tv Key Capitol Hill Hearings CSPAN December 24, 2014 5:30am-6:48am EST
>> the first time i talked only to his son doug. so we're your jeans and dress down in my hair was long at the time. i could tell he was thinking why did the at newspaper send this hippie to interview me? i knew he would get mad. and he would give me 10 minutes but i did my homework and i knew the story in to talk to somebody that was genuinely curious. >> they ran a cartoon it is
a picture of a coffin. somebody was kneeling in the last nail it said it is the last sale of the furniture called thin in virginia. i want to say wait a minute. [laughter] so to tell you some hard things as a writer hired you wrestle with having to say something hard that is the truth. >> i called my friends is it fair or is it true? and really you should be wrestling with these deep tissues. i don't want to hurt anybody is feelings and that is hard
for me. but it would be hard for others so it is a constant is it fair is it true. but chapter for. that was the most difficult. of. >> knowing that it would hurt some people that had nothing to do with what went on in years ago. >> if you could relive any portion of your life over again with his whole story story, which portion is why? >> there is a lot of things i would do differently. i found women's.
[laughter] i found alcohol and a good time. the things that richard me more than anything else was the united states army. it is a great experience i spent three years in germany during the cold war. right on the german border. when the weather across it and we saw several people shot that tried to get across and we could not do anything until they got across. several were killed. and i realize i grow up in a free country. did i grew up in a wealthy family and i was given all of this.
i missed my shot at college. psi graduated but i could have done better. but the only reason is because i was bored american and i never forgot that. [applause] >> what did you learn from reading her book? >> i learned a lot of things about my ancestors side did not know. [laughter] somebody asked me one time what you think about what your ancestors did? i said that was before television is so they had to do something to entertain themselves. [laughter]
>> what do wish you could have included? >> a lot. somebody started a the "factory man" discussion group that the first question the moderator posted where you from? and i thought you would say much about that? there was a collection of what had happened to about knave the businesses that you miss. this morning there were 120 so it has been cool to see
people come together some of it is anchored sun is just a brief. but that is the wonder of it. those pseudo longer have the veto place to go to work every day. but this little place on facebook is where people are telling the stories of what happened. >> what advice would you give to your younger self? speesix don't ever give up. there is one word in business i will not
tolerate. if you work for me only do this once. i will give you one shot then i get upset and that is the word kit -- can. for two reasons if i say i can't to do something that means you quit trying in number to you quit thinking. i don't like people saying i have a problem in can you help me we're not getting assault. let's work on it together. we don't always succeed the first time that you don't say i can't do it. you have to get a mindset that we're going to do this.
we can do it if we really want to. >> a question from the audience. clearly you to have tremendous report and how did you create that? [laughter] >> 100 protocols. [laughter] we have had a lot of different emotions. i have spent matter at him than anyone in my whole life. but we're still friends in the he said this isn't going to be like lyndon johnson does not talk by thought we will always talk. i thought that was pretty cool thing to say. but this is a smart group. but one of the things that
you don't have to go to the p.r. person to get to the ceo. but in this age you cannot even get to this city manager you have to get to the levels. so it is rare that you have access. it does so in answer the question by a long shot but he volunteers names didn't telephone numbers of people he knew would say bad things about him. and they said some bad things. [laughter] learned is his motivation for that? there were only asked to
read one chapter. id to go through north carolina would you read your award winning chapter? i called my husband it in said read chapter one. that he is an asshole. [laughter] i said i will read it to you on one condition you cannot say anything until i am done. he had a couple of corrections but they were later. so with the freedom of the press. >> but to call the vietnam
sold the first of all, she is not the first one that has said that. [laughter] but when she had a party she asked me to come to the party so in the end they ask me to say a few remarks and i said there are people in this room that thought this book was written that do i was an asshole. but the only thing that has changed is that after they read the book ever betty will though. [laughter] who would you like to play you in the movie? [laughter] [applause]
>> the person that could play be the best is dead. george c. scott. my favorite movie ever is patton. >> glenn todd hakes treated his love. and i said do you know who tom hanks is? he's and i may be a dinosaur but even i know who he is. >> another question from the audience. how are you preparing for the steven colbert show? >> that is a very good question. [laughter] this guy is quick. i am watching him it depend
