Scott Horton Show - Just the Interviews - 3/24/23 Ryan McMaken on Nuclear Weapons and How the Fed Fuels Inequality

Episode Date: March 29, 2023

Scott is joined by Ryan McMaken of the Mises Institute to talk about nuclear weapons and the boom-bust cycle. They begin with a discussion of McMaken's recent article pushing back against common arguments for the production of more nuclear weapons. McMaken argues that, even if you accept the premise that we need nuclear weapons for deterrence, it does not follow that we need thousands of them. They then move on to the economy. They first dig into what’s actually behind today’s inflation and looming recession. That leads to a broader discussion about why some of the most important goods and services, like housing and healthcare, are growing more expensive. Discussed on the show: “No, We Don't Need More Nuclear Weapons” (Mises Wire) “The Fed Backtracks on Future Rate Hikes as Bank Failures Loom Large” (Mises Wire) Mises.org Ryan McMaken is a senior editor at the Mises Institute. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Breaking Away: The Case of Secession, Radical Decentralization, and Smaller Polities and Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre. This episode of the Scott Horton Show is sponsored by: Tom Woods’ Liberty Classroom; ExpandDesigns.com/Scott. Get Scott’s interviews before anyone else! Subscribe to the Substack. Shop Libertarian Institute merch or donate to the show through Patreon, PayPal or Bitcoin: 1DZBZNJrxUhQhEzgDh7k8JXHXRjY Learn more about your ad choices. Visit megaphone.fm/adchoices

All right, y'all, welcome to the Scott Horton Show. I'm the director of the Libertarian Institute, editorial director of anti-war.com, author of the book, Fool's Aaron, Time to End the War in Afghanistan, and The Brand New, Enough Already, Time to End the War on Terrorism. And I've recorded more than 5,500 interviews since 2004. almost all on foreign policy and all available for you at scothorton.4 you can sign up the podcast feed there and the full interview archive is also available at youtube.com slash scott horton's show hey guys on the line i've got ryan mcmakin huh did i say it right and yes the first time of my life i said the man's name correctly but i meant to all the time because i respect his great work so much

No, we don't need more nuclear weapons, reads the headline over there at mises.org, the Mises Wire blog there. Great article. Welcome back to the show. How are you doing, right? It's great, and it's great to be with you. I'm great, and it's great to be with you. Yeah, great. So you're anti-government, too. I like that. Listen, but this is, I wrote the book, Abolished Nuclear Weapons. This is the Menarchist take. We just need a few. Is that right? well I don't even know that this is even the proper take I mean I'm just taking a gradualist point of view here that if you are going to accept the presumption that the United States should have and is entitled to have and all of those usual arguments should have nuclear deterrence that if you just accept that premise even then, yeah, you don't need thousands of nuclear weapons. You need maybe dozens

would fit perfectly well with established even standard defense department sort of research going back to the 1960s in terms of what's necessary to establish deterrence. So, I mean, this isn't even a radical view, right? This is assuming

just their argument that, yep, The U.S. absolutely needs nuclear deterrence, but then you don't take that next step, which is therefore, we need 5,000 of them, because that's just crazy talk, is the point of my article. So, I mean, it's a separate argument if you want to argue that the U.S. should disarm, but even if you're going to accept the premise of the U.S. should be a nuclear armed state, then it's the next step does not follow. that you need thousands of them. Right. Okay. Yeah, but would if we get in a seven front war?

With the, I suppose one could be in which seven nuclear powers would one be in that? It'd have to be almost everybody, yeah. I mean, that's a pretty wild guess that you, that the U.S. would be involved in. with seven nuclear states at once. But I recognize that you're not the only one suggesting that. Well, and listen. That you're not even seriously suggesting that. Come on, Ryan.

Let's not underestimate America's ability to step on toes here. No. They're just telling us about China and Russia all the time, right? That's right. It's a two-front war is the thing that they say seriously. We must be prepared for a two-front war at all times. And so I was just kind of play on that. each other. Yeah, because even if we had to nuke Russia and China, it seems like it wouldn't take

thousands to get that done. Right. And I think to discuss this, we just need to talk about, right, like established thinking on what establishes deterrence, right? Because basically what I was looking at was recent article saying, oh yeah, numbers matter. And if China gets a thousand nuclear warheads, but the U.S. only has 3,500 in its active non-retired stockpile, then, boy, that just makes them so much more likely

to nuke the United States, because they're going to get cocky, because I guess they're up to one-third of the number of active U.S. nuclear warheads, which is by itself just a crazy argument. But even if you were saying, then, that, oh, look, they got up to parity

with the United States, or the United States reduced down to a warheads and China got up to 1,000. There is zero reason to assume then that China's saying, oh, you know what? I guess we can win a nuclear war now because the thinking there

assumes that China then could engage in a first strike nuclear war attempt and that in that first strike would take out the entire U.S. nuclear arsenal because if you only take out 90%,

and they've got three or four still deliverable nukes, well, these aren't like Hiroshima type nukes. These are much, much larger. So the Chinese regime is going to say, well, you know, we're pretty sure we got most of them, but they could still easily have enough nukes left to completely destroy Beijing and two or three of our other major cities, but we're just going to go ahead with it anyway. Now, your regime is not going to survive that sort of thing. If you think your regime's going to survive, uh, destruction by nuclear weapons of all your major cities, you know, a handful of your major cities, well, you're probably wrong. And I guess we don't have a historical precedent of that occurring.

