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tv   Cronyism Corruption Government Power  CSPAN  November 29, 2014 2:05pm-3:51pm EST

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[laughter] it is nice to be back. that seems like a good segue into my topic than anything, cronyism and corruption in government power. we have heard a lot about cronyism in the last several years. the political right and a lot of libertarians have been talking about it frankly for years and it has become a big issue with the export-import bank and other issues. we have also heard a lot for many years about government corruption, primarily from the political left, but frankly that's from across the political spectrum. so i think most people understand that these two ideas somehow go together. i'm not sure everybody would place the idea of government power in the triumvirate, and that is part of what i put it there, because i think that is really the key issue. but what i want to start, let's -- that is in a sense and essence that's what i want to get at. i want to get at what is the issue here and what should we be
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concerned about? there is a real problem when people talk about cronyism. it signifies or gets to a real phenomenon with government but i think it's widely misunderstood. it's worth starting with a simple question. we hear about cronyism all the time. we hear about corruption all the time, but what does this idea mean? and this is part of what i want to do. i want to explore with this idea means and what its implications are. i will say off the top of the issue that there is a problem here but if you think about it the wrong way it has very dangerous consequences. but in order to get into this issue we should first start with what people think of this issue. what is that people are talking about when they talk about cronyism and corruption? so i want to start by characterizing this issue and kind of giving you an example of what we often hear.
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it's an election season now and it makes sense to think about this in the context that perhaps something that you have heard and if you haven't heard you probably will hear. so think about this and ask yourself have you heard something like this? so here it is. money and influence are corrupting our democracy. we have a government not by and for the people but by and for the special interests. big business colludes with big government and redistributes money and favors to itself at the expense of everyone else. in short, it's not capitalism that we live under in this country, it's crony capitalism. i don't think this is anything new to you guys. if it is you are not paying sufficient attention because this is especially in an election year what we are hearing constantly.
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the question is, what does this mean? what is it that people are getting at? there is a real issue here. i think there's a real injustice and a view of our economic system and our government that is accurately criticized, but i don't think people are thinking about it in the right way. now that's kind of a caricature of the issue. instead of relying on what i think is the general statement, let's first before we start analyzing this take a look at what the commentary is saying. the right is criticizing this issue a lot and let me give you a sense of what a lot of commentators are saying. first i want to really get a sense of what this is all about. this is an author by the name of tim carney. he is with the "washington examiner." he's done a great job attacking the issue of cronyism and special-interest influence. but i would part company with him on how he describes a buddy -- describes it. he wrote a whole book called the big rip off and here's one of the things he has to say about
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cronyism. the idea he is attacking is the myth according to him that this is big business is opposed to regulation. what he says is the truth is that big business lobbies for and profits from big government policies that rip off consumers, taxpayers and entrepreneurs. moreover, government is happy to comply. i think this is a fairly typical view. here's another one from national review. this is how cronyism works. the company wants a special privilege from the government in exchange for political support in future elections. if the company is wealthy enough or backed by powerful enough interest groups the company will get it way and politicians will get another private sector ally. this is a quid pro quo or a trade going on here. a few cronies win at the expense of every one else. that's another common statement. last but not least let's look at what a politician has to say
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about this. this is i think my favorite of all. wendy davis, a gubernatorial candidate in texas, and she's describing her opponent. here's what she says about him. my opponent is "part of the special interests crony class of insiders who has raised millions of dollars in campaign cash." that one caught me. i asked myself, what the hell is the special-interest crony class of insiders? it's not just an insider and it's not just a crony class of insiders but as the special-interest crony class. when i hear that i get this image of the guy that lives in a vault at halliburton and sits on a big pile of money and smoke cigars with dick cheney and they calculate on what's going on in the world. [laughter] the point is not to ridicule the idea of crony capitalism, because there is a serious issue. it is to ask the question what do people mean by this? let's characterize this idea.
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what are the essential points that people are putting forward in this idea of cronyism. i want to analyze the issue and see what is the real issue or what is it that we ought to be criticizing or not. the main point here is what comes across in this description is that big business and big government writ -- collude to rip off the little guy. that well-connected insiders are able to get benefits from government that are not available to others and that, at the expense of others. the idea here seems to be that this is a problem of bad people corrupting a good system. the evil insiders who are profiting in corrupting our system of government. in case anybody misses the point, let me give you one more example. this one is from the economist magazine, purportedly a magazine
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that cares about the free market and capitalism. not long ago they ran a cover issue called planet plutocrat, and in case you didn't get the point of that day had on the cover a picture of crocodile, it -- a crocodile, a wolf, and a hippopotamus dressed as businessmen. the obvious issue being animals are impersonating businessmen too much. it's too much, so but the idea here obviously is businessman and insiders are evil and this is a problem of outsiders or well-connected insiders influencing our political system to their benefit at the expense of everybody else. now, i take pretty close to the opposite view of that. so the idea is that this is a
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problem of bad individuals corrupting a good system, i think a far better way to think about it is the real problem here is a bad system, not bad individuals. in other words, the problem here isn't individuals per se. it is the system in which they are operating. the problem is not that bad people are corrupting a good system. it's that our system is fundamentally flawed. if we want to understand this issue, we have to understand that aspect of the issue. in short, this is a problem, cronyism or what people are referring to as cronyism is the problem of the misuse of government power. it's not a fundamental problem of individuals trying to influence the system. and i'll explain why i think that. i would go as far as to say under the system of government we have, what people complain about when they complain about cronyism or the phenomenon here
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is absolutely unavoidable, and until we fix our thinking about government and until we reform government ultimately this problem has to persist. that is what i want to focus on. before i go further i should say a word about the term cronyism. and it's actually four words. i don't like it. i don't like this term. this term suggests that the problem is an issue purely a -- of favoring people. it's purely an issue with influencing the system. there is nothing inherently wrong with cronies. the term cronyism really just means favoring your friends or your colleagues. that's not inherently wrong, but the suggestion of this term is the problem is favoritism. now i will however be using the term throughout the talk and i will apologize for that. i don't have a better term to use at least not one that's commonly used.
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in my focus ultimately it's on the phenomenon. what is it that people are complaining about and what should they be complaining about? not the terms. however, if i had to pick a term, ayn rand referred to poll peddling and the aristocracy of the poll, that people are able to use the power of government for themselves. that happens in a particular system. another one that i really like come from the 19th century french economist and it's a legal plunder and i will explain why think this is an issue. that captures it really well. so here's what i want to do in the talk. i want to cover three basic points. first, i want to explain why you -- i think this issue is really important. this is an issue that can even -- easily travel under the radar but i think that the issue of cronyism and how we think about a government that results in our
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economic system is really important. i guess i would classify the issue as i said as the misuse of government power. but there's more to think about in considering why it is we ought to care about the issue. what i ultimately want to do is convince you to think differently about it and advocate to others and try to convince people what is the real issue here. that's the first thing i want to do. second, i want to explain what i think is wrong with the common thinking. the prevailing view that this is a problem of bad people and not a bad system. there is an absence of packaging -- in essence a packaging of two things that don't go together or ought not go together when to separate them. i want to examine something i mentioned a minute ago, which is that if this is a problem of government, under the type of government that we have this problem is unavoidable. there's no way to avoid it. i want to expose that, because the way we think about government is a large part of
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the problem. so long as we characterize our government in the common way and i will get to the issue. i mean, you can sum it up by saying democracy but there's more to say about this issue. so long as we think about government that way and have that type of government, this problem is unavoidable. so let me start with the issue, why is cronyism a concern? my view is cronyism and what people rightly complain about with the term is a misuse of government power, and that should be of great concern to people. that's not what i really want to focus on. i will go back to that. i want to focus on for a minute on how this issue of cronyism or the underlying phenomenon, this issue that some people are accessing government for their benefit at the expense of everyone else, which is a common view. how does that affect our thinking of institutions in this country that are really important? that's something we need to step
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back and think about. i'm guessing that this actually impacts all of you in this room in ways that you have not considered. that's something i want to bring up because it's a serious issue and we need to correct this. if we want to correct a lot of the flawed thinking about government, about capitalism and about business. let's start with the issue of business. it impacts our view. it impacts our view of our economic system. and our view of government, all in negative ways. now to begin with, i will assume, and i don't think this is a bad assumption. i will assume that most people in this room at least do not have an antibusiness you. by antibusiness or pro-business i'm not talking about individual industries or business, i mean in principle. my guess is you have a generally favorable view of business, and that is a good thing.
