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President Obama: Shutting Down Capitalism

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HS - Jason Hartman Income Property Investing (3)Jason Hartman interviews Victor Davis Hanson, professor and author, regarding how the crises around the world, especially in Greece and the European Union, have had a profound impact on employers, and how Greece’s crisis will impact larger countries. Visit: www.HolisticSurvival.com. People in Greece are uncertain in these times because the president has created a climate where the people don’t know what the tax code is going to be, what the regulations will be, or what the national policy is going to be about investment savings. With governments unable to pay their debts, the affluent feel they’re in the proverbial crosshairs. Victor feels that here in our own country, Obama has succeeded in shutting down American capitalism. Victor also discusses with Jason how California’s economy is pathetic, including the infrastructure and schools, and how employment and salaries are affected, and talks about the out-migration from the state. He gives examples of what is really happening within California, from the street level to the government level, including how unions and crime and complications from illegal immigration have compounded the problems. Immigration has put a huge strain on the public health system, employment and the resources of the state, and Victor feels California needs to close its borders to recover.

Victor Davis Hanson is the Martin and Illie Anderson Senior Fellow in Residence in Classics and Military History at the Hoover Institution, Stanford University, a professor of Classics Emeritus at California State University, Fresno, and a nationally syndicated columnist for Tribune Media Services. He is also the Wayne & Marcia Buske Distinguished Fellow in History, Hillsdale College, where he teaches each fall semester courses in military history and classical culture. Hanson is the author of hundreds of articles, book reviews, scholarly papers, and newspaper editorials on matters ranging from ancient Greek, agrarian and military history to foreign affairs, domestic politics, and contemporary culture. He has written or edited 17 books, including Warfare and Agriculture in Classical Greece (1983; paperback ed. University of California Press, 1998); The Western Way of War (Alfred Knopf, 1989; 2d paperback ed. University of California Press, 2000); Hoplites: The Ancient Greek Battle Experience (Routledge, 1991; paperback., 1992); The Other Greeks: The Family Farm and the Agrarian Roots of Western Civilization (Free Press, 1995; 2nd paperback ed., University of California Press, 2000); Fields without Dreams: Defending the Agrarian Idea (Free Press, 1996; paperback, Touchstone, 1997; The Bay Area Book reviewers Non-fiction winner for 1996); The Land Was Everything, Letters from an American Farmer (Free Press, 2000; a Los Angeles Times Notable book of the year); The Wars of the Ancient Greeks (Cassell, 1999; paperback, 2001); The Soul of Battle (Free Press, 1999, paperback, Anchor/Vintage, 2000); Carnage and Culture (Doubleday, 2001; Anchor/Vintage, 2002; a New York Times bestseller); An Autumn of War (Anchor/Vintage, 2002); Mexifornia: A State of Becoming (Encounter, 2003), Ripples of Battle (Doubleday, 2003), and Between War and Peace (Random House, 2004). He also authored A War Like No Other, which was named one of the New York Times Notable 100 Books of 2006.

Hanson has written for the New York Times, Wall Street Journal, Los Angeles Times, International Herald Tribune, New York Post, National Review, Washington Times, Commentary, The Washington Post, Claremont Review of Books, American Heritage, New Criterion, Policy Review, Wilson Quarterly, Weekly Standard, Daily Telegraph, and has been interviewed often on National Public Radio, PBS Newshour, Fox News, CNN, and C-Span’s Book TV and In-Depth. He serves on the editorial board of the Military History Quarterly, and City Journal. Since 2001, Hanson has written a weekly column for National Review Online, and in 2004, began his weekly syndicated column for Tribune Media Services. In 2006, he also began a thrice-weekly blog for Pajamas Media, Works and Days. Hanson was educated at the University of California, Santa Cruz (BA, Classics, 1975, ‘highest honors’ Classics, ‘college honors’, Cowell College), the American School of Classical Studies, Athens (regular member, 1978-79) and received his Ph.D. in Classics from Stanford University in 1980. He divides his time between his forty-acre tree and vine farm near Selma, California, where he was born in 1953, and the Stanford campus.