on the questions he asks for gore really does. if you read the book he could get someone at risk day. [laughter] wait a minute. [laughter] is to say to you great loves. and i said to have it all wrong. and should have said saks first. [laughter] >> my mom is is a the front row. >> when i said steven
so i stood right next to him by an 6-foot 8 inches there five-foot to reduce dyewood lean down. is everybody is waiting and then i said boo. [laughter] out gate of the cameras there all looted to get their picture taken with the 2e mail it back to china i guess who i had my picture taken with? [laughter] >> this is very sweet. this is more of the declaration of gratitude. thank-you to john and bath
to stick to your ideals to put the assistance of others before your own and for whom we should be grateful. you are truly the original american hero. [applause] >> so for the final question today please answer where do think the american of furniture industry will be in five years? >> that what he would say in a note it is struggling with
is not what comes from china but most of it is made in the united states. so it is the different fabric in different things that shot -- that drives the chinese crazy. [laughter] we are used to it because we grew up with it but they can make over there but if you ask me what will happen in an with the company in new york the amish have so that they are quite expensive and i will tell you a story about that if we have tied. but literally i counted 125
factories that i know had closed. virginia and north carolina said tennessee. we are it. but for five years ago they said john what our real going to do? we are fighting this a battle. it's not over with. so you do all this to talk about business meetings it i could see that i is a class over. bid i always try to tell the story. abraham lincoln was because they don't necessarily remember. so i was trying to think of something.
i want you to think about 12 men on an island. one woman. one female. i've got news for you. she doesn't have to be beautiful. i can guarantee you somebody will fall above. head we intend to be the girl. [laughter] [applause] >> 8q for being here tonight into all of you for coming her carry tremendous banks to staffa and volunteers of state -- of saint john is a the bookstore manager ed kindergarten teacher extraordinaire.
>> we are very privileged to have with us this evening a very recognizable figure in the media and the business world. steve forbes is of course editor-in-chief of "forbes" magazine, the nation's leading business magazine and he has headed a media company that includes not only asian and european editions but a number of web properties focused on politics, sports and financial markets. many of you will also remember
steve spirited campaign for the republican presidential nomination in 1996 and 2000 during which he promoted the idea of among other things the flat tax along with the new social security system, medical savings account, term limits and strong national defense. this evening steve comes to us as an author which also is not a new role for him. he has written or cowritten five previous books. his sixth and latest one "money" how the destruction of the dollar threatens the global economy - and what we can do about it is every bit as emphatic, reasoned and clearly written as the earlier works. anyone familiar with his free-market libertarian views will not be surprised to read his criticisms of central banks in existing monetary policies
with the fed now winding down its quantitative easing, steve sees an especially opportune moment to rethink our monetary system and ensure a more sound and stable currency by returning to the gold standard. he writes in the book quote freeing the dollars from gold was supposed to make united states stronger. instead, it has made the country weaker. something has to be done done. ladies and gentlemen here to explain what needs to be done along with steve's co-author, elizabeth ames who is a communications executive is steve forbes. [applause] >> thank you very much bread and thank all of you for coming out. as brad indicated the book is about money, monetary policy and money particularly monetary policy is one of those topics
that seems to intimidate a lot of people for some strange reason. as a result, the federal reserve for example as less formal oversight from capitol hill, from congress than our intelligence agencies and the thesis of this book is that won the topic of money is very straightforward and simple. even though shrouded in a lot of jargon and a lot of equations, the idea of money is very basic. we have gotten away from it and our policymakers today know less about money and monetary policies than they did 100 years ago. since the early 1970s even though we had booming decades in the 80s and 90s overall our growth rates since we went off the bretton woods system the old gold standard in 1971 the u.s. average growth rates are less than they were before 1971. if we maintain the growth rates
that we had for 180 years up to 1971, if we maintain those growth rates after 1971 on average the u.s. economy today would be 50% larger than it is now. 40 years compounding, in fact reverse compounding adds up to a lot. saber for a moment having 50% higher incomes and what it would mean for the deficit, what it would mean for social security, what it would mean for a lot of the social conditions today. this thing over time adds up. it's a critical reason why it takes two incomes in the family to do what one income could do in previous generations. obviously taxes are large part of it but the debasement of the dollar since the 70s is a part of it as well. when this happens, when they don't have a stable currency unit up with people not getting ahead the way they should.
