's some legislation just recently, I don't know if it's passed yet or not, with regards to reform for the financial systems, the banking systems. And I was made aware by someone else, and I haven't verified this, but apparently this new legislation, this sweeping legislation to regulate the financial industry does not include or affect Fannie Mae or Freddie Mac. and additionally one other thing that was left out of this I think that was being argued and considered was a return to a system similar to the Glass-Steagall Act and apparently what I've heard recently is that Germany is actually toying with the idea or actually considering a return or actually some sort of system similar to the Glass-Steagall Act as well. Have you heard these things? Are you are you familiar with it? Can you confirm whether as to Well, yes, I think that you're quite right, in your facts and also in your assessment.

14:58The Glass-Steagall Act established the FDIC and helped along with central banking. You see, what happens is the government has regulation A, and it screws up. Instead of going back to the free enterprise system, they have regulation B, and that screws up even worse. and now they go to regulation CD, I guess we're past Z, I don't know what the letter after Z is, but what they ought to do instead of going down that regulation path which leads to the Soviet system is to go back, turn back the clock toward the free enterprise system, go back to the gold standard, get rid of fractional reserve banking, in other words, incorporate what Ron Paul has been talking about in terms of financial security, certainly Freddie and Fanny Well, I'd just like to send a shout out to Senator Dodd and Barney Frank and thanking them for running this country and I hope that everyone hears that and keeps that in mind that they're both Democrats, so, anyway.

16:09And I agree that there is no left or right, I agree solely with, wholly with what you The Theory of Money and Credit You're just really not economically free, and if you're not economically free, you're not free. Does all the world's countries operate under a central bank? I'm really not sure. There are 275 countries, and I imagine some of the teeny-tiny ones that are just islands.

16:59But I really, unfortunately, can't fully answer your question. The major countries all do have, yes, certainly. You're kind of fading out there, Dr. Block. I don't know if something's going on with your phone, but that's better. What I'm saying is that the major countries all have central banks, but I'm not sure that I agree with that statement that if you have a central bank, you're not economically free, and if you're not economically free, you're not free. There are degrees. I mean, horrible central banks, and then there are central banks that aren't as horrible. There are degrees in all of these things. Now, I wasn't seriously suggesting that people leave the country. Look, I haven't left the country. I'm still here. I was asked the question of what could you do and that should be put on the list. Absolutely, that and there is that shovel in the silver in the backyard.

17:47You're definitely right. These are matters of degree. But the reason I say that is because if they can inflate the currency and steal from what you're trying to save, I really just don't think you're economically free. But certainly not everybody is as bad as what we've got here. Well, for example, the German central bank is usually better than, say, the Greek central bank or others. So even though they both have central banks, if one has harder money, like, say, Switzerland, than the other, you're better off with one central bank than another. So it is a matter of degree, although I certainly agree with you that central banks have three bad things and we should have free enterprise money, which is the gold standard. We have a caller online, too, for you. Mike in Covington, you have a question for Dr. Block?

18:33Good morning, it's a great show and I really had a question for the doctor and I wanted to find out what is the most effective way to detach yourself from an over-regulated system to a free market system? Is it progressive steps or is it like using the idea embodied in the 10th Amendment where you would have your localized or regional regulation bodies or authorities that are going to kind of run things? and through that separation of power you don't have it coalescing into a national or a federal government and is it really just returning to that? Is that our best hope in the short term to try to get rid of the communist system or the socialist system that is really just crony capitalism back more toward the free market? Is that the approach we should take? Is it to say let's take the control back on the state level? Well, I think there are many, many ways to go. For example, there's the Free State Project where libertarians are

19:31to move to New Hampshire. That's one way to go. Another way to go is to come to study economics at Loyola University with me and my colleagues, because we're the most free enterprise economics department of all. Another is to support groups like the Mises Institute that are working in this end. Another is, I'm not sure about the Libertarian Party with Bob Barr, but certainly Ron Paul, support this radio program and other radio Dr. Block, you've been a great guest and I would really encourage everybody to learn as much as you can from Dr. Block and that's a lot. I certainly have. And we'll have him back for sure because he's back to New Orleans now.

20:20And his website is pretty simple, WalterBlock.com, just like it sounds. Yes. So encourage your friends to go check out Dr. Block and download some, download this podcast and listen to it. And Dr. Block, anything you want to promote? Well, this radio program is magnificent. I certainly support it. Thank you so much. Thanks for having me and I look forward to coming again. Excellent. Thank you very much. Thank you, Dr. Block. This is Tom Coates and Michelle Godin.