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 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.

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Jason Hartman: It’s my pleasure to welcome Victor David Hanson to the show. And today we are going to talk about several interesting thing, a little bit about Europe, Greece, that meltdown and also about California as well. Victor, welcome. How are you?

Victor Hanson: Very good – thank you for having me.

Jason Hartman: Well, good. My pleasure. So you’ve written quite a bit and maybe we’ll start about this early recent pajamas media article, Zero Jobs 101, the Psychology of Alienating Employers, and as an employer myself, I couldn’t agree more if you’re referring to the government alienating employers.

Victor Hanson: Yeah, well most recessions have recoveries and the recession officially ended as you know in June of 2009 officially at least, so these last two years have been something quite unusual, at least in comparison to other post-war recoveries – a very sluggish recovery. And one of the reasons I think that we’re having such a difficult time is employers are hording cash, consumers are not spending because the president, for good or evil, has created a climate where a lot of people are uncertain. They don’t know what the tax code is going to be. They don’t know what the regulations are going to be. They don’t know the national policy is going to be about investment savings, but they do have a sneaking suspicion that if they’re affluent, let’s say they make over $200,000 and those are a lot of the people who hired there in the proverbial crosshairs. So a lot of it’s psychological. People just don’t feel comfortable with a president who is talking about millionaires and billionaires in reference to those who make over $200,000 a year.

Jason Hartman: Yeah, all those people with $200,000 a year driving their private jets as he likes to talk about.

Victor Hanson: Absolutely, it cost $50 million dollars, so I don’t know who can afford that but it’s not the guy that has the local garage or the landscape business.

Jason Hartman: I completely agree. It’s interesting – I don’t know if you caught any of it but I like the way Peter Schiff said it. He testified in front of Congress recently and I was watching the tape and he said the riskiest thing one can do nowadays is to hire somebody. You have threat of lawsuit, theft of your trade secrets. I mean it is a risky thing to hire somebody. And as an employer, I would agree if I can find a way to get that job outsourced or to do it with technology, I’m gonna do it.

Victor Hanson: I think everybody feels that way and that was even true before Obamacare came in. Now, we’ve already started to pay some of the taxes on our health plan whose details nobody knows anything about. I haven’t met one person yet who knows what is expected of the employer except that it’s going to be bad. I think he’s really succeeded in shutting down American capitalism. Whether that’ll continue for a long time I don’t know, but when you have things like this Dod Frank or you have Obamacare or you’re shutting down a Boeing plant or you’re reversing the order of the Chrysler creditors during bankruptcy to protect the union or you have the share the wealth attitude, it all is an aggregate disturbing any one action or any one sermon in isolation wouldn’t be too bad because people are pretty forgiving but now after almost 3 years in aggregate, people see the picture and they don’t like it and they’re starting to react to it. And it’s quite unusual because, as I said, the deeper the recession, usually the more vibrant and robust the recovery.

Jason Hartman: But that’s not happening this way. We missed two summers of recovery so far, so I don’t know when one will actually happen. Let’s maybe talk a little bit about global events and California and I’d like to get your opinion on the future in terms of is it inflationary, deflationary, your thoughts there? Let’s start over in Europe – is Europe coming to an end? I just cannot believe what is going on over there – it is just amazing.