But I'd say it's a good, good bet that your regime is not going to survive that. So just all this crazy talk about how, yeah, well, Beijing, you know, they're not like us. They're insane. So of course they would be fine with 10 of their cities being completely destroyed, which is the reality of any sort of nuclear arsenal where you have more than just one or two and you can know exactly where all of them are and you can hit them at any time, which is not even a remotely plausible scenario

regarding U.S. nukes, even if the U.S. had, like, say, 20 of them. Right. And look, nobody knows what the latest top secret war plans are and that kind of thing, but historically, there's been a lot of great journalism on this and including insider statements from the likes of Dan Ellsberg, the former nuclear war planner,

that you really do have just, you know, a nuclear war complex inside the government, never mind the military industry kind of overlap and all that, but just even inside the government, there's a situation where everybody wants to hit the same target. So if the Air Force gets to, if even just the bomber pilots, they get to hit it with a bomb,

well, the missile guys are men. they want to hit it too and then it's just not fair that two legs of the air force get to hit the target when we have a perfectly good submarine here says the navy we want to hit that target too and then we developed a brand new kind of missile so now we're going to definitely use the new kind of missile and our new gravity bomb we've been working on we're going to drop those too and the whole thing is just a government program has nothing to we're talking about taking out one radar station on the edge of town but now we're going to drop 10 h bombs on the same city And we're going to nuke the same crater halfway to China just because, you know, of institutional interests.

And so you end up having a war plan that ends up just having dozens. In fact, there's an anecdote I have in the book, I think that's from the Washington Post. People can find it. Where when Cheney was first the Secretary of Defense in 1989 under H.W. Bush, they showed him a nuclear war simulation up on the big board. and at the point they showed where they just nuke Moscow over and over and over and over and over again and at one point Dick Cheney

old iron ass is what Bush Sr. called him the worst war criminal this century so far starts squirming in his chair and says to his aid whoever it was what is this why are we doing this I want this redone. This is you know it bothered Dick Cheney

that we would have just newt what used to be Moscow over and over and over and over and over again just because that's the way the plan ended up being compiled basically might be a way to put it you know well i think a lot of reasonable people see that because there was a lot of comments like to my article and related which was oh no we only have enough nukes to destroy the planet a hundred times yeah clearly we need to modernize so we can destroy it 200 times and it's just so far in a way beyond what you could claim as necessary for deterrence at this point, that only really crazy people at like the Heritage Foundation. Oh, we got to modernize the nuclear arsenal. And then, of course,

at the Pentagon, oh, we, you know, we got too many of these missiles are in disrepair. And what are we going to do? Because we're going to get beaten by these hypersonic missiles and China, which in reality only has 300 warheads at the moment compared to our three, more than 3,000. Oh, well, you know, by 2030, they'll have hundreds more. Oh, wow. None of this makes any difference. And you can see this in a lot of just the international relations writing over the last 50 years. And it goes back to the whole missile gap myth. And this was a big thing in the early 60s and really back to the late 50s. And if you watch the old Kennedy debates and stuff, that's what all that space race stuff was really about, was having better missiles. I could deliver more nukes. And, oh, we need more scientists to develop more missiles because the Soviets are beating us on this. There was never a missile gap. Even Robert McNamara himself, hardly a lover of peace admitted to Kennedy in 1962. Yeah, there's no missile gap.

This is something invented by, quote, unquote, well-meaning people at the Pentagon. But they keep bringing back that myth, which is now it's just, oh, hypersonic missiles, there's a gap there. There's no gap and deterrence if you define it by conventional means is more than sufficient. So these people just have no leg to stand on when they're trying to argue that the U.S. is then going to be a sitting duck for the Chinese unless they spend another $80 billion. And then, of course, that's just basically what it comes down to all the time, right? What you described there at this competition between the service branches and all that, it's always a race for more money, always a race for more prestige.

and you look at it and they're already getting $150 billion budget and then they're turning around and say, oh, we don't have enough money to modernize the nuclear arsenal. I think they've got enough money to do it. If they feel that they need more money for nukes, well, how about you just end a few wars then around the planet and then I'm sure you can pull it off? Yeah, seriously. You know what really bothers me? I always think about this is you might remember from back in the days the great nuclear physicist Gordon Prather, who used to write regularly for us at anti-war.com and previously at WorldNet Daily. And he had been the chief scientist of the Army and it helped test nuclear weapons at Sandia and Lawrence Livermore Laboratories and all these things. He was an H-bomb, you know,

producer. I'm not exactly sure his role in the chain, that kind of thing. But he used to talk about in the military, and he was a military guy and, you know, originally. And then, as I said, became the chief scientist of the army. And he said, you know, in the bureaucracy, the nuclear weapons departments of the military branches is like the dead end loser job, right? You don't get to go to war if you're a nuclear weapon. So that's where, you know, the lower IQ dudes go to sit at desks and not really do much stuff. While the real go-getters are off, you know, trying to take over special operations forces or, you know, lead the big army here or there, but that is really the least competent, right, about the nuclear arms component of the military, right? We sit here. It's really

it is only supposed to suit the purposes of deterrence. There's no, like, in between tactical nukes or fairy tale, right, because it's just bonkers to start whipping out nuclear weapons of any size. Look, a tactical nuke means a Hiroshima-sized nuke. right and well and that's something they complain about too oh where we don't have enough tactical nukes and uh so we're falling behind on that and then they get really insane and claim that well let's arm we we have too many strategic nuke uh submarine so we need to arm some submarines uh with some tactical nukes and we'll use those two because you can launch those from the sea and then they'll hit a battlefield in like

