The Daily Signal - Series Pt. 3: Want to Pay in Cryptocurrency? In Louisiana, Now You Can.

Episode Date: October 4, 2024

In a move toward modern financial practices, Louisiana residents can now pay for state services using cryptocurrency.  “Louisiana has always, I think, lagged behind other states when it comes to doing things that are in modern commerce,” Louisiana state Treasurer John Fleming says, adding that he hopes to change that.  Cryptocurrency is “going to have a huge role” in the future of finance, Fleming says. Sometimes referred to as digital currency, cryptocurrency does not require a bank account. Louisiana is now accepting bitcoin, bitcoin lightning, and USD coin payments. The first cryptocurrency payment was made to the Louisiana Department of Wildlife and Fisheries on Sept. 17. The digital currency payments are converted into dollars following the transaction, Fleming explains. The Louisiana treasurer joins “The Daily Signal Podcast” for the third installment of the show’s money and transparency series.  In addition to explaining why the state is now accepting cryptocurrency payments, Fleming discusses his efforts to eliminate the Louisiana state income tax.  Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Friday, October 4th. I'm Virginia Allen. Cryptocurrency has taken the world by storm. And if you live in the state of Louisiana, you can actually now make payments using cryptocurrency. Today, I am so pleased as part of our money and transparency three-part series, we are ending with a bang today with the treasurer of the state of Louisiana, John Fleming. He talks about some changes in the state, why they are embracing cryptocurrency, the potentials, why it may or may not be a safer form of payment, and whether he sees the future as a future full of cryptocurrency. Stay tuned for this conversation and learn a little bit more about what crypto is and isn't

right after this. Your government is out of control. It's doing things it has no business doing. It spends way too much money. It gets involved in way too many wars. It not only tells you what you can and can't say, it actively censor. And the things your government should do, it can't, or worse, won't do it all. It can't keep your streets clean of crime and filth.

It can't keep your neighborhoods safe enough for kids to play outside. It can't even prevent your country from being invaded by millions of illegal immigrants. Why is that? Because your leaders no longer represent you, they represent themselves and their friends. In my new show, The Signal Sit Down, we'll expose how the sausage really gets made in Washington, D.C., with guests who have experience on the inside. Fingers will be pointed. Names will be named. You ready? I am so pleased today to be joined by Louisiana State Treasurer John Fleming.

Treasurer Fleming. Thank you for taking the time to talk today. Yeah, thanks, Virginia. I'm glad to be with you. Well, there's some really exciting news out of the state of Louisiana involving cryptocurrency. Right. You all have just started accepting payments for state services in cryptocurrency. And speaking of someone that's still still. trying to fully understand cryptocurrency. Explain exactly how this works.

Well, first of all, what is cryptocurrency? It's a digital form of currency that's been created. Bitcoin is the one best known, and it should not be confused with central bank digital currency, which is a proposal by the Biden administration to have government-controlled digital currency. Now, this is under-private auspices. And there are other types of cryptocurrencies, as you well know.

So I'm very interested since taking office back in January of 2024 of really modernizing our economy. Moving forward, one of the things that we did early on was we passed into law that we now recognize gold as a currency, recognize a legal tender as a correct term. in Louisiana, there'll be more that we can talk about later on that. But we also have been working with a company called Bede that is sort of an intermediary when it comes to taking cryptocurrency payments, converting them on the spot market,

you know, within a matter of seconds, and then delivering it into dollars. So we've now begun that process. We've accepted our first payment last night for the, for a third. fee for Louisiana wildlife and fisheries and so forth. And we'll begin to expand that to take on more and more fee payments using, again, cryptocurrency. And this one was specifically Bitcoin Lightning was the brand. But it doesn't really matter as long as we're all hooked up with everything.

It's a very good system. You can account for everything. But the point is when it hits our bank account, it's in dollars. We're not yet holding or dealing in cryptocurrency itself. Oh, interesting. So it converts into dollars? Yes. Okay.

So are you all accepting all forms of cryptocurrency? Well, the major forms. Bede, again, is the company that has to transfer that into dollars. And as they bring more companies online, because there are more and more companies coming, as they do that, and it becomes safe and security. secure and we will accept those payments. And there may be a day when we actually manage cryptocurrency, but we have to take this a step at a time. But we are either the first state or one of the first that have accepted cryptocurrency as a payment.