Victor Hanson: Yeah, it’s returning to the way it had been for centuries. I lived in Greece three years and I think anybody who knew the country well would be surprised that it could survive in a European union because to go to Munich and to go to Athens is much more different than to go to Mississippi and then go to New York. The culture’s completely different, the attitude towards taxes, a siesta, the idea of work and the idea of the public sector. And so the idea you were gonna have Germans and northern Europeans subsidize a Mediterranean lifestyle was not sustainable without some type of federal coercive state. And so that’s where we are. I think you’re gonna see more of a whimper than with a bang. I don’t see a dramatic default. I just see people talking and preparing people for the eventuality that Grease will not pay those loans back and won’t get enough to continue and then we’ll try to default and then it will have some mechanism to leave the European union and that’ll probably be over a 24 month period or something. And I don’t know to what degree that will spread but it seems unlikely that Spain and Portugal and Italy are gonna find a way to pay those because their loans are much more massive and that’s what everybody’s worried about. There’s only 11 million Greeks, so it’s not a big deal but if Greece – and I think it will go – then when you have countries with 50 and 60 million people and 10 times the debt, that’s the worry.

Jason Hartman: Huge problems ensue. I mean I know what my answer is to this, but maybe I’ll try to get yours. Was the mistake trying to form a European union or was it just the entitlement society in general?

Victor Hanson: It was both. Yeah, it was both. They had a pretty good idea with the common market where they were trying to achieve in the 1960s terror free ease of trade. And like every bureaucracy it just grew and grew and grew and it became less democratic, more utopian, more bureaucratic. And it tried to bridge and actually eliminate cultural differences that were much, much sharper than between states in the United States. And even in the United States, we had regional cultures but not the the same extent as different countries. And the other idea was the government after World War II I suppose people felt that nationalism and national identity had led to World War I and World War II and they were gonna change the nature of man so to speak by making him better educated with health insurance, guaranteed job, you wouldn’t have to work 35 hours a week. That was contrary to human nature, so I think anybody who went to Greece by say 2000 was starting to notice things, that in the beaches around Athens at 2 o’clock, everybody who worked for the government, electric company, water company, phone company, bank – they had their government panel vans down at the beach and then you started to see that people were not eating until 9-9:30 in the evening. And then the siestas were a little longer.

There was three or four more employees in the bank of Greece when you’d go in and you’d see them before. It always had been that way, but now somebody else was paying for it so it was more cute. And then you started to see other things that didn’t quite make sense, that a country with 11 million people with a very unproductive agricultural sector was starting to have a very sophisticated subway system, highway system, airport, bridges, that was not a result of a capital they were generating in tourism or agriculture, but they were transfers from AU. I guess what I’m saying is the more I read the Greece newspapers, there was a sense that even if we default they still have more money than we do and that’s not fair. So maybe they’ll blame it on World War II as some of the [0:09:56.7] writers did, and maybe they’ll blame them on The United States somehow, but the Greeks have a tendency to do that anyway, but it’s a radical version of Obamaism where they think that life isn’t too fair and it conspired against the Greeks and they worked just as hard as anybody else, but bankers or Jews or German from World War II or whoever their enemy of the week is, they’re responsible and not themselves. You cannot get an average Greek on the street to look in the mirror and say what you do from 6am to 6pm explains why your country’s broke. They’re just capable of that level of introspection.

Jason Hartman: And retirement at, what, 40? This is just craziness.

Victor Hanson: Well, it’s typically Greek. Officially, it looks great on paper. I don’t know what it is, 67 or 66. The problem is they have I think it’s 400 professions that are exempt.

Jason Hartman: Hairstylists working with dangerous chemicals and all this kind of stuff. You know, it’s just crazy – when it’s everybody’s money it’s nobody’s money. Nobody cares when the bureaucracies grow like that. But just an interesting thing I wanted to ask you about – I remember my last trip to Europe I did an eastern European tour. And I went to Bulgaria, Romania, Estonia, Latvia, and several of those countries had just come into the EU right before I was there. And that’s why I was particularly interested in going. And you saw all these signs everywhere that said this is an EU highway project or whatever and they were building these great highways in Bulgaria where average wages were like 200 euros a month or something and isn’t that just part of the business plan, though, to kind of give to those countries, put all this money into them, give them infrastructure to hopefully lift them and make them greater countries if they just has a head start, a hand up rather than a hand out?

