A lot of people compare today’s economy in the U.S. with the Great Depression. High unemployment figures that seem to be unrelenting, deflation and inflation, and various bubbles provide some interesting similarities. Jason Hartman and returning guest, Devin Foley compare the historical events with today’s events, including government policies and programs designed to prop up the markets and ideally create jobs. As Devin points out, based on historical and present figures, the programs and wars that the government implies will help the economy do not in actuality pull us out of recession or depression. He also talks about other common myths about market corrections and other attempts to right the economy. Devin stresses that economic freedom rather than government interventions, while requiring an adjustment period initially, would ultimately result in recovery, with more realistic prices and a sustainable economy. “When government is taking big steps and big actions and getting very involved in people’s lives based on how people are voting,” warns Devin, “that’s a dangerous proposition to get into. That’s not something that’s going to lead to long-term stability.” Devin and Jason also talk about solutions to the U.S.’s current predicament.
Devin is co-founder and president of Intellectual Takeout (www.IntellectualTakeout.org ). In his role, he oversees content development and marketing, works with academics and experts to assure quality, and publicly promotes the site.
Prior to co-founding Intellectual Takeout, Devin served as the Director of Development at the Center of the American Experiment, a state-based think tank in Minnesota, where he was responsible for meeting a $1 million annual budget. He has roughly eight years of fundraising and policy experience working for candidates and non-profit organizations. Additionally, he has been on 100.3 KTLK as well as Talk of the Nation on NPR and was named a 2011 Young Leader by the American Swiss Foundation.
Devin studied history and political science at Hillsdale College in Michigan. There he met his lovely wife; together they have three kids and live in Stillwater, Minnesota. Devin enjoys fast cars, long drives, great books, old planes, and nearly everything life throws his way.
Narrator: Welcome to the Holistic Survival Show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary for you to survive and prosper? The Holistic Survival Show is your family’s insurance for a better life. Jason will teach you to think independently, to understand threats and how to create the ultimate action plan. Sudden change or worst case scenario, you’ll be ready. Welcome to Holistic Survival, your key resource for protecting the people, places and profits you care about in uncertain times. Ladies and gentlemen, your host, Jason Hartman.
Jason Hartman: Welcome to the Holistic Survival Show. This is your host Jason Hartman, where we talk about protecting the people places and profits you care about in these uncertain times. We have a great interview for you today. And we will be back with that in less than 60 seconds on the Holistic Survival Show. And by the way, be sure to visit our website at HolisticSurvival.com. You can subscribe to our blog, which is totally free, has loads of great information, and there’s just a lot of good content for you on the site, so make sure you take advantage of that at HolisticSurvival.com. We’ll be right back.
Start of Interview with Devin Foley
Jason Hartman: My pleasure to welcome Devin Foley to the show. He is the co-founder of Intellectual Takeout, and that is a website that has fantastic content on economics, government, and many, many other things. And Devin comes to us today from Minneapolis, St. Paul. How are you, Devin?
Devin Foley: I am well. Thanks for having me on your show, Jason.
Jason Hartman: Good, my pleasure. Well, there’s so much going on in the world today and it seems like we live in interesting times as that ancient old Chinese saying goes. And that’s not necessarily positive. First of all, tell us a little bit about Intellectual Takeout and then let’s get into some of these issues. Your company’s about 3 years old I guess?
Devin Foley: It is, yeah. We were founded in 2009 and basically the thinking behind us is we want to change minds in the public about the role of government. And we wish to do that to expand personal freedom as well as promote a just society. We just see a lot of opportunities out there to spread ideas and information to the general public so that they can really understand what’s going on around them and just some of those interesting times that we’re in.
Jason Hartman: Fantastic. Well, yes, they are interesting times for sure. So, what are your thoughts about all of this Keynesian economics that are being practiced nowadays and what it means to people’s future in terms of the national debt, prospects for inflation, interest rates, etcetera, etcetera?
Devin Foley: Well, that’s a lot of ground to cover.
Jason Hartman: I just thought I’d make it a big compound question and let you take it where you want it to.
Devin Foley: Excellent, excellent. So, you have a few hours, right?
Jason Hartman: Maybe a few weeks.
Devin Foley: Exactly. The simple answer is basically where do we see Keynesian economics going? It’s going to fail. I think that the lessons of the past have not been learned. A lot of these ideas have been tried repeatedly. And I think that we are getting to the point where the government quite literally can’t spend us out of the problems or the bubbles that have been blown and that debt both at the national level and personally corporations and other places is going to become a greater and greater burden and definitely slow down our economy. As far as where all of that goes, we can talk about a number of points within there as far as the impacts for folks investing, for everyday people, for those who are coming into their senior years and looking at how am I going to survive, the changes that are taking place on a fixed income and all of those sorts of things.