Eastern Poland or whatever. It'll be fine. And then the targets will somehow know by magic that these are just tactical nukes as they leave the sub and fly into the air. Whereas of course, as it has been pointed out by just plenty of mainstream people, that's insane thinking.

You've got a nuclear sub out there. It's going to launch missiles with a nuke on it. But you think that, oh, well, somehow they'll know it's tactical and not one designed to destroy an entire city. So, I'm sure it'll be fine. That won't escalate things at all. And so

any talk about tactical nukes is just asking for trouble as well. Yeah, of course. And meanwhile, tactical nuke can destroy an entire city too. Yeah, so, you know, maybe not Mexico City size. Right. Yeah, certainly something the size of Denver would be destroyed. Yeah, all the downtown, for sure.

You know, something like that, yeah. And now, look at Hiroshima and Nagasaki. That's 100,000, 75,000 killed right there. That's a 10 and a 15,000, 10, 15 kiloton bomb, you know? Mm-hmm. I mean, and so, but the way they talk about these things is just like it's no big deal. And, oh, we'll have a limited, you know, a limited nuclear world.

We'll just take out some key targets and all that. That's just ever, all the smart people, the people have actually had a conscience, they've recognized since Vietnam, when they were talking about using nukes to just, you know, clear the jungles and all that. They're like, eh, you start launching the stuff. I really don't know. it's going to end. And so they did air on the side of sanity, which was to just not try. But we've got people not just in the military, but I wrote an article, too, once called a

brief history of pundits pushing for nuclear war. And I look back at the Cold War, you guys like Buckley and his friends at National Review saying, you know, I would destroy the entire planet if I had to to get rid of the commies. And even if it takes a 700 million, corpses. It'll be fine. We shouldn't be too timid. But now we've got like left-wingers who are saying things like, well, you know, I just can't live in a world where the Russians control Mario Pole. So therefore, we should just do whatever it takes. And people should quit being such cowards about nuclear war. And this is insane. Talk to every bit as insane as the old Cold Warriors were doing back 50 years ago. Yeah. Hang on just one second. Hey, y'all,

the audiobook of my book, enough already. Time to end the war on terrorism is finally done. Yes, of course, read by me. It's available at Audible, Amazon, Apple Books, and soon on Google Play and whatever other options there are out there. It's my history of America's War on Terrorism from 1979 through today. Give it a listen and see if you agree. It's time to just come home. Enough already. Time to end the War on Terrorism, the audiobook. Hey guys, I've had a lot of great webmasters over the years, but the team at Expanddesigns.com have by far been the most competent and reliable. Harley Abbott and his team have made great sites for the show and the institute, and they keep them

running well, suggesting and making improvements all along. Make a deal with Expandesigns.com for your new business or news site. They will take care of you. Use the promo code Scott and save $500. That's expanddesigns.com. man i wish i was in school so i could drop out and sign up for tom woods's liberty classroom instead tom has done such a great job on putting together a classical curriculum for everyone from junior high schoolers on up through the postgraduate level and it's all very reasonably priced just make sure you click through from the link in the right margin at scott horton dot org tom woods this liberty classroom real history real economics real education you know it's funny man because

you know, I used to somehow in my head think that it's different over there somehow. But I'm always reminded of this when Indian Pakistan started testing their nukes in, I think it was the spring of 1998, nobody cared because it was the same week that the final episode of Seinfeld was coming out. And so, that was all anyone cared about. But meanwhile, India and Pakistan are testing nukes. And I saw on some foreign news channel or something, a clip of a. Pakistani general,

telling the cameraman, you tell those Indians, we're not scared of their atom bombs. Bring it on. And I just thought, I just liked the way that he phrased it, that it was a matter of how afraid he was or not, that was going to have anything to do

with the destructive power of these weapons. And, you know, I don't know if the Indians had H-bombs yet. I think they do now. Yeah, it's weirdly sort of, I don't know how, would describe it. It makes you feel better in some sort of weird way that the people around the

world aren't any crazier than the people running your home country. But our guys are just as crazy as them. That they're about equal crazy. Right. They say the same sort of stuff. And, you know, that's just politics for you. And so, yeah, these people are not fundamentally different. Even though, right, especially in that sort of situation where you've got like a real border dispute and stuff, it seems like you would be bending over backwards to avoid some sort of escalation. But, you know, it's interesting that you know that nobody even really seemed to care when, in the late 90s, when that happened. Because I remember looking several years ago to find out when India got their nukes and the same with Pakistan and all that. I thought the India thing