Victor Hanson: Yeah, that was the idea. And they worked a little bit better in Eastern Europe because they had so rejected statism because they had really suffered under communism. So they saw the EU as a protection more of personal freedom and protection maybe even from the Soviets in a way that greeks had been part of the western block hadn’t. But that was the idea that they were gonna make a uniform European infrastructure. And then the way it was sold to a lot of Germans and Dutch and Scandinavians was simply we’re all in the same boat now and you love to go do to Mykonos and you’d love to go to Nafplio, and you’d love to go to Hania, Crete. So wouldn’t you like, when you get there, to have a good airport and wouldn’t you like to have a good subway system in Athens. And you’re gonna be there in tourism and that was the idea that everybody was going to enjoy it and there were no more national differences. And that’s the way the Greeks looked at it. But of course the problem is that when you’re in Athens and the meanl costs more than it does in Berlin and the people are working 60% as productive and something has to give…

Jason Hartman: It really does. It’s just an immature philosophy to believe you can have something without earning it, no question. So what is the conclusion going to be? I mean will the riots and civil unrest continue? Will they get a lot worse? Will you see them spread into other European countries? And what’s the conclusion? Print more money and cause more inflation? Just a huge reduction of standard of living?

Victor Hanson: Yeah. I think you’re going to see a return to southern European currencies. And when I lived in Greece, this happened all the time. I can remember it happening in ’74, ’77, ’78, in where you would wake up and there would be a radical change in the value of the drachma. When you went into Greece, you had to write on your passport all the dollars that you had and you couldn’t take anymore out when you left. And then when you went to the bank, I think then it was $200 in cash you could have and everybody swarmed you that you knew because they wanted to trade black market drachma so then they could get US dollars because they couldn’t travel outside their country. They didn’t have any currency that was convertible. Things were very cheap. And when corruption was exposed and there was a big budget deficit, just printed more drachmas. Everything got cheaper, more tourists came in, less Greeks could buy imported goods. That’s a big thing that I noticed in all those countries. When one traveled in the 70s you just didn’t see electronics, jeans, sneakers. I never bought foreign clothes or foreign electronics when I was in Greece. You jst couldn’t get a hold of them. The government did not want to waste foreign exchange on stuff like that.

Jason Hartman: So the return of those southern European currencies and what does that mean? They’re just not convertible outside of the country then again? In today’s connected world I can’t imagine that.

Victor Hanson: Well, they have to be because they don’t have indigenous industries other than tourism that are competitive on the world markets, so that’s very hard for them to get a convertible mark or franc or dollar. And so one of the ways that the government functions is it doesn’t let its citizens earn dollars or euros and then spend them abroad on vacations when the government really needs those to buy sophisticated power plants or to have a foreign company come in and build a bridge. And then it means the consumer doesn’t really have access to Chinese goods or low cost consumer items because they have no mechanism to pay for it. And the idea is that people then find ways to be more productive. If they don’t have exchange, maybe they will not have a subsidized olive orchard that the Germans are paying for, then since selling your oil to a subsidized co-op and getting a check in the mail for doing really nothing. Maybe they’ll have to go out and study what oil production is like in The United States or other places, and then compete on the world market to earn foreign exchange. So I think we’re gonna go back to the way things were before the EU came onto the scene. And your question to whether it’s gonna be a source of social turmoil, I think it will be for a while and it’ll be followed by a collective depression – I mean a mental depression. People will just see that there’s no alternative to it. I don’t see any alternative. The big question will be the political institutions, whether the democracies will be able to weather this radical downgrade in individual people’s lifestyles without a swing to fascism or communism.

Jason Hartman: Yeah, scary stuff. Talk to us for a moment, if you would, about California. What is going on? And when you say that, are you really focused on central California and the agricultural communities there or I mean the state is just a disaster of epic proportion. I mean I just moved. I left California to move to Arizona. And when I drove across the state line, my state income taxes went down by about 35%. And everything else got a lot less expensive – I mean the price of gas – there’s just so much less regulation. And it just seems like California’s just collapsing under its own weight.