median income has not grown the way it should and leading as my co-author elizabeth will discuss in a few minutes to a fraying of the social fabric, rejection of social trust and more divisions. as keynes said it's a process about one in 1 million will be able to diagnose. so that is why we wrote the bo book. since monetary policy doesn't usually get the heart beating a flutter away some of the reality shows do, i will begin by just giving you an advance reward and that is to give you a travel ticket. if you ever find yourself in an airplane in and coach, middle seat, on the runway watching your life pass away you want a little bit of elbow room from your seat mate start about monetary policy. they will cut you a wide girth. [laughter] so as a result of the chaos that
we have had slow moving for most of the time since the 1970s, the federal reserve has gotten up in terms of more and more power but the thing is the more power it gets the worse we are. take quantitative easing which i will discuss in a moment. even though they are now tapering the thing, which is a good thing, it ended up subtracting from the economy rather than stimulating the economy. now in terms of money the thing to understand about money is very basic. transactions, buying and selling is how we move our standard of living and how we exist. it makes buying and selling much easier. in the old days we had barter. it was very inefficient so let's say i -- an added forbes how would i get paid? perhaps with a herd of goats. i'm being a little facetious here but let's say we are
writers so let's say i went to the apple store 3000 years ago with my herd of goats. the apple store owner says i don't want goats, i want sheep so i have to figure out how to swap the goats for sheep and maybe have to hire a sheepherder because the sheepherder come you don't want the wolves to eat the sheep. the sheepherder wants to be paid and wine. i have red wine and he wants white wine. imagine if we still had barter today. imagine trying to deposit a cow in an atm. it becomes very inefficient. so in essence, what money does, money most of the time does not have intrinsic value. unless you have old gold gold coins in the light that money makes transactions easier. in that sense money measures value. it's all it does. it measures value the way clocks measure time, scales measure weights, rulers measure length,
money measures value. so because it represents value it makes transactions easier and in that sense it's a form of communications that latino information to do all the billions of transactions we do around the world each and every day. so money in and of itself is not well but it represents a claim on products and services. think of it as you would a coat check. a coat check has no intrinsic value. in a restaurant you put your coat in a closet in a coat check and it represents a claim on the coat. so the idea that creating money, money represents products and services that have already been produced. so it would be -- so the idea if we stimulate the economy by printing up money it would be like a restaurant saying if we create more coat checks that will stimulate the production of more codes. no, it does not. it's a claim. it represents a claim on a
product or service, money does. so money works best when it has a fixed value so just like the clock has 60 minutes in an hour. imagine what the world would be like and what daily life would be like if the federal reserve did to clocks were due to the dollar. imagine floating the clock so you have 60 minutes one day, 48 minutes the next and 22 minutes the next, 80 the next you would still have to have hedges and derivatives and futures to figure out how many hours or working a day. let's say you are baking a cake. bake the batter at 45 minutes. you have to figure out is that inflation-adjusted minutes are real minutes? it just makes life much more difficult. imagine what would happen if they change the number of inches and a foot. you are building a bridge. some of you have learned instead of 12 inches is 10 inches. imagine building a house. just makes things much more chaotic. so money works best when it has
a fixed value and then the question becomes what's the best way to do it? even though it's absolutely out of fashion in the economics profession the way it works in this country for the first 180 years of existence is you fi fit to gold. why gold? because more than anything else in the world gold keeps its intrinsic value. it has for 4000 years. he can't destroy it. every ounce of it has been mined and is still in the world today. it has been pointed out that the gold ring you are wearing may have certain grains going back to egyptian pharaoh times. you can't destroy it. it's hard to make but not too hard so you don't get to do much of it at a time. because you can't destroy if you find a big goldmine. you don't get a lot of gold. the california gold rush which was one of the biggest ever only
increase the annual supply three or 4% and then taper down back to the average of 1.5 or 2%. so unlike wheat, you don't get droughts are things like that so you don't have to worry about storage and about mice eating the gold. so whether you freeze it for heated or beaded up you can't destroy it because it's got unique properties. so it stood the test of time for 4000 years. now people think if you mention gold does that mean we have to have gold coins in 100% backing in all back? think of gold issue with the ruler. it's just a fixed measure of value so let's say you fix the dollar of gold at $1200 an ounce. all that would mean is if the one above 1200 in the marketplace, $1200 an ounce that has created too much money so it creates less money. if it goes below 1200 it means you've got to create a little more money so that the marketplace determines the need
of what's needed in terms of money. if you have a vibrant economy you are going to create more money. you don't have to own an ounce of gold to do it. the british ran it with the gold standard with very little amount of gold. they knew what they were doing and they responded to signals in the marketplace and it worked right up into world war i which lasted along with a lot of other things. so gold golden that sense is like the ruler. the fact that a mile has 5280 feet does not restrict the number of miles of highway you can build. just to give you one little factoid that you can use at a cocktail party to show how brilliant you are from the time of arch distance, go back to the revolutionary war in 1775 when we were a small agricultural nation, up to 1900 population increased 20 five-fold. we went from a small ad nation to the mightiest industrial nation in the world.
