Would You Have Kids Today? Economist's Dark Warning About the Future | PBD Podcast #835

As an economist, how should we judge economists >> as frauds? The only people who get considered for a position at the Fed are conventional economists. They don't even understand how money is created. >> Who's Karl Marx to you and who's Milton Friedman? >> You better explain that question. >> Do you think uh Karl Marx was a con man? >> Cuz I regard Marx as a far superior thinking to most. >> Is it fair to say Marxism, communism miserably failed his theory, his ide? >> No, it's not. What countries would you say tried to follow Marxist philosophy and miserably failed? >> Marxist belief and the belief of the Soviets was that socialism would grow so much faster that it would overwhelm capitalism. >> Say, well, capitalism produced this. What the communism produced? Not much. And even, you know, hang on when you're talking about China. >> So true. Capitalism basically says, you [music] know, everybody out for themselves. >> I'm surprised the level of tension you have in defending uh communism. >> I'm surprised by this stuff, mate. You are not letting you you this is I'm sorry but I'm finding this a very black and white conversation when I prefer to preserve work in shades of gray. >> Feel free to make it colorful. >> The best example of free market failing America is your health system. Would you agree with that? >> No, I don't think so. I think we have a great health system. >> Do you now? >> How do you feel about RFK? >> I think he's a fool. >> But what do you disagree with them on? >> The average kid would get five vaccines. Now they're getting anywhere between 50 to 72 vaccines. what number of kids were getting autism. >> Those stats are are nonsense. [music] >> You know, you talk about >> You ask me about John Kennedy. What do you expect me to say? >> Sunshine or god knows what else is. >> You think sunshine cause autism? >> I'm just saying it's a silly argument and I'm not going to I don't see any point having this conversation. >> So you you don't think the future looks bright? >> No, I don't think it looks bright. >> It's scary. So you think it looks catastrophic? If if you were 25 today, would you have kids today? >> No. >> Wow, man. They really got a hold of you. >> No, reality got a hold of me and I can see what they're seeing coming and I'm [ __ ] terrified. Steve King, great to have you on the podcast today. >> Thank you for the invitation. >> Yes. So Steve, uh, you know, as an economist, you know, where you you were famous for making quite a few different predictions, one of them being the 2008, and your work's been documented all over the place. How do you think we, the average people who read and study economists? How should we judge economists >> as frauds in so many [laughter] words? >> Not that they're conscious of their frauds. Yeah. But fundamentally all the economic theories with the exception of the school of thought that I'm part of which is called just for historical reasons called postcanesian. They tend to be people who got sick and tired of leftwing versus right-wing views from other economists and say we simply want to understand how the economy works. Uh and so there's less ideology in the postcanesian school but you get Marxists to one end who think capitalism is going to give way to socialism. You get neocclassicals and Austrians at the other end who think that capitalism is the best possible social system and those ideological biases drive their analysis more than more than logic and more than data do. >> Got it. And so how how do you view I' I've seen the work and the things you've said about Karl Marx versus Milton Freriedman. Who's Karl Marx to you and who's Milton Freriedman to you? >> Pardon me. You better you better explain that question. >> Yeah. Who who is Karl Marx to you and who is Milton Freriedman? >> Well, Karl Mar, both of them are caught up with some sense of ideology. I regard Mars as a far superior intellect to Freriedman. Uh but just like uh other ideological branches of economics, Markx uh had a set of conclusions he wished to reach. When his logic didn't reach those conclusions, he twisted his own logic. Milton Friedman does the same thing. I don't know how anybody takes him seriously. uh when you take a look at his uh detailed work, the the stuff he puts across uh the at the sort of political level, the sort of standing on a podium giving a speech level can be persuasive. But if you look at the arguments behind his logic, they're just mythical, completely mythical. uh there's a wonderful put down of people like Freriedman by Joseph Schumpeder who is the the great non-orthodox uh Austrian economist and uh and historian of economic thought and he talked about what he called Ricardian uh the Ricardian vice he said that's when you set up a set of assumptions that leave the conclusion you wish to reach as the only possible conclusion you're conning people that way and that's what Freriedman does it's what Ricardo did as well uh so there's a large amount of of um of rhetoric in economics which rest people outside the the discipline will mistake that as logic but it's actually trying to reach a rhetorical position and it's it's question a question of how clever you are with words rather than what whether you what you say actually makes any logical sense >> so you think you think Milton Friedman was a con man do you think uh Karl Marx was a con man >> um no it's beyond saying the con man people convinced themselves of a particular set conclusions about about capitalism. Uh it's a question of how well they reason within their own frameworks. I regard Marx as not only a far superior thinker to most uh people in economics uh but a a great logician but when he pushed his logic uh when he started including his philosophical thinking in how he analyzed the economy he ended up contradicting what's called labor theory of value. Now the labor theory of value says that all basically all profit comes from labor and if you have a industry with a high amount of labor and a small amount of capital will make more profit than one with a lot of capital and a small amount of labor and this is empirically wrong and uh it it argues that all output comes from workers. Uh but it also gave Markx an argument that there'd be a tendency what he called the falling rate of profit and that would lead to socialism. Now when he used his own he developed his own philosophy uh to apply his philosophy to economics he ended up saying that labor is not the only source of value machines can produce value as well and that meant there's no tendency for the rate of profit to fall now that meant he basically he proved there wouldn't be socialism and his response was to bury his own logic because he wanted to reach the conclusion that socialism was inevitable. So there's an extent to which people uh twist their economics because there's a set of conclusions they wish to reach and if their own logic doesn't reach to those conclusions then they disrupt their own logic and you can find it both in you can find that in Freriedman you can find it in Paul Samuelson you also find it in Marx. >> So I is it fair to say um Marxist theories Marxism communism miserably failed his theories his ideas? >> No it's not. No it's not. Okay. Tell us tell us why you think it succeeded. >> It didn't succeed because peop people's people outside economics um [sighs] it I'm not saying that you socialism succeeds. I'm saying that a form of thinking about capitalism can be successful or unsuccessful. And the way we think about capitalism which comes from neocclassical theory is completely unsuccessful. You take a look at the theory as carefully as I have done over you know it's one and a half centuries of existence they've contradicted their own logic they contradict empirical data and they keep on going with that same belief system regardless uh so the logic inside neocclassical economics is extremely poor now Markx worked out a brilliant form of logic but he didn't like the conclusion so his logic is great his deductions for it contradict his own logic so in terms of having somebody with an intellectual framing to understand the capitalist economy, I'd go with Marx any day, but not with the labor theory of value and not what most Marxists believe. >> But let's stay on that. If somebody what what countries would you say tried to follow Marxist philosophy and miserably failed >> the Soviet Union, >> so they miserably failed and they were all about communism, right? They followed >> Yeah. I'm sorry. Look, this the the the um it how do I how do I frame this? The the soviet Union basically thought you could have a centrally controlled command economy. Okay. Now, that failed uh to grow anywhere near as fast as the capitalist economies did. So Marx's belief and the belief of the Soviets was that socialism would grow so much faster uh and produce so many more goods for the workers that it would overwhelm capitalism by being more productive and giving a better salary to the workers. In fact, it failed on that front and that's why rather than you know it wasn't the east, it wasn't the west that tore down the Berlin wall to get into the Soviet Union. It was the opposite direction. So the system failed. But there's a brilliant Hungarian economist I'm sure you haven't heard of called Yanos Corno. Ever heard the name? >> I haven't. >> Okay. Yanos Corno was a socialist economist in Hungary and he's asked this question why did the Soviet Union fail and why did capitalism succeed? And what he looked at, he said, "Well, in the Soviet system, of course, you the when when so when when the Soviet Union began, it was in a feudal society. Russia in 1917 still had surfs. So we're talking about a very primitive mainly agricultural society, very very backward. And therefore because you had the the Soviets had the ambition of industrializing Russia uh every last sector of the economy needed development goods and they were trying to centrally plan each one. Now what it meant was every sector got less than it needed. So they were all resource constrained and when you're resource constrained the best way to meet the physical targets you're given in the 5-year plan is to produce more of what you produced last year. You don't innovate. Okay. Whereas capitalism in in corniz analysis is demand constraint. You've got lots of people producing cars uh inadequate agg aggregate demand because you try to pay workers as low wage as possible. So in that situation the you have more productive capacity than you need to supply the actual level of aggregate demand. So there's excess capacity everywhere. And the way that firms make try to get the demand to come in through their doors rather than through a rival's door is by innovation. And so the constraints of capitalism give you innovation. The constraints of the Soviet system gave you no innovation. So that's what's Corno's explanation for why the Soviet system failed. Uh now China has studied both Marx and the Russian and the Chinese and and the Russian experience and um and and corniz work as well and they realized they had to find some way of guaranteeing innovation would occur at the level of consumer products and they've done that they have centrally planned laying out the infrastructure. So the the roads, the rail systems you see are all stateowned and state managed. But in the uh in things like car manufacturing, I think it'sund but about 120 Chinese car companies at the moment. They won't that won't maybe won't last, but it means you've got 120 different companies competing for the share of the same market. They're innovating like crazy. And therefore this Chinese system has got the best of both worlds in the sense they've got central planning for infrastructure and long-term development and they're doing that quite brilliantly and at the same time they've got enormous innovation taking place uh in the private sector which is all driven by uh profitability and capitalist motivations and so on. So u in in terms of the country which succeeded from a marxian foundation it's definitely China. >> Yeah. So I if we if we were to judge the systems what is the right way for us to judge e economic systems if it's communism and capitalism to judge it. So, you know, like to me, if I a personal trainer comes up to me, Stephen, and he says, "Hey, Pat, I want you to help you lose 40 lb, but the guy's 300 lb, 40% body fat, out of shape, but he wants to be a trainer to tell me I can help you get in shape." Right? And so, the average person will look at him and say, "How can you get me in shape if you're out of shape yourself?" What