Victor Hanson: Yeah, it’s kind of like Greece. And I’m kind of lucky because I drive from my farm in the center of the state, south of Fresno to where I work at Sanford University. So I go really from third world California to first world California. And I mean I leave a community that’s about 75% either first generation Mexican-American or illegal alien. And I got to a post-modern University avenue in downtown Palo Alto and I often speak a lot. So I travel all over the state and the symptoms are pretty disturbing. They’re not just that we have the third highest income tax at 10%, I think the second highest sales tax at 10.1, highest gasoline tax at 46%. Highest paid teachers, $65,000, highest housing prices – at least on the coast. But what you get for it in value, in other words, our schools – our public school are behind only in Mississippi in math and English even though we have the most expensive teachers. We have the highest cost per prison inmate. We have the largest number of illegal aliens. We have the largest amount of US dollars sent from a particular state to Mexico. So we have 8 billion dollars that we are sending for Hispanics who are not citizens and then they’re sending about $20 billion dollars in disposable income to relatives in Wahaca, Mexico for example. And I could go on, but people look at California and they think with that high revenue coming in, why is 101 or that 99 freeway, why by any interstate standard they’re pathetic? Why is LAX just pathetic? Why are the public school pathetic? And the answer is the number of people who are productive for the reasons that you outlined are leaving 3000 a week. We have about 200,000 that are leaving California we think with incomes over 70,000. And they’re being replaced by about 1500 people who are largely coming for the pirate and average state subsidies. So we’re starting to see it in very mundane ways. I can give you 1000 anecdotes to explain what’s happening. Three weeks ago before I came to Michigan for my teaching stint here, all the copper wire in my ag pumps was stolen by a gang, $1500, they just ripped out the copper wire. I’ve had three accidents in the last 10 years. In all three cases, the person who hit me fled the scene of the accident and he had no driver’s license apparently, no registration was left, and no insurance. If I go to the Department of Motor Vehicles and I don’t have an appointment, I expect to wait 2 or 3 hours there.

Jason Hartman: I don’t think there’s an English speaking person at the DMV anymore. I mean the last time I went in California, it’s unbelievable. It’s interesting you mention Michigan because I always compare the two – I say that California is the new Michigan. You have a place that used to be one of the world’s great, great cities, Detroit. And then it became, as I see it, just encumbered with liberal politicians, unions, public employees and the weight of all that that just the employers started leaving, the productive people started leaving, the people that wanted freebies stuck around and the bureaucracies grew and the crime rates soared and it’s just an epic disaster.

Victor Hanson: Yeah, I think that it’s true. And I think that what’s sad about it is this discussion you can’t have in California because the public rhetoric makes the necessary adjustments. So if I go to my local town of Selma and I pick up the newspaper, let’s say on August 20th I see the headline is that three public employees have been arrested for stealing the city’s manhole covers and sending them in for scrap, and I look at the next article and all of the bronze plaque, some of them from the 19th century for Bhedaghatori buildings in town have all been yanked out by gangs who are melting down bronze plaques. Then I see two policemen have been arrested for felony charges. And that’s not atypical now. And that’s happened is that when you combine 7 million illegal aliens and you have a lot of people who don’t know English and are not legal and don’t have a high school diploma and you’re trying to bring them up to social parody in a generation that requires a lot of capital, and then the rhetoric has to adopt to it. So if you object to it and you say that this won’t work then you’re a racist or you’re a nativist or you’re a xenophobe.

And so the same thing with public employees, if you’re upset that the California State University system is unionized and all 30,000 professors make more than their counterparts elsewhere and they’re not subject to dismissal for poor teachers very often, then you’re anti-education or you’re anti-University.