during that period of time the amount of gold mined in the world went only up 3.50. the money supply went up even though the dollar was fixed at gold. so gold just make sure the value stays fixed. it does not restrict the supply. if you have a vibrant economy that sustains the marker placement in a stagnant economy you don't created so it's just very very very basic. so when people lose sight of that, when you end up having what we have had since 1971. we have gone from one crisis to another. we had a terrible decade in the 70s. we got a semi-right in the 80s and 90s and boy we moved ahead but in the last decade we went backwards and starting, and this is not a partisan thing started under the bush administration, treasury department federal reserve started to weaken the dollar. they thought that would stimulate exports and that's how we got the housing bubble. anytime you undermine the integrity of the dollar, people
don't own hard assets. in the mid-1980s the last decade the average price of a barrel of oil was a little over $21 a barrel. what is a two-day? 80, 90, 100 this crisis may not get up to 110? in the 70s if any of you are old enough to remember the 70 70s. [laughter] tried politics which didn't work which is why i'm peddling books now but back in the 1970s, oil went from $3 a barrel last time when off the rails to almost $40. everyone thought we were running out of oil and we were going to go to $100 then reagan came and with paul volcker and they killed the inflation in the 70s. oil went crashing down to $10 a barrel and averaged $2225 a barrel. it's like putting a virus in a computer. if you don't trust the value of
money what it means is you get less investment, investment is less productive because you buy existing things rather than things for the future. investing is risky enough that you don't know whether you're going to get back the $110 for a factory that may not pay over five years or 100-cent dollar, 80-cent dollar, 20-cent dollar. that is more uncertainty which is why you can stagnate dead in the water by our historic standards. so that's why we wrote the book "money." educate about money. with money represents value. gold is the best way to fix that value. if we understand that then we can move ahead and get back to the growth rates we had before 1971. obviously there are a lot of other things we have to do but experience shows us if you don't get the money right in terms of the fixed value you get other things right. you have the tax is right in the
spending right, the regulations right but if you don't get the money right it's just going to undermine everything else. this is the basis of everything else. the basis of transaction come the basis of trust, the basis of investment and when it works we don't realize what makes it wo work. it's like the air. when it's cleanly taken for granted and when we have pollution oh my goodness there is important. so money is the same way. one aspect of money gets overlooked because we always focus for me think of money and economics, gdp and the like, is social trust. we have a chapter which lives will discuss for a few moments talking about how debasing money to base a society. it undermines the fabric, the social fabric and the ways that go beyond simply gdp numbers and exchange numbers. so i will call up elizabeth but one thing to keep in mind is that when money is stable and
value brainpower goes for conductive use. just one example before 1971 when currency didn't fluctuate because we were at fixed gold. little currency trading. now currently trading is a huge activity all around the world. daily volume over $3 trillion. tens of thousands of the best brains in the world focusing on an activity would not exist if we had stable money, brainpower that could be used for medical research, other things, productive things. so this thing has consequences that go beyond merely gdp in qb and whatever acronyms that drought. with that let me say thank you and turned over to my elizabeth elizabeth ames. [applause]
>> good evening. it's good to be here and i would like to talk a little bit about that chapter, chapter 5 which is money and morality, how debates and money to base a society and people have found this chapter particularly thought-provoking about money. starts out with that quote a famous quote from john maynard keynes and i will read it and in its entirety. lenin was certainly right. there is no set -- subtler sure means of overturning the existing society than to the bots the currency. the process engages all the hidden forces of economic laws on the side of distraction and it does it in a manner in which not one man in a million is able to diagnose. and we say in the book that unstable money is a little bit like carbon monoxide. it's odorless and colorless. if you don't know the damage it's doing until it's nearly too late and people are really not always aware when the government
is tweaking the currency and they only see the effects which is one reason why debasing money is so corrosive. people say money is about greed but in fact it's about trust. money from strangers from all nations and societies in all walks of life come together and conduct transactions based on a commonly agreed-upon measure of value. money promotes cooperation between people. it serves as an instrument of communication as well. it tells us what society values not just materially but what its priorities are. so when money is corrupted its ability to act as a facilitator of cooperation is corrupted as well. unstable debased money and of mind survival relationships between buyer and seller, between lender and debtor. the philosopher john locke described this issue that is produced at societies correnti wrote, and you have also heard