Jason Hartman: Yeah, many aspects to it of course. When you mention, though, Devin, that these things have been tried and they’ve always failed and I couldn’t agree with you more, if you look at Weimar, Germany, if you look at Zimbabwe, if you look at any example, if you just look at Europe, even before the European crisis really started, the big overarching intrusive nanny state style of government that requires Keynesianism as its basic stock and trade, it doesn’t work.
But here’s the hard part about the situation now and kind of predicting it I think, is that none of the countries that have ever done these things, have ever had the world’s reserve currency, they have never had the largest military, they have never had the particular unique situation that The United States, frankly, enjoys nowadays. And so it’s not very fair I don’t think if you’re China, for example, or even Japan, but I just keep asking myself can they just kick the can down the road forever?
Devin Foley: I’ve been asking myself the same thing. I’ll be quite honest. Looking at the housing bubble, I mean we came out the tech bubble, we go into a recession and then next thing you know, 2001-2002, all of a sudden people are buying up houses like there isn’t a recession going on. And that bubble continued to climb until it finally popped. I actually sold my house in 2007, went to cash expecting some big problems. And I’ve actually been renting ever since just because I don’t see the housing as a good investment.
But when I looked at the numbers even back then, I mean we have to always remember that there are very powerful interests involved in this. And the components that you mentioned as far as the US having the reserve currency, the military, I never would have thought that things would have continued the way they are right now as far this continues kicking the can down the road.
You look at under the Bush Administration, 8 years, you have it just under $5 trillion dollars to the national debt. In the last less than 4 years, we’ve added $5 trillion. These are incredible numbers. Where does it hit? It may very well be that we’ve actually already sort of gone off the proverbial cliff if you will. But we’re sort of doing the coyote and the roadrunner skit where it’s just you’re going in air but at a certain point you start to go down. I mean, when you start to think about the national deficit, the annual deficit where you’re running in numbers – GDP includes government spending which means it also includes the money that’s being borrowed and spent by the government…
Jason Hartman: So they’re counting it twice.
Devin Foley: Exactly. And if you’re only getting 2 or 3 percent growth but you’re borrowing and spending 6, 7, 8 and 10 percent of GDP, that’s something to be really alarmed about and it’s something that can’t continue again.
Jason Hartman: Let’s examine that for a minute because that’s really interesting. So, the GDP is around, what, $13 trillion, right? Something like that?
Devin Foley: Yeah, a little bit more, but yeah.
Jason Hartman: Okay, so GDP, $13-$14 trillion dollars annually and the government’s percentage of the economy now to even comprehend the government’s percentage of the economy is hard because there’s a zillion different ways to count that. Do you count federal, do you count state, local, every municipality? I say you have to count all government. And then there are all sorts of ancillary parts of government that aren’t really maybe classified as “government”. But this is the problem you get when the state, and I don’t mean the state like the state of California or Arizona, I mean the state meaning the government in general becomes such a large player in the economy, it’s very hard to really comprehend what the impact of this player is. It’s just so big and it’s tentacles are everywhere.
But talk to me about the government’s percentage of the GDP, if you will, you know what are your thoughts on that?
Devin Foley: Yeah, again you can look at it from a state level. What is the federal government spending? The number that I focus the most on quite honestly is let’s look at this year projections for the deficit are right around 1.3 trillion or so. The numbers you’re pointing out of the GDP, that’s just under 10% of the economy. It’s being bowered and spent by the federal government. I mean that number alone is the one that’s…I mean let alone the fact that you’ve got more along the lines of 30 to 40 percent, depending on when you start to add up state, local, federal government as far as being part of the economy, that’s an incredible number alone. Just that as a deficit that’s being spent, and we’re only getting under 3% GDP growth for that. That’s incredible. Those numbers don’t mesh.
Jason Hartman: They don’t mesh. And what you’re pointing out, the thing that you eluded to a moment ago is that if you take the government size, I’d say the federal government’s part of the economy is about 20%, something like that I think. I mean that’s some of the readings that I’ve done, say that’s the farer numbers. And so then you take all those local governments, and there’s much more than that, and the state governments. And then you look at how we’re going into the whole by about 10% per year. But then if you were just to look at the GDP as the actual private economy, how much of that economy is private? It’s much smaller. I mean, these GDP numbers, they’re just fake, aren’t they?