had occurred much earlier because already by the year 2000, we were already talking about India and its nukes. Like, it was old ancient history. And it just wasn't even something we had to talk about anymore. In fact, I think it was kind of known that they possessed them, but they hadn't tested them yet, and they didn't test them until 98. But I think that I'd have to go back and see, but I believe that the idea was that they had sort of announced, soft announce that they'd had them years before or something like that. Yeah, it's the late 90s is accepted as the period when India officially joined the nuclear club. I mean, I don't know what date they put down for Israel, right? It was just been kind of known that there's an arsenal there. And one

similar to the U.S. in the sense that they're, that's suspected that they have a nuclear triad as well. And that's actually an example you could use of here's a country with 80 nukes or so, that does anyone doubt really that they that that deterrent

doesn't work in the Middle East? I think trying to have troops roll into Tel Aviv and get people there to hit the nuclear panic button would probably be a bad idea. But this, there's a big

difference between 3,080, and it seems that 80 is at least as frightening as any slightly larger number or much larger number, and especially if you have no way of guaranteeing that you could take them out because they have some on planes, they have some in nuclear or in nuclear subs or any type of sub, and they've got some on the land somewhere. So it's, we can find examples of basically all these countries, because only Russia and the U.S. have these crazy multi-thousand unit arsenals. Everybody else has managed to establish deterrence, including North Korea, because the U.S. simply has never invaded a country that has nuclear weapons.

It acts as a pretty good deterrent, even though we're not talking about huge arsenals. So the U.S. has itself shown in its willingness to invade only countries that have no nuclear deterrent that, well, it has a pretty big effect, even when you don't, haven't shown that you have especially reliable missiles or other methods of delivery. Yep, absolutely right. And in fact, Iran has gotten away with deterring us with merely a latent nuclear program. They've showed that they know how to master the fuel cycle and enrich uranium up to whatever percent 235 they want to. And this is, you know, pretty nice status quo where we're holding it now.

But it's prevented, it's one of the major things, I think, that's prevented the United States from attacking them this whole time, even though that's supposedly the cost of spally that they're making nukes. You know, it's actually the reason not to attack them is that. They're right on the verge of it, but they keep stopping short of ever trying as long as we don't attack them. It's probably the number one way to get them to go ahead and go for it would be to hit them instead. You can see the political benefit of being in a world where Iran always almost has nuclear weapons but doesn't quite. That's extremely beneficial for U.S. foreign policy then is, you know, for fundraising for saying, you know, we need a new war with their allies now. Right. But yeah, I mean, look at Saddam. He had nothing. They bulldozed right over him. Gaddafi was like, well, I have some centrifuges in boxes in a garage. You want those? And they said, yeah, and they turned around and murdered him seven years later and overthrow him. The North Koreans said, forget this. They started making atom bombs. We haven't messed with them. Won't talk to them either, but, you know.

Yeah, the U.S. military action in the last 30 years has been the best argument for getting a small nuclear arsenal if you can. Absolutely. And look, it's the number one reason why we ought to be backing off

this ridiculous fight with the Russians right now is, you know, you do get to a point where, you know, never mind deterrence. These guys could wipe our entire civilization off the face of the earth in just the space of an afternoon if it comes down to the thing.

And I believe Putin, when he says that they still have a dead hand machine where it's automatic. If anybody nukes Russia, all the nukes go off toward the United States. So don't try it. And even if they're all dead, it doesn't matter. The machine will do it. Well, and you certainly hope there aren't any accidents or mistakes in those cases. And that's another point I make, too, is that when you've got these humongous arsenals that are unwieldy, you've got a lot of different people doing a lot of different things with them, it's a lot harder to ensure that there aren't going to be any mistakes or accidents.

those cases. And that's another thing that was recognized by even the people in power decades ago was the nuclear deterrence is only really working well. You can say if you know you have control over the arsenal and the ability to prevent accidents or unauthorized use. And so once you're up in the territory of thousands of them, can you really say that you've got for sure control over that? So the higher the number, the greater the odds, that there's going to be some sort of accident. And that should really frighten a lot of people. And that's just an ongoing problem.

It's another reason why the arsenal should be reduced. And then, of course, you should just have, you should publicly announce our nuclear posture is that we will never launch a first strike. This is defensive use only. But they refuse to say that and really to come out and just make it clear because they all want to be able to say, oh, well, you know, you never know what other thing might

happen that requires us to launch 500 nuclear warheads. So they don't even do what is necessary in terms of taking what they've got and making it more defense-oriented. Yeah, you know, I'll never forget when Barack Obama was talking about. Yep, when I'm president, I'm taking the drones to Pakistan. I'm going to kill some terrorists. And one of the reporters said, well, you wouldn't nuke Pakistan, would you? And by the way, he was talking. I'm going to fighting sub-state actors there with the permission of the national government, but the reporter lady didn't know that. She didn't know what was going on. So she said, but you're not going to nuke Pakistan.

And Obama goes, no, no, no, I'm not going to nuke Pakistan. You know, we're talking about 500-pound bombs here, lady. Chill out. Right? Then the next day Hillary Clinton attacked him and said, you see how naive and unprepared this guy is? You never announce that you're not going to nuke somebody. It just shows his inexperience that he's not qualified for this job.