Jason Hartman: Or worse yet, if you say anything against the NEA, the National Education Association which Steve Forbes fittingly called the National Extortion Association, what about the children? You’re not compassionate. It’s like we can’t even have a discussion in this country anymore. When you can tell that the people that have just baseless arguments are the ones who always go to those ridiculous comparisons –they can’t stay on the issue, they can’t stay on point.

Victor Hanson: The only thing that’s real now in California, we did have a $25 billion dollar deficit as you know, so when the money runs out – and it cannot print money like the federal government and people can leave on like US citizens that don’t really leave the country, then them or they, the bad guys who pay for things, leave. And then the people who are left would go through a process of Detroitisation. And now that’s where we are. So people are starting to cope with it and the center of the state, we have furloughs where I know a lot of people who tell me that they make a particular salary but they really don’t because they don’t go to work every day, they take one or two days a month where they stay home and are not paid, because the unions are so strong and can’t readjust the salaries or the wages. And so people are kind of coping and it’s getting back.

One of the things I try to look at from a historian’s point of view – I live in the same house as my great great-grandmother, and I can remember all of the so-called marches of civilization. There were people that passed roles that said we had to have dog licenses and rabies shots and they’d come out and respect your dogs. And then there was a mosquito abatement district we paid taxes to that would drive in and make sure there was not mosquitos carrying malaria or West Nile virus today I suppose. All that is starting to go backwards, so when I ride a bicycle 20 miles outside my home, I see rural lots with 6 or 7 Winnebagos. I’ll see 3 or 4 pit bulls with no collars on them. I’ll see cantinas just up and down the street where people are selling food but they don’t have any permits and they’ve just made permanent restaurants, park their cantina, put chairs, got a Porta Potty and they’re not inspected. And so when you have hyper-inspection, you discourage business, then you have hyper lawlessness. So one of the ironies of California, it’s the most free and un-free place at the same time.

Jason Hartman: That’s a very interesting point because I have found in business, I owned a real estate company a few years back that I sold and it was interesting because the regulators will make a law and then they won’t enforce it or at least not enforce it very much and everybody starts disobeying the law. And the problem is all your competitors are here disobeying the law which makes them more profitable than you if you’re following the law – and you live in fear that, gosh, if you’re gonna break that law, are you gonna get in trouble, right? And so this is exactly what’s happening. The people who have nothing to lose are opening up these unregulated restaurants that you talk about that are violating every health code in the book I’m sure and not having a business license and they have nothing to lose. But a real business person, if they want to go in business, they’re burdens by just mountains of regulations – especially in the socialist republic of California.

Victor Hanson: Yeah, I call it ignoring the felony and going after the misdemeanor because I was riding a bike this summer and I saw an individual come up, look both ways, open up the back of his van, take out a dishwasher and some used ruined appliances and throw them on the side of the road where a lot of trash was and drive off. And then when I continued to ride up to a corner, I saw a highway patrolman and he was lasering people for cell phone violations, looking for cell phones. So he had his window down – I just talked to him for a second. And I said if you’ll just get out of your car or you’ll just turn your car around, a mile away we have real health hazards because people are throwing wet garbage, all sorts of appliances all over the road. And that seems to me a much greater danger to the public community even though I don’t like people to use cell phones. And he said something very interesting – he just said that doesn’t pay.

Jason Hartman: Exactly, it’s not profitable. Follow the money. They make money by writing tickets.

Victor Hanson: I guess he thinks the people have a cell phone will obey the law when they’re stopped and then they will pay the fine where if he arrests somebody throwing out garbage, either they don’t have the money or they’ll have to be deported or they’ll have to do something. And it’s very funny because the people who are the architects of this system don’t even like it. Jerry Brown was really the architect in the 70s of what became California in his vision and now he’s unhappy with what he created. Mayor Villaraigosa in Los Angeles is unhappy with the security of the mayor’s house, so he built a fence which was kind of illegal, around his mayor’s residence. And I could see that a lot that some very liberal people who’s ideas was reified now, they’re either leaving or their fleeing to the Palo Alto hills and they’re trying to find in their own personal lives mechanisms not to deal with public agencies that they used to – the logical expressions of their own ideas.