Devin Foley: In some sense, yeah. And there is some serious discussion taking place about how we’re actually measuring the government. But there is some very real discussion taking place as far as how we’re measuring GDP and whether or not that’s actually an honest portrayal of the economy. I mean, in one sense, it’s very true. If government spends the money, does it have an impact on the economy? Of course. On the other hand, it goes back to that economic idea of the seen and the unseen, where that money has to come from somewhere.
Now, if it’s coming from tax revenues, you’re taking from one person and then redistributing it somewhere else. And that could mean just going to military or going to the Department of Justice and natural roles of the government. On the other hand, if you’re borrowing it and then spending it, well you’re taking it from future taxpayers. You’re pulling that tax revenue forward but it’s going to have to be paid back down the road. And really, when you start to look at these numbers, it’s like what is actually taking place?
And I think we get into a lot of issues of how much is debt actually driving the economy right now? How much is this government debt driving the economy and keeping the sort of mirage that everything has recovered or is at least steady now and things are fine, but is it really fine if your government is having to borrow somewhere around 10% or a little bit less of the entire GDP and spending that to keep things just sort of at an even keel? This is dangerous territory.
And I think, to your point, there are lots of examples historically. I mean, there are some good examples, too. I mean, even leading up to the French Revolution, you look at a French government that is borrowing lots of money causing spikes in food prices. You can look at the Roman experience as well, their situation, and both large empires and sort of applicable to the American experience that we’re going through right now.
Jason Hartman: Sure. You can. Again, the problem is Weimar, Germany, France – I guess Rome had the military for sure – but they weren’t in the unique situation of The United States. And I ask, when I do seminars to teach people how to invest in real estate and so forth, I ask the question how many of you have ever borrowed money from a friend or family member? How many of you have ever loaned money to a friend or a family member? And then I say who is in control of that transaction? The borrower or the lender? And the traditional wisdom would be that the lender is in control, but I say that’s not so at all. I say the borrower is really the one in control. And on a micro-level if you look at what’s going on nowadays with loan modifications and short-sales, hey, I say the borrower got the better end of the deal in every case than the lender.
And then you look on the super global economic geopolitical macro level and you look at The US and China, and I don’t know, The US, maybe they’re in the position of power over China because what are you gonna do if you’re China? Are you gonna destroy your own customer’s economy? I mean, they can’t do that unless they create enough of a consumer class which is going to take them many, many years to do, granted they’re on the track of doing it. They’re in a real spot, maybe one worse than The US is.
Devin Foley: In that sense, as far as China, I think that you are right. It’s interesting – I actually grew up in San Diego, California. I moved to Minnesota for the weather.
Jason Hartman: Well, you went from one liberal state to another. I grew up in California and I moved to Arizona because I wanted to lower my tax rate and increase my lifestyle.
Devin Foley: Yeah, I should have read something about that before moving. But no, I love Minnesota. It’s beautiful here. But what was interesting is in California, in the 80s, you probably remember the Japanese were buying up everything.
Jason Hartman: Yes, and everybody was xenophobic and scared of Japan, right?
Devin Foley: Everybody was terrified, except what was interesting is the economists who would be of course of a more either Keynesian or like technocratic mindset that government has this role of managing the economy. We’re praising Japan and celebrating it. Look at this – America needs to be more like Japan. And what was funny is this went so far into the culture that if you watch I think the first Lethal Weapon, they make a joke about it where some folks, they’re sitting there monitoring Mel Gibson and Danny Glover and monitoring the radio and the South Africans are speaking in Afrikaans, and “What is that? I don’t understand that language. The Japanese, they own everything else, they probably own the radio station now.” And I mean that’s how far the thinking went.
What’s interesting is you see a lot of that taking place now in China, too. I mean, I’ve seen where various heads of some of the unions and other folks have been out there saying we need to be more like China, we need this managed top-down economy, things like that. The reality is we know from economic history that that sort of top-down approach doesn’t work. You can make things happen in the short term, but ultimately people need the freedom to be able to adjust their prices, to adjust their wages, to adjust and to adapt to the changing markets. China, with a top-down structure still does not have that ability.
Now, of course, as you pointed out, changes are taking place. And in many ways changes are taking place rather rapidly. But they still have a wide variety of problems and a much less flexible economy. Despite all of our regulatory problems and things like that, The US still remains a flexible economy. And I think that it is different this time in many ways, but I think that some of the reasons that we’ve actually done surprisingly well is because people have been able to adjust and have that freedom.
