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NOTE Scott Horton Interviews Robert P. Murphy

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Alright y'all welcome back to the show. It's Anti-War Radio. Our next guest on the show is my pal Bob Murphy.

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He's at the Mises Institute. He wrote the Politically Incorrect Guide to Capitalism

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and the Politically Incorrect Guide to the Great Depression and the New Deal.

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The Mises Institute, Mises.org, named for Ludwig von Mises, that is the guy that wrote

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Human Action and consulting by RPM.com Now, I don't know, somebody said that the recession

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thing is over and that, hey, look, Bob was wrong, there was no hyperinflation or anything

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close to it and that the stock market was going up.

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That's what the top of the hour news said.

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We avoided the double dip and now the economy is growing again.

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We haven't recovered yet, but we're recovering, pronounced the chief executive or the commander-in-chief

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maybe is more like it.

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And so what do you have to say for yourself, Mr. Murphy?

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Well, as far as the economy being in recovery, I mean, no, I still think the economy right

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Now is held together by Bubblegum and Bernanke's Charm. So I do think that even outsiders are

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going to realize, oh yeah, we're back in the midst of a plunging recession again. What

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is going to happen next month, five months from now, I'm not sure, but I certainly think

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when the tax increase is going to affect, you're going to see that issue. But in terms

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of the inflation too, it's true, probably if you looked at what I was saying on your

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Show 18 months ago, I was more worried about milk and bread prices being higher today than

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they are. That's certainly true, but this idea that we're on the edge of a deflationary

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cliff is just crazy. The last producer price index that just came out, so these are the

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government's own numbers, were saying things like intermediate goods are up 5.4% year over

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year and crude goods are up 20.3%. So last September to the previous September, that

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One Year Period, the price of what they call crude goods rose over 20%, right? So that's

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not deflation. So it's true that the statistics that Bernanke and all those guys point to

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when they try to say we're in danger of deflation, it's consumer prices with food and energy

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taken out. So with 10% unemployment officially, and then of course the real numbers higher,

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is it any wonder that people aren't spending gobs of money on things besides food and energy?

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I mean, why is that shocking?

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Yeah, well, you know, I'm at least three quarters crank here or something, but it sort of seems

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to me like a sick, evil plot because you're telling me that they're raising taxes, which

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means they're destroying our money and creating deflation for our, you know, real income basically.

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And at the same time, they're talking about doing all this quantitative easing, creating

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The government's own numbers, you look at their graph, loans to small businesses are way down from the moment TARP went into place, literally to the month.

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They said, of course, we only want to save Main Street, you, but we can't save Main Street

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unless we save Wall Street because you need Wall Street.

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Exactly.

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So, I mean, everything, the official narrative is literally 100% backwards.

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The big banks, of course, are making huge profits since this all went through at the

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same time.

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The only group that they're lending to is the government.

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If you look, and I, again, document all this stuff if people want to see it with their

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own eyes.

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Why do they want to raise taxes, though?

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If they believe that consumer spending is what the economy is based on, or whatever nonsense,

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aggregate demand and all that, don't they want us to stimulate?

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Well, I can give you the official answer, then I can give you maybe with the real answer.

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So officially, if you had Paul Krugman on your show or something, a Keynesian economist,

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they would say, look, the raising taxes especially on the so-called rich, a rich person right

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Right now, it's not like he's out spending money employing people at restaurants. If

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we raise his taxes by a point or two that he's going to stop, they're going to say what's

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important is for the government to spend money, or they're going to say give more income assistance

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to middle income or lower income groups because they're going to turn around and spend it,

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whereas the rich, if you give them a tax cut, they're just going to save it so that leaks

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out of the economy. That's the official changing story. Now, if you're asking me, what do I

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So I think, not to be conspiratorial or anything here, but I mean, just think of it from their

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point of view, if you have the Fed in your pocket and you can literally create money

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and you've already created billions, hundreds of billions of dollars and handed it out and

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bailed out your buddies, I mean, how do you stay on top?

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You can raise taxes or the estate tax that's getting reinstated next year, they've lowered

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the threshold there.

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So now any estate over a million dollars gets hit with a 55% estate tax.

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So in terms of once your family or your buddies get on top, how do you stay on top?

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You just kneecap everybody else, so why wouldn't they want to do that?

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Yeah, I don't know.

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Everybody always thinks when Bill Gates says, yeah, taxes ought to go up.

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Everybody thinks, wow, what a great guy.

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He wants to pay more taxes because he cares so much about the society and whatever.

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And no one ever thinks, huh, maybe it's in his interests.