Well, that's the reason, right? You're exactly right. That's why you've got to maintain that you've got a hair trigger on your nukes at any given time, because you never know what they'll take advantage of. So you've got the world's hugest military, you've got the second largest nuclear arsenal,

of course, not that the difference between ours and Russia's matters at all. And yet the paranoia, or at least the stated claimed paranoia, It's still that these enemies, these tiny, poor countries could launch a successful war against you at any time. I mean, you really have to be out to lunch to find these sorts of arguments compelling, but a lot of people do. Yeah, man, absolutely. All right, so, can I get a few minutes with you on the economy here?

Sure, let's talk about the economy. What in the hell? All right, now, here's the deal, everybody. In case you don't know this, and listen, I try to make this as easy. for people as I can, okay? Listen, you could be a right-winger of any flavor description. You could be a liberal left-wing, progressive, socialist, anything you want. I don't care.

I'm not arguing about that. I'm not saying that. But I am saying this, and you've got to believe me. It's just true, and you can look into it and figure it out, and you'll probably hear the man in a second here. The Austrian school of anti-government, libertarian, free market, private property, guys, they're the only ones who can understand and truly explain why the economy booms and busts all the time and you'll see their wisdom is now kind of seeping through finally

it's getting the recognition because things are just so crazy right now but it's really because of course ron paul 10 years ago or you know right around then 2008 through 12 there really help to popularize this and get people to understand the business cycle the boom and the bust that happens every 10 years or so or more now or whatever it's the government messing with the money tell him ryan yeah i think there's a big problem here where people think they can't they can't look that extra step back so they think that the fed that the central bank is causing the recession now or that the recession is caused by Putin's price hike as it's called or it's high gas prices or it was just the lockdowns or it's not enough regulation I mean we've ready waiters demanding raises right right I mean

these little things that have nothing to do with boom bus cycle. Because, yes, it's manipulation of the money supply. It's these wealthy people running the central bank and the U.S. Treasury and the hedge funds and Wall Street who are absolutely addicted to a rapidly growing money supply at all times. This financial sector depends heavily on the central bank constantly, constantly creating more and more money, extending more and more credit, buying up more and more assets even, like U.S. Treasuries and mortgage-backed securities in order to keep interest rates low. And this all feeds into the business model of large banks and Wall Street guys. And they want it that way.

And as soon as you back off this money creation a little bit, then Wall Street and banks start to get into big, big trouble. And that's why we're seeing these banks collapse. But the people who suffer the most while that process has created, this easy money, low interest rate world, it's people who suffer from inflation. So it's people who are paying more in groceries. It's people who can't afford a first-time homebuyer experience. It's people who now they have to pay massive amounts of money for even a used car, all driven by inflation. And it's a result of this Wall Street preferred easy money economy. And that's what creates the conditions that lead to the bust.

The Fed isn't causing the bus. The Fed is just realizing what the reality is and that they either make inflation worse by printing more money to keep the boom going or they back off a little bit, at which case the economy goes into recession. So those are your two choices, even worse inflation, which would probably come with ongoing economic dislocation and probably mounting unemployment. employment anyway, or finally allowing asset prices to fall, Wall Street firms to go out of business, a lot of this stuff to finally collapse in value, which would then finally get rid of this inflationary cycle. But boy, they sure don't want that to happen. The bankers desperately want ongoing bailouts. They want more money. They want low interest rates. And they want to make you pay a whole lot more in gasoline and rent and groceries in order to make sure that happens.

yeah man so how much money have they created lately to bail out these banks that are failing here well it all started back in 2008 when they started just buying up worthless mortgage back security so the thing was is even as all of these americans were foreclosing uh they of course the values of homes were going down and they were becoming more affordable so had that been allowed to happen if the home prices have been allowed to really fall you would have tons of ordinary people in the years soon afterward, be able to afford houses that they had never been able to afford before. But instead, what the Fed did was there, oh, no, no, no, we don't want the value of these assets to go down because my friends on Wall Street, they owe tons of these mortgage-backed

securities, which are based on home values. And these are owned by hedge funds and Wall Street guys. And it's an investment instrument. And we don't want the value of those to go down. So the Fed's going to print up about $3 trillion in order to buy up a bunch of these bonds. And then we're also going to print up about, oh, another $5 trillion so we can buy a bunch of government bonds to keep interest rates low on that so the government can keep borrowing more money to produce more nuclear weapons or invade more countries and all that. And so that's the system that was created in 2008. They created about $9 trillion new dollars just in that. And then, of course, during the lockdowns, they created another $6 trillion essentially to finance loans and to just pay out money in order to keep people from starving to death because they'd shut down all sorts of small businesses and wouldn't let people go to work. And so then what you had was just this huge wave of monetary inflation, new money created.

And then, of course, lo and behold, prices went up massively. And now what you've had is 24 months in a row of real wages going down. What that means is every month, your wage increases, even in an inflationary environment, aren't going up as much as actual price inflation. So you're actually getting poorer every month. So now we're in a situation where people are getting poorer for two years straight in terms of the real wages. And now, in spite of the Fed bailing out these banks and continuing to do a bunch of stuff on the side to keep things going, you're probably going to lose a lot of jobs anyway in the economy.