I think China, you’re looking at a potential for property bubble over there, and the question is what happens if their property bubble pops? What happens if their economy goes in the tank? Are they going to see civil unrest? Are they going to be able to see a culture that it’s not America. I mean, America is still very much of the mindset of, well, you’ve got to adapt, this is what happens, we need to innovate, things along this line. Is that there in China? I don’t know.
Again, I’m thinking of the Japanese example where this can do it, you gotta be like them and then, boom, out of nowhere it collapses. Two decades later, Japan still hasn’t recovered. Well, what does that say about things? And I think that gets to the economic fundamentals of more of the philosophy that animates the country and how it works. So, I do think that we’re still in a position of strength, but bankrupting your country still can be really a dangerous thing.
Jason Hartman: Right, I know. Believe me, I’m not being an apologist for our completely irresponsible spend thrifty government. It makes me angry to no end. However, when you listen to the real doom and gloomers, I think there are some factors that really kind of matter that are different from all those historical examples. And I just wanted to take those into account is all.
So what are your thoughts on where are we going? I mean, in terms of inflation, interest rates, markets, stock prices, all of that, do you like my long questions by the way? They’re very broad.
Devin Foley: It’s a million dollar question, too. If I could really read the tea leaves, I probably wouldn’t be in the non-profit world. I’d be happily on a yacht somewhere enjoying the good life. But the reality is I think we’re in an interesting place where quite often I go back and forth with inflation, Bruce is actually deflation. On one hand you’re seeing a massive growth in the money supply, but that money supply is largely just going into the banks to be able to show their questionable balance sheets.
And, at the same time, we are seeing – and this is a known thing, this is not new to economics and particularly to the Austrian school and free market thinking – if the government comes from money supply, things like that, and does inflationary measures, which I think it is trying to do – it’s trying to inflate the economy – the question is can it actually do that?
There’s a lot of talk about speculators and this and that. This is nothing new. When you play with the money supply, people are going go and try and seek other places, other stores of value. Currently, it seems to be in a lot of the commodities and the stock market and other places, but what is long term? There is the potential for of course this great growth of inflation, but there’s also the potential deflationary environment. Is it really inflationary if you all of a sudden are facing $15-$16-$17 trillion dollar national debt bill in addition to people’s private debt? I mean, look at the younger generation coming out of schools. I mean, we’ve seen this even in our own institution where young people graduating from college have $80,000-$100,000 in school debt.
Jason Hartman: Yeah, that’s the next big bubble. I tell you, that student loan debt is nothing to sneeze at. I heard the other day that it’s topping a trillion dollars now in student loan debt, unbelievable.
Devin Foley: But are they going to be able to pay that? I mean, you think about the chain of events involved. First of all, they’re having a very difficult time finding jobs which makes it hard to be able to pay your school debts back. So, if you start to think about that, if across the board of personally, corporate and particularly government can’t pay their debts, is that an inflationary environment or is it kind of an odd deflationary environment while the federal reserve and others are trying to pump things up and re-inflate them which is why I think you keep seeing these bubbles and then these dramatic declines.
You look at the tech bubble as being pumped up and then it collapses. And then there’s another effort to pump things up into some other asset or store value, you go into houses and it collapses. Now, is it in the bond market, is it in commodities, you be the guest. So, I wish I could read a little bit better.
Jason Hartman: The other amazing thing about the student loan debt it’s not dischargeable in bankruptcy. So there you have a case where you pose the question, which is a very good one, with employment being scarce, are these students going to be able to repay that debt? And many of them won’t and they will not be able to discharge the debt. So basically now we have a society of indentured servants who don’t get a second chance, they don’t get to rebound.
And, listen, I’m no fan of the idea of bankruptcy. I think those laws have been abused massively and I think it’s really wrong of course. But one of the good things about The US hisctorically has been that there are lots of great stories about people who have made mistakes, that had a hard time, and filed bankruptcy, got their chance to start over and created successful businesses, boost the economy, created jobs. In other countries, you don’t really have that second chance. America’s pretty forgiving like that.
Devin Foley: Completely agree. No, I love America per the opportunity that is here. One of the things I’d say, though, just thinking about the school debt type stuff is that we’re becoming more and more structured in the sense that if you talk to a lot of students, why are they going to college? To get the degree. Why do they want the degree? They just want the sheet of paper that says they can get a job.