this as well, whether the creditor is forced to receive less for the debtors be forced to pay more than his contract the damage and injury is the same whenever a man is defrauded of his due. and during periods of unstable money you often see a particular scenario unfold scapegoating corruption social unrest and increasingly coercive government. in the worst cases it can unleash forces of political extremism that can lead to the rise of dictators. recently an investment strategist named dylan rice wrote a particularly good piece describing this classic scenario that has occurred throughout history. it he points out that monetary debasement has coincided not only with persecution of pre-world war ii germany but also with the french revolution's reign of terror in
the salem witch trials and other bloody episodes through the centuries. but this kind of distraction of trust and unrest is not just a remote historical occurrence. it's taking place in many areas of the world today such as the middle east, europe and to a certain extent the u.s.. analytics south african investment advisory house has issued reports which predict the worlds most likely troubled spots. the firm has been able to forecast unrest based on nations rates of monetary abuse and syria which has suffered nearly 200% hyperinflation topping the list in february 2013 followed by argentina, south africa, egypt india and turkey all of which have been in slaters. of course there are causes for events unrest and it takes different forms in different countries with unstable money in all cases has been a catalyst.
the riots of the arab spring for example you may remember started over increasing food prices. the financial crisis is very much a lockean betrayal of tru trust. it helps create a housing bubble and pulled out the rug out from under borrowers and this led to ultimately the collapse of some financial become a wave of foreclosures which led to the collapse of major financial institutions and triggered the stock market meltdown of 2008 and that in turn set off a worldwide destruction of trust that ricocheted from one continent to the next. in europe bank failures and bailouts shook the confidence of global investors helping bring on the sovereign debt crisis over there. we all remember those days and i will read a "from an economist from deutsche bank told "the new york times" in this day and age a bank run sprints around the world not around the block.
once a bank run is underway it doesn't matter if you have good ones are bad loans, people lose confidence in you. that obviously shows this is really about trust. this worldwide loss of trust quickly could turn to rage riots and protests and we say in the book it went from balance sheets to the street. in 2012 there was a poll by the pew research center that we cite in the book that says america is more polarized than any other time in the past 20 years and what they basically said most of the increased polarization is taking place not just in the last few years but the presidencies of both george bush and barack obama and both administrations were a weak dollar administration so was definitely, this polarization has coincided with the weakening of money.
basically when money is weekend there's a sense of increasing unfairness that the system is rigged that you are being defrauded. people on fixed incomes and salaries see their money-losing value while other people are reaping what looks like artificially unfair windfall gains. and the link between effort and reward is severed. that is why an economist of an unstable economy get more corruption and crime. a number of studies have found that inflation actually has a stronger connection, actually a stronger connection to crime than joblessness. crime rates in the u.s. dropped immediately after the financial crisis when there is a serious deflation that they began to move up in 2010 during quantitative easing which is an interesting thing we say in the book. these are just a few highlights from the chapter and both left and right agree today that this is a period of malaise that we
hope this book helps people put aside some of the finger-pointing that has been taking place in recent years and helped them recognize the role of the unstable dollar as the catalyst and culprit. thank you. [applause] >> we now come to q&a. as brad said if you could come up to the microphone if you have a question. feel free to ask away. >> i guess rather than trying to debate the ideas here of the concept of stable money and so forth i guess i would just ask this. why is it that so many countries
including the united states have dropped the gold standard and why is this this theory so unpopular? you mentioned the fact and he gave the quote from keynes who said one in 1 million will correctly diagnose the problem. so that's kind of a hand that there are some basic fundamental reason why it's hard for people to understand and for other economists to accept the theory. why do you believe that there are so relatively few economists that accept your proposal? >> the reason the gold standard lost dominance that it has in terms of intellectual circles was the result of two
catastrophes. one was the first world war which began 100 years ago this year, destroyed the classical gold standard. after that war because the standards work so well they didn't really realize what made it work. and so britain did not do it right trying to go back to it. that led to her example after the war they tried to ignore the inflation that the first world war created to try to re-peg gold to its prewar price which is ridiculous if you have doubled or tripled your money supply and recognized you had a one-time catastrophe and to do a reevaluation. they didn't do it so they harm their economy that way. keynes came along and others and this sounds a little arcane but it's basic. classical economists say the real economy is the production
of products and services. the money economy is the symbol of products and services. kaine work -- change reverse that and said money is the real driver of the economy and is the production of products and services that respond to the money so we have reversed it and put the cart before the horse. ..