is the right way for us to judge an economical system, communism versus capitalism, to say, well, capitalism produced this. What the communism produced? Not much. And even, >> you know, hang on. When you're talking about China, let me finish this. When you're talking about China, >> uh, China even had to go and, you know, sit down with Japan to find out how they were growing exponentially. And then finally, they said, "Look, you got a couple banks in China. You need a lot of banks. You need thousands of banks that are doing what they're doing." and China finally listens and opened it up and realized they need a form of free market. Yes, they don't believe in free speech yet. They don't believe in a lot of that stuff, but they allowed guys to have ownership and that changed. And so, how do you judge success between how should we judge success between capitalism and communism? Well, if you're going to use the America versus China result, China's rate of economic growth and China's uh lifting of people out of poverty transcends anything America's achieved over its time. So, America American industry has lost complexity, lost sophistication. China's increased its complexity, increased its sophistication and uh since the Dong Xiaoing reforms which are absolutely critical occurred, you've had you know something like you know over half a billion people raised from uh out of absolute poverty. So there the so there's the the social >> which they embrace capitalism right they embrace an element of capitalism >> an element of capitalism we we there's a tendency to be like a cardboard cutout um attitude you know capitalism versus communism uh as if there's a standard version of both now of course there's dramatic variations in capitalist nations and in communist nations and like if I had to choose a communist nation which as well as suffering from American um sanctions is done very well badly in its own form. I'd choose Cuba. Okay. Uh having spent some time in Cuba, China is stunning at the other extreme and you cannot believe >> capitalism though. I I would put China as capitalist because their government is communism, but they're they have a free market element that allows you to compete. It's not by force. You can't have an opinion. You you have an ability to build a business. And they watch others succeed. and they decided to copy what was working, which is America. So did Russia in a sense. Wouldn't you agree on those two concepts? >> No, I wouldn't. >> So you would say that Russia and China are still 100% communist nations. >> No, I'm not saying 100%. This is why I think you're trying to put things, you know, black and white pictures when everything is show. >> Why don't we do this? Can you can you define what communism means to you? What is the definition of communism to you? >> Well, we don't have communism anywhere on the planet. Okay. Because when you look at a marks defined communism is once you get to the stage where people you know every each according to their ability from each according to their each from each according to their to their ability to each according to their needs that sort of you know idealist system in the future what you have is socialist versus capitalist and the socialist uh if you had to get a a pure statement of the ideologies of both systems capitalism basically says you know everybody out for themselves get the best possible gain you can for yourself and out of the self-interest and and and selfobsession you'll get the best possible outcome. That's your definition of capitalism that it's only self >> potential. It's not the one that I heard mathematically impossible if it's only self-interest for you to >> That's true. That's true. That's that's an important point in both systems are impossible and they're extremes. And there's a tendency in western thinking to go left versus right, one extreme versus another extreme. Not nec. I'm I'm more interested in in being specific. You you've been doing this for 50 years. I've talked to a lot of different economists. I enjoyed my conversation with Richard Wolf who's a socialist. I've spoken to Slava X who was more of a communist himself and we had a very good conversation. I've sat down with Ray Dalia. We've sat down with a lot of billionaires. We've sat down with a lot of heads of states and and and uh >> presidents. If if we were to put a percentage to it, Steve, and say taxes, because to me, capitalism, socialism, communism can be tied to percentage of taxes. Communism is the state owns everything and they, you know, seize the means of production. So, it's 100% taxes. You don't have the ability to build anything. And maybe capitalism is going to be a lower rate of taxes. You pick and choose where you want it to be. 10% flat, 30% or some states want to do progressive. I know you guys in your state uh just launched that if somebody decides to sell you, you could end your capital gains just went to the roof depending on what time frame you sell it in. and then socialism could be in the middle. How would you describe those three economical systems specifically tied to percentage that people pay in taxes because that's how clear would make it for the average person. >> I think it's percentage of the of the services that are provided are provided by the state rather than provided by the market. And in that sense uh the socialist economies tend to be 50/50 or more provided by the state. Uh capitalist less than 50/50. But there's so as time has gone on there's more and more things that are pro that are needed for a sophisticated society that uh what you can call public goods. So for example health my health affects your health. If I come down with a communicative disease you're going to catch catch it. So there's there's ways in which that's a public good rather than just a private good. Now there's an enormous range of things that are like that. Now education we all benefit from an educated workforce. We suffer from a dumb one. Uh, education is a public good, health is a public good, uh, transportation to some extent is a public good because if it's easy for workers to get from one point to another without paying a great deal of money, then it makes it cheaper to hire those workers because your wages don't have to cover high transportation costs for them to get to the factories. So, there's a division between what is a public good and is better provided in a public environment and what is a private good things like, you know, television sets and fancy restaurants and so on. uh which are best provided by the private sector. And there's also a time dimension to it. When you're looking at uh normally ordinary consumer goods, uh there's plenty of potential for a manufacturer to make a profit out of things like television sets and so on. You can't make a profit at the same scale up to sewage systems. You you if you if you leave those sorts of things for profit oriented providers in the first instance to provide, you'll have less sewage than they need. So I think that's really it's a division between the extent to which goods are provided by the state sex system as as just part of the fact that you're a citizen versus having to pay for them. And the socialist economies will have more of that. And I think that's actually in effect that's the trend we've been going through over time because 150 years ago you didn't worry about sewage. You had [ __ ] running down you know the streets of London uh into the into the Tempame's River. uh if you move to a more advanced and sophisticated society, we can't tolerate that. And that means you have the state providing those services. If you leave it to the private sector, those services will break down. Those services would break down. I mean, a lot of people would say uh anything uh produced by the government. It's shittier customer service. They treat you horrible. They can make you wait as long as possible. and free market. If they do do that, they get complaints and those complaints hurt their business. But the state doesn't have competition. What would the state worry about if they don't treat you well? They have a different energy when they talk to certain people. Uh I was in the US Army. I was in the military and I've dealt dealt with the state for a long time. I've never seen any customer service on how they treat people be better that's ran by the state than ran on the free market side. When I was in China the first time which is 8182 I ran a seminar between Australian journalists and Chinese journalists which was observed by a large number of students of journalism in China. This is the beginning of the of China having a not not a free press but a press system. And the one thing the students were most fascinated by that I unfortunately did not give them information on for various reasons was the ombbudsman system that Australia had which had copied from Sweden. And the ombbudsman system put controls and and monitoring sets on public servants. Now it seems that China has implemented that. If you become a a bureaucrat in China, you have a set of guidelines that you're required to reach. And if you don't reach them, you either get sacked or you don't get promoted and you you you get oified. And that seems to be a large part of why the public services in China seem extremely well well provided and certainly better than what you get in America. >> You you said certainly better than what you get in America. So transportation public transportation. >> So you feel you feel service is going to be better rendered >> uh by the government than free market. What what uh what does the government have the best example the best example to free market failing America is your health system? >> Would you agree with that? >> No, I don't think so. I think we have a great health system. I think uh >> do you now it cost three times as much as the rest of the world. Do you think that you you pay you pay about three times as much per head to health as most western nations do? >> Our our you know capita per GDP is also higher. If Australia was a state with us, you would be number 40. You know if if if UK was a state, it would be behind Mississippi at 51. So it's also capitalism's brought more people out of poverty in US than any other country in the world. I'm surprised you're fighting this. Well, let let me let me >> I'm surprised you're fighting it as well because you're making this live here. I escaped Iran to come live in America because I have a incredible life. And by the way, I'm I'm surprised the level of tension you have in defending uh communism, a failed economical system. I'm surprised. >> I'm surprised by this stuff, mate. You're not letting you This is I'm sorry, but I'm finding this a very black and white conversation when I prefer to work in shades of gray. Feel free to make it colorful. I mean, go ahead if you want to make it color. >> Color is I mean, I mentioned about the medical. Now, you you say the medical system in the States is fine. You have a low you have a a lower life expectancy than virtually every other major western nation. I don't know the actual numbers, but I think the life expectancy in America is of the order of about 74 or 78 I think it is and most of the rest of the world it's 84. And you pay about three times as much per capita for the health system. And the reason health works very badly as a private good is because when you find you're dying of a fatal disease or that's you don't have any bargaining power. If you if you find you've got a disease you need the best doctor for, you'll pay the best price. >> I think a lot of people would say on that side how do you like Robert Kennedy? How do you feel about RFK? >> I think he's a fool. >> You think he's a fraud? >> I think he's he's weird. I mean, his attitudes to vaccines, uh, the idea that you should catch diseases and and the idea you're going to have her immunity from, uh, from exposure to diseases. >> Do you agree with that? Do you agree with them? Do you agree with them on >> the types of food that we eat in America is a lot worse than other places because of >> Oh, yeah. That that that he's definitely right on. >> Okay. So, you agree with him on that? So, what do you disagree with him on? >> Belief that vaccines cause diseases. >> So, you So you don't think you don't think that the studies that show that in the last 50 years and this is the part that you and I may actually agree on. You don't you don't think uh uh uh Steve that these big pharmaceutical companies have benefited from increasing from the average kid would get five vaccines, three vaccines back 50 years ago and now they're getting anywhere between 50 to 