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i do, too. i think business is awesome. in principle. to signify the point -- simple by the point. to oversupply at i would think about it like this. the industrial revolution and business and all the wonderful things that business has produced, and individuals in business has essentially made the difference between life and death for most people in this country and most people in the industrialized world. so to perhaps oversimplify a bit, if it weren't for those two things industrialization and business probably we would all be dead. or at the very least it make our lives infinitely better. so business is a positive thing. but think about this for a moment. think about your own view of business. in the current context of america is it true to really say to yourself that i have a positive view of business and the pursuit of business? maybe you can abstract away from
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individual examples and i will give you a couple of examples in minute. but my guess is you are like me, and sometimes, there are a lot of businesses that seem to do the wrong thing. there are a lot of businesses that seem to be using government to benefit themselves at the expense of everybody else. and cronyism really impacts that. in fact that's kind of what i would say one of the fundamental reasons that people who would otherwise be motivated to view business a verbally, and indeed -- favorably, and indeed some people who work in business still have kind of a mixed view. business isn't really good, it's kind of dirty sometimes and this issue of cronyism impacts it. let me give you a couple of examples to sort of get you thinking about how you think about business and why this issue affects our thinking.
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consider the electric car company tesla. leave aside a minute that it is electric cars. i don't when you think about electric cars in the whole phenomena of electric cars. tesla is technologically amazing and everyone in southern california where i'm from, as far as i can tell only people in southern california can afford them, but leave that aside a minute. it is an interesting company. my point is not to make a point about whether electric cars are good. it's to make a point about tesla and the broader phenomenon. tesla is now going to build a battery company in nevada. how do they come to nevada? well, there was a big competition that was held to decide what state tesla was going to come. it was not really a formal competition, but in effect it was a kind of competition and guess who was competing? nevada, california, and texas. the competition was for how many goodies can we give to tesla to entice them to come to the state? things like a free road, which is probably the smallest, cut rate electricity for a decade,
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meaning they will get a better rate than other tax payers, and no taxes for something like 20 years. we can talk about this in the question-and-answer period. i will try to probe the steeper. i'm not making a point about whether or not it's good or bad to exempt people from taxes. i can make that point -- it is good -- but the overall point is this looks like tesla has got an inside line to the nevada legislature. this is an example of the nevada legislature and the other legislatures essentially saying hey come to our state and we will manipulate the rule of law for you. we will manipulate our laws. when i moved to california nobody said hey we will exempt you from taxes. [laughter] that's not the way it works. only tesla gets this. there are other really good companies. apple has done this. they set up operations in given states, and it really looked like there was a kind of quid pro quo.
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a trade going on with the legislature. if you look at the things closely, as a lawyer, some of you respect the rule of law, the phenomenon is pretty sickening. let's make a deal. it's not leave us alone. let's make a deal. we will negotiate. these laws will not apply to you, this one, we will erase this part and have a special apple law or tesla law. that really is the impact on people's thinking about government, even people who are very pro-business. take one more, pfizer. pfizer the drug company. great. the innovation in medication today is phenomenal. pfizer are producing amazing drugs. but again, tainted by this issue of i will call it cronyism, but there is a deeper issue. one quick example. i used to work at the institute for justice. you probably heard about the
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issue of eminent domain abuse. i'm hoping you heard about the kilo case in connecticut where suzette kilo's home was taken through eminent domain and handed over with hundreds of other homes to a developer so he could build a company partly which would be used by pfizer. so in my view that taints pfizer in a sense. if you think about the circumstances of this, we knocked hundreds of homes down and ultimately it is like nine years later, and what we have to show for it? not that we should expect good things out of this arrangement, but what we have to show for it is a barren field that isn't being used by anybody because it's stuck in all sorts of fights over it except ironically literally a group -- a group of cats. just a bunch of cats, and they are not even fat-cats. they're just regular cats.
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living in this. [laughter] where is the justice in that? the point ultimately here is this really pains their view of business and it's hard to sort out who are the good guys and who are the bad guys. even if you have a positive view of business you are tempted to think this is dirty. think about it from the layperson standpoint. i think this is really impacting people's view of business. kind of corollary of that or a follow on to that is more broadly broadly speaking it impacts our view of capitalism and the free market, which again i probably don't have to make this point too much to you. but capitalism is a great thing. it's awesome that we have a system of capitalism that leaves us free to produce and the society, the advance society we have today is because of that freedom and the economic system of capitalism. but think about what people argue about capitalism all the time. even people who might be sympathetic to it.
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let me give you a quote and i think that will round out the point. but i think you have probably heard this sort of thing before. so i'm going to read the quote first and then you guys can think about who this sounds like. this is a politician talking about the economy. "this economy delivered record corporate profits with sacking middle-class wages and anemic jobless recovery that promoted and exacerbated inequality. it has isolated the poor and squeeze the middle class. if ordinary citizens who work hard and play by the rules only end up subsidizing and bailing out the alleged insiders who do not, then the land of opportunity really isn't." who does that sound like? any thoughts?
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like john kerry, obama -- that is what i thought. actually it is senator mike lee of utah, who is very good on this issue of cronyism. my ultimate point here is that this is an attitude, so that this is the attitude coming from a guy who is supposed to stand for the free market and capitalism. think about what the average man on the street thinks. they think capitalism is a rigged game. we see this constantly. inequality just rules capitalism. it is not a system of for the people. not a system where you can get ahead. it is not what you know, it's who you know. that is fundamentally untrue -- untrue and a slander of capitalism. because of that is really the opposite of capitalism. a large reason why they can get
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away with this is in my view what is going on with this issue of cronyism that makes capitalism less dirty and unfair. finally i would be remiss if i didn't point out the impacts of our thinking, on our thinking about government. you might think and again i'm guessing i am from the ayn rand institute oppose government and that's not true at all. ayn rand thought government was absolutely essential. i agree with you wholeheartedly and in fact what a lot of people on the right and among libertarians would characterize government is a necessary evil. i would not say that at all. government is a necessary good. it's absolutely essential for us to be able to live freely. now that only applies though if government is limited to its proper purpose and i will discuss that as we go. my point here is this.
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government is essential and it's really important to our lives. it's what keeps us free. yet the prevailing view of government, largely because of this issue of cronyism and issues wrapped up in it is that government is fundamentally corrupt. we have a corrupt government. it is -- i will leave that characterization aside. it's not a government out to do what it is supposed to do, to protect us. it is a government out to rip us off, as the book said. that is a very negative thing. that breeds cynicism about our government that makes it very difficult to argue for proper limited government. it breeds a view that government is inherently corrupt. that's not true, not the proper kind of government.