And I think there’s a huge opportunity for us to hopefully do it in a wise manner, to really rethink some of these laws that are on the books, why it is that students need a degree. Have there been changes in the labor laws? Have there been forced changes in hiring practices and by government on companies? And from what I’ve heard from talking to local companies, they have. They’ve had to turn to the sort of, well, if you need a degree to get in the door because we can’t do tests of any other kind because that would be unfair or this or that and violate…
Jason Hartman: That is a great point that you bring up. So, just smoke that out a little bit what you just said. You’re saying that because of labor laws, in the government restricting employer’s ability to test people, the new proxy, because the employers aren’t allowed to test certain things because that would be considered discriminatory, then the proxy for testing becomes that sheet of paper from a college and you have the student loan programs that have been promoted and pumped up and so all this money is now floating around. It’s fairly easy to get but never dischargeable. And the students sign the papers, not really knowing what they’re getting into.
Institutions of higher education have massively inflated their prices because the government has offered all this money. I mean, college used to be cheap. My mother went to Berkley and she worked her way through school, she didn’t have any student loans. She didn’t have any parents helping her out. In the old days, you could work your way through college. Now, it’s probably impossible.
Devin Foley: Exactly. I’ll tell you a local story here from Minnesota – and I can’t disclose the company, but it’s a significantly sized company – international company. And it was fascinating – I was talking with the president and he was telling his story of how he got involved in the company. He graduated high school, vocal kid was just saying, well, I gotta do something with myself. Go to this company, and this is many decades ago. And the company gives him a test and says, okay, here you go. It’s just an ability test, see what you can do. He takes the test, they call him back in and, seemingly excited, gives him some more testing, more interviews, things like that.
They call him back in and say alright, we want to hire you. Here’s what we want you to do. We have a problem – and I think it was in the mail room or something fairly simple but they said we’re having some problems with inefficiencies in this department. Please just go monitor it, see if you can figure out why things aren’t working right. See if you can figure out the problems and then fix it so that you’ve got this basically a kid fresh out of high school who goes and does that. And I think it was something like it took him two weeks or so to be able to sort things out and streamline thing. The company is thrilled. They move him around and they end up moving him around the company, doing this sort of work and fixing things, making it more efficient, studying it. And he climbs the ranks, becomes the head of a significantly large company.
I asked him after that – I’m just amazed by the story – it’s great. I talked about the American dream, right. And I said “Could that happen to you today?” And he just looked at me and you just saw the energy go out of him. He said no. He said “We do not have the freedom to be able to hire that way, to be able to test that way, to be able to move people around because of the rules and regulations that are imposed upon us by government.” And he’s like “And that makes me sad.”
There are a lot of kids out there that don’t necessarily need to go to college. They’re bright, they may actually already be well educated in some ways. Think about the opportunities. I mean, are there opportunities to bring back apprenticeships, things of this nature. When you think about the founding fathers, it’s not like they all went to college. Yet you’ve got brilliant people and this is part of our American past, too, is where it’s like there was a lot more flexibility and hiring practices. And this idea that you’ve got to go to college, I’m sorry, but there’s a very large vested interest group in higher education that wants to see that myth perpetuated and those laws stay on the books because it’s their gravy train.
Jason Hartman: Right. And many of those are professors that work a whopping 12 hours a week and they have tenure. And it’s just a scam at every level. It’s unbelievable, yeah. I couldn’t agree more.
Devin Foley: No, it really is. I fully value education and even higher education. There is a real purpose to it and to be well educated, to understand the issues, to have specialties to do these things is really good. And that’s great for personal development, for other reasons, all of these. Companies need these types of workers. Some of these people will go out and start new jobs. But to expect that every student should have to or family should have to spend $30-40-100,000-200,000 for a piece of paper that really at this point has questionable return on the investment, I don’t see that lasting that much longer and I think that we really need to have a real sincere conversation about that as a country.
And, unfortunately, a lot of the argument now is just, well, government needs to provide everybody with a college education. More spending, more government isn’t always the solution. There are lots of solutions that we can do to this as a free society, as a free people that better empower us, better build community, the sense of personal responsibility, all of these things than just always turning to government as the solution to every problem out there.
Jason Hartman: The nanny state is clearly a failure at virtually every level. So, I couldn’t agree more. You alluded to it just a moment ago, talk to us about the role of a citizen in a free society. That’s one of the posts that you have on the intellectual takeout website. What are your thoughts about that?