72 vaccines. You don't think financially that's benefited big pharma in America? >> Well, certainly it has. But now you're being a critic of capitalism. >> I am. I am. I am with pharma. I am with pharma because they they force down. You see, to me it's >> I have the ability to reason and see the flaws in certain areas and weaknesses. I'm very comfortable doing that. Uh that's not something I'm uncomfortable with. I do think with the help of the state, they forced these vaccines on kids. And if we go look at stats, because I know you like stats as an economist, it's not hard to see what number of kids were getting autism 50 years ago versus today. Have you looked at those numbers? >> I'm not a political person and I've seen arguments from people I know who are medical researchers say those stats are are nonsense. I'm certainly not going to get involved in saying I mean the antivax the antivaccine like I'll give you one reason why I'm pro vaccines. Okay. My father had polio. I didn't. Okay. Uh and and the but certainly for big farmer making money out of unnecessary drugs for sure and that's one reason you need a state system. And it may be that that health in general is better at the state level where it's provided in state health is guaranteed uh in that sense rather than being something you can only afford and operation if you have the money for it or you have the insurance cover from your private company which is very much an American thing. It's not the rest of the world. Got it. But but when you're looking at numbers, I mean, these are numbers that's coming from the state, an organization you trust, right? >> Please, please, please, please. So, you're doing a caricature of me here. I'm a critic of the state. I've worked in the state. I I I used to regard the Department of Trade, which I worked in at one stage, as a retirement center. >> Are you familiar with the CDC? >> The Center for Disease Control? Yes. >> Okay. So, this is coming from CDC. You brought a vaccine. Nowhere in my notes was I planning on going into vaccines. I was going to, you know, you talked about >> You asked me about John Kennedy. What do you expect me to say? >> No, I don't have I'm glad you did. I'm glad you. But since you did, let's look at some numbers cuz you're a numbers guy. You're an economist. So, 1970s in America, according to CDC, one in 10,000 children had autism. 8 1995 was 1 in 500. 20ou 2000 was 1 in 150. 2010 is 1 in 68. 2020 is 1 in 36. The latest is 1 in 30. About 4.9% of boys today are identified as autistic. 1.4% of uh girls. How do you think that happens? Should we not consider vaccine as possibly one of the reasons for it? >> We can probably think sunshine or god knows what else is. >> You think sunshine caused autism? >> I'm just saying it's a silly argument and I'm not going to I don't see any point in having this conversation. But you but you you brought it up and >> you brought up John Kennedy and I to I mentioned vaccines as one. You said do I like John Kennedy? I instantly said I had no intention of discussing vaccines and I let's talk about something that's actually my area of expertise. >> No, no, but you brought this up and you had strong opinions and I'm just sharing. >> You said John F. Kennedy what do you expect me to say if you raise Robert Kennedy? >> Yeah. I think Robert Kennedy, he's a guy that brought >> Why did you raise Robert Kennedy? >> Because why did you raise him in the first place? >> I'll tell you exactly why I raised it. because you said the healthc care is the issue in America and I said he brought up the food that we eat in America is a lot more processed than other states. I was going in the food direction. You went to vaccine. I never brought up vaccine. You brought up vaccine. >> Okay. Well, let's let's go back to food. I guess >> let's stay on that. Let's stay on vaccine. If you brought it up and let's just move on past this because you brought it up. >> How do you how do you feel when you see a data if an average person like me or you who is not in this space, you're a thinker, right? And if you see we go from 1 in 10,000 autistic rate to now one in 31 according to CDC not pharma. What do you think could be those reasons? >> Different definitions of autism >> such as >> I have like you know I if I think back to my school class 50 years ago, there's about half a dozen kids I could classify as autistic today who wouldn't have been called that 50 years ago. Uh but in terms of I have I've vaguely seen some research contradicting the argument there's any relationship between vaccines and autism and I have no expertise and I have no interest in the topic either. >> I figured that makes sense why you wouldn't have any interest. What do you think about Alan Greenspan? He just passed away at the age of 100. What do you think about Alan Greenspan's legacy? >> Very negative. The one thing we should remember Greenspan for is he rescues the finance sector when it causes crashes. That's the Greenspan put. when the stock market fell 87% in uh in 1980 so fell 20% 1987 in one day he basically guaranteed that all the uh all the financial firms would be rescued and that basically led to encouraging financial instability and the financial irresponsibility I think he did uh very negative contribution to Americans the American economy >> which American uh economist do you think or uh um a Fed Ed chair do you respect that did a decent job in America? Who would you say that person was decent? >> All all the Fed chairs have come from the same school of thought which is called neocclassical economics. That includes Ben Bernani for example. Uh they have in my opinion a totally they have a model of the economy which is to use a great American satist Menkin uh their theories are neat, plausible and wrong. And those those the the only people who get considered for a position at the Fed are conventional economists. They don't even understand how money is created. So you've got there's not not a single one I would take particularly seriously. If you wanted to ask me a mainstream economist that I have some time for, I'd mention Robert Schiller and Paul Roma. That's really about it. >> Got it. Uh how hard of a job you think the the most recent chair has uh Worsh that he got the job with being pressured to lower rates versus keeping him that way. And if you were given that job, let's just say if you were given that job, this is your world, you follow it. >> What do you think would be the right move for him to make in this state of affairs that we're in America? >> Well, I think the main problem in America is too much private debt. It's not the government debt that matters. And that's what all the mainstream economists obsess about. What causes financial uh crisis is too much private debt. Burns and bust and the level of rate of growth of private debt. So I'd be using the government's capacity to create money to cancel household debt which is what we used to call a jubilee. Uh that's what I'd be doing. And in terms of the interest rate, uh again it's a very facious theory of economics that says the rate of interest controls the rate of investment. That's the basis of or the rate of consumption in fact is what modern so-called modern economic theories argue the rate of interest controls. They're completely facious. Uh they don't work. And at the moment, if I was in charge of America's interest rates policies, I'd be reducing them because we're about to see a huge shock for the American economy coming out of the closure of the straight of Hormuz. Uh the impact of that on the productive theap capacity of the economy to produce goods and services, which will mean people can't service their debts anymore. And you're going to start seeing bankruptcies coming out of the inability to pay the debt levels people currently have uh because of the destruction of the productive capability of the economy from the war in a war against Iran. >> So your position would be to lower rates. So so you would agree with Trump because Trump wants to see also >> in this particular point? Yes, I do. I do. >> Can can you unpack that? Why do because some people um push back on the president on lowering rates and they're concerned if you lower rates, you know, inflation may continue versus keeping it kind of where it is right now for things to level off. What is your position and the reasoning for lowering rates? >> Well, inflation is not controlled by interest rates in any effective sense. If you want to reduce the rate of inflation by using interest rates, you have to do something like VOCA that did and cause a recession. put rates up that much. That's what actually that's the only control mechanism is when you [ __ ] the economy and therefore push inflation out that way. That's what happened under Vulan. Uh to I believe you can fine-tune it using the interest rate which is the belief that conventional economists have. I think that's completely wrong. Now what commercial economists don't look at is the level of private debt. They have no idea even though they'll collect the data. They really have no idea of how high level of private debt is. As you put up the interest rate, you you make it harder to service that debt. And that's what can cause a a downturn. What worries me about the current situation for the economy is that people are comparing it to the 70s when there was the uh uh the oil price rose and that led to rising wages and that gave your wage price spiral. Back in the 70s you had strong unions relatively speaking certainly stronger than they are today. So when the price of petrol went up at the petrol pump, unions could go and lobby uh the firms to say we want a higher level of wages and you got a what's called a wage price spiral. This time round, unions are so weak and workers generally speaking don't dare go and bargain with their wages. They're happy to hang on to their jobs. Uh what you will get from the increase in the oil price, which is coming courtesy of the straight of closure, is that workers won't be able to afford to uh pay their petrol costs. they will they will have to reduce what they do elsewhere. So there'll be less consumption coming out of the economy that will cause a bit of a slump and rather than getting a wage price spiral, you will get increase in prices courtesy of the straight of Hormuz. Uh and that means workers will not get the wage rises they want. So what I expect instead is to see a deflationary crisis coming out of this. Initially inflation from the increase in oil prices and increase in cost of production of so many goods courtesy of the other uh things which are blocked by the straight of homos uh and then workers been unable to pass those costs onto them in terms of their wages a collapse in demand and then you will have a a deflationary crisis and in that situation the last one you would think you want is a high rate of interest. >> Got it. And I it's funny because you and the president agree on that. That that that is a part where um you know they they think that's the right move to I'm not sure if I'm there with you and the president. I know you guys agree on that part of it. Uh whether lowering the race the right thing to do or not. The the economy a lot of people in America would love to see that happen. By the way, going back to the personal debt side, how much of that and I'm curious from your standpoint, how much of that personal debt challenge happened the moment we got off the gold standard? Is that where you are with it or do you have a different position? >> No, no, no. What actually caused the growth in debt was deregulation of the financial sector. You used to have if you go back and look what happened after the great depression, uh what Roosevelt realized and Irving Fischer realized was the financial sector caused both the bubble of the 1920s and the crash of the 1930s. And so we have to restrain the tendency of the financial sector to get involved in irresponsible behavior and Ponzi schemes. So things like the glass deagle act reduction in the level of uh margin leverage. So margin debt used to give you 10 to1 leverage now it only gives you 2 to1 leverage. All those things came out because the attitude of the people who experienced the great depression was the financial sector uh will lead to speculative bubbles and we have to restrain that tendency of irresponsible behavior by the financial sector. When we got conventional economists dominating their profession starting in the 1970s, they basically thought everything is better as a free market. Let the banks do what they want to do. And their belief was that if you deregulated the financial sector, there'd be