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Since he has $60 billion, he doesn't pay a dime in taxes.

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It's like Wal-Mart coming out to increase the minimum wage, and they get to be on the front page of the paper and everything.

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Look, Wal-Mart says that the minimum wage ought to be raised. How selfless of them on behalf of the poor.

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Meanwhile, they pay their people just barely more than minimum wage, still enough that they got to be on welfare and have the rest of us pick up their expenses for them anyway.

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but then the people who do pay minimum wage are the mom and pop shops that hire kids for

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summer jobs and things like that, Walmart's competition and those are the people who have

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to pay the price.

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Right, I'm glad, I mean I know Scott that you're well read in these areas but just to

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give another example for your listeners in case, you know, they've never heard this viewpoint

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before, what people need to realize is it's not the simplistic thing where, oh, the government

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is anti-business and so therefore all businesses oppose all regulation, that's not true.

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Your corporations a lot of times are actually lobbying for restrictive regulations that on

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paper you would think, well, this hampers the big corporation. Why are they for it?

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And it's because it hurts their competitors even more. If you're a huge multinational

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corporation and you get some new regulatory thing like you got to comply and put in ramps

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for people in wheelchairs, stuff like that, you can handle that much more easily if you're

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a multimillion dollar company than if you're just some $800,000 a year company that's competing

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Yes, what makes us libertarians is that we recognize that regulatory capture, as liberals

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call it when they admit that such a thing exists, is the reason that Alexander Hamilton

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created this state in the first place.

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He was the corporation that wanted to do some capturing and so he created the Congress and

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the presidency.

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Yeah, I mean, it's, how can I put it? Things like, the Federal Reserve is the best example

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in terms of, if you wanted to look at an industry and just look at banking as an industry and

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how those governors and so forth are picked, I mean, it would be as if the factories all

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got to appoint the people that were going to then be in the regulatory agencies watching

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over them.

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Right, yeah. And you can look at the list of everyone who's ever been on the Federal

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Let's just take the Bernie Madoff scandal. It's not a surprise that the SEC was just

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completely ignoring the people who knew that he was running a Ponzi scheme and sending

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those letters to the SEC saying, hey, you guys need to look into this, because Madoff

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was buddy-buddy with the people in the SEC. How could it be otherwise? If you just think

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about it, if the government's going to establish some regulatory body that's going to regulate

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The economic system that Adam Smith was refuting when he wrote The Wealth of Nations.

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He said, you don't need to have every corporation sponsored by the crown and have all this where

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the profits are privatized and all the risks are socialized onto everyone through state

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power.

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What you need is a system where people can rise or fall based on whether they're actually

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turning a profit or not.

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So here we are, we live in this, you know, I don't know what to call it other than fascism,

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really, it's where everything is a public-private partnership, where government is involved

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in everything and where big business loves it that way, and it's permanent war, I mean,

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go ahead and call it what it is, mercantilism, killing people, that's fascism.

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Yeah, and it's, and again, I understand, I know a lot of your listeners don't trust

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of Big Businesses.

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And I understand that, but the libertarian point on this issue is, look, precisely because

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you can't trust them and they are ruthless and they will do whatever they need to to

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make money, that's exactly why you don't want to have the government create this regulatory

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body that has power to shut down some companies and to prop up other ones, because that body

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itself is going to get corrupted by the big businesses, because they're going to give

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them bribes and they're going to do all sorts of stuff behind the scenes.

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So, it's precisely because you can't trust the big businesses that you don't want the

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government getting this much power to be able to pick winners and losers.

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Well, and we see how it's been, you know, they try to pretend that, it was really funny

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actually like in 2008, I guess we probably talked about this at the time, that when this

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crisis broke out they said, yeah, basically George Bush is Ron Paul and we just lived

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through an eight-year era of complete laissez-faire, free market economics and the belief that

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that corporations can regulate themselves and whatever kind of madness, freedom took

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the rap for this whole thing even though we all know that's the exact same thing that

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they told us was that Herbert Hoover was Ron Paul and sat around and did nothing and believed

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in libertarian free market economics and whatever and that's why that was a failure and that's

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why we threw out the constitution and Franklin Roosevelt and then established the precedent

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that the government can do anything that it wants to any person or any business basically

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at any time, I mean ask Jose Padilla what their limits are and that was a long time

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ago when our grandparents were little kids and so it couldn't possibly be that we had

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a free market just now and yet still they just put the exact same myth from the 1930s,

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the one that you debunk completely in the politically incorrect guide to the Great Depression

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and the New Deal, and they just placed it on top of the George Bush, Barack Obama era

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and people bought it.