Devin Foley: I think that we’ve definitely lost our way. It’s interesting – I mean you look at society, we now live in a very atomized society and I think that’s partly as a result of our choosing where we like to and part of it as far as the environment that we’re in as well and then government taking on an increasingly larger role. I mean, how many of us actually know all of our neighbors around us anymore? I mean, if you talk to your parents or your grandparents, depending on how old you are, they knew everybody in the neighborhood. Everybody again went out. They talked, they watched out over each other’s kids, they did all of this sort of stuff. And they knew when somebody was having a problem.
These days, we go into our house, we watch our TV, we hop in our car, we drive to work, we talk with our work friends, we drive back, and we’re largely in these little bubbles and we don’t worry about the lives of other people because government’s taking care of it and that’s fine. And in a free society, we really have to rethink what is your role as a person. It’s that question of saying is it a better society to have a faceless bureaucrat write a check to a single mom or somebody in need or somebody that’s disabled from DC? Or is it better for us, as individuals, to actually come out of our little bubbles and to say, hey, wait a minute. What can I do to help you? What can I do as an individual?
And that’s not to just say that it’s all about helping other people, but if you look at American history, there is a sense that, one, I need to be personally responsible for my activities, for the things I want, even for my health care and other things, but at the same time, there is a part of it where I have a personal responsibility to watch out over society and make sure things are running justly. And that means actually me getting my own hands dirty and making sure my neighbors are okay and things like that, not just simply saying I’m gonna vote to make sure that Jim down the street pays more taxes so I don’t have to worry about how Bob’s doing. That’s not really a just society, that’s not what a free society’s all about.
Jason Hartman: Yeah. That’s the difference between community and civility and forced slavery by the government where the government is forcing one to do these things rather than people working together for a greater common goal. It’s funny that America is known for this concept of rugged individualism. But actually, if you look back in times, I think you’d find rugged individualism exists and it existed back in the old days, but there was also this sense of community that just doesn’t really exist anymore. Now, it seems people look to the state, they look to the nanny state to provide for things rather than looking to each other and looking to their neighbors.
Devin Foley: Exactly.
Jason Hartman: And looking in the mirror of course.
Devin Foley: No, of course. And I’m just as caught up in the culture and the world that we lived in as well. But you think about it – the family as a unit has largely been shattered. I mean, you’re looking at I think across the board you’ve got out of wedlock birth rates north of 40% and that’s on the low side. And if you start getting into certain demographic groups and others, I mean here in Minnesota we have some demographic groups of out of wedlock birth rates north of 70% in certain counties and stuff. I mean, that’s an enormous change in society. And the impact of that is just incredible.
But furthermore to your point of back in the day, you look to the demise of fraternal orders, various aid societies that used to be around, you look at the end of charitable hospitals – now it’s basically the government requires that every doctor, every hospital takes care of people. And there’s something changed in that where it’s just like, no, you have to do this, whereas setting up a charitable hospital, charitable needs and actually taking a part in things as a community and understanding that if we’re going to govern ourselves, that means you actually have to play a role in it, not just vote to redistribute wealth to other people or to have somebody else take care of all of your problems. That’s not what being free is about.
I see a lot of it in the conversation out there where people want this “We need to be more community minded, we need to be more local minded.” True, true. All of this, great ideas, but that doesn’t mean that government’s going to do that for you. That means each of us has to step out of our box and say, you know what, maybe I should get back into a fraternal order or some sort of aid society or see what I can actually do in this way.
And if you look at even the “robber barons” and those guys, it’s like their charitable giving and things like that, what they did that they wanted to do to make their communities better wasn’t in the sense of I need to give back to the community. It wasn’t that I owe the community. It was I want to help people. And in doing that, they themselves sort of grew as an individual. In your own self-interest, helping other people actually often helps yourself as well in some sense. So, there’s an enormous opportunity for America to turn around and I think that we are seeing, as you said, sort of the welfare state. Can it survive? Right now it looks like it’s going to have to be cut back tremendously which means all of us are going to have to reconsider our roles in society as individuals, as families and as people in our neighborhoods and our community.
Jason Hartman: It is amazing to me the level of distraction going on in the public arena and the news media. We’ve recently had this whole debate over the Buffett rule – just ridiculous. I mean, first of all, Warren Buffett is a massive hypocrite in my opinion for many reasons which I won’t bother to bore people with. They probably already know. But the Buffet rule, it was nothing more than a ploy to exploit class envy it seems because it wouldn’t have solved any real problems. The problem is government spending, period. The government is just simply too large. And it is massively unsustainable. It creates cronyism, it creates favoritism.
You look at these solar companies – I’m in the greater Phoenix metro area and you look at the scandals that have gone on with the Obama handouts. It’s just unbelievable.