more money for investment. In fact, there was more money for speculation. You had the uh you had some, you know, obviously banks provided uh money investment funds for telecommunications and internet and all that sort of thing, but they also did the subprime bubble. And the whole idea of the subprime bubble was borrow money, buy a house, and sell it to somebody else for more money, which only worked if somebody else borrowed more money than you did. So you got this exponential increase in the ratio of of household debt to GDP, which reached a peak and then crashed in 2006 that led to the crisis. So uh the the banking sector has a tendency to be irresponsible and it just runs with the nature of banking. So I I blame that on deregulating the financial sector. I'd bring back regulations to make sure that the financial sector predominantly provide working capital for corporations rather than providing funds for gambling and speculation in casinos which is what they do at the moment. >> How how do you do that? How do you do that? Because what what opened up we talked about it earlier with China. What opened up the market in China is when they started having more banks lending more money to small business owners. You and I both know when uh the big banks were uh bailed out in 2008 and they got all those billions of dollars, the money didn't go to the business owner. They kind of kept it to themselves and didn't So what what can we do? Like how do you force them like what what do you create for that money to go to small business owners? >> Well, one thing I do rule out making it possible to make a profit out of funding a Ponzi scheme. So my favorite one there of course is the housing scam, housing housing bubbles. And I've done empirical work to show that what causes rising house prices is accelerating household debt. And that's what's that that's caused the booms and busts you've seen in America and everywhere else. And what that mean that comes about because banks will claim to be giving a borrower an amount of money based on their income. But they'll fudge the numbers. You know the idea of what do they what do they have expression for it? No ninja loans. No income, no job, no assets. That's right. Okay. Okay. They're willing to do that. I would make it uh I would put a limit on the amount of money that can be provided to buy a property based not on the income of the buyer but the real or prospective income of the asset itself. So you if you buy if you you know you build a house for rent then I would say the the maximum amount of you could borrow to buy a house for rental purposes would be 10 times the annual rental income of the property. The same sort of thing applies for owner occupied. That would mean that it was no longer profitable to lend into bubbles. You wouldn't get runaway amounts of debt. The level amount of money being lent would be rel related to the in the to the rental income of the property which doesn't have the bubbles we see elsewhere. Uh I'd also make it possible for banks to take a equity position when they made a loan. At the moment there's a very good reason for banks not to lend to entrepreneurs and that is that most entrepreneurs fail. And if you if I have a bank lends to say six entrepreneurs, then five fail. So the bank loses its money on five of them and only makes an interest uh earning out of the the sixth. I would have banks having passive emphasis on passive. I've got enough entrepreneurs who tell me the last thing I want is a banker making decisions on their board. But a passive position uh where they take an equity stake and if they have six five companies that fail and one that succeeds, the one that succeed could be Amazon. So you make up for the losses elsewhere. private equity kind of like a private equity model >> similar but it's it's money creation rather than you know private equity tends to pull existing money this would be banks create money when they lend this is one thing mainstream economists do not understand they simply don't want to know that that's the case but when a bank makes a loan it also creates money so I want to uh limit that for money being created for productive purposes not for speculative ones and I want to encourage getting money to entrepreneurs so that idea of being uh firms, banks make loans to entrepreneurs and get an equity stake rather than a loan position. I call those eels for entrepreneur entre entrepreneurial equity loans. So you can make changes like that that change the behavior of the banking sector and get back from the days when the banking sector dominates the physical economy to the days when the banking sector was a servant of the physical economy. That's what we need. Do you think do you think there almost needs to be a massive shakeup for them to make that kind of an adjustment? Because, you know, if if somebody wanted to go that route and somebody got elected and they wanted to propose your idea, real estate valuation in America would probably take a 25% hit overnight if that were to happen. Yeah. >> Right. And >> and I've come Yeah. And you'd like to see happen. >> Yeah. I I'm I have no I have no doubt my ideas will never get tried. Okay. So, I'm aware that I'm putting through hypotheticals, it won't happen. But in the in the case of trying to reduce the level of household debt, uh, which is like running at about 100% of GDP, it should be about 30% of GDP at most. >> It's scary. By the way, I it it it is it is truly a uh concern that I don't care who the president is on the left or the right, they have to know that's a real issue with affordability because if the average guy, say 28-year-old man cannot afford to get married, buy a house, and have kids, we have a very big problem in America. >> And that's the situation you're in. Yeah. And it's a global it's a global phenomenon. A house house prices used to be roughly three times three times household income when you had a single income earner back in the 50s, the male male income owner. Okay. and the male bread winner could support a wife and three kids and and build buy a house at the same time. That's the so-called American dream. Women's liberation, I think, actually contributed negatively here because women got into the workforce and it's now three times two incomes, right? Uh the the finance sector benefited more from >> women. So you think the idea so because in 1970 we had I think 1970 we had a record-breaking most kids born in America are it was a 3.59. You know how we we're at 1.58 right now? I don't know what it was in 1950, 1970. Can you look up when was the highest birth rate in America? The year it was one of the highest birth rates in America, Steve. Um only 35% of women were in the workforce. Today it's 70% in America. So you think that wasn't a good thing for the economy? >> No, it was the benefit of that went to the finance sector rather than individuals. If you basically thought if you had two people working, you got twice as much income. you have a a more comfortable life. That was the the fantasy of of you know getting expanding women's role in the workforce and and the the women and the and the families will benefit. Instead, it meant that when you went to buy get a house loan, housing loan, they they took, you know, two incomes in double the amount of money they let you borrow, you end up servicing that debt. And in fact, the the increase in incomes uh ended up causing an increase in house prices, making houses unaffordable. So, I've gone from the days, it's not as bad in America as most of the rest of the world, I might add, but the ratio of house prices to incomes used to be about three and a half. Now, it's about 10. >> And that just means [clears throat] scary. That's a scary sight. >> Yeah. So, we need to get out of that. But the thing is to do it, you've got to reduce the level of household debt and reduce house prices. Now, as you said, if you do that, you'll make many people who think they're currently asset rich make them asset poor. So, I came up with a proposal that I call the modern debt jubilee. And the idea with a modern debt trial is the government can create money and it creates that money and gives every American adult $100,000 and says if you have debt you must pay the debt down. So if you have a you know two two income family they got $200,000 they've got a mortgage of $250. They've got to pay that $200,000 off. They end up with a mortgage of 50,000. So they benefit in that sense. Uh so you the cash injection in the first place can cover the fact that the price of the house might fall. And of course, most people think they're asset rich when they've got an expensive house, but to get benefit from that house, they've got to sell it. This would be a way you hang on to your house, you have a lower level of debt, and we get you out of the debt squeeze you're in right now. And then we limit how much banks will lend in the future so we don't have the same ridiculous level of household debt to buy a house in the first instance. >> So, so in other words, let me restate what I think you're saying, and correct me if I'm wrong. A form of a quantitative easing for individuals, not corporations. That's a reasonable way to put it. That's a reasonable way to put it. >> I got it. So So that that makes sense. And and by the way, where are you at? Uh uh Steve, uh on the topic of what's happening right now with the wealth disparity, you know, we've always heard the saying rich get rich or poor get poor, right? >> I I pulled up something yesterday when I was looking at it when you know the last 50 years, who were the top five richest men in in America last 50 years? And one of the things I noticed is 50 years ago the difference between first place and second place was I don't know 10%. Okay. Yeah. >> And it went to 20% and then 25%. >> Today the difference between first place and second place is 300%. >> And and you know Elon is at the top with 1.3 1.4 which I have no problem with. I'm the capitalist. You and I may differ in this in this uh uh in this u topic, but what role you think AI is going to play on accelerating creating extremely wealthy people and a lot of people being left behind. And then if that does end up happening, your position, maybe you're pro AAI, maybe you're optimistic that AI is going to do good for the economy, but what role you think AI is going to play the next 5 to 10 years? We're just seeing it right now. What do you think is going to happen? When we set out to create a shoe that blends comfort, function, [music] and luxury, we had the choice to make it fast. We had the choice to make it cheap. We chose neither. Instead, we [music] chose Tuscano. We chose true Italian craftsmanship. Each pair touched by 50 skilled hands. We chose patience, spending two years perfecting every detail. And we chose the finest [music] quality at every step. Introducing the future looks bright collection. Not rushed, not disposable, not ordinary, rather intentional, luxurious, timeless. Well, first of all, I think there's going to be a bust. This is a classic boom and bust cycle in capitalism, just like with railways back in the 19th century. So railways were private technology when they first came in and everybody thought they were going to make an absolute fortune out of railways. Railways particularly in the UK just criss-crossed everywhere. They all went bust. Uh and and you only had a handful of operators surviving and then the state bought. >> How long did that take by the way? How how long did from star to bust? What was the >> I'm only get I don't I can't recall. I haven't read the Is it over 50 years? 