And why was that something that was really important to you? Well, because I just have to tell you, Louisiana has always, I think, lag behind other states when it comes to doing things that are in modern commerce. And it's my interest to move forward in many ways, not just in the gold and silver arena that we talked about a moment ago, but in cryptocurrency and in pro-growth taxation, transparency in government, many different ideas that I'm wanting to move forward on.

And we're moving very quickly on those things. So excepting cryptocurrency is just one of many that we are very interested. Is it safer than other forms of payment, more secure from fraud? Well, again, once it gets to us in the form of dollars, yes. Now again, that's why we have to evaluate this in terms of actually managing cryptocurrency. As you know, there have been problems in that space, and we're not ready to actually manage funding in the form or currency in the form of digital currency.

So we're going to take it one step at a time. it one step at a time. As we get comfortable and as we see this unfolding, honestly, I think there needs to be more regulation for cryptocurrency before states and many businesses are going to be able to accept it on a regular basis. Yeah. As state treasurer is someone that is very plugged into the finances of your state and nationally what's happening, how do you see the cryptocurrency kind of playing a role in the future of finances? I think it's going to have a huge. role. Americans love cost-effective, convenient services. I mean, you know, you go through a drive-thru nowadays of any sort, whether it's a drugstore or fast food or whatever, and everybody just wants

to hand a credit or debit card, have it tapped and go from there, even when they do transactions on the inside of that establishment, or even just on their telephone through an app. Everything, want that convenience and they're willing to pay a little extra price and the more we get into this I think the lower the fees can be so it can be more cost effective as well people just don't like handling cash any longer they don't even like writing checks it's true I've written maybe one check in the last year yeah I do everything as digitally as possible just because that's my personal preference and I really think that you're just gonna see more engagement from customers when there's ease of

And of course, the downside of that is it could strip away some of the discipline that people have, too. Because if you don't notice your account's getting too low, then you may overspend. But maybe we'll come up with some ways of dealing with that, helping consumers on that as well. Well, you're certainly focused on keeping more of individuals in your state, more of their money in their pockets. And you have proposed eliminating state income tax in the state of Louisiana. This is something that I'm sure many of the folks in Louisiana are pretty excited about. There's only nine states in the U.S. that don't have that state income tax. Louisiana wants to be the 10th. Why?

Well, first of all, the modern economy is migrating to the south. The high-tech companies are leaving California and they're coming to the south, mostly the Austin and Atlanta. The finance industry, the financial industry that's in New York and along the East Coast, They're leaving. They're coming down. I understand Texas is looking at starting its own stock exchange. So these companies and all this capital is coming to the south.

However, they're not coming to Louisiana. They're coming to states around us. Texas, Tennessee, Florida. What do those three states have in common? They have no personal income tax. And they're doing very well with their budgets. So I think a no personal income tax state, is becoming emblematic of where people want to go and create businesses and raise a family.

So I think that's very important, but it doesn't stop there. We also, at least in Louisiana, we have a patchwork of corporate taxes where you have huge exemptions for some industries and others get taxed very highly. Well, we all know if you tax it, it goes away, and if you subsidize it, you get more of it. So that's what we're doing, is we're actually bringing in comfort. companies in some cases telling them they don't have to pay taxes and they stay. But then we don't get any revenue. But then when we tax others, boom, they leave the state. Even many of famous companies that have started in Louisiana have left Louisiana because to them it's a patchwork, a complex set of taxation as well

as regulations. And they just find it burdensome and they want to go someplace where it's more straightforward and where they can actually make more money, have more profits. Well, speaking as someone who spent a good portion of my childhood in New Hampshire where they don't have state income tax, but they do have very high property taxes. So how, because tax dollars have to come from somewhere. So if in Louisiana you all eliminated that state income tax, would sales tax go up, would property tax go up? How would you all figure that? I fully support across-the-board tax reductions. And see, that's the trap we fall. into is that this is a static equation, that you need X amount of revenue, and in order to

have it, if you don't tax it here, you've got to tax it there. The truth is, well, look at the 2017 tax cut and jobs act, where President Trump signed into law where he reduced the burden on businesses and on individuals and what happened. The economy just exploded. It just was amazing. And the people who did the best were the lower income people. That's where they saw the most growth and their income and job opportunities. So really, it's a very dynamic process. So if we want more people to stay in Louisiana, because many are leaving, for better jobs elsewhere,

we send people to college. We have more colleges per capita than perhaps any state. So we train them up, but then they go to other states for jobs. What we really need to do is we need to bring the jobs here. So the idea is to have more people paying less tax rather than fewer people pay and more tax. And that's a big problem in Louisiana today. We can turn that around quickly.