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so that's to at least give you a sense of how this issue is used. it affects our view of business, capitalism, and government and that is a negative thing. so we ought to get to the root of this problem in this issue and root out what the problem is and separate the good from the bad. that's what i want to do next. i want to talk about what i think is wrong with the prevailing view of cronyism with an eye toward what i think is right about it. in other words, what should we be criticizing when we criticize cronyism? if you are with me and you think there's a real fundamental issue here that we need to talk about, we need to think about how this issue is used and what i would say is the great injustice done in the idea of cronyism.
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now, if i had to boil my theme in this part down to one essential point it would be this. cronyism is kind of a fuzzy term that packages together two things that don't belong together. one of them is bad and one of them is good. the impact of this is too good and to elevate the bad. the impact of this is to damn the good and elevate the bad. it's sort of sullies the good part. what is the good? actually let me backup at second. this is what if you are interested what i'm getting at here is what ayn rand would have preferred as a package deal. this is an idea for a term or a concept that packages under one conceptual roof two very different things. the impact of it all, if you are talking about things i should -- that should be evaluated as good or bad, the impact is always to sully or dirty the good and excuse the bad. in a sense it's like blaming the victim in a crime. claiming that the problem was you were walking through that
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dark alley. so you deserved to be mugged. people should not walk through dangerous areas. that's crazy. we shouldn't think about it in -- immorality and illegality like that. we have to separate the good from the bad and judge harshly the bad and judge positively the good. the good in this, i would say, is the following. business, production, well that is produced by industrious people. it even goes as far as limited government and freedom. that is the good that is packaged into this idea of cronyism. the bad is that, not to put too fine of a point on it, but stealing. using the government to steal from others. but it is also the erosion of the rule of law, the kind of perversion of the rule of law and a perversion of government.
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all of these things are packaged together in cronyism. and what the effect is is we ignore what is wrong with our government today and we end up blaming the wrong people. so that's what i want to focus on now. now what i want to do is, i want to do this by exploring a little bit more that the idea of -- not the idea of cronyism per se but some related concepts. i'm guessing that you have heard some of these concepts. these are ideas that you either see in public these days as public discourse and oftentimes you will will see them and -- in economic discussions of government. so let me through a few of these terms out. what i want to do as i want to examine them and try to understand what are they implying. here are the terms. has anyone heard the term rent
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seeking? the idea here is that government erects barriers to entry are some sort of a qualification to get into a business and those who are in the business are then able to use their privileged position to extract what's known as monopoly rent. basically just high prices. here's an example. i'm a lawyer, let's take lawyers. i am licensed to practice law in certain states. because of that licensing i can at least this is the argument and i think it is absolutely true because it is very difficult to compete with people like me. we can charge higher prices than -- and we can really get rid of competition. that's definitely true on a state-by-state basis. i just moved to california. i can't practice law there but it would be great if i could become a member of the bar to do legal practice on the side or just because it would be interesting. i'm not allowed to do that. here's another one, regulatory capture. have you heard this one before? i hope you have.
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so regulatory capture is the idea that regulatory agencies whose job is to regulate businesses get "captured" by the businesses. they are turned and used by the businesses for the business's various purpose area supposedly a bad thing. that is the second idea, with the individual using the government in a particular way. two other ideas, special interest influence. everyone knows the idea here. private interests influence
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government or influence the political process and finally corrupting government or corrupting democracy. cronyism is another one that fits into this. think about this. all of these terms you see coming up in the debate. people are doing all of these things and is supposedly bad. they are rent seeking. they are capturing realtor agencies for for special interests influencing our policy or corrupting democracy. think about these terms for a minute. what is the common denominator or maybe another way to put it is what is the uncommon denominator? what is the implication for everyone of these terms? what is missing from this calculus when we think about rent seeking private individual or private interests taking advantage of government laws, whether it's regulatory capture, private businesses capturing the regulation, special-interest influences. private business, private interest influencing politics, corrupting democracy.
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the idea here is that private. interest are corrupting democracy. the commonality is that private interest are somehow corrupting our form of government or taking over parts of our government and using that for their own designs. they should strike us as we are. i will give an example of why think that's true in a minute, but think about what is it that people are complaining about here when they complain about all these phenomena? regulatory capture. if the government has a particular power and you are capturing it for your own design. or rent seeking. think about that. why do we call it rent seeking? what is wrong with rent? is rent a bad thing? i have rented a property before and i think it's an awesome thing. but the implication here is evil landlords who are preying on people. but why would we call it rent? special interest influence. anyone know where this term comes from? this has been around since the mid-19th century during the progressive era. this is an era when the government grew almost exponentially, purposefully by the progressives who wanted to expand the size and scope of government. their view was we are doing a
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wonderful public interest and of course on the side of god or however you want to characterize it and the evil special interests, businessmen who are trying to influence what we do. they are bad outsider, illegitimate. we are good, insiders running the government for a proper purpose. so again this is the idea and any time you hear it is typically business interests but it very often is any private interest influencing government. so the idea at the root of all of these is somebody's using government, but what is it that they're actually doing? if you really unpacked as i -- this, what is actually going on, what is the real evil people are focusing on? what does it mean to create a barrier to entry? what is the government doing when it creates a barrier to entry?
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stripping down to its essence. it is imposing, passing a law that essentially says you are not allowed to undertake this business, and you are. what does that mean? that means the government is using the law to actively prevent people from doing what they would otherwise freely choose to do. boiled down to the essence, this is the application of force and that's really what people are complaining about. the same thing with predatory capture. what do regulatory agencies do? they regulate and restrict business. their purpose is to prevent businesses or private individuals from doing what they would otherwise do in a free market. they are imposing force. that is in essence what people are complaining about when they complain about all these issues. why is it that they are blaming the private interest in all of this and not focusing on what it
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is that government does? think of some hypotheticals for a minute. let's say you pay a mobster to destroy your competitor's business. go burn down his business. would anybody describe that as mobster capture? think about that for a minute. the idea is while the mobsters just exist to be used and the problem is here that you are using the mobster for illicit purpose. my view is the mobster is illicit to begin with, and we need to focus that. think about another example. a mobster comes to you and he says, you are in business. nice business you have there and i'd hate to see anything happen to it. if you pay me a little bit every week i will protect you from me destroying your business. the protection racket. would anybody say they paid the guy you are corrupting that mobster? that's horrible. you should not do that. what does this leave out?
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it leaves out two things. it leaves out the role of the mobster first of all. what is he doing? he's using force and is something i talked about earlier earlier. it's a form of plundering. he is engaging in thuggery and a criminal act and get all of these terms and in fact the entire issued cronyism crosses over that entirely and that points at the individuals who are influencing the mobster. that's the first thing it does. the second thing it does is it elides the distinction between the guy who is defending himself by paying the mobster off because he has to in the guy who is enlisting the support of the mobster to destroy somebody else. it glosses over the distinction. that is a really important distinction.