So they got four for the last two years in real terms, and now they're actually going to lose their jobs in a lot of sectors. And of course, it's already seen about half a million job losses in a variety of sectors, not just tech. And that's the direction we're headed in now. This is all part of that experiment that began back in 2008, and really even to a lesser extent, back in the late 90s. And they just want to keep it going,

just more inflation, more easy money for Wall Street. And this is, as the economy becomes more and more chaotic, as inflation mounts and as employment starts to soften, that's the result of it all. Man, so where we're at now is that they are, I think I read your latest headline said, oh, they got scared and now they're backing off raising interest rates anymore. So we're really stuck with this worst of both worlds thing, where we have this, you know, continuing inflation and recession at the same. time. Instead of just causing a bad enough recession to lick the inflation, start all over again. Right. Because if we're going to have to deal with recession anyway, it should have been interest rates should have been allowed to rise enough and the Fed allowed to rein in enough some of its newly created money enough that it actually ended inflation. Price inflation,

I mean. So rising prices. But it didn't do that. They're all ready to the point where they're like, oh, no, some of these banks failed, and there's a lot of my rich friends are really getting hurt by that. So, yeah, we'll do like a small, tiny interest rate increase this month, but next month we'll probably stop, maybe hold still.

We won't sell off all the bonds in our portfolio that have been propping up home prices at these unattainable levels. And so they're already backtracking on that. They're already chickening out. They're already saying, well, you know, we'll get inflation down eventually. and that's literally what he says.

We'll get inflation back down to that 2% eventually. Who knows how long that'll be? And meanwhile, of course, lots of people will be suffering more because, boy, used cars. I mean, I'm just looking at headlines on that. Just totally unaffordable. Home prices. They have not even gone back to where they were in 2019,

at which point they'd already inflated in their prices for years and years. So it's just going to be a long, hard road unless the Fed really sticks with it and raises interest rates more. And I want to note that when I say raise interest rates, what they're really doing is just allowing the economy to heal and allowing interest rates to go to a more normal level that's not a result of all this blatant central banker manipulation.

And so it's not so much of they're just setting this interest rate and their meanies jacking it up higher and higher. They're just taking less action. They're just doing less. They're taking their foot off the gas pedal and letting the economy readjust to where it should be and that's what's causing

all these bankers, all of these problems because they've got zombie companies. They can't function. They haven't made any real money in years and so they need the new money and without it they're just going to collapse. But the people who are going to suffer the most from that will mostly be the wealthy.

And when you look at how the rise of those financial groups has actually made the economy worse in terms of real manufacturing and real production and small businesses and all of that. Normal people have suffered for years in order to create this economy we have of huge banks and these firms and hedge funds that are making tons of money off the low interest rate economy. So to have a recession would be to finally reverse that situation to what it should be,

but they don't want that to happen. And they're going to phrase it as, oh, we've got to keep things going regular people, or you'll just, you'll never recover, you'll never have a job again. And they just want to frighten people into keeping the old system going, which is all constructed and put together to help only certain healthy friends

of the regime, really. Yeah. Well, folks, sad to say, they lied us into war. All of them. World War I, World War II, Korea, Vietnam, Iraq War I, Serbia, Afghanistan, Iraq War II, Libya, Syria, Yemen,

all of them. But now you can, and get the e-book, All the War Lies, by me, for free. Just sign up the email list at the bottom of the page at Scott Horton.org, or go to Scotthorton.org slash subscribe. Get all the war lies by me for free. And then you'll never have to believe them again. Hey, y'all, Scott here. Let me tell you about Roberts and Roberts Brokerage, Inc.

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That's 800-874-9760, or check them out at our RBRBI. That's rrbi.co. You'll be glad you did. And look, anybody could tell you. Rich get richer, man. The whole thing is at regular people's expense. The thing that bothers me about this is, you know, you mentioned used cars and whatever other, I don't know, stocks and bonds and properties and things that people have, but we're talking about homes, where supposedly the good part of this is when home prices are going up, up, up for the people who already own a home, I guess, and then if they sell it, but they still, now their property taxes going through the roof, so it's probably mostly a wash anyway.

But then everybody just ignores the fact that you're talking about whatever number of millions of people now are quite literally, structurally, priced right out of having a roof over their head. And now they've got to live in their car in the Walmart parking lot. Now they're screwed, and now the CPS is going to come and try to take their kids away. Now, you know, they live in a totalitarian state because they don't have a place to live. So they're at the mercy of the rulers of the public property where they're banished to. They can't afford rent. They can't get into a house.

And now we need a massive depression so that things will get back to normal and just the average slub can have a job and a place to live without necessarily. specializing in anything. You know, not everybody is extremely talented and with the ability to like figure out, or maybe they have health problems or family problems or got hit by a motorcycle or whatever problems. That means that they're not in a position to trade on the market and make a lot of money. Maybe they're just, but, you know, as Boots Riley says, a lot of homeless people got jobs. And that's true. I've seen the statistics on that when I was in communism in college. I took a class in Bolshevism there. And they, you know, there's a lot of good statistics

about that. And you see it everywhere. And it's not all just junkies. It's really not. And in fact, a lot of the junkies are junkies because they're hanging out with junkies because they're homeless all day. They got none to do anyway. And, you know, and by the way, not that I'm a communist, because I really am truly an anti-government guy to the end degree. But I'm just saying it's pretty easy to see why people feel like, geez, you're counting to me, Ryan McMacon, trillions and trillions and trillions of dollars going from the government, printed out of nothing at all our expense, taxed right out of our paychecks, to go to make Wall Street banks whole. Trillions. But you're telling me you can't find 20, 30 billion. You got 100 billion, not you,

they, the state, got $100 billion to throw into a border war with Russia, for God's sake. But you can't find $10 billion to try to give people a warm place to sleep in the wintertime, because that would be communism. You know, it really seems pretty unfair. Well, I mean, there's so many bad narratives in there, right? Heck, I even have people submit articles to me trying to claim that money spent on welfare is bad, but money spent on defense, that's defendable. which doesn't fit with our philosophy at the Mises Institute at all, right?

