Judging Freedom - How We Will Win - Jeff Deist, Mises Institute

Episode Date: November 18, 2022

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Hi, everyone. Judge Andrew Napolitano here for Judging Freedom. Excuse my froggy voice today. Today is Friday, November 18th, 2022. It's a little after one o'clock in the afternoon here on the East Coast in the United States. My guest today is no stranger to the Judging Freedom audience, Jeff Deist, longtime personal friend of mine, but even more importantly, the president of the Mises Institute in Auburn, Alabama, probably the finest academic think tank for libertarian Austrian economics, freedom, peace, and anti-war views from an academic point of view anywhere in the United States full disclosure I am on the board of the Mises

Institute I'm there because I love it and I agree with its incredible mission Jeff it's a pleasure welcome here my friend yeah this is our second meeting this week. Right, right. People will think I'm crazy. I flew to Atlanta and then drove two hours and met you and our friend Lou Rockwell and then drove two hours back and then flew from Atlanta to Newark. It was a long day, but it was well worth it. So it's a pleasure to see you, my dear friend. What is your opinion of the newly emerging Republican majority in the House of Representatives? Should libertarians be rejoicing that there's a backstop on what Joe Biden wants to do in one of the two houses of the Congress, or are they just going to cut some deals, get more money for defense,

and then let Joe do whatever else he wants? Well, I can't say I'm optimistic. I know we're talking about the House primarily, but over on the Senate side, Mitch McConnell said, hey, let's talk about what's between the 40-yard lines that we can agree on. So that's the last thing I want to hear coming out of Washington is more the same. But, you know, when I look at the Republican Party and I do not consider myself a member of that party, nor a voter for that party, but nonetheless, as an outsider, take that for what it's worth. I mean, we know what the Democrats are. They are the party of government, of socialism, of wealth redistributionism, of woke, of an insane energy perspective, of an insane perspective on education. They are the party of taxes and socialism and basically denial of reality. Let me just stop you right here. And they're open and honest about

it. They don't hide it. They're crazy lefties, but they acknowledge this is what we're going to do. And when they get in power, they do it. Go ahead. Correct. So the Democrats are serious. The Republicans are not. Now the Republicans could craft a message, which was something other than simply reactionary to all the things I just mentioned. In other words, they could craft a positive message. They might not mean it, but politics is not always about telling the truth. But nonetheless, they could at least craft a message of capitalism, of opportunity, of ownership, of limited government, of the idea that average people ought to be able to improve their lot in life through education, through capital accumulation, through investment and savings,

and actually owning property, actually owning a piece of the stock market. They could craft an opportunity message, but they don't. They tend to craft a message that is entirely reactionary and responding to what the left is doing. So as we saw in the midterm, it's not enough to just say, we're not them. They need something more. You know, you used a phrase, Jeff, which we both love, but which with the exception of Thomas Massey in the House and Rand Paul in the Senate and your former boss and our dear friend, Ron Paul, you never hear today in, you're certainly not going to hear it from the Democrats. You don't even hear it from the government. And that is limited government.

I mean, the government grows. This is not even to be disputed. The government grows in leaps and bounds no matter which party is in power. I can't imagine Kevin McCarthy announcing on January 3rd, we're the party of limited government and we're going to dial back the government. I mean, if he did that, I don't think he'd be the Speaker of the House. Those House members that are about to elect him the Speaker want to be able to bring home bacon, and you don't bring home bacon when you have limited government. Well, I think it really comes back to us, to the American public. In other words, in our view, there are whole spheres of human life which ought to be outside the bounds of politics.

Yes. That ought to be dealt with socially, economically, amongst families, civilizational matters. Politics ought to be a small part of our lives. And I like the great Jim Grant, who was at our recent 40th anniversary thing. He said, you know, what if every time you woke up in the morning and you were talking about last night's ball game, all you talked about was the umpires, right? I mean, that's, in other words, what was supposed to be a night watchman or a referee in society, meaning the federal government, we can get into federal versus state, but the federal government was supposed to be a tiny part of American life. It has become

an active player in the game, a player that determines outcomes, that picks winners and losers. And the result of that, because of the federal government's growth throughout the 20th century, both on the executive side, the unitary executive, and mind you, conservatives were bad on this too, but also in the entitlement state, you know, the New Deal, the Great Society programs. As a result of all that, the U.S. federal government has become such a leviathan that politics, federal national politics, becomes this insanely important zero-sum death match. In other words, we have to care about who's a senator in some other state that we don't live in precisely because we have granted to them authority wildly beyond their constitutional boundaries. So this is where we are. The