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let me make it clear that should make it clear, my point is not government is a mobster in all cases nor is it that the businessman or private interests are always good. in fact this is an essential point the way to bring out. in one hypothetical the business is being extorted and he's behaving in what many people, if you you don't have any other recourse what is your choice but to pay the guy off and let me do business. in one case he is innocent. in the other case what's he doing? he's using essentially extortion by means of paying somebody to go destroy another person's business. again, the central issue here is in both cases you cannot have this. this can't exist if you don't have mobsters. so the question i think that people need to ask about this issue of cronyism and government's role in it is do we want government that acts like a mobster or do we want government that protects our rights and
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acts like a proper government? there's a difference between those two things. and cronyism glosses over the whole thing. it doesn't say the evil here is a government using its power which is the power of force against innocent people. it just says anybody who accesses this power, we are not really going to talk about what it is, it's bad influence. or is that to influence it in a wrong way. that is another concern. sometimes it's a good thing to use this power and sometimes it's a bad thing but we don't think about what is the essence of this and what is actually going on in these circumstances? now it's beyond the scope of my talk to go into a full-blown analysis or discussion of the nature improper purchase of -- purpose of government but i want
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to make two related points that are really important to think about when we think about government and unpacking the issue of influence over government or a special interest warfare or cronyism. the first is this. government is not a value neutral enterprise that should be open for everybody to use depending on whether they get voted into office or whether they control the government. it's not value neutral. there is a right sort of government, a good sort of government, beneficial sort of government and there's an evil sort of government, a wrong sort of government in a destructive government and that really matters. as i said i think the distinction is ignored in the context of cronyism. what is being ignored ultimately is government's proper purpose. the idea is this.
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the idea is government is just, it's a value neutral enterprise and whoever wins the lottery called elections get to use it for their purposes. what is the essential point behind back? it's this. it's might makes right. if i hold the reins of power is pretty much get to use power however i want and the government power which is the power of force. what we need to do to have a proper government is to subordinate the right. we have to understand that government has a limited proper role. that brings me to the second which is the essential principle of individual rights. again i don't want to go into a great amount of detail on this but the essential point is this, government is only acting
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properly if it's protecting rights rather than destroying rice or destroying individuals ability to be free. what rights get us the freedom to thrive, to pursue our lives, to produce, to pursue happiness and to live. so the purpose of government is to prevent our rights from being violated in the way the government does that is by using force only against those who would violate our rights those who would initiate force. if government goes beyond this in any way and tries to get people not just the pursuit of happiness and the freedom to pursue happiness but actual actual happiness the only thing it can do is in effect plunder other people. that is the essential point and the essential thing we need to understand about cronyism. i referred to it earlier as a form of legalized plunder and i think that's a really apt term. the real evil here has to be and we have to focus on those who would use government the way a mobster does or the way somebody who pays the mobster to achieve our goal.
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that's a real essential my point -- the broader question and it is a broader question here in a free society is there any such thing as corrupting the government or what is the role of bribery laws and had we think about those issues he or? i'm going to set those aside and if people want to ask me about my thoughts about that there's a lot to talk about it would be happy to address it. my fundamental point is that this is an issue and what we have to do is criticize the improper use of government power not simply the effort to influence government at all. think about it like this. when we think about where we talk about the issue of cronyism or what the real evil here is that something like businessmen are trying to get favors. we ignore the fact that sometimes those favors are favors end quote are a guy trying to prevent himself from being destroyed by the very government that is supposed to protect him. sometimes those favors, and
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"favors" in quotes are a guy or a group of individuals trying to use the government to destroy somebody else. there's a really important distinction between the two and it's entirely up scared in this issue of cronyism. we ignored entirely. what happens? i mentioned the idea earlier of blaming the victim. so let me talk about that just a little bit. if you think about it when we talk about government corruption and cronyism. who is typically --who has the finger pointed at them? i have quoted a number of people earlier across the political spectrum and it seems pretty clear to me that the great villain all the time his business and especially big business. the idea is biggest bad and businesses are always out to use government power for their own advantage and at the disadvantage of others.
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but there is never a proper understanding of the fact that some businesses or private individuals or private interest so to speak, they have no other choice. we can't ignore that. we have to pay attention to the fact that the real evil here is using government in effect to plunder, to steal. well, let's put some more flesh on those bones to redistribute income from one person to another, to put up barriers to business's ability to compete, to regulate and restrict businesses and prevent them from engaging in business in any kind of an economical way. let me just give you one quick example. let's go back to drug companies. people complain that drug companies in the medical profession in general, the
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medical device business captured the fda and is using it to their own benefit against others. here is how i think about that. if i were a drug company and i had to spend billions and billions of dollars trying to get drugs approved, beneficial drugs that people want to buy, and run through the fda's gauntlet i would try to capture it too. i don't blame businesses for trying to do this. now you can say this whole process is unseemly. i wish it didn't exist. i certainly wish it didn't exist. i wish that businesses didn't have to spend -- and all sorts of private interest, to want to seem like the only ones affected our business but business is a culprit and held out as the evil bad guy so it's worth focusing on. i don't want to suggest that the process is a good thing or the phenomenon is a good thing. but i really can't blame businesses for doing it. it's difficult even to blame
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businesses like tesla who are in a sense looking for the best deal from some government because not only does everybody do it but they are operating in a context in which there are so many regulations in such a web of laws that they have to deal with that oftentimes it's impossible to figure out how it started, who is the good guy and he's the bad guy and what is that this is supposed to do? that is what they face. inability to do business without dealing with government. you can blame them for doing it. now you can blame people and you ought to blame people whose goal here is to use government to achieve unearned benefits or to destroy their competitors. that's a real evil, but decision. now if we don't make that distinction but think about what the consequences of this are. this is one quick consequence i want to go into that is not
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otherwise obvious and then i will finish by talking a bit about our conception of government and what leads to or allows for the prevalence of this issue of cronyism and what i would call pressure group. consider for a moment if you consider this issue a matter of bad people rather than a flawed system and that ideas that lead to it what's the logical result of? let me read another quote and i sense of it and i'll talk about it. this is the new republic reacting to many on the right criticizing cronyism. here is what they say. they say quote if conservatives want to improve transparency or curb lobbying so the corporations find it harder to manipulate the political system there is a vast network of
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progressive leaning good government organizations working on that cause already. progressive meaning good government organization. i litigated campaign-finance laws for longtime championing free speech and that this guy is talking about her all the organizations who want to clamp down on political speech these days. my broader point is that is what he is saying. he is saying what we need to do if conservatives are against this let's join hands and pass more restrictions on people's ability to influence politics which a couple of examples of this in citizens united case which you may have heard about at issue was a film that criticized hillary clinton. that is what they're talking about when they talk about political speech or influencing campaigns. it's people criticizing government. and to the extent that and i can talk more about this in a