15 years 10 to 15 years. AI is much faster than that. So we're seeing a huge buildup right now. I from what I've seen in terms of the amount of revenue these companies are getting versus the cost they've got. Their cost of five or 10 times the revenue. In other words, they're losing large amounts of money. And so you're going to come up with only a few survivors coming out of this. And I think the cost of AI is going to increase quite dramatically as well. At the moment, people are using AI to make funny cartoons of their father-in-law or mother-in-law. U the days when that's a feasible idea. >> More mother-in-law is fun. But my mother-in-laws, I'll agree with that. >> Uh but uh but but this uh we're getting a boom and a bust. So we're getting a boom at the moment. The bust will come, I think, in the next one or two years. Uh and then you're going to get a large collapse. All all the all the money that was put into it will be lost. Money will still be distributed in the system of course, but it won't be in the hands of those who paid out for the data centers and so on. So I see that happening. with AI in general. I know that it's a long way from this being technologically feasible. But the thing which Musk is talking about and I agree with him on this front is that if we got to the stage where robots could replace humans, then there would be no capacity for workers, anybody without capital to get an income. So the only way to survive that is to have the income generated by the economy as a whole. And that means you get uh the basically a universal Musk calls it universal high income. But you have to create the money that enables people to buy because the vast majority of people won't have ownership of of of capital and they won't have uh the capacity to get unskilled jobs anymore anyway. The robots will have them. So if you're going to avoid the Hunger Games outcome, you have to give everybody enough money to be able to buy the goods being produced by these firms and live a comfortable life. >> Yeah. >> But I can't see that happening. I think I think we're going to see climatic issues long before we get to that point. Let me let me let me uh by the way, when is your birthday? What month is your birthday? I'm curious. >> March. >> You're March. Okay. Early March, mid-Marchch, >> right? >> Okay. Uh so you're in Aries. Are you like after the 22nd? >> Yes, indeed. >> Okay. So, my dad's also the same as you and and it's it's funny just talking to you. I'm I'm I'm uh wondering wiring. How much of your own philosophies on economy and finance, how has it worked for you when it comes down to making investments with your own money? >> I don't invest >> at all. >> I've been in No, I mean I'm building a company. I've got a company called Ravel Rolation. So, I'm making a software uh uh uh products. I've done a couple of attempts at getting businesses started. If I'd done them in America, they would have been successful because the scale of your American economy is much larger than the Australian economy. So one >> So you like American capitalism? That was a very big compliment. >> The scale of the American economy. >> You flirted a little bit. You flirted a little bit with the you know >> equally Europe. We have been quite successful in Europe. I think I think you made America look a little sexier. The way you said it, you could help. >> That's fair enough. I mean there is there is a one thing I will say in favor of American culture, failure is not a problem. uh failures. One of my favorite lines as a send up is saying success is the first step on the ladder of failure and vice versa. So being able to fail then pick yourself up and keep on going. That's part of what the attitude of America is and that's a that's a positive contribution to enabling innovation to occur. So you need that to some degree. Uh but yeah, in terms I what people call in investing I call speculation. Okay, you're buying shares and buying houses and expecting to increase in price. when I know when I know the logic behind that it's all driven by financial bubbles. So I've stayed out of that but I am trying to form a company right now called Revelation and that'll be marketing a software package both for data analysis and for economic economic planning. Steve did did a did did you fall in love with an American girl that broke your heart many years ago and you just had spite for America? Did a girl break your heart in the past? Is that what it is? It seems like you are you know Mary was wrong. It's not your fault. Steve, I just want to let you know, screw Mary. You're okay. We're going to be fine. I'm giving you a hard time. I'm saying if your ex's name was Mary. >> In fact, I married I made I made two I said two things I'd never do is marry a nurse or an American. And I did both in sequence. >> Really? >> Yes. >> So, you married an American nurse? >> No, I married an American singer. >> Oh, singer. I thought you said nurse. And I was >> The first wife was a wife. The first wife was an Australian nurse. The second was an American singer. >> So, the second one succeeded. You're still married. No, lasted about two years and I wish I never got involved. >> There you go. I mean, we just figured it out. We just figured out your economical philosophies in the last 20 seconds with what happened on the second one. But let let me ask you, do you do you ever sit there, Steve, and wonder and say, "Maybe I should have gone into the market. Maybe I should have invested. Maybe I should have bought some Bitcoin. Maybe I was wrong on some of my >> Bitcoin. Definitely. I should have bought Bitcoin because I was first introduced when it cost a pound of Bitcoin. Stop it. >> Did you say a pound a bitcoin? >> Yep. Roughly speaking. >> And you said no to it. >> I just when when I had the energy use explained to me, I thought this isn't going to work. Now, I should have done what Newton did. No, not the first time, but say this is a crazy bubble. If other people are idiotic enough to do it, I'm going to buy and put a,000 bucks I can afford to lose. I would have made a billion. Okay. So, it's my mistake. I didn't do it. So, yes, I do have regrets like that. >> Do do you do how about how about free market? How about the stock market? Like, do you look back and say, you know, because because an element of investing and I'm so glad you're in the in free market capitalism right now to build a company. God willing, you'll build it and you'll sell it. And I I actually hope you do because I love when these types of I just had Medi Asan on. >> I don't know if you're familiar with Medi Asan. We He was on >> I think he was on two weeks ago or three weeks. So, we had a very good conversation. Great back and forth debate and you know, he's a professional debater. I mean, he does us for a living. It was a phenomenal conversation, but I said to him, I said, you know, how's it feel going from working at MSNBC and they're paying you a salary to now you're a capitalist, you have to hire people, you have to build a company. And he had a smirk. We laughed about it, you know, kind of went through it. I hope he exits for $100 million. I hope he because you, you know, I grew up in a family where my mother was a communist. We grew up, our Bible was the Karl Marx Communist Manifesto. I've read the book. I you know my mother's side they come from Baku Azerbaijan so >> okay >> her family was all about my dad was pro-shaw so he was an imperialist >> and so they married each other they married and divorced each other twice [laughter] >> and so no literally that's what happened they married and divorced each other they married my sister's born they divorced two years later they remarried I'm born divorced and they never got married again to anybody but a big part of my a big part of my uh financial philosophy fee comes from me hating rich people and saying these guys are greedy. It's all self-interest. That's all they care about. And then I went into business and then I started off with Morgan Stanley Dean Witter and then next thing you know I made some money. Then I built a business and I realized you're not going to win if it's only you making money. And so I gave everybody equity and then I realized when everybody owned a piece of the company, they ran in a different way. They picked up the trash. You know, they said hello to people in a different way. There was a certain incentive to it. So, I'm glad you're getting into the business, but do you think about and say maybe I should have gotten involved in equities 30, 40 years ago? >> Not equities, but the software package I'm designing now called Ravel, I came up with the idea for that 30 years ago. In fact, it's Ravel. The main thing Ravel does that in terms of data analysis that's better than anything else on the market is that it handles multi-dimensional data, data that's more than rows and columns in a spreadsheet. And in fact, the system that most people use is called a pivot table. And it turns out that pivot tables first invented seven years after I came up with the idea that I'm now putting into Ravel, which is a a graphical multi-dimensional object for handling, you know, complex data and being able to analyze it and see it easily. So yes, I I I could have made the decision to go and push that forward. I would have come up with a software package that predates Excel that would have trashed what Excel tried to do with pivot tables. So I wish I had done that, but I didn't. So I'm now doing it a bit later in >> Would you mind spelling it so guys know how to find it? Rival Rival >> Rave. No, Ravvel. R A V E L. And the company name is Ravevelation. Not Revelation, but Ralation. So, >> and is there a website to it? Is there a website? >> Yes, it's it's we're just about to launch it. In fact, there is a Patreon page which we're doing at the moment. Very basic, but that's where you can get a copy of Revelation from at the moment for a sort of Patreon support level. >> Can you send that link to us so we can put it below for the audience? >> They'll come out about two. We have we have to do initial seed launch. Uh we've done a preede round uh using you know the idea of a safe agreement. So share a agreement for future equity. We've already done that. >> I love it. Yeah, I love it. >> So we're doing doing a happily doing a seed round in about one or two months time. >> Beautiful. If you send that to us, we'll put it below. Let me continue. So question on this as we're going into it and we're talking about, you know, investments, capitalism, all of that. Have you followed Jim Simons? Do you know about Jim Simon's uh Renaissance Technologies? >> Yes. And I also know Louis Kels. They to similar sort of idea as the capitalist manifesto. You were talking a bit about worker managed firms fundamentally a moment ago and it's a similar sort of idea. You want people to have a commitment to the firm they're in and just having a wage doesn't necessarily do that. Having an equity position can uh can enhance that. Apparently that's a large part of the success for BYD. >> Yeah. Do you remember that one socialist uh who said, "I pay everybody only $70,000 a year." And Bernie Sanders liked the story. The story of the guy went viral. This was like 5 years ago. I don't know if you remember that story or not. >> Uh what was the guy's name? Who who was the socialist that >> paid his employees 70k a year? Something like that. And he went viral. Can you pull up his name? Yeah. I remember. So when when we had him on I Yeah. [clears throat] Gravity Payments. >> We ended up having him on. What was the guy's name? What was he had long hair? He looked like a guy. He looked like Brad Pitt. Good-looking guy. Dan Price was his name. Dan Price. And I had him on the podcast once. This was probably five years ago. And again, politically we probably economically we probably disagreed where we were at because he was more of a socialist. >> But then when I asked him the question, I said, "So you pay everybody 70 grand?" He says, "Yes, including your seues." Yes. >> I said, "How much equity do you give your guys?" >> And he was startled by that question. I said, "If you're so much about spreading the wealth, why don't you give them equity?" I said, "So you got a $100 million your company and you want 100% the company?" I do. I said, that's not that doesn't sound like, you know, your values match each other. So, it it made for a great conversation. I I don't know what happened to his business. I think he got in trouble, but I'm excited to see what this next phase you're going. By the way, um, how much you think if if I were to ask your best friends from high school, guys that you've known the longest, okay, people that like, you know, if you ask my friends, they'll be able to tell you who I was and all this stuff, >> would they consider you a pessimist or an optimist? >> Back in those days, an optimist. Okay. Um, I'm I've got a very optimistic orientation, a very outgoing personality. Um, so I tend to be optimistic, but the more I learn about society and the state where in pessimism has been forced upon me. >> Do do you regret that? Do you wish you were the old optimist? >> Well, only the optimist if I didn't know what I know right now. Um, so like for example, one one career I could have had was being a professional tennis player. And that would have been a very different lifestyle to what I've led. Uh it it did I it was like a fork in the road moment where I had a choice between uh professional uh sports career or academia and by sheer circumstance academia won out. >> What what happened? What was the event that you didn't go tennis? Because I mean why wouldn't you go tennis over