federal government is the only game in town at this point. As aggravated as libertarians were over the lockdowns for COVID, you saw a little bit of brightness in that on the part of governors like Ron DeSantis, who resisted lockdowns, who basically told the feds to go take a hike and stay out of Florida. I mean, is that a trend? Is federalism going to come back? I mean, in your lifetime and mine, go back to the dreaded Woodrow Wilson, the power has always flowed to the feds. Will we see, can we see, how can we create a reverse so that power flows to states and localities or to the original source of power, which is the sovereign individual? Well, the whole history of the 20th century in politics is one of political centralization across the West. Authority that used to reside locally went to states, went to the national government, and increasingly went to supranational bodies.

So the most interesting political question for me in the 21st century is no longer capitalism versus socialism, which was the fundamental question of the 20th century and which was decided basically in favor of socialism, although in the West it's been moderated into social democracy. So the question for me in the 21st century is who decides and where? That's the far more interesting question. I don't think we can save ourselves from progressives simply by trying to persuade them any longer.

I think people are pretty dug in at this point. So it really is a question of whether aggressive federalism or even some degree of outright secession could ever take place in the United States? It's an interesting question. I don't think progressives have any reason to allow it because from their perspective, they're winning. Why would they yield an inch? But nonetheless, they have been dealt a few body blows in recent years. Trump was a body blow to the progressive sense of inevitability. Brexit was a body blow to the progressive sense of inevitability. Brexit was a body blow to the European sense of progressive or globalist inevitability. So when they start to realize that

these deplorables are living longer than they imagined, there's more of them than they thought, maybe that is the impetus for getting states to start looking at each other and say, hey, look, there's a better way to do this. If nothing else on the so-called social issues, we could immediately have a much greater degree of social cohesion in this country if we simply stopped looking to the Supreme Court to decide things like guns and abortion. So our defense budget is now about $780 billion a year. That is more than the next 12 nations combined, which of course includes Russia and China. The American foreign policy has been based upon the hubris of we know what's better for other countries and we're going to

expand American empire because we're good and we're going to spread democracy. This has been an abysmal failure. It has cost trillions. It has lost millions of lives. How do we stop that? Republicans are even more for that than Democrats. I'm thinking of George W. as an example. Yeah, it really is something how we spend so much more than the rest of the world. I would argue that that 700 something billion figure is actually closer to a trillion when we factor in a lot of stuff in the U.S. federal budget that runs under the State Department or aid that flows through supplemental bills, which are not directly going to DOD itself.

The intelligence community, CIA has its own army. Right. NSA, et cetera. But here's the thing. Pretty soon, the biggest line item in the federal budget for Congress every year is going to be interest on the national debt. Interest rates on treasury debt, just in the historically average range of,

let's say, 5% to 7%, are going to, let's say, the next three to five years, are going to make interest payments alone higher than Social Security, Medicare, or Defense, which have always been the big three. So regardless of where you stand on that, ideologically, regardless of where you stand on that, you whether you're a neoconservative, whether you are the biggest bleeding heart anti-war pacifist on earth, regardless, we can't afford it. There's no way around it unless the federal government goes out of business and defaults like the Soviet Union did.

And maybe that's not such a bad idea. Where are we going to come up with $31 trillion, which is what we owe today? It'll be $32 trillion a year from now, Jeff. And you're right, with the interest rates going up, more than one-third of what the feds collect in revenue from income taxes and other sources. More than one third will be going to interest payments. Well, and beyond that, the U.S. government doesn't account for its books, its liabilities in the same way that public companies are required to undergap accounting. The federal government has made promises to an awful lot of people that they're going to receive Social Security and Medicare checks in the future.

Those promises are in no way represented in that $30 trillion number. So the real number, the real gap between what we're likely to bring in under reasonably rosy scenarios of future tax revenues versus what we're likely to spend on Social Security and Medicare recipients, that gap over the next, let's say, 30 to 50 years is more like $200 trillion. So 30 is the nice number, folks. So when you talk about defaulting, the U.S. government is already in a slow default. In other words, you might be paid nominally, but in real terms, this debt is unpayable. The whole world knows it. It's just a matter of when that will be reflected in the treasury market.