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question period but very recently congress -- and this will continue -- congress considered a constitutional amendment that would change the first amendment to allow congress to impose reasonable regulations on political speech. that is what this is all about. this is -- if you dig down a bit deeper this is the logic of this new republic author statement. as i said before i think this is entirely logical. it's indefensible, from a constitutional and i would say moral standpoint. we have to check your premises here and say wait a minute we are talking about restricting free speech in our ability to restrict government. if you accept the idea that the problem is that people influencing a good system but it's an entirely logical result. what are you doing bad people are corrupting something? to pass laws to prevent them from corrupting. so the logical consequence if we
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don't challenge the root of thinking about cronyism is greater restrictions on our free speech or at least the pressure to restrict their free speech and ultimately to restrict our ability to influence the government which is a foundation principle of a free country. so with that let me move on and i hope i have motivated you to think more about this issue if you care about it than to think the right way about it. i want to talk about one final thing. why do we get into this way of thinking about government? one reason at the micro level is that people don't understand the nature of government power and they don't understand that government should be based on what the declaration of independence says switches governments are instituted protect life liberty and
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property. that's one component that there's another component at issue here. let me characterize it as follows. you have heard the term power corrupts and absolute power corrupts absolutely. i put a spin on that and say democracy corrupts absolutely. the point being if we really think of our government is a democracy and i will explain why this is, this interest group warfare is absolutely unavoidable. to do that let me ask you to think of again a common they are looking for something in return. they want to give financial support and are looking for return benefit in the form of legislation that is valuable to those businesses and then he asks isn't this obviously a form of corruption and? i think a lot of people would
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look at it like that. they would say that thing is corrupt. here is what i want to ask. the way he puts it is is that when people give money to politicians they are looking for something in return. they want to give financial forort and are looking return benefit in the form of votes for legislation, valuable to those businesses. asks, isn't this
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obviously a form of corruption? here is what i want to ask. why do we think that that's corruption? why do we think that that's corrupt? what does corruption imply? it means the basement, defilement and destruction of something. how do you have a view of corruption if you don't first have a few of propriety or if you think about it in terms of the deceased body corrupted by disease of germs, you wouldn't know when something is corrupt? you can't think i don't have any idea what the good looks like but what the corrupt version of >> let me ask you, how can we view the government that we have today as corrupt are because individuals giving -- or sorry. process,e view the
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say, of a businessman or corporations or private interests trying to access government officials through campaign donations or through lobbying as corrupt? the reason i ask it that way is notnt you to think about, the government as it was conceived of in the constitution or in the declaration of inspectionindependence, but thet we actually have. this.about it like every election season, do we not hear some variant of the following? the for me and i will tax middle class to pay for benefits elderly. or vote for me and i'll tax the elderly and the middle class to for benefits for students, let's say, student loan forgiveness. vote for me and i will favor labor over business, right, and that restrict the ability to freely associate with people, you know, because that's good for labor. for me and i'll favor
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business over labor. i'll favor and american companies over foreign companies. favor thee and i'll farmers over -- i don't know -- wall street, right? it to the farmers. you can play this out. what you ultimately get to is this idea that the purpose of hand out favors or to hand out essentially -- to bilk some people with taxes or regulation and redistribute benefits to other people. you, how can we consider any one instance of be corrupt without thinking that the entire system is corrupt? we point to any individual player in this process or this game and say, he's corrupt but the entire system is somehow okay. that doesn't make any sense. it makes no sense to think only one example of this is corrupt perfectlyst of it is
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pristine. right? what is the idea at the root of this view of government, that it electionriate every for politicians to appeal to people to vote for me so i can oredle, you know, income destroy one person's business in favor of another? democracy, not in the popular conception of it, conceptione popular of democracy is a very fuzzy idea. some people think of it as freedom. others think of it more like this. majority-arinism. purpose idea that the is to serve the will of the people. how does that work? every election season, we vote on who controls the reins of power and they supposedly serve interests inrious
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society. in practice, how does this have to work? chase, ifut to the businessman, let's say, or a union or any of the other interests i talk about, what is to thisural approach going to be? are you going to sit still and say, yeah, okay, i'll be destroyed by the government. and if the election goes the the wayy, that's just it went. my business will be destroyed. my hard-earned income will be handed to other people. you know, the insurance business, let's say, that i'm in, will be completely coopted by the government. am i going to just sit there? not.urse i'm going to go out and try to influence this process. and that makes perfectly good sense. so my point ultimately is this. or do we notreated view the purpose of government engage in precisely the sort that judge posner
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what areg about, and the implications of that? i said that our form of government makes cronyism and what i would call legal plunder or special interests or i should use the term "pressure group warfare" inevitable, under a system in theh we really believe that purpose of the government is to serve the will of the majority, are other terms for this. the public interest. i referred to this before. interests, which suggest that we're just one somehow thes and government is going to serve all of our interests regardless of what they may be. of that isble result dash, like a one-hour sale where prices are 90%.ed by, you know, people will just -- it's like a riot. you just run to this and try to government. it's a kind of, you know,
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regulate or be regulated view, be taxed. ultimately, a kind of kill or be mentally, right? everybody suddenly becomes a to live, my ability thrive, produce and be happy. so what's the natural result? tocourse people are going engage in this process. how can we say, number one, one butance of this is corrupt not all instances of this are corrupt? democracymy point is, is the system of corruption. conceptualize government, we think about it as its purpose is to serve the will the majority or some nebulous view of public interests. our view oft into government the kind of corruption and cronyism that complaining about. or the real tragedy injustice is that almost always it's precisely the people who loudest aboutg
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that sort of, quote, corruption promoting this view of government. they are the ones that support idea that this is a democracy, not a limited republic in a limited -- under a limited government, government is essential thing, which is protecting your right be happy byive and preventing anybody from acting talkede mobster that i about before, by abolishing the use of force in human affairs, except to protect people. right? the role and purpose of to protect us from crime. it is not to engage in legalized plunder. does engage in legalized plunder, we can't be surprised that people view that as the purpose of government, that they as very see government much like the mobster in my know,e, except, you
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nothing personal. it's just business. right? that's just the way it works. it's okay. that leads inexorably to the type of cronyism and interest group or pressure-group warfare that people are complaining about. to solve this problem, we have to, number one, differently about government. and number two, limit government. so if i have to boil the point my talk into two points, if you take away nothing other than take two points, at least them away or take away these two points, which is, number one, the idea of cronyism mixes together good and bad. tantamount to blaming victims and ignoring criminals people who want to use government power to destroy. and that is a massive injustice. it perpetuates exactly the problem. the mobster gets to travel under idea that the real problem here isn't him being a mobster; me, you trying to influence right?
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so you get the blame for that. that's the first issue to take away. second issue is the issue that people are complaining about is our concept for government. so long as we view government's dividingssentially us -- which is the practical effect -- dividing us into factions or warring interest groups, corruption will of ruleule, or the use against one person against another, and warring interest is theand legal plunder only option. so perhaps a better word for the or theat people refer to term that they use, cronyism, i instead of crony capitalism, which is a horrible term that suggests that a system ofwhich is freedom, is leading to this sort of thing. term would be crony statism, statism being the individualhich the
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is subordinated to the group or to the state. redundantly, that's in my view, because the real essential evil here is that form government, statism. so if you really want to pinpoint what the problem is, talk about cronyism, it is the view that the state is areeme and individuals subordinate. if we want to fix this problem, only solution ultimately is, up as leave us the hell alone. okay? lives.pursue our let us produce. let us trade. free.tely, let us be thanks. [applause] all right. questions? i think we want to wait for the -- there we go. so over here.