Devin Foley: Yeah, it really is a shame what’s taking place on those fronts. When you look at talking about the Buffett rule, it’s a fascinating insight into the thinking is that a lot of it’s being talking about, the rich need to pay their fair share and that fair share is right around 30%. Correct me if I’m wrong, but that’s what I’ve seen at least, looking at it. But then how it’s being marketed and spun politically, it’s they need to pay their fair share and their fair share is 30% to the federal government. I mean, that’s a profound statement that to be fair, to be on par with the middle class you need to pay 30%. Why isn’t anybody actually asking the question of why is it fair that the federal government gets 30% of my income. I mean, that’s a huge amount.
Jason Hartman: When the federal income tax started, I think they said it would never go above 1%. And people were so angry about it back then.
Devin Foley: Really? Are you sure?
Jason Hartman: Yeah, I think so. That’s what I heard. And then people are just livid about it at the time.
Devin Foley: Yeah. And it gets to this sort of change in ideas and mentality where it’s like you owe the government your taxes because the government has done all of these things and you have to pay back what it’s done for you. And that really leaves out this idea of freedom and of individual achievement and personal responsibility as if to say I would be nothing without my government and therefore it deserves 30%. I mean, if you’re a religious person, God only asks 10%. Does the federal government think it’s 3 times better than that? I mean, it’s really a fascinating insight into the psychology of folks.
And it really gets into this idea of who comes first? There’s this idea of even revenue. The government doesn’t exist without private enterprise producing good, growing the economy that the government takes its cut off of. That’s how reality works is that individuals and corporations and everything else have to actually produce goods and services of value and a surplus in those that can then be taxed to fund the government. Government does not create those things.
And now we see what you touched upon with Salindra and others, government thinks that part of its role is to be a venture capitalist with our tax dollars. No, no. That is not your job. Your job is to maintain the rule of law.
Jason Hartman: Right. And a terrible venture capitalist at that. Obviously, a venture capitalist, the people that contribute to campaigns and can influence voting blocks, it’s just a vote buying scam. It’s incredible, it really is.
Since when did the government get into the venture capital business? Well, that’s a Keynesian idea. And it is a total flop. I mean, I can’t think of anything since this great Obama society took over 3 and a half years ago that has been successful, not one program.
Devin Foley: Right. I mean, folks will point to thinks along the line of the internet or the space shuttle and things like that and say, well, that is government investment and look what it did. And there are other examples from history of even going back into the renaissance and other periods where governments invested some money in a technology or a device that would be actually for the common good.
But what we’re seeing now is something very, very different from that sort of effort. I mean, you’re seeing where taxpayer dollars are going to an already known and existing technology that we know, particularly let’s go in the case of solar panels, where the cost of energy from solar panels greatly exceeds the cost coming from natural gas, coal, nuclear and even wind to be honest. And the price differences are exponential.
Yet government now says, well, just because we’re going to fund it, it will work. And it’s like that is not a role of the federal government and it’s not within the guidelines of the constitution. I mean, you’re paying favoritism with taxpayer dollars and I think that’s part of the outrage. But one of the problems that we see is particularly this partisanship and factionalism that’s taking place where people seem to think, well, let’s just consider the dialogue between the tea party folks and the Occupy Wall Street. You’ve got one group saying this whole thing of the bankers and bailing out these rich guys and this and that is really bad, but because our guys and our team, our faction, our party, whatever, is supportive of renewable energy, it’s okay for government to fund that.
And it’s like, no, let’s actually return to some principles here on all sides, too, and just start to take a look. If you don’t want government bailing out big banks, why do you want government bailing out or playing venture capitalist with solar panel companies? I mean, this is the same thing, but we need to actually step back and say, you know what, actually I just want to look at these things with certain principles and guidelines and say, you know, both of those things aren’t good. So, that’s one of the things we see and it’s a worry.
If your listeners have an opportunity, we actually have it up on our site as well. Just plug in George Washington’s farewell address and he gets into this same problem of factions and people being just politically motivated and government basically being taken over by this back and forth political battle rather than by people who are actually just looking out for the actual common good of the nation, not individual special interests or corporations or this or that, but the common good of the whole nation across the board.
Jason Hartman: Yep, absolutely. So, what is the prescription? Let’s kind of close with that. And, by the way, the website, IntellectualTakeout.org, what is your group’s prescription for success? Something that maybe the listeners can actually do or implement in their lives that will make a difference.