academia? >> Well because I was a student at the time at Sydney University uh studying doing an arts law degree studying economics and horrified by how stupid the economic theory is. still even more horrified today than I was then. And then there was a student strike at university which led us to overthrow the economics department. Well, not to overthrow it but to create a a rival department. I got caught up in all the politics of that. Uh and and that meant my tennis went from 5 days a week to one day a week and I dropped from that incredibly high standard. Wow. >> That you hit when that level I was doing 20 hours a week of tennis >> plus a ludicrous amount of running and weightlifting and cycling uh while doing a university degree. And then with the academic uh the excitement of the student strike and taking on economics and challenging it, that's become my life. So in one sense, I'm I'm enjoyed the life I've led. I'm glad I've led this life, but I'd like to have two of me. I would have liked to try the tennis as well. [laughter] >> Is that not crazy when we look back and we're like, what if I would have done this and what if I would have done that? Who would it have become? And what would I have done? By the way, how old were you the first time you read Communist Manifesto? Oh, I I first read Capital as the first book I read by Marx. I was 20. >> You were 20. >> So you so you read capitalist first, then you read Communist Manifesto. >> I've read everything Mark's ever wrote on economics. That was my master's degree is true because when I read capital, this is a bit of a funny story. At the end of that student strike at Sydney University in 1973, I was well all everybody in the strike was a lefty. Okay. You'd call them communists. Sure. For sure. and and they said the we all the various strikes succeeded all sorts of reform of education at Sydney University that year and we had a let's have a Marxist reading groups in the middle of a Sydney summer and I'm talking a glorious summer when you should be spending your time on the beach bunch of 20 or 30 lefties sitting in a cold room inside the Sydney University reading Dus Capital now part of what I knew was in Dus Capital was the argument that machines don't add value machines transfer the value they hold but they don't actually add any extra value to the system and I remember walking across to that the beginning of this reading group with a colleague looking at the over Sydney's skyline and where Sydney you can see the whole of Sydney from Sydney University and there were hundreds of cranes and I said I want a very good explanation by marks as to why those machines don't add value. So I read the the book very carefully and I found that Markx had a brilliant argument about what he called the gap between use value and exchange value uh in production and I applied that to machinery and it led to the deduction that machines do add value. So I then said that to my bunch of fellow Marxists and they had already brainwashed themselves into believing the labor theory of value. They they laughed at me. So I then decided that's going to be my master's thesis topic to find where Markx came up with those ideas. And I didn't do a masters until I was about 20 years older. I started I finished my undergrad in 73. I began my masters in 1993 I think. So 20 years later. But I went through Mark's looking for where he came up with those ideas and I found it. Um so I've read everything Mark's ever wrote on economics including the Communist Manifesto. >> But would you have considered yourself a leftist at 17? >> No. I was quite right-wing. >> So so academia got a hold of you and and kept that mindset with you since then? No, [clears throat] I'm I'm I'm I Marxists dislike me about as much as neocclassical economists do. Okay. It's very hard to put me into any particular category. Uh I'm a very much a capitalist entrepreneur at the same time as being an intellectual. So, uh I don't think I've got a hold of anything. Uh I've been what I look for is good logic. And what I found in Markx in those first seven chapters was brilliant logic that contradicted a fundamental argument he believed in which is the labor theory of value. And the labor theory of value was needed to believe that that there'd be what I call a falling rate of profit. And a falling rate of profit was needed to believe in socialism. So when I read that book in 1973, I saw Marx's arguments that socialism is inevitable were wrong. Okay. So you're pretty hard. I mean the the first people I got the first people I attacked in terms of attacking their economic thinking was neocclassical economists. The next group was Marxists. >> But by the way the school you went to did they also ask you to read Wealth of Nations or Hayek or any of the Avon Mises? Any of this stuff or not really? >> Well, it's all my own reading. I mean at university at school I I went to a Catholic school. So I read the Bible more than I read any economics text but I read books by books by Samuelson and Hicks when I was at school. Um, so my my my basic argument is you've got to read to understand what people are talking about. You don't just take newspaper cutouts to understand the theories. >> You just took a completely different angle. You I mean I wasn't even going to go this angle with you. >> Uh, you know, I'm 47. I'm about to turn 48. I don't know your age, but if you've been doing it, okay, so 70, by the way, you look like the guy >> uh the Hollywood actor who was Batman's mentor. I don't know what the guy's name is. You look like him. Meredith. Meredith Bergman. >> Uh uh. Can you pull him up? Is that the one? Is very very good-looking guy. No, I'm thinking Alfred. Who is the Alfred guy in Batman? >> Alfred. The You're thinking Batman's a Batman. >> That guy right there. You look like him. So, you're you're a good-looking man. It's a compliment. Take it as a compliment. >> I'll take it that way. >> You know, I'm 47. You're you're 73. Um it's tough when we get older to talk about the mistakes we made earlier. What What advice would you give to young men? like you know being where you are right now and you know you've seen a lot you've been all over the world you've you've had some ideas maybe some of them became right maybe some of them you got wrong what would what feedback would you give to young men young men are very confused today what advice would you give to young 16 17 18 year old men >> given the fact that I expect climate change to cause the social system to collapse I'd say learn how to hunt I hate to say um but >> you all of a sudden became an optimist that that was a so we went back to the pessimist you So you you don't think the future looks bright? >> No, I don't think it looks bright. I think it's catastrophic. >> Scary. So you think it looks catastrophic? >> Uh, by the way, did did you ever end up having kids or No. >> No. My first wife was uh had a disease called indometriosis. She was infertile. My second wife was far too old. And my third wife already has three kids. >> Yeah. And if if you were 25 today, would you have kids today? >> No. >> Wow. Man, they really got a hold of you. >> No. reality got a hold of me. I can see what's >> I I can see inside of you there's the sense of humor, light-hearted, fun, positive side, but they they got they got a hold of you. >> And what's got me a hold of me is facts. Okay. Uh I I've read massively in the climate change literature as well and work with climate scientists and I can see what they're seeing coming and I'm [ __ ] terrified and the last thing I want to do is have a child to lug through what I think is going to come our way in the next decade. Did you see the recent report that came out? I don't know if you saw this recent I'll show it to you, please. >> Yeah. You know, I don't want you to lose your [ __ ] and get upset at me. This is a report that came out here. I'm just going to read it to you and I want you to react to it any way you want and tear it apart if you want to. >> But this is from Department of Energy that just came out >> and it says this is from uh uh the website energy.gov. Guys, I just texted you the link. If you want to go to it, you have it. You I just literally texted it to you. Department of Energy issues report evaluating impact of greenhouse gases on US climate and invites public comment. And one of the things they said here is the the severe concern that they had. If you read this entire report, I'm not going to read the entire report to you. >> Yeah. >> It was overly exaggerated on how bad climate change is going to be for the last few decades. And this is coming from the state. Uh do you agree with this report and have you had a chance to look at? >> Total [ __ ] Total [ __ ] And I can tell you why. Tell me. >> Okay. This is what economists sort of say. This is William Nordhouse. And if I had to have anybody blame that the state of the what I expect to be the state of the planet in the next 10 years is William Nordhouse. Uh his work on climate change is why we've done so little about climate change and trivialized the dangers. Now to give you one example of why he said climate change wasn't dangerous when he first tried to quantify the impact of climate change on the economy. This is back in 1991. He said that his prediction was that 3 degrees of warming by 2100 would reduce GDP in 2100 by one quarter of 1% compared to what it would have been if there's absolutely no global warming at all. Now one quarter of 1% means that the impact of three degrees of warming would be to reduce the annual rate of economic growth by 140th of the precision with which we currently measure it. So we currently you know you get a reports GDP is growing 1.2 you know 2.1% 2.2. So you work in the.1% he said a 025 uh impact which is you can't even measure it. >> Can you say who who said this? >> William Nordhouse the guy who got the Nobel Prize for his work on climate change in 2018. Now, as part of that, he assumed that a roof would protect you from climate change. Okay? So, you mistook weather for climate change, weather for climate. And that's the basis of all the low predictions you're seeing right now. All coming out of economists. And they have literally pretended that you can use data about the impact of temperature on GDP across the planet today to predict what's going to happen out of global warming over time. And that is completely mistaking what rising temperatures mean. And so I think that particular Department of Energy report, I'm sure it's based on the work of economists and it's a load of nonsense. >> So you don't you don't side with what they're saying here. Let me just read it to you to fire you up a little bit. It says, "The report challenges the mainstream view on climate change, arguing that climate risk may be overstated. The benefits of emissions cuts must be smaller than advertised, and the economic cost of aggressive climate policies deserve greater scrutiny. So you you're for you know uh uh you side with the Al Gores of the world. You side with the AOCC's of the world. You side with the people. >> I side with the scientists. >> You side with the scientists. Scientists have got a lot of things wrong in in in the past as well. Right. >> Well, mate, you're talking to me through something invented by a scientist. You're seeing me through something invented by a scientist >> by capitalist. I would say by an entrepreneur, right? By a >> entrepreneurs don't have engineering degrees. Entre if an entrepreneur doesn't have an engineering where he can't make something that involves engineering or science. It isn't the entrepreneur it's it's the it's the knowledge levels that we have and we don't give enough respect to scientists. >> Yeah. Those are engineers to me but they also get things wrong. I mean it's not like to put here and sit there. So so let me ask this. So for you you're not optimistic about the future. You wouldn't have kids today if you were 25. You're so so okay. So then why have kids? Why get married? Why buy a house? Why have a career? Why create rival the company that you're building? Why buy your product? If we're going to die anyways, let's all be negative. Let's not go to the website now. Let's not support Patreon. >> Like I don't want to change our direction. And I think you can't change direction if people believe there's no threat on the road you're on. Now you're saying there's no threat, so there's no need to change our behavior. I'm saying there is. Okay. And uh >> that's that's a good push back. So, so maybe maybe help me with what you think the right solution is and how much of it is on free market people and how much of it is on the state to fix it. >> A lot of it's actually on on economists period to making the mistake of not understanding what global warming actually means. So I I don't blame the state or the uh private sector so much. I blame economists barging into an area where they know nothing about and producing numbers which convince politicians because they're used to taking advice from economists and they trust them they should not. So economists have fooled us to believe global warming is a trivial challenge. It's actually existential challenge and on that front uh like there's there was a survey but I'll give you an idea of how different economists are from scientists on this front. There was a survey done of climate economists in 2020. They surveyed about two and two two and a half thousand people about 380 answered a question saying what do they think is going to happen to GDP if we hit seven degrees of global warming by 2220. So two centuries away. The average answer those economists gave with GDP to be 25% smaller at 7 degrees of global warming than it would be if there's no global warming at all. Now you talk to climate scientists and they say that anything more than five degrees of global warming probably means humans won't continue to exist on the planet. It's existential. So econ scientists are saying anything more than 3° is catastrophic. 