But it begins with one very fundamental thing. Cut spending. Cut spending. There's a lot of wasteful spending in Louisiana. Just like in our federal government. And really, to be honest with you, you don't even have to cut spending. You just slow the growth of spending.

We've gone from $29 billion to $49,000. billion in terms of our annual budget in Louisiana in just a few years. And yet we still have the same problems going, well, are we going to balance the budget this year? So you see, spending expands with income. And we need to change that whole concept. We need to say, no, what we're going to do is spend what we're supposed to spend. And then we can pay off debts and other things that we have. And we We tax people less. We have more people, which brings more companies, more jobs, and more people paying taxes, but less tax rates.

Sounds like everyone should be, would be on board with that. Is that bipartisan in your state though? Well, you know, it's, frankly, it's a new idea. I'm the first one I know of who's actually said, less in the personal income tax in Louisiana. But it's being picked up quite rapidly. are saying, well, what about this? Well, let's tell us more. So to be honest with you, I don't think minds have been made up yet. But I think any person who really logically thinks through the problem, and they look at states around us, like Texas and Tennessee and Florida, these states

are thriving. They're doing very, very well economically. And one of the advantages they have over is they're attracting Louisianaans to go there to create jobs and businesses. And We want to reverse that by borrowing from the best practices that these states have. They've really figured it out, and Louisiana needs to learn from our neighbors. Yeah. I want to talk about a couple other issues that I know you're working on right now. One of those, ISS, explain what it is. Yeah, ISS, this is really getting into the weeds, but it's very interesting and important.

So publicly traded companies out there, their shareholders vote or have the, the opportunity through a proxy vote to decide what are some of the policies under which that company is going to be run and how money is being invested. And so you have these proxy services because you're talking about really, really complicated questions that the average person can't possibly understand. And there are oftentimes thousands of questions. So an individual stockholder has tremendous difficulty. So there's been created these organizations like ISS. You tell them, well, this is how I feel about how this company should run. And what they'll do is they'll vote on your behalf. They're a proxy voter service. And so that's very important

because hopefully they carry out the mandates you provide to them. I see. However, it's not working that way. What's happening? Well, what's happening is that these proxy services will say, well, look, this is middle of the road, this is mainstream, and then if you actually look deep inside, what you find is, as in the case of ISS, they've uncovered over 192 votes within that so-called mainstream voting that are very leaning towards climate change policies. Very politically Very politically motivated. So we found that we can't just trust them to do what we ask them to do because they're, in many cases, unfortunately, are going to do what they want to do anyway. And we're talking about not the company, but the proxy service, which is intermediate.

So we're now looking at on a molecular level, well, let's test this. Let's see when we tell them this, how are they voting on our behalf? And as I say, we've uncovered at least 190. 92 cases where they're voting adverse to the way we wish to have them vote when it comes to climate change questions. Wow. So now you all are trying to bring that accountability? Yes. Bring in that and there are, there's organizations out there now that are popping up that will

do that on your behalf, that they will, you know, I say a stockholder or, let's say a group of stockholders or state retirement system or whatever that we can, say, say, a stockholder, that we can rely on these services to advise us when ISS and other proxy services are not following our orders. So it's a way, it's a whole new concept being brought in to hold them accountable for doing what we tell them they must do on our behalf. Really critical. Treasure Fleming, before we let you go, I want to ask you about the Business Roundtable and what you all are up to there. Yeah, the Business Roundtable back in 2019 made a drastic change without really giving notice to folks. So for many years, they functioned the whole idea of doing what's best for the stockholder.

But they changed this in 2019 to the stakeholder. And you go, well, what does that mean? So let's say that you've invested maybe your life savings into a company. and you expect the people who are making decisions to do what's best for the business, get the best return, protect, you know, and save everything. Well, when they made this change to stakeholders, what they're really saying is, well, not necessarily for the stockholders, but maybe for everybody else in the world.