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why don't we start over here. then we'll move sort of across room. that makes it a lot easier. i've been thinking, as you were talking about this line between what counts as self-defense versus companies i wason the offense, and trying to think, like where can i identify? what is the moral difference? i think where companies tend to cross lines, and individuals saying when they start we're just trying to level the playing field. to makere just trying everything equal for others. this is something i've just seen finance in the campaign laws. hashe right in colorado been subject to campaign finance laws and the left -- i eninto, mean, they're-- i still subject to them but the left is using them as a weapon those on the right. somebody on the right has now decided he's going to show the what it's really like to be
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subject to these laws. and i think this is crossing a moral line for me. is where -- like you are no longer by ally. you are somebody i don't like. you're actually going out there and violating rights now. would you say that that is a of threshold or not threshold but like a freeway to immorality? >> that's a great way of putting it, a freeway to immorality. so the phenomenon is this. it's kind of -- so, you know, you pull a gun or you pull a knife. he pulls a gun. mean, it's that con stant escalation -- constant escalation. so if you're going to do this, i'm going to do it, either the same way or even worse. fundamental the evil here. but it's a phenomenon that i think -- this is not defending it. right, you're absolutely although two points. one, as a general matter, you know -- i hate it when
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economists say this, but other think if ag equal, i person does this, it's immoral. no question about it. can get complicated. think about it from the stand stand-point of asking for a subsidy. subsidy.petitor got a why shouldn't i also get a subsidy? that gives him a competitive advantage. >> the third party, like parties number 3 through 212 were also not getting subsidies. right.'s >> but like so it gets really got ton like, hey, i've level the playing field, because competitor a is doing it, but goinghe regulations i'm to do to try to control him is also going to harm all my other and i'm just going to ignore that. >> that is absolutely right. a war of all against all. it's like those chain-reaction videos from way back when i was
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a kid, where you have a million that have ping-pong balls on there. blows up.thing just it's just like that. it goes from single examples of 19th century,e where it would be with the railroads primarily, and today it.ybody does look, everybody does it, so either i have to do it. it's kind of self-defense, broadly speaking self-defense, i have to play this game to get by. it's even does it, therefore it must be morally neutral. fields a level playing and we're going to level down to the least common denominator, destroyingerybody everybody. the only solution to this is you have to abolish the system. incremental an approach to that. i would say definitely judge the laws offensively to, you know, plunder other harshly. but you do have to be a little
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sensitive to the context. that's what i would say. next question? over here. you useyou ever or did the arguments you've made speech as aour litigator when you were working? >> did i use the arguments i've speech as a litigator? not really. but i will say this. so i was a campaign finance for, i don't know, about a decade at the institute for justice. constantly. so these are the arguments i would make in court. this is an example of freedom of speech. we have the right to influence the government if we limit the oury that goes to pay for speech, we necessarily limit the speech. that's the first amendment component. now, in the field of law, within is a very kindre of -- a very specific view of corruption. and the view of corruption in the legal field, in this
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context, is it's not corrupt unless you literally give a contribution in response and you get from that an actual -- it's a quid pro quo ultimately. arguments was always, look, there's no evidence that candidate isor the yielding a favor in return. concrete example would be i'll give you, senator contribution, and you pay me back by voting on a given law. right? corrupt.d be seen as but that's never how it actually works. and we would always argue, look, this doesn't meet the definition of corrupt. that made perfectly good sense terms.l i think it's not just viable. it's correct, although i'd have a distinction ultimately between legally correct and morally correct in certain circumstances. but it was true. but i found this. over time -- and i mean this was understand -- people
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looked at me, like, yeah, right, sure. corrupt.t's not you go to a politician and you give him money and you expect on your pet bill. how is that not corrupt? that's what the judge said. this not corrupt? the commonsense view, commonsense in quotes, is yeah, of course it's corrupt. this is not how politics is supposed to work. so part of the reason i'm interested in this issue and view of on our corruption and what the kind of starting point is, is there is earlier -- theid logical result of this kind of leads directly to restricting our free speech and restricting our ability to government. it just makes sense. if you look at it the way people the big picture, you know, it's people trying to influence government officials. you shouldn't be able to pay off the cop to, you know, arrest the the street or let you
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off of a traffic ticket. therefore, you shouldn't be able of thence the campaign candidate. that argument -- there's a of commonsense to it. i think the only way you can kinde it is by taking the of big picture approach i'm taking, which is this is a ofwed -- this is an issue government power and the wrong view of government. but in all events, it's insane -- not to put too fine a point on it -- to people's ability to influence this government. if i had to just choose, you goingthe direction we're and accept kind of big government in a sense, i would rather have -- put it this way. if we're going to have a government that influences we do and that controls everything we do, we have to be able to influence that. so the way i look at it is it's insane to get rid of free speech the freedom to influence
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government, not to mention immoral and really a fundamental attack on the foundations of a free society. but as a practical matter, it's also crazy. government is going to have this much power, with ehave to be able to -- we have to be able to influence it. the ultimate point is i couldn't use these arguments in court because they're not strictly relevant. are very relevant to convincing people that, you need to maintain and preserve freedom. much more important goal than worrying about, you know, petty corruption. right here. >> what about the -- what's your companyon the auto bailout? was it 2009? do you think that's corrupt? into all this?it >> well, yes. let's think about it in tw two ways. corrupt from the big picture standpoint. in other words, this is not what government should do. it's probably like an example of
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the influence of the car companies over government, although i'm not positive of that. thing oftend of happens. but so i didn't really get into this in the talk. but what we need to think about is, if we're going to talk about government corruption, as i we have to first have a view of what government should do before we can have a view of what government shouldn't do. right? or when government is being corrupted. so if the -- now, the pure, proper view of government is it our rights andct do nothing more than that. an auto bailout is not protecting our rights. the government stepping in and saying, we really favor you as a business and we don't want you to go out of business. so what are we going to do? we're going to take money from and give it to you. that's horribly corrupt. it's corrupt on the model i discussed earlier, basically government acting like a
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mobster. where with does government get off telling me, the taxpayer, that you have to support chrysler? not by buying their products, because they're crappy, let's say, or whatever the reason, but you're going to be forced to support these other people, this business, through your tax dollars? corrupt. that is really corrupt. that is a corrupt view of government. aat turns government from protecter into a destroyer. it makes government, you know, mobster rather than the protecter of our rights. example of what i would call legal plunder. now, if you want to talk about questionh -- if the is, is this an example of companiesby the car on government policy, what i but not having really looked at sort of one, it's of those things, you know, you kind of assume that's what's wayg on, because that's the things work these days, and
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especially if you look at gm now operating.s it's cozying up to government constantly. of so it's hard not to think it like that. but i couldn't say i'm absolutely sure. 75%just -- i don't know -- insure. sure. stories about this kind of thing. you can really figure out quite easily by just reading the wall street journal and the new york times, because they report on this stuff. they report on it in a way.cular but if you read between the lines, it's not that hard to often out, because they talk about the cozy relationships, the meetings in the white house. think about this. are calledecutives to testify, an account to congress, constantly. why? because stuff in their business doesn't go the way politicians them to. i mean, what's that all about? yeah, it they say, don't have time to come to washington, d.c. or go to hell. i'm not coming down there. a business to run,
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shareholders to worry about. go to washington? because they have to. because the regulators and the powerment has so much over them, that they have to be, in a sense, in bed with them. of examplese loads of this. but let me cut it there and move on to the next one. how about right here? >> yeah. blamingpoint -- we keep the victim, so to speak, seeing if i'm of backwards, understanding what your point is. reactionoint does the all to no ability at petition the government and therefore dictatorship? mean, is that not the natural -- >> yes. that's absolutely right. result?ltimate >> that's the natural, ultimate result. i'm sorry to say, in a sense, we time.oser all the let me make two points. so the supreme court has done a very good job in recent years of