5 degrees is so they beyond catastrophic including existential risks. Economists think that seven degrees of warming will reduce GDP by 25%. uh the they're totally different uh uh predictions. Obviously, it's damned's good idea to find out which one's based on realism. Having looked at what the economists have done, they're completely based on fantasy. But unfortunately, most people don't know that. So, they take economist arguments seriously. I'm sure that's what that energy department of energy document you've got there is doing. And I wouldn't trust them as far as I can throw them. Yeah, I'm going to push back a little bit and please feel free to do what you do best. So, you know, do your thing. I'm enjoying this banter. >> Um, don't you think a a an element of economists or pro-climate change, global warming, fear porn, all this stuff that maybe maybe they believed what they're saying. Don't you think a part of it is if all of a sudden that solution didn't exist, they don't have a job. Let me unpack and then, you know, I want to I want to hear from you. I'm in the insurance space. In the insurance space, there's such things as actuaries. Okay? And actuaries, you know, most of them, they make very good money. They make a few hundred,000. It's a very, very highpaying job. And these reinsurance companies where hire them left and right, and they get a job. But recently, the last five years, AI can pretty much do 99% of what they do. And the 1% is their opinion or their intuition. And their gut is I think this is table D. I think this is table C. I think we're gonna approve him at this. And it's just kind of more, you know, what they think about it. It It reminds me of the old story, which is this one guy uh goes and hooks up with the king's daughter. The king is furious and he hooks up with her in his castle. So, he's even more furious. He sends his soldiers to go kill this guy. Now, this guy is a psychic and he predicts the future. So when the soldiers come to kill him, he says, "Look, before you kill me, I have one prediction that the king needs to know. It's very important to him." So they said, they call the king. The king says, "Come on down. Let's talk." You know, of course, this is a fictional story, but I'm just sharing the story with you. >> He goes to the king, and the king says, "What's your prediction before I kill you?" He says, "I have one prediction for you." What's that? You're going to die a day after I die. And the king says, "What did you say?" He says, "You're going to die a day after I die." And the king says, "Shit, this guy's made some predictions in the past before." He puts him in the castle, gives him to his daughter, lives there, wellfed everything, and of course, the king died before he died, but that was his way of saying, "Let me scare the [ __ ] out of everybody to make sure you know me." Don't you think there's a little bit of that going on with climate change? >> No, I don't. You want me to bpack why? >> Please. >> Okay. What would be the temperature of the planet, do you think, at if there was zero carbon dioxide in the atmosphere? >> Tell me. >> -14° C. And of course, it wouldn't stay at -14. It would hit minus 100 because the whole planet would be covered in ice and it would then reflect solar energy back into outer space. So, the fact that the temperature, the average temperature is not minus14, but plus4. I might have had the the first number wrong. The second is pretty I think mine is -15° or - 11 something in -1 to -15° that's the temperature we'd have if we didn't have carbon dioxide and other greenhouse gases particularly um uh water vapor capturing photons bouncing off the surface uh and going back into outer space the temperature would be that much lower. So without global warming we wouldn't have a civilization at all. We wouldn't have life on the planet. So global warming is necessary to have a a biosphere that can support life. Now as we increase the amount of carbon dioxide, of course, we're increasing that temperature. And the sort of thinking which you're caught up in, and this is what economists have done as well, is they've said, look, it's you people live at minus 7° in the Arctic and they live at plus 35 in the tropics. That's a huge range of temperatures. Global warming is only going to increase temperature by 2 or 3°. What's that in terms of across the space of the planet? I'm doing a cartoon right now and you might actually want to take a look at the cartoon because I'm trying to get across why this is completely wrong thinking because we're talking about temperature across space and we know this huge range we think now what's a few degrees across space it doesn't mean anything at all but if you look at where we came from as a species we evolved about 300,000 years ago and about 12,000 years ago we started to develop civilization the reason we started developing civilization about 12 to 15,000 years ago was because the planet goes through cycles that are called Malankovich cycles after the person who first discovered them and they're pulses in the average temperature of the planet caused by changes in the orbit of the planet around the sun, the inclination and so on. So every 20 roughly every 100,000 years that we've got got a a cold period and a hot period. The cold period lasts about 80,000 years which is an ice age. The warm period lasts about 10 to 20,000 years and that's what we're in right now which we call the holysine. So if we go back just uh 20,000 years, we find the temperature of the planet was about 7° colder than it is now. So the average temperature of the planet during the ice age was about plus 7° C. So going from plus 7° to +4° is what enabled us to build our agricultural systems. Now if we hadn't built industrial civilization, we would have gone back down again into the next ice age. So, at the moment, temperatures are falling. The natural temperature of the planet is declining. And if that kept up, we'd be go back and lose another six degrees, six, six, five, six or seven degrees cooler. Uh, we'd go back to an ice age, and that would destroy our civilizations. So tiny variations across time like 6° not tiny but uh you know 6° is the difference between an ice age when Chicago is a kilometer uh beneath a kilometer of ice and today where you know col Chicago is an industrial powerhouse. Uh that's how sensitive temperature is through time. Uh it's far more sensitive to time than it is to space. But what economists have done is said, "Oh, not particularly sensitive across space, so why should it be sensitive across time?" They're completely ignorant of the dynamics that give us the the change in temperature over time. And that's why it's so dangerous to trivialize what we're going through. >> Yeah. I I I think for me, uh, I I sit there and I watch human behavior on what we do. And again, this is my opinion on on what I think happens is, you know, I'm in Florida, so right now by 2030, you know, they're they're wanting us to lift I live on the water. They're wanting us to lift the edge to the inner coastal two feet higher, right? So, because why is that happening? It kind of validates to your point where why are they doing that in Florida? because the climate and all this other stuff, but people are still actuaries and underwriters are still underwriting homes on water and they're still getting the insurance. And the insurance companies are not going to give insurance if they didn't feel in the next decade, two, three decades, something's going to happen. That's just not not a good business plan for them to be able to do it. Now, don't get me wrong. Some of the insurance companies in America have left the state of California and they've just flat out says, "I'm out and reasoning for leaving it." Like, I think Geico left. I think State Farm left. Somebody can fact check this to see one of those farmers left. And a part of it is their fires that happens there. So, insurance companies won't stay some stay somewhere if they can't make the money. And so, I don't know. I I think on the climate change side, I do agree. I think they went from global warming and they said, "Well, it's probably not a good name. Let's change it to climate change. Kind of like how we used to be uh uh pro death to pro-choice. Pro-choice is probably a better word than pro-death back in the days campaign wise politically. But I also watch what Black Rockck did, what that ESG concept was. I kind of went away from it. Who knows? It may make a comeback. It may make a comeback. But my bigger concern is that a lot of a 20-year-old Steve Keane went to a university with the aspirations of being a tennis player and some Marxist got a hold of him. He read Das Capital and then read Communist Manifesto. Instead, he could have competed against Jimmy Connors. Not not Connors. Connor's 10 years before you, I think. Right. I think Connors is in his 60. Yeah. Younger. >> But who knows? you you may have played against some of these guys, but I I worry respectfully, I worry that there's millions of 18, 20year-old young next Steve Keen that may have people around them that that have maybe a little bit of the framing like you that are negative about the future and that may scare the crap out of them to not want to pursue it because they're thinking the end of the world is around the corner. I think that is a bigger damage than the risk of climate change. And I think by tenfold it's a bigger damage. You You're probably going to disagree with it. >> Of course I am. >> I know you are. You have to. You don't have a choice but to disagree with it. >> What is the alternative? >> Wrong. Okay. The alternative. See, we don't realize how fragile life on this planet is. >> And there's a arrogance to believe we can do anything we like to the planet and won't come back and bite us. Now that arrogance is going to kill us. And so it's arrogance and not understanding the actual dynamics of the system that is commonplace for humans uh that I think is the greatest danger we face. >> Don't you think it's also the mutual arrogance of knowing for a fact you're right? Maybe you're wrong. Are you comfortable with you being wrong? >> I'm working with the climate scientists. Okay. So I'm looking at the models there. But >> you comfortable with them being wrong? Are you comfortable what if they're wrong? >> Yes, I am. And I think in fact the mistakes they've made are to under underestimate the dangers they face. Okay. For example, I'll give you one of the my favorite examples there. Have you heard what's called wet bulb catastrophe? >> Yes. >> Okay. Um I asked one of the leading scientists in this area, has anybody done work on the wet bulb temperature that will kill nonhumans? Because one thing which makes humans almost unique in the animal kingdom is we have sweat glands all over our body which means we can radiate heat from our bodies much more effectively than any other animal except horses. And I thought that somebody would have said well in that case we we know wet bulb temperature that would kill a human. It used to be thought to be 35° for 6 hours. We now know it's probably 31°. Experimental results recently have shown that it's more likely 31° wet bulb will kill the vast majority of people. So it's much closer in that sense than we think. But I said, "What