And at some point I would argue, this is an opinion, that to get anybody who invest in Uncle Sam, this dysfunctional fiscal house is gonna require junk bond rates, not 3%. Right, right. So we have a lot of, Judging Freedom has a lot of tech-savvy viewers. So let's go to their field for a few minutes. I'm not, you are, a lot of people watching us are. Is the digitization of society centralizing or decentralizing? Wow, it's both because all of this new technology available to us is also available

to governments. A central bank digital currency is a very, very frightening idea with respect to privacy because as Neil Kashkari at the Fed openly points out, he says, look, what this would allow is for the government to track all of your transactions, literally everything you buy. Second, to tax any of them, either in terms of taxing the net worth in your account or to tax the transaction itself. And finally, to impose negative interest rates on your account if we're trying to force people to go out there and spend money. So there's nothing good about a central bank digital currency. negative interest rates on your account if we're trying to force people to go out there and spend money.

So there's nothing good about a central bank digital currency. And let's hope that these insane people who are running this FTX gambit don't end up causing a bunch of pretty elderly congressmen and senators on the House Financial Services Committee and the Senate Banking Committee to come up with an entirely new regulatory framework, which is going to squeeze us. So if you look at a dollar bill, it famously says on it, this is legal tender for all debts, public and private. In the New York City area, if you go across a bridge, the George Washington Bridge from New Jersey to New York, if you go under the Hudson River, the Lincoln Tunnel or the Holland Tunnel, if you go to park at any of the three major

airports, JFK, LaGuardia, and Newark Liberty, you can't use cash. You can't use cash. And you can't use your credit card. they will take a picture of your license plate and send you a bill. So the dollar is not a currency for all debts, public and private, when the government itself won't accept it. You can't make this up, Jim. If Times Square still had hookers and drug dealers, I guess you could go spend your cash there. But I think they're gone, too. Yes. Yes, they are. By the way, while we're talking about Times Square, I know we didn't plan on talking about guns.

Times Square is seven square blocks, as you know. You and I have been there in the middle of Manhattan. When Governor Hochul's people enacted the so-called right to carry law, they said you can't carry in Times Square because it's too crowded and too jammed and somebody could take your gun from you, wouldn't know it. Except they expanded it from seven square blocks to 35 square blocks, to areas that no New Yorker in his or her right mind would consider to be Times Square. But you see where my finger is? That's the northeast tip of this 35 block region. What's right there? The Fox building.

The Fox building. If you're an employee of Fox and you have the right to carry, you can't carry that gun to work. I think this will be invalidated. But I couldn't resist mentioning that when we're talking about Times Square. When you wrote back in January, how we will win, and again, you have spoken about this and you and I have talked about it. What did you mean? Who's we and what is winning? I think winning is almost by

default. I think truth and beauty are inextricably linked. I don't think you can have one without the other. And I think the idea that human beings want to be free at the end of the day is pretty ineradicable. We find that even in the worst conditions of concentration camps or prisons where you could say government has reached its full and final position. You find even people being shot or executed still clinging to freedom right up to the end. So I don't think it's something that's so easily snuffed out like a candle. So given that, the only question for me is to look back at history, at periods of human history, and say that we don't have the right to be down in the dumps. We don't have the right to be crybabies about this

because a lot of our ancestors and previous generations had it much tougher than we did in material terms. So if we think something is unjust, well, while we're fighting that injustice, we're not literally starving. We're not literally being beaten or imprisoned or shot at for the moment. Let's move forward. To me, winning would be starving the government.

I think winning is when Atlas shrugs and when government simply ceases to be able to operate under the terms it set for itself. And I think that's what happened in the Soviet Union without a violent revolution. In other words, government just simply can't do the things it purports to do, you know, pay vast entitlements, remake Afghanistan into some sort of Jeffersonian democracy, all these big things. But at the, you know, at the end of the day, they can't even fix a pothole or keep a bodega safe. I think that's what Atlas shrugs. And so maybe we don't win ideologically so much as we win mechanically. Jeff Deist from the Mises Institute. It's always a pleasure. Well, you'll see my smiling face at your office door one of these days. Next time,

I'm not going to give you a heads up. All right. All the best. Thank you, my friend. Thank you, Judge. Judge Napolitano for judging freedom.