whole excise taxes were enacted on numerous items including a stamp tax on tax. in the thirties if you wrote a check to pay a bill had to pay a tax to the government for using a check whether go these cave in the u.s. and britain is in germany went berserk so that deepened the downturn. so's they said let's try study many celebrities started to devalue the pound and numerous other countries so one bad thing was done after another. despite that we still got a gold standard after the war designed in 1944 brentwood's. -- britain woods but by then to use the government to guide the economy was so prevalent they did not know how to preserve the system was shut is why every blip
gratuitously into halves of fluctuations but why give it a c plus for monetary policy. with there nearly part of the last decade we went off the rails again. whole world war i in great depression new york but me be this hot funny money before adam smith maybe she had it right period we should be examined things again. getting the conversation in going.
so that federal reserve should be no more important in by the way if you run into a federal reserve official asked them why. they said 2.5 percent inflation is what they would because they believe extra of money stimulates the economy that translates to a typical family index rose $1,000 per year of expenses. beth lamp food gave you authority to tax american families an extra $1,000 per year and why does that stimulate economic activity? i have asked and i have not gotten an answer. >> it just seems i believe you are correct something is wrong with the money but i don't believe it is a broad enough discussion to really
cover what is happening to us economically it is more sophisticated now they and i think of your analysis. but the goal changes and fluctuates but the value of gold was artificially created to legislate its s the center of the value of money so it had the reverse effect. the there are times when we had to expand. the point is, isn't there in your thinking a broader concept of distribution of wealth? it seems to simplified in this complicated situation. >> the key thing is to recognize monday is a
measure of value just lighthouse whole cloth is a measure of time. -- the clock is a measure of time. just to make sure with the dollar is created it has a fixed value. now to take your point on the fluctuating price of gold is less about the intrinsic value of gold but more about the market's value of u.s. dollar for coho so when people thought the world was coming to when end in 2011 with the default crisis author gold shot up in 1900 of the world did not end soon notice 1200. in 1980 they thought it was coming to win it so it shot up. before going back down with the election of ronald reagan. that is the perception of
value of currency the of the intrinsic value of gold. but tears of legislate the reason there rose is not bankers getting together to say let's do that but year roosevelt of the marketplace. governments quickly went into the business. but when the rose of the needs of the marketplace. so it was spontaneous so what isaac newton did how 300 years ago was to codify what people thought needed to be done. in the us small country under attacks from spain labor under water literally that is what they have dikes. a small population because of selling the money but to with a sophisticated capital markets they became a
financial center of the world before london even though on paper this country had nothing. britain became the financial center fixed to cool even though it was the second year power. they have other things going for it to the saving money brought it all together. the marketplace is set to over 4,000 years this is the way to do it. us a result the economy gets more complex. so to talk about the division of labor and the jobs rise up. if you said apps is that applications for college or icon? is that the movie about monsters? people in things rise up to you cannot even imagine it is the sixth measure of value the way we improve our
standard of living so we could focus on what we do best when so we don't have to hunt the mastodons to survive but focus on what we are best at. you can do that with fixed money more easily. >> and giving the economy with monetary policy in the willingness to create money whenever they feel like it, would is a return for the market's hot? >> if we decide to do it not as a result of a crisis but people say we have been drifting 40 years so let's start. there is a congressmen representative kevin brady to has proposed a commission of bipartisan hot to examine
it monetary policy. that is a good start. when going on the gold standard over time means you have the but -- a much bigger economy there is a lot of myths. thinking the causes deflationary in bad times for farmers but no. what it does is allow the humankind to search for word the change with the economy was not gold that led to hard-pressed agriculture the factory to grow more food we still learn to grow more food. but cornyn now in the 30's a typical acre produced 27 bushels. today is windage 50.