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protecting the right to participate in politics, in this area. it's broadly speaking, the right there areeech, but components of it. the right to petition government is another way to look at it. i'm talking to government and i put my essentially concerns before my representations so they'll take me seriously. and that's part of the first well.ent as but broadly speaking, you can think about it as the right to influence what government does. a free people have to have the right to influence its government. there are many ways that you do that. voting, supporting candidates and speaking out and just trying to convince government officials do things. you can testify, lobby. lobbying is a good example of the right to petition government in the kind of modern sense. there's definitely a way in is bad but that's not my ultimate point. we're talking about the tonciple of being able influence government. notwithstanding the fact that the supreme court has done a great job of protecting these citizens united is a
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good example -- one at least i'm happy to say i was involved in, courts are doing some good work in this area. couplee's what -- so a kind of ominous signs. number one, today's young people not understand or respect free speech. a bit afield is from my topic. but consider how free speech is on america's campuses today. it's not very good. so they're the next generation. free speech to be preserved, we have got to teach kids what free speech is all about. and it's wrapped up in the idea that any idea that i don't like disagree with harm me and i want to restrict it. state ofat with the commencement addresses that were cancelled. attitude. that's -- i mean, the colleges right to do that. but this is an attitude that holds that i have no interest
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and your ideas are an affront to want to blot you out. that, i think, translates into the second is the really negative reaction to the case.ns united the last time you was roetion like that vs. wade. so citizens united is just held out as the devil. came down, that case people were referring to it as of thet century version dread scott case. oversimplify, it upheld slavery right. commentators talked about it. but that shows you how just the this idea that be entitled to
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influence what the government does. how kind of deeply rooted that is. and i think the latest manifestation of that, i earlier --n the talk or maybe it was in the questions -- but it's the effort to amend the constitution. there was a serious effort in monthss just about an ago. it culminated in september. judiciaryate committee, to amend the first amendment so congress could pass, quote, reasonable restrictions on campaign financing, which means reasonable restrictions on the amount of money you spend on means effectively how much you get to talk and whether you really get to talk. and this was -- now, it was theated handily, because republicans -- there was no way they had -- i think they needed it out ofority to get committee. but this issue has come up many least two and every time, it gains a
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momentum. more and i look down the road, and sometimes if i'm depressed -- maybe -- i don't know if this is inspirational but at least it will kind of fire under everybody's butts. sometimes i think we have one left for free speech, because the upcoming generation doesn't get it and they really oppose it. that's the scary phenomenon. but i would be really concerned amendment like that passed. then it would be really just a matter of time. then it's like you pushed over domino and they're going to follow a particular track, and there's an end then it's very bad. others? sure. >> what would happen to a business executive that told hell, if they were requested to come to washington? >> that's a great question. so what would happen? well, so -- i mean, i'll give
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you one example. it's kind of peripherally related. actually, two examples. i don't know if you heard about this, but jpmorgan was fined in of dollars for countrywide bank and not telling the government that, guys, countrywide bank, which you just asked us to take in financial difficulty. i mean, it was an insane circumstance, where the asked jpmorgan take over countrywide, during the financial debacle. over.ook it then the government turned around and said, you didn't tell us the problems with countrywide. makes no sense, when you think about it. the government wanted jpmorgan it had it over because problems, and then they turned around and said, you know, you didn't disclose things to us. fined them in the billions of dollars. of, there's a lot
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speculation that that was a direct shot at jamie diamond, ceo of jpmorgan. thei mean, if you read financial press, if you read the wall street journal, they make a was paybackat this for him, you know, not playing ball with the current administration. and i hesitate to say this is a problem of the current administration, because there of all kinds of administrations. but the lawsuit against standard poor's for downgrading the government's credit. i mean, that's a baseless lawsuit. the hell is that all about? we did what we were supposed to us?and now you're suing what's the legal basis for that? example is if you really talksllison's book, he about -- he opposed tarp funds. he's the former head of bb&t and i hope you all know
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who he is. he hoped tarp. he lobbied in congress. he was really against it. in essence, one day, they reallyly said, that es a great -- that's a really great bank you have there. thehate to see us change capital requirements, which would immediately render you insolvent, so you might want to rethink your optio opposition t. those are three examples of what happens when you, in essence, to the government. there's so many ways the government can destroy your that it's understandable that politicians don't do more of this -- i businessthat the leaders don't do more of this. all of that said, i would say i think it would be really and i would love to see more businesses stand up and at least speak out. know, whether they can get away with it, going into congress and essentially saying, know, to hell with you guys, is a separate question. like to see them do
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more of it. but they really are making life difficult for themselves if they do that. others? oh. over here. me think of the question of government, the fcc, redskins. so what's your comments regarding that? because it looks like the fcc is to try to use their power, because he has radio stations -- >> yeah. >> -- to force them to change their name. what do you think about that? >> well, i think it's wrong of them to do that. certainly wrong of them to do that. have no poweruld over broadcasters at all, in my view. but i think -- i don't know how to -- i'd have to think more about that. example of government using its improper authority to essentially censor speech it or is that an
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attack on a particular person? ultimately, morally, constitutionally, you know, from a good sense standpoint, i'm not distinction should matter. but if you're asking, is that an issue of kind of payback against a particular person, i would say know,ore an issue of, you vehement disagreement with what the -- you know, i don't know. let's say the media and intellectuals think of the term and the fact that the redskins have towed the kind of issue.ine on that whether -- it's certainly an that, of just public pressure coming to bear on a regulatory agency to regulate somebody, because people don't like the message or don't like for.somebody stands whether it's an example of kind of cronyism or an attack on an don't know.i but in all events, it's bad. government should not have this what yougardless of
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think of the redskins, you know, a trademark.nd the broadcasters absolutely the fcc -- i mean, there shouldn't be an fcc. and so let me put it this way. if you have an fcc, whose power essentially to grant the enter into a and ifllion business, you -- so i talked about public interests being the kind of people viewthe way the government. if you read the federal communications commission act, it actually says that. it says -- i'm paraphrasing -- the federal government shall have the authority to grant licenses, quote, if it serves interest. what does this idea mean? is a mascot or a trade name for that offends a lot of
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people, is getting rid of that in the public interest? i don't know. standard here at all. this is arbitrary. of course they're going to end exercising it in an arbitrary manner. there's no nonarbitrary, principled way to do it. this is an issue that should be people either, you know, fans or anybody else continuing to, quote, pay for what the redskins have to offer or not. but that's a private matter. it's inevitable once you have regulatory agencies and you explicitly make their power hinging on the public interest. any others? oh. two. so how about in the back? explanation on cronyism was very enlightening. it gave me a perspective that i quite had before, so i appreciate that. i have a concern, though. seems, in discussing the
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apic, you've opened up pandora's box, so to speak, concerning the equal opportunity for influence. seems like, as you characterized know, a guy comes up with a knife. the next guy comes up with a gun. seems like there's almost an arms race going on. any positive outlook on there being some sort of agreement to lower the we'llnce, or do you think just achieve a mutually assured destruction through influence? >> so i think -- well, do i have a positive outlook? answer is so, my long as we view government the do, this do, and we is -- so we don't live -- our government is a constitution is the best way to think about it, a limited du jour.
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the fact, though, we are a democracy. bys is a country ruled majorityism. you can see that. i mean, the president has a mandate to do anything he wants. how many times have you heard that? or remember when obamacare was debated. the american people want this law. ultimatelyit's legitimate. that's all. debate over. right? long as that's the view, i don't see how this possibly changes. that are so many ways various pressure groups -- and you can call them interests, i know we can talk about standpoint of legitimate interests, because many of these groups are out to others -- but there's so many ways these groups have theme so entrenched in law-making process, that unmaking that one, unwinding is enormously difficult.