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So even now, everybody's turning to stimulus and Keynesianism and Rooseveltism to try to

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get us out of this.

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More government, more regulation, more inflation.

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Yeah, I mean, everything you're saying is right and that's actually why if we're going

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to have a president who's going to be an interventionist, I would rather the person stand for big government

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rather than, you know, so for example, I wanted McCain to lose. And even though I know a lot

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of people that were economic conservatives were asking me, oh, but come on, this Barack

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Obama guy is going to be more of a socialist than McCain. But I said, yeah, but McCain

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is going to run on the free market. And so when he gets in there and does the exact same

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policies except, you know, give or take 10% either way on any issue, I mean, McCain would

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have done all the same thing qualitatively as Obama has done on every issue. But at least

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With Obama in there, people will know this was supposed to be liberalism for you in the

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American sense, right?

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Whereas under McCain, they would have said, oh, yep, this is the free market solution.

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Look what happened.

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So you're exactly right.

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And I would just say for your listeners who are skeptical and think, oh, come on, George

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Bush deregulated and all that stuff, well, just think of how annoyed you get when some

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interventionist who thinks we should intervene in the Middle East is going to say about Barack

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Obama's presidency, hey, we tried to be compassionate.

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Obama went around apologizing to everyone and look what it got us, and that's why we

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need to get tough with these people.

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When you know full well Obama is not pulling out of the Middle East, it's just his rhetoric

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while he's upping the ante.

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So it's the same thing with Bush, he talked a good game about how he was a free market

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kind of guy and he nationalized banks, so he's not a free market guy, he took over the banks.

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Yeah, you know I had an argument with a left anarchist a long time ago where I said, come

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on man, face it, socialism with the police force is communism.

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And he said, fine, capitalism with the police force is fascism.

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And I says, you got me, and this is the America I live in.

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Yeah, it really is.

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I mean, the one thing, if you can call it, that's a consolation in all this is I can

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kind of understand it when you read the history books and you see the crazy stuff that other

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people did in countries back in the day and you're like, man, how do those people just

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sit there and let their government turn into this monstrous thing?

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Well, we're seeing it right now.

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I mean, 10 years ago, if somebody said, hey, do American troops torture people?

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the American would have said, categorically not, we don't do that.

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But now if you ask them, you say, what do you mean by torture?

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We do harsh interrogation because that's just, they think by definition, my government doesn't

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do bad stuff.

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And so no matter what it does, they just adjust their belief system to make it so that my

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government is still the best one in the world.

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Right.

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And you know, on this show, we're always talking about the wars and the torture and the theories

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of executive power, the lines being crossed in terms of who the president can kill and

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How and When. But on the economic front, what you guys are paying attention to and cataloging

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and really writing the history in real time of over there at Mises.org every day is how

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all these same lines are being crossed. It really is sort of revolutionary New Dealish

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times in terms of the power of the government over the economy, which just of course still

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means the power of the banks over the government over the economy.

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Well, yeah, that's exactly right. I'm glad you've drawn that analogy because I know there

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are a lot of, I guess they would call themselves leftists or whatever term you want to use

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that think, you know, look, civil liberties and war and those are really important things.

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Who cares about marginal tax rates or who cares about when the bailout of the big auto

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companies if the shareholders' rights were respected. But the point is, it's the government

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arbitrary power intervening with standard, what was supposed to be areas of rights of

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of People that they had. And so, yeah, of course, it's more of a crime if the government

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goes and kills in this in person than if it just takes somebody's money, but it's still

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a crime. And like you say, Scott, the stuff they're doing economically now, especially

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what the Federal Reserve is doing, I mean, Bernanke was literally bailing out, just creating

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billions of dollars out of thin air, handing it to bankers. Congress called Bernanke before

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them and said, we're not telling you to stop. We just want you to tell us in private, who

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You can all go to hell, I think was the exact quote, because what they founded the movement

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to be was he wanted prosecutions of the people who stole all this money, this giant mortgage

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fraud bubble and these bailouts and these bankers and these current and former Treasury

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secretaries and their assistants and whatever.

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They wanted accountability and instead they get Sarah Palin and he says, that's it.

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Forget you guys, I'm taking my ball and going home.

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You know, big deficits when you're applauding the guys who gave us huge ones.

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Because they get their news from TV, that's why.

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Alright, everybody go check out Mises.org and consultingbyrpm.com.

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That's my man, Bob Murphy, the politically incorrect guide to capitalism.

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And, yeah.