-- 150 and one man in iowa will invent a breakthrough in core that will lead to 300 or 400 bushels per acre. agriculture to a 2 percent of our economy it was 60 or 70 percent. railroads after world war ii employed 1.2 million people but today it is less than 200,000. so economies are always adjusting. but you rather have upward rather than stagnation and to wonder is my fifth year-old son is going to leave the house? [laughter] >> thanks for coming out. as part of the minority but i cannot afford gold at all
it is $69 for coins but i do carry notes of silver with a. it is a $1,923 is worth about $20 today did what i realized after the past to retreat years is you can buy the same amount of gasoline today as he could have before 1964. before then all quarters or dimes are half dollars were 90 percent silver. that even though it is still $1 you go to a coin shop it is $20 because it is silver the with your $20 bill you to buy the same amount of gasoline so that tells you the price of gas has stayed constant in relation to gold and silver where the price today of gasoline rose not
because the price of gas but the purchasing power of the dollar has gone down. of the second most interesting mind blowing fact is than dives is exactly the same plate as this silver dollar in four quarters is the same weight as a silver dollar. to have dollars is the same way to of this dollar. before the dimes were smaller than the corridors for reason. so you talk about gold so reduce sees silver coming into the picture? >> in terms of ideal society it is never deal with human beings. met in the first one ended 80 years of existence.
in write-up and tell nixon bluet up with the applause of most economists and experts. and then 12 years before we went off the rails again. 1 gallon of gasoline was a dollar. but now what is it? but in terms of silver for centuries gold and silver had the same relationship. but what happened in the 1870's is people started to use more and more paper money.
the with the rise of paper we did not the coins as much. so the demand for silver fell so today it is 60 / one. it is held better there and silver with the things like oil it has remained constant. but what we think of as the rising cost like energy is the devaluation of the dollar it is a very good point and by a the way with that silver dollar you have to flippant on this table lanais loud sound that is how you get the phrase sound money. [laughter]
>> what are your thoughts of the banking industry consolidation? with the consolidation of the banking industry as a result of regulation and fiat the first part of our history we have a lot of extra banks because of regulation not because of the nature politicians would not allow banks to combine. with the original bank of america started in california when he took it across state lines using a big holding company so he had a bank holding company
congress cpac -- pasternak so we had too many but today dodd/frank had the implicit purpose to drive small banks out of business. it is not the economy by regulation and. it is easier for government to control that is why they make it impossible for single practitioners of health care they don't want you to have so many doctors out there but be part of a collective easier to control or regulate. so that the consolidation is from the changing
marketplace. also putting their claws into the insurance industry and they go after mutual funds. hedge funds anything that moves they will go after to reduce risk. so when you reduce risk you will get no innovation in never would have allowed the rise of money funds in regulating what banks could pay for interest. it is coming by fiat rather than nature because one of the virtues we have is the vibrant markets but they went off the rails police developed numerous ways for people to get capital but it is all based oriented
because it'll have a system that nurtures from babies to adolescence so they go public in with one statistic with banks lending about one-half trillion in retake europe together it is the same population the when you add up the economy of 4. 8 trillion there over dependent on banks which is a fragile system. that we don't want to go that way. >> go into the core of your argument with the way people really are.
part of the argument it is contrary to what you say. that the story of the fabric of society there has to be a mechanism that you allowed dreams but then also what some point in time. >> but the gold standard will not change in nature. that will not change. period. in the utopian societies so they try to change human nature by crushing people or killing them it does not change so in the early part of the last century everyone realized automobiles were a big thing we had the creation of two or 3,000 automated fractures and how many survived? you can count on your
fingers may be rather early '80s with the first pc boom sent you have to have a shakeout with apple is survived but atari, the commodore, texas instruments , it is inevitable. you don't know what will work until you try it. 15 years ago google was a number once. fit they challenge microsoft and research? so this is constitute. all the gold standard does is make sure money has a stable value it does not prevent people from getting giddy or depressed it just makes sure when you do a transaction the many is fixed in value just like when you order gasoline it is 1 gallon.
deal we were getting ready to have more risk taking in people investing in the future. and the constant experimentation indeed been henry ford had too painful bankruptcy's and a trial and error is what you want to. if you don't have stable money then things stay the same. >> touche short questions. was nixon faced with? what did he feel he had to do? gold has increasing industrial uses