Government spending is all, it all distorts the economy. It's all a transfer of wealth and taking money from the taxpayers and giving it to, yeah, this war in Eastern Europe that has nothing to do with U.S. defense. That's just a transfer of wealth to certain people who make weapons and people in NATO and that sort of thing. And you're right. And then simultaneously where they're shipping all that money over there, they're like, oh, you know, we don't have enough money to build bridges right now. it's just astounding what they can say. But what they rely on so much with the home price thing

is, oh, well, so many Americans, they count their home, their net worth in terms of what they have in their home. Your home is your largest investment. Well, I don't think you should really be creating an economy where everybody's viewing their home price as the key component of their personal net worth. I mean, homes, they can go down in value. They, of course, can become dilapidated. You see this all the time with older people, that their homes just basically, they fall apart, and you have to keep up with the maintenance constantly. Homes are not really an investment in that sense. They only always go up in value because of the way the economic system is constructed to constantly inflate asset prices. And that's something

we've covered in a lot of detail, is that even in the years where they tell you there's no inflation. There's huge amounts of asset price inflation, and by that we mean real estate and stocks. So just look in a low inflation year, say, in 2013, lots of growth in home prices and in stock prices in that period. So when you hear home price growth, and they say, oh, this is just so great and wonderful, what you should really hear is homes just became less affordable for first-time homebuyers because growing home prices is only no big deal if you can sell a home you have and move into something else that's comparable. Whereas if you want to move into a home and you're a first time home buyer, well, what are you going to do? Because you can't sell a house to come up

with that money that you need. And when you have an economy that's geared around inflating home prices more than other sorts of investments like a savings account and such, you have no other way of getting ahead. And that's a good point you make, too. Not everybody has like the education, the wherewith, all the energy, the free time, the background to become a day trader. And so that's why a just economy, a good economy, makes it possible to save money with just things like CDs and savings accounts and relatively safe investments. And there have been historical periods where that was perfectly possible. But we've now in the last 30 years been living in economy where that'll get you nowhere, just trying to be a good conservative, conscientious

saver. You know, I'm just renting, but I'm putting my money in a savings account, and I can earn 6% on that, and that's pretty good. That economy's gone, because they've been suppressing interest rates in order to move up gains for people who already own lots of assets. So it's extremely difficult to obtain assets in this economy, but it's really easy to make a boatload of money if you already own a lot of assets

and that's what a low interest rate easy money economy means and that's what we've got right now yeah and look i know you see this all the time too well i don't know if you follow as many commies on twitter as i do but you kind of can't help it right it's this everywhere this is late capitalism this is what happens when you have free markets i the same thing i learned in seventh grade is the wild excesses of free market capitalism got out of

control and caused the great depression and the government came to save us from that. After George W. Bush, the centrist, the compassionate, conservative, total, you know, rhinos, certainly on economic affairs. You know what I mean? Nothing right wing about him. As soon as he left the presidency, the TV pretended that Ron Paul had been the president for eight years. And that the reason that everything had just happened that it had happened is because we had a complete libertarian laissez-faire, free market, deregulated economy. And so, now it's the beginning of the regulation we need again, and that's just the way they push the narrative, and people believe it, you know, people, and I think the real danger ultimately is that

people really do believe in socialism. I saw a headline, this isn't the worst thing in the world, but I saw a headline today, state of California wants to start producing insulin and sell it for 30 bucks, because, of course, there's a racket that controls insulin and prevents competition and all these things with the FDA and the rest up there. And so there's an opening here that when capitalism is so corrupt, there's an opening here for a guy like Gavin Newsom to say, yeah, little Bolshevism might be the solution to that. And it sounds reasonable to people. When the game, there is no playing field at all. The whole thing is rig from top to bottom and people feel that way about it, you know? But ultimately you could have like-

Yeah, the feds created cartel that limits the supply and raises the price of insulin with federal regulation. And so then it seems necessary that California created a different cartel to produce insulation to deal with the first cartel. That's where we are. Yeah, it's like the opposite of laissez-faire. Exactly right. But you could see how the middle of the road leads to socialism, as Mises says, right? Where the more they intervene, the higher the prices, the more people. And I've told this story before. I know real ass right-wingers, like, hey, maybe a couple clicks to the right who voted for Bernie Sanders because hey somebody has to pay these bills man you know guys trying to keep his wife alive and they essentially make it where you know your

insurance isn't going to cover it oh we'll cover the first four cancer treatments but not the last three and what are you going to do about it because again it's completely gangsterized there's no like real accountability in the courts that you could rely on there you just looks like you signed up with the wrong company, dude, and your wife's dead. And so people are, figure, you know what? As long as they're the ones who rigged it, might as well make it worse in a way, you know? That's the logic that goes into it. The, if I remember correctly, the only candidate in recent years that was actually attempting to reduce healthcare costs through deregulation and other real means, that is of allowing people more choices in buying drugs, buying medical treatment. I think it was