Jason Hartman: Yeah, but of course it’s typical liberty hypocrisy, the liberal syndrome where they don’t live the lives they created but Jerry Brown doesn’t seem that unhappy with what he did in the 70s. I mean he’s furthering his agenda from back then. He just allowed illegals to get free education I think in colleges in California. I mean that’s unbelievable. Where if you’re an Arizona resident and you come to California, you’ve got to pay out of state tuition. This is just so bass ackwards it’s crazy. I mean no logical human being could ever agree that this is fair and it’s reasonable and it’s okay in any way.

Victor Hanson: But he is governor and he does have to balance the budget. So when he does that, where is the money gonna come from? He knows that if he raises the taxes any higher, he’s gonna get 5000 people going a week. So he’s gotta cut something. What’s he gonna cut? He’s gonna cut the EPA. He doesn’t know.

Jason Hartman: I don’t think he’s gonna cut anything. I think since they can’t print their own money in California, they sell these lousy bonds that you hear advertised all the time which I think is almost fraud. When Arnold Schwarzenegger was on the radio advertising California bonds, I mean that’s like inducing someone into something that you know is a bad deal – I mean it’s an insult to the state.

Victor Hanson: I guess I’m saying there are limits because they can’t print money and so they’re looking around for revenue. And California Highway Patrol ticketed 1 million tickets in addition in 2010 than it did in 2009. So all the agencies are sort of in Latin American style trying to find their own revenue streams. They say they’re not because they go into the general fund but they really are and they’re increasing fees on everything and the principal is that if you’re upper middle class, you’re gonna pay more for this redistribution for people less fortunate. And the sad thing is that even liberals know what needs to be done. You’d have to close the borders, you would have to go back into the school system and start stressing a fact-based literacy English/Mathematics curriculum rather than the therapeutic social themes that are in the curriculum. And then you’d have to stress construction rather than regulation. And I don’t think there’s too many people invested in the present system that they’re afraid of – mostly public employee unions. What runs California right now I think are the public unions, the environmentalist, and the open borders La Raza elite. And between those three groups, you can’t get much done in California.

Jason Hartman: I always say that because you don’t want to live in a state, meaning a state or a government, a state in that way, that is financially insolvent because they always end up going into business against their own citizens. And that’s what the ticket business is. I mean no one’s gonna say they like drunk drivers of course. That’s terrible. But even when they lowered the DUI limit from, what was it, .1 to .08, I don’t know exactly the right numbers for that, but when they lowered that, that was a whole new slice of revenue – these red light cameras, the speeding cameras. The government is going into business against the citizens to try to raise money. And it seems like the only way out for California is bankruptcy so they can renegotiate the contracts, which I don’t know if they will because the political will’s probably not there even if that happened or a federal bailout. I mean what else is the state gonna do?

Victor Hanson: Well, they don’t like to talk about it, but if you talk to state employees, and I have a lot of friends who are state employees, and my son is a teacher in the Fresno Central Unified school district, it’s off the radar, but each year they’re either not getting a raise or their pay is decreasing by 2 or 3 percent or they’re paying more for their health care, so Californians don’t like to talk about it because that would represent physical discipline, but there really isn’t any money there. And in all of these little towns, I read the local papers and they’re laying off public employees, they’re cutting back, they’re very angry, they’re trying to blame people – that was part of the motif of the Whitman campaign that you had a private jet, Carly Fiorina had a private jet, that’s not right. But privately, there’s no money. So we’re starting to slowly and incrementally go back to a smaller sized government. I think if you look at the budget of the state of California, where it was in 2008 to where it is now, I think it’s down to about 2006 as far as the size of government, and it’s going down because there’s no money. And part of the irony is that the highest paid employees are so highly paid, the full professor in this CSU system, that you can’t hire anymore. And so as the government shrinks, in some cases we don’t have enough public workers for 1000 people because they’re just too protected and too wealthy. I know that’s true in education. I know that’s true in construction.