So we're going to start running the country in a way that we think is best for the world, for the populations of the world, the people of the world, rather than the people who own the company. What does that mean in real terms? It means ESG, environmental, social governance, which is the whole woke thing, the DEI stuff, the CRT. Right back to what ISS is pushing. Exactly.

And so you go, well, okay, so what? Well, here's the problem. There was a study done by the University of Chicago. They looked at 20,000 Morning Star-rated funds, and they had divided them into ESG, and non-E-G funds. And then they compared the best-performing ESG funds against the worst-performing non-ESG funds,

and the non-ESG funds beat them every time. So what that means is that if you let companies, or as you say, the business roundtable, if you go that direction, and you put as a priority climate change and DEI and all these other things that have nothing to do with return on investment or safety and security of your investment,

then what happens is that returns go down. And so I, as a fiduciary for the state of Louisiana, I'm not going to participate in that. If they're going to go the ESG route, then we're pulling our funds and we're going someplace else, and that's what we advise other people. Now, if you're well-informed citizen and your personal money,

you want to put it in something that's going to give you a lower rate of return and do these kind of things like climate change, I think that's great. you know, that's freedom of American, but there needs to be transparency. And again, and a fiduciary responsibility that I have, I'm not going to make that decision for the people I serve. It's up to them to decide how they want their money. When I'm holding their taxpayer money, my job is very simple. I want to stretch it as far as I can, get the best return I can, and keep it safe. And that's the only thing I'm interested in.

And look, I'm not pushing my conservative agendas through any recommendations or certainly anything that we do on the investment side. And I expect everybody else to do the same. Let's just make this all about best return. And that's a way it was originally started back at the beginning of our country, is treasuries should have the stockholders or the owners or the investors with the primary goal of making money for them and keeping that money safe. not bouncing off into political ideas or schemes or those kind of things, even cultural things.

That's just not our job and we need to stay focused on what our real job is. Yeah. Seems straightforward enough. It is to me. I don't know why there'd be any controversy for that. Absolutely. Well, you have been in office for less than a year. Do you feel optimistic about the future? You have started big plans. You have big plans for the future. How are you feeling about the next several years in Louisiana? I'm very optimistic about the future of Louisiana.

Now, Louisiana's taken a beaten, economically speaking. We've lost population. Our economy, we ranked 50th in virtually everything. But these things can be turned around in a New York minute. I'm just telling you that if we get pro-growth taxation, we get school choice, which we've begun that process, transparency to go with that. We're standing up a website. It goes live in March, where you can see on a molecular level everything about K-12 in our entire state. That's going to help parents

make choices there. We need to get crime under control like every other state with big cities, and we're beginning that process with our new governor. And then we have several other areas that we've still got to work on. Taxation being the major one, but improvement of our school quality, of course. And I think we could turn our state around really fast, but it's going to take a lot of action and a lot of activity. And I think we now have a full Republican state in charge,

a Republican skate in charge slate. Excuse me. Yeah. We have a full Republican slate in charge in the state. We have a, majority, both in the House and the Senate, when it comes to that. So we should be able to implement these things in ways that we've always been blocked either by somebody in another party that's blocking our progress in the state. So I think we're well positioned to move forward,

but we've got a lot of work to do still. Well, Treasurer Fleming, thank you for your time today. I really appreciate you sharing about the work you all are doing and the exciting plans for the future in Louisiana. Thank you. With that, that's going to do it for today's episode of The Daily Signal podcast. Thank you for joining us for our Money and Transparency series. I hope that you've enjoyed these conversations. If you missed any in the lineup, be sure to go back and check them out. And don't forget to hit that subscribe button.

So you never miss out on brand new shows from The Daily Signal. We'll see you right back here at 5 p.m. for top news before we head into the weekend. The Daily Signal podcast is made possible because of listeners like you. Executive producers are Rob. Louie and Katrina Trinko. Hosts are Virginia Allen, Brian Gottstein, Tyler O'Neill, and Elizabeth Mitchell. Sound designed by Lauren Evans, Mark Geinney, John Pop, and Joseph Von Spakovsky. To learn more or support our work, please visit DailySignal.com.