about um if we have a wet bulb catastrophe which cools livestock? Has anybody done studies about that?" He said, "No, we haven't." So because animals normally sweat through their tongues, uh they can't get rid of heat as easily as we can. And it's quite possible the wet bulb catastrophe could hit at a lower temperature for animals and wipe out our animal stock. Now, that's the sort of thing where I thought scientists would had done the right work. They haven't yet because this is happening so quickly in terms of scientific procedures. Most of the programs that computer programs that simulate what's going to happen with the climate are written in forran because that's what they were first meteorological uh systems were first written in forran. Uh that's what people still maintain. It's ancient code. It's not stuff which is you know got all the the powers of modern software object orientation and functional programming and things like that. So they don't get updated fast enough and people don't aren't doing the work. And so in that sense there are dangers that are not being considered by the climate scientists even though they've got the technology to do it. Uh so we're under we're potentially underestimating the dangers we face. Not overestimating. >> Um fair enough. I don't think I'm going to change your mind. I think you're >> you're not going to change my mind. Definitely not. >> I think you know so you know our brand is called future looks bright. Okay. If you go >> is it? I didn't know that. >> That's what makes it so funny. or if you go to uh if you go to flb.com or if you go to vtmerch.com can you go to the future bright collection that's our brand take a look at that I I >> for you I'm thinking about making a shirt and selling it to see how many it sells the one that's what is the opposite of future looks bright >> would it be future looks dark [laughter] future looks grim I wonder I wonder walking in the streets and seeing somebody kids wearing future looks grim what they would say about >> I think I think we're close to to a global golden future. This is what pisses me off because it's so dangerous. In the last quarter of a millennium, so 250 years pretty much since the beginning of the American uh uh America as a country, that's when the industrial revolution began. We've learned so much about the universe in that period of time. And I would if we can continue learning and continue expanding, we could go to a Star Trek future. And that's what I'd like to see. Okay. But at the same time, we're we're damaging the biosphere at the same point. Now we are probably 20 or 30 years from being able to take production off planet. I mean therefore we could produce the goods and services we all consume now and and far far richer in outer space. The dump we'd waste we dump the waste into the sun. We could have that global golden future. And that's what I'd like to see us get to. But we can't get there if we recklessly go at it at such a stage that we end up destroying the productive capacity of the planet before we get to that point. >> So you must be you must be a massive fan of uh Elon Musk. >> Uh yes. No, I he was total bloody fool when he got involved with Trump. I think it was totally destructive. He should have stuck with engineering. So like I was supporting Mus because I I really want to see a human outpost on Mars or anywhere off planet because my feeling is we're not going to stop the damage we're doing on the planet. We are going to destroy the capacity for this planet to support human civilization if not human life. So in that situation a bit like the middle ages the only way to hang on to the knowledge is to have a monastery somewhere that keeps all the knowledge and you know while there's chaos around everywhere else at least the knowledge is preserved and then we can go for forward in the future. That's what I saw about Musk and the potential for getting a human outpost on Mars. Now he's wasted so much bloody time with his right-wing politics and with his meddling in in elections around the around the planet including getting Trump elected. I hope he regrets that now. Uh that I don't think he's going to get there. And the Chinese might beat him. But I do want to see a human outpost on Mars to give us some chance of hanging on to the knowledge we've built in the last quarter millennium and not destroying it by destroying the biosphere and not being aware we're doing it until it's too late. >> I want to go to the last topic before we wrap up, Steve. And again, I appreciate your time. By the way, have you seen the movie Project Hail Mary with Ryan Gosling? Just came out. >> No, I haven't. >> I think you would like it. It's about that. It's It's a very >> I I actually think you would love it. It's one of my favorite movies I've seen last 12 months. And on the business side, have you read the book Blue Ocean Strategy? Have you ever read Blue? I think read that as well. It's sold 5 million copies. The guys that wrote it, their academia, it's about how to differentiate your product. You're about to go through building a business. I I don't think you'll be able to put that book down. >> But last thing before we wrap up. So, >> yeah, >> Iran, you know, um >> this thing started few months back. We are now where we are, you know, negotiations. I'm sure you followed what happened in uh Switzerland when JD Vance is there and you know cutter and all this stuff. Where are you at today? You know, cuz some people said, you know, I I this is going to be a next Iraq and next Afghanistan. It's going to take decades. We're going to be in it. We're going to do this. We're going to do that. What what is uh what are your thoughts about where we are right now specifically with Iran? >> I think we're about to suffer a serious economic downturn caused by the damage by by by blocking the straight of the products that come through. They're absolutely critical for the uh for our civilization and we're blocking off supplies of sulfuric acid, helium uh fertilizer, the lubricating oils. All these things have been damaged and we need them to maintain our production system. So, we're about to it's it's this is likely to start hitting the American economy in the next four weeks. It's literally that close. uh because that's the length of time from the straight of Huls to where the ships would normally be unloaded. We're getting to the point where that huge hole in the supply chain, a 3-month hole is about to arrive. And when that happens for of that order, >> how nasty is it going to be? How nasty is it going to be? >> Well, it' be nastier for other countries which don't have their own capacity to produce their own fertilizer. So, America's got a bit of an advantage there. uh but I think quite nasty because when you take a look at the relationship between energy and GDP it's absolutely lock step if you have a 10% fall in energy you get a 10% fall in GDP we're looking at about that scale of fall in energy because of damage to the straight of Hormos or all the facilities in in the in the in the Gulf in the Gulf u so and also we're going to lose the capacity to produce so many goods that rely upon sulfuric acid copper uh massive use of copper right now for data centers. Uh we won't be able to refine as much copper. So all these things are going to hit the economy in the next start ending in the next four to four to 8 weeks and it'll be quite drastic. And I think this is partly why Trump is finally looking like he might make a negotiation he actually sticks with because he's getting been told that the strategic petroleum reserve is down to about 20 days. uh you were that close to running out of supplies in America that we might finally get a sensible resolution for this stupid war that should never have happened in the first place. >> So So you also predicted a famine though, right? Didn't you predict a famine? >> I think a famine is likely because with about 30% of the world's fertilizer comes through the straight of people aren't aware of the extent to which we rely upon fertilizer for food. Again, this is stuff I know from economists. I I I know not not from my own research, but they claim that if we didn't have the fertilizer from the habos process, the stuff that gives us nitrogenous fertilizers and super phosphate, uh we would have a carrying capacity on the planet of about one or two billion people. We currently have 8.5 billion. We currently produce 30% more food than we need to cons to to keep all those people alive. But that 30% could fall because of a 30% fall in fertilizer. It could be more severe than that. So, I don't think we're going to see a global famine, but we will see famines all around the planet when people aren't producing as much food because of the fact they haven't got the fertilizer. And also, the increase in the fertilizer is meaning that some farmers are deciding not to plant crops. So, for example, Australia's wheat planting, it seems to be about 50% of the usual level because the fertilizer is costing too much to make it worth the farmer's while to plant the acreage they normally plant. So we're likely to see a large fall in global food supplies and that will affect not just you know brown people countries the usual thing where famines occur. It may even affect countries like the UK which imports over 40% of its food. So we'd like to see some serious disruptions and and this is one time where collateral damage from a war won't occur to the civilians in the in the war zone. It's occurring to civilians all over the planet. Incredibly irresponsible war. It should never have started. >> Yeah. So okay. So, uh, if you're wrong, would you be willing to come back and say you were wrong about what happens in the next four weeks with the famine and the market? >> Yep. Yep. >> All right. So, >> I mean, again, in terms of timing, again, I'm going on I'm I'm not an expert on shipping, for example. So, one thing somebody pointed out to me is that a super tank has moved at about about 13 miles an hour maximum speed. So, how how many miles have you got between the state of Hormuz and California? And that's how many days before the supply chain you're doing it based on turns up that sort of thing. Okay. >> Yeah. And by the way what's more valuable what what has got more uh impact to the world economy the straight of hormos or Panama Canal? >> Probably the straight of hormones I mean the panel is absolutely canel you know the Panama Canal is absolutely essential for you know American exports to uh Asia and Asian exports back to America and so on. It's a it's a critical life way. But um the thing about the straight of homos is it locks up uh as I said 30% of production of of fertilizer and sulfuric acid. And I don't know that you in some ways a straight the the Panama Canal divides the planet in serious ways. You the Pacific Ocean on one side, Atlantic on the other. with a with a straight of homosi blocking off the Persian Gulf and given the idiosyncrasies of the planet that so much of the oil is around that region and so many critical inputs we need for our manufacturing systems come from oil that's why the straight of is so important >> Steve this has been a pleasure of speaking we started off rough I think it was a little >> we did we sort of got to like you by the end okay so [laughter] >> so Steve where can people find you if is there a website you want guys to go look you up because I know we're going to put the link of the Patreon you talked about, but is there anything else? >> Well, there's I've got a Patreon site and a Substack site and they both have the name Profsteve Kane in that that link and then my YouTube channel is also at Profsteve Kane. So, those are probably the three main sites to go to. >> We're going to put both of them below for the audience to go support Steve again. Thank you for your time and I look forward to our next visit. >> Yeah, that was fun. We got there. Okay, take care. See you again. Bye. Bye. >> Bye. Okay, so we're going to do an experiment real quick. You know, our brand is Future Looks Bright. We're going to say that Steve's Future Looks Bleak, right? You just heard the exchange back and forth. Here's what we're going to do. Order one of these two shirts. Future Looks Bright. If you believe the Future Looks Bright, and if you order Future Looks Bleak, we've never done this before, we will give a 100% of the sales of Future Looks Bleak to Steve's Patreon. So, go to vtmerch.com. We'll put the link somewhere here. Go to the site. Let's see what you're going to order. Future looks bright or future looks bleak. 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