Devin Foley: Well, Jason, I think that right now we are really excited about what we’re seeing. I mean, despite the partisanship and the factionalism, there seems to be a very sincere desire to learn a lot more about the ideas behind the founding of our country, behind economic freedom and these things and to really dig deep into these issues and to really consider them and to reevaluate these roles of government and things like that. And for us, that’s where our focus is, is to engage people’s minds, their imagination, their hearts, everything else, and to really explore the ideas that brought the country to this point, both the good ideas and the bad, and understand the history how did we get to this point? What was the initial premise of the country? What’s the initial idea of freedom, of being a free individual in society?
And to start living that out in one’s own life and then to be able to share that information with one social network – I mean, Facebook, Twitter, all of these things, if you thought the Gutenberg Press had an impact, which it totally did, we are on the cusp of something amazing. I mean, the ability of average individuals to communicate just broadly across the country and to communicate ideas, to dig up material, to know this, I would just urge your readers to take full advantage of that, to understand that all of us living today are going to be the ones that determine the course of our country.
And we need to educate ourselves first, we need to understand the issue, and then we need to go spread those ideas and that information. And those are the first steps that we see, we can hand the football off to folks that are more into changing things within the inner workings of Congress and things like that and we’re willing to take the ball. But I think that the first steps right now are really to learn, to understand, and to spread the knowledge and the ideas and to engage in this debate.
Because if you look at history, the hearts and minds, John Adams rights about this. The revolution was won in the hearts and minds of the people before the revolution ever happened in America. And he’s just saying that, look, it’s really about the hearts and minds of the people, the way they view themselves, communities, government, all of that, and that’s gonna determine where we go as a country and a globe as well I guess.
Jason Hartman: Couldn’t agree more. And I’d love to just let you close on that because that was inspiring, so thank you for that. However, I want to just bring up one more point. When you talk about social media, and I think that is of course a great tool between Twitter and Facebook – I mean, look at the impact of Twitter in Iran and in the Arab Spring in general – wow, what an incredible, incredible, powerful tool at our disposal.
But there’s an old saying. Two topics that aren’t there for polite conversation are politics and religion. And I get into these political debates and discussions on Facebook all the time, I can’t resist sometimes. And I don’t know what you think about it, but I would want to encourage people nowadays – I think we’re living in pretty serious times. I think we have a lot of good going on in the world and in the country, but there are some pretty serious things going on and maybe every generation felt this way.
I didn’t feel this way 10 years ago as I do today that we are at a crossroads, a tipping point, whatever you want to call it, where things are weighty right now. And I would at least personally encourage people to use social media to bring up these points and to debate them and to do it in a civil way. But people need to post things about these issues and they need to discuss them and they need to have dialogues about them. That old saying, politics and religion not for polite conversation, I kind of think in times like this we have to throw that out the window. Your thoughts?
Devin Foley: Completely agree. I think that we’re in the eye of the storm right now and I think that my conversations with a lot of folks, whether they be progressive, independent, conservative, Libertarian, whatever, that sentiment is across the board right now. And it’s funny that we’re not supposed to talk about politics and religion, which for most people those are two topics that animate them the most that they often care about the most, particularly religion and things like that.
And, understandably, there are ways to talk about these things that are implied, but there are also good ways to be able to bring it up. And I think that comes down to the one thing that I would say is just a matter of tone and tenor. At Intellectual Takeout, we try very, very hard to maintain a very dignified tone and tenor and be respectful of all of the viewpoints. And if you want to spread ideas, if you want to engage people, you need to do it in a kind way. You need to recognize that these are other people. If you get called a name, are you really going to listen to that person? If you say this thing is stupid, this or that, this is so dumb, you’re not necessarily going to engage him.
On the other hand, if you say, hey, I’m really worried about this, all of us I think are going to be facing this common challenge – here’s some good information, some good background on it – that is the way to open doors to these conversations and to make those discussions about politics and even religion at times, polite and reasonable things to do, because people do care about these things – they care deeply about them. It’s just a matter of your tone and tenor that matters quite a bit.
Jason Hartman: Absolutely. Well, there’s an old saying, you’ll catch more bees with honey than you will with vinegar, right?
Devin Foley: Absolutely, Jason. Well said.
Jason Hartman: Hey, Devin Foley, thank you so much for joining us today. Keep up the great work at Intellectual Takeout, the website is IntellectualTakeout.org, and appreciate what you’re doing. Keep up the good work.
Devin Foley: Well, thank you, Jason. I appreciate you having me on your show and I look forward to speaking with you again.
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Transcribed by Ralph
Guest: Devin Foley
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