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i will say this. there are definitely some signs.e tech industries, uber, lyft, abilityently, no actually, in s to sell cars locally and get around state franchise laws that dealers, because tesla doesn't want to sell through dealers. they want to sell directly to consumer. uber and lyft have both -- presumably knows what they are, tech cabs or have run intoey all sorts of local transportation and taxi regulations. but notice that there seems to be a kind of backlash against that. don't credit that as people are starting to understand the ander purpose of government
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now they're seeing the light of day. but i do see it as people are saying, wait a minute. if this is what regulation means, there's something wrong with that. bad is happening and let's pay more attention. that's kind of -- you know, that's a glimmer of hope. a slight light on the horizon or whatever. a good development, people the first step is understanding why should we care about this. it affects you and what you want your life. the second step now is to start thinking, why do we have these regulations? they're idiotic. what good do they do? to see what the future holds on this. it's a very mixed bag, because hand, people seem to be opposed to at least the on the other hand, the tech andstry, as a whole, by large -- this doesn't cover every single one -- they just don't get it. guys -- like i
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think most of these guys are even younger than me. kind ofe weaned on a regulatory big government view is, oh, no, thisr is all about public spirited regulators and the trying to protect people, and it's all good, so we'll just get them andwith negotiate, just like a business transaction. not really anything fundamentally wrong with this. i think they're about to find out what the regulatory process is really all about, unfortunately. but it's hard to say. it's a promising development. that's what i'll say. it's people pushing back against the regulatory state. back is goodng news when rarely we get, you know, any kind of opposition at all. i wish i could give you better news than that. is --e more development i'm sorry. i'll get to you in a second. the fact that people are talking an issue issm as also a positive development. now, as i -- as you gathered a problemlk, i have
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with the way they're thinking about it. but the fact that they're even focusing on it and talking about it as a phenomenon and as an development.sitive we need to think about it the right way. but i do think this issue of the left, orput proponent has put on its heels. they can see it's hard for us to defend this. goes inther it kind of the right direction or not is hard to say. >> i really like the contradiction of them trying to the up the unions and cattle companies while at the same time trying to shut down a sharing economy market that lower emissions. ha ha! it's like, ah, this is the cultures.ash of two >> yeah. the iro irony is thick. okay. >> do you see that -- the
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results of any national elections on the horizon might what you'refor talking about here? >> it's hard to be terribly optimistic about the results of elections. [laughter] but i'll try to find -- i don't know. i mean, again, it's kind of like my previous answer, that i don't about- you have to think what is possible to get in today's world and what we look positive development and not really compare it to what always the absolutely ideal hadd be if only history turned out better. of senatorn critical mike lee before, but on this issue, he's actually pretty good. all to encourage you read what he said about cronyism. he gets a lot of it. doesn'tsn't fully -- he fully talk about it in the right way, in my view, but he really real to understand in a
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way that this is a problem of government power. so a lot of what he says is a promisingat's development. there are other politicians on the national scene. example, rand paul also, who they are pushing this monolithic view that government knows all and should be able to control lives.ire how positive a development is that? they're flawed in their thinking, in my view, but they are pointing to a lot of problems that need to be pointed to. that's the best i can say. it's hard to judge. it's hard to read the political leaves. and more importantly, to see what impact politics will have culture, if any. but i will say this. ultimately -- and this is one that you've heard before -- it's all about the ideas and the dominant know, ideas among the public intellectuals and ultimately politicians. you really can't start with politics and hope to fix what's wrong in this country from the
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top down, from a political down standpoint. actually, can we have this one first? here.e'll come over >> with the renewed interest in the cronyism and trying to explain what's going on, i guess, are you aware of any academic developments in the resurgence of public choice theory? i don't know how much that informs your own research when economics. law and >> there's actually quite a lot on this area. an economist and he's written about this a lot. read an article by him. and he's quite good, although i think there are issues with all of the economists on this issue. but from an economic standpoint, lot ofothers have done a good work in this area. specifically he -- he wrote an article recently. point was academics have been talking about this phenomenon for a long time, and the ideas ithat in
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referred to, which, by the way, let me clarify. those ideas about in the wrong way. but they are a real phenomenon on. people need to focus i just want them to take a different perspective on it. but economists have been talking this phenomenon for a long time. a lot in this area that's really quite good. problem is the intellectuals i mean, there are two problems. people don't pay attention to it or care about it the way they to. and the reason is, in my view, explained why free market economics is actually in everybody's legitimate self-interest. so it's a deeper issue. but the economics is out there. think probably -- i'm not an economist. i'm not up on all the literature. but this is something i've been reading about since i was in my for 25 years probably.
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the problem is not the economics. it's how to frame and how to the issue. so in short, it's the moral underpinning, in my view. so i think we have the last one here. >> doesn't seem like a lot of theissues really are over incentives that we have in our argument. there's an incentive for a congressman to get elected, right? so his incentive is to capture run his campaign, and where is he going to get it? from constituents. you look at agencies of government. to grow.pose is their purpose isn't to solve problems. their purpose is to grow so they a bigger budget. so they have more control over more things. me that -- and certainly rand talked about it, the bureaus and
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that, to run things. that?ou looked at any of >> so i guess what i would say is -- that's absolutely right. perverse incentive structure. happens -- i guess the way i'd think about it is, if you have good principles to with, you end up with good reinforcingthat of structures that reinforce those good principles. principles, the opposite happens. gresham's law. you inflate the currency and the reallytores valuable currency in their mattress. drive outples also the good. part of the reason is this incentive structure. this.omes necessary to do and thereby it becomes morally seen asate or it is seep as appropriate. deeper, philosophical
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reasons for that, in my view, but once you start this process a vicious cycle and it continues to build on itself. troublingery phenomenon. there is -- i mean, again, to back to something i said before. it's kind of a war of all against all. as soon as one person gets away with rioting, everybody else has to start it. war.ust get a you get people thinking they're defending their interests and mayhem. get that's what happens in politics as well. has toely, the solution be to return to first andciples, so to speak, understand what should government do as a path to do.ding what it should not i'll close with that. thanks. [applause]
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>> on this small business saturday, president obama local washington d.c. bookstore to shop with his daughters. at them making their purchases from just a short time ago. you?w are you guys doing good? do i get a discount for that? discount.'s >> a visiter's discount? >> i think you get the neighbor's discount. >> the neighbor's. yes. >> thanks for visiting! register]cash
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>> a long way. what was the name of... >> it might be coming out a little fast. >> oh, no. you look so sad. ah. >> the saddest photos. >> i know. [inaudible] >> i hope you can close on top them. >> we're working on it. thank you. yes. any other issues? >> a fireside chat. [laughter]
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sir.ank you, >> all right. thank you. >> all right, guys. happy thanksgiving! and merry christmas! >> small business was also the topic of a short video with house speaker john boehner. this was posted on his website. ♪[music] >> if you look at the leadership side,n the republican you'll see that most of us had some involvement in a small the way.along so we understand the challenges facesmall-business people
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each day. our job is to try to get the federal government out of the way so that businesses can succeed. >> and other members of congress using twitter today to talk saturday.l business texas congressman tweeting, is small business saturday and i want to thank all our local businesses for their our community. california representative paul cook says, did you know that million small businesses in the u.s. and other self-employed? support one of them today. and democrat senator jack reed tweeting, as the holiday shopping season begins, please remember to support your local rhode island small businesses today and throughout the year. >> this thanksgiving weekend, we tvtinue our four-day book and american history tv programming. tonight, at 10


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