When a professor at California State University, any of the 22 campuses, retires, nobody can afford that $120,000 salary and $80,000 benefit, so they take the position and they divide it up in fours and they hire people by the hour part time. And that’s what they’re doing all over California. So guess all we’re seeing is sort of aristocracy that’s retiring, public aristocracy that won’t be replicated.

Jason Hartman: Right. So it’ll just have to sort of die off through..

Victor Hanson: Yeah, that’s what’s exactly happening – it’s dying off very slowly.

Jason Hartman: Yeah, but that could take a long time and California could end up being a much more devastated place that it is today. I mean I don’t know that there’s really any hope for California in the next, what, 10-15 years?

Victor Hanson: I think because it has such national wealth, it’s the wealthiest agricultural sector in the United States, this year it’s gonna export $16 billion even despite the water cutoffs. And it’s got natural beauty – it’s the biggest tourist earner of any of the 50 states. They have things like Napa Valley, Silicon Valley. So it has strengths, it’s got a lot of natural gas, especially with new fracking in the San Joaquin Valley.

Jason Hartman: I know, but nobody will let anybody get to that. They’ll do it, they’ll cave in. I mean are we gonna see an oil platform in front of Barbara Streisand’s house in Malibu?

Victor Hanson: They’re gonna get to that point where they’re gonna be forced. And I think they’re gonna have to close the border. I think everybody understands that there’s just too many people, the old idea that people are only coming to California to work and they’re not coming up here to have children or they’re not pregnant when they come or they’re not gonna burden the health care. Too many people have been to the DMV or to the emergency rooms of community hospitals to see that they just don’t have the resources any more to extend such generous benefits to 6-7 million people from the third world. They can’t do it.

Jason Hartman: Good point. First of all, do you have a website?

Victor Hanson: Yes, I do, VictorHanson.com.

Jason Hartman: VictorHanson.com and you have several books, right?

Victor Hanson: Yes. I have a novel that came out this week called The End of Sparta.

Jason Hartman: That’s interesting. Can I ask about that for just a moment? I remember in college studying Athens in Sparta and how my professor would compare the two and I found that to be such an interesting thing. I know nothing about the novel, but did Sparta end because it was such a closed system versus Athens that was open?

Victor Hanson: Well, it won the Peloponnesian War, but it did eventually lose. And the novel is the invasion of Sparta by thieves and the freedom of all the serfs and helots. And it’s about a great march that took place…It’s an obscure event in history but was very famous but very little was known about a great march of farmers who marched all the way into the heart of Sparta and destroyed the state, freed all of their slaves and defeated it. So it’s kind of an odyssey type of novel. Who was on their march, why did they do it, what price did they pay for doing it?

Jason Hartman: Very interesting. Well, everybody should get that book and Victor David Hansen, thank you so much for joining us today – I really appreciate the insights.

Victor Hanson: Thank you.

Narrator: Now is your opportunity to get the Financial Freedom Report. The Financial Freedom Report provides financial self-defense in uncertain times. And it’s your source for innovative forward-thinking investment property strategies and advice. Get your newsletter subscription today. You get a digital download and even more. The price, only $197. Go to JasonHartman.com to get yours today.

Thank you for joining us today for the Holistic Survival Show, protecting the people, places and profits you care about in uncertain times. Be sure to listen to our Creating Wealth Show which focuses on exploiting the financial and wealth creation opportunities in today’s economy. Learn more at www.JasonHartman.com or search “Jason Hartman” on iTunes. This show is produced by The Hartman Media Company, offering very general guidelines and information. Opinions of guests are their own and none of the content should be considered individual advice. If you require personalized advice, please consult an appropriate professional, information deemed reliable but not guaranteed. (Image: Flickr | futureatlas.com)

Transcribed by Ralph


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