Rand Paul. He actually had some legislation. He was really supporting that would allow you to shop for health care across state lines, to import foreign drugs, to do a lot of those things that, of course, are actually free markets. You should be able to buy your drugs from wherever you want. By that, I mean

medical drugs, right? And, well, of course, buy your recreational drugs wherever, too. But I mean, we're talking about real medical stuff. And, yeah, the fact that there's all these controls on it about where you buy it from and from who and the prices are said by a variety of negotiations with the federal government and all this stuff. I mean, that's just, that never seems to result in falling prices and availability

and increasing availability for regular people. And maybe, just maybe that's by design. Yeah, seriously. And you could see the advantages in it everywhere. And, you know, this is just an anecdote, but I got a million of them. That's the job. I was a cab driver for many years. And I had doctors two or three different times, I guess one real specific time I'm thinking

of, where the guy just in. assisted to me that, look, man, I got regulations on my shoulders. I got to carry around. You wouldn't believe. I mean, they suck of what, 30-something, whatever high, double-digit percent of all of his money and effort to hire all of these people to run his office for him where, guess what? He's a doctor, like a pretty highly qualified specialist in whatever it is, which means he's pretty smart, and he could run this little business himself with his partner and maybe like one staff person. if it was just a free market business. But instead, it's not.

It's almost nationalized in this sense of all of the hoops that you have to go through for the insurance company under the regulations of especially the national government. And how is the way he explained it was like, hey, you know, like in your libertarian fantasy where you just make it pre-market and everything works out. Yeah, that's basically right. That's because you could see that's what's wrong with the system, is just how much corruption, essentially, in the form of these regulations, have been layered and layered and layered on top of the system over the decades, right? There's no one ever really strikes it down like that Rand Paul bill you're talking about.

It just builds and builds and builds. I think the only progress we've made in recent years is maybe getting these right wingers to stop referring to U.S. healthcare as a free market health care system, which I think they were still doing just a few years. ago. I think it's now so blatantly obvious that there's nothing free market about it, that they don't say it like they used to, even though, of course, decades ago, that's when the current situation began with all this need for all this administration and all of this insurance, these layers of insurance, it's all required by federal taxation systems and requirements, and it's just not a functioning marketplace at all. And then we can note on top of that, that on a percentage basis, the United States Treasury, the U.S. government spends a larger percentage

of its budget and its GDP on health care stuff than most of these other countries that we regard as, you know, Western welfare sort of states, right? So the U.S. is spending more by a measure proportionally than Canada, then Australia, then Germany, then the Netherlands. I mean, it's really quite remarkable. And what are they spending all of this money on? It's unclear. So the U.S. actually spends huge amounts of money. And by that, I mean, the government itself, of course, Americans spend huge amounts on top of that just out of pocket and through their insurance premiums and employers and all of that.

But even on top of that, the U.S. has such a huge Medicaid system, Medicare system, administrative system behind all of it, that it's not a, it's not a, what would you call it? It's no sort of free market, social Darwinist, every man for himself system. It's this intricate system of huge amounts of government spending that are going somewhere. But I don't know. And so it's more expensive for everybody somehow. And you're talking about, Ryan, the consumer to the government. You're correcting for the insurance costs. You're saying besides that. Yeah. Because that's my, what you and I pay through our wages for insurance or what employers pay for insurance, that's, of course, huge, right?

But even if you take that out, what the U.S. government spends directly on health care services for government provided health care or subsidies, it's larger than if. in many of these Western European countries. So it's just astounding that they're spending that kind of money. And we still have an inability for people to obtain some sort of affordable health care through one system or another. So what I'm saying is the system is just like broke three times over. And that it's got just this horrible system that's like quasi market, quasi-government,

And both systems are just simply awful because there's no freedom allowed anywhere. It's just completely controlled by all these federal bureaucrats and other policymakers who don't have the slightest idea how it should work. Yep, absolutely. All right. Well, listen, guys, the Austrians are right about everything, but especially the business cycle. And so even if you don't like our free market health care stuff, listeners who tend to put foreign policy first from all different places on the spectrum, you've got to concede that the boom and bust cycle is the way. that they described. And to find out all about that, you go to mesis.org and Ryan is the editor over there, but of course, that's the home base of Bob Murphy and Joe Salerno and Mark Thornton and all of these brilliant geniuses who understand all of this stuff too and teach it so well. So,

that's mesas.org for the Ludwig von Mises Institute. And you can find Ryan McMakin over there at Mises Wire, pretty much all the time there, and it's the best of stuff. I know you'll love it. Thanks very much, Ryan. Thanks, Scott. The Scott Horton Show, Anti-War Radio, can be heard on KPFK, 90.7 FM in L.A. APSRadio.com, anti-war.com, Scotthorton.org, and Libertarian Institute.org.