The Liberal Perspective with Austan Goolsbee

Let’s address the ELEPHANT in the room! The response to part 1 of this mini-series where I interviewed Donald Trump’s former advisor Stephen Moore was HUGE!!! We held NOTHING back as we challenged one another to find the TRUTH. Now, I am incredibly excited to share with you PART 2, The Liberal Perspective with Former President Barack Obama's economic advisor, Austan Goolsbee! This mini-series is all about THE FACTS and the HARD TRUTHS that often get skewed and filtered by biased media stations and one-sided conversations. It’s our civic duty to VOTE but we must first be well-informed before we can do so with clarity and confidence. That’s EXACTLY why I created this mini-series… because you DESERVE the unfiltered truths straight from the mouths of the ones closest to the action! Austan Goolsbee formerly served as the Chair of the Council of Economic Advisers and was a member of the cabinet of President Barack Obama. This great American economist is currently the Robert P. Gwinn Professor of Economics at the University of Chicago’s Booth School of Business. As I warned you in part 1, we don’t agree with each other on everything... but I'm holding NOTHING back as we challenge one another to find the TRUTH. MY JOB IN BOTH INTERVIEWS IS TO ASK HARD QUESTIONS! I’M NOT POLITICAL. I HAVE NO AGENDA. I encourage you to keep your blinders off so that you can hear out BOTH sides to make an optimal decision. In this interview, the facts and truths uncovered from part 1 will be challenged, dissected and new truths and facts uncovered. We talk about everything from the economy and the realities of a looming recession to Obamacare, medicare, and how those are shaping the future of our country. Austan even shares his disappointment of missed opportunities during Obama’s presidential term. Also, what was it like to be w the President on a historic evening he was elected. I share these with you guys NOT because I have an agenda, but because I genuinely care about you, your families and this country. I learned so much in both of these interviews and I want YOU to be fully equipped so that you can VOTE based on the FACTS and make the BEST decision not just for you, but for your family and for the United States. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ed Mylett?

  I hear so many small business owners say the exact same thing. They just never have enough time in the day. Well, I measure time differently. I've compressed, condensed, heck, I've bent time. My first day is 6:00 a.m. to noon. My second day starts at noon and goes till 6:00 p.m. And my third day, 6:00 p.m. to midnight. I now get 21 days a week. Stack that up over a month, over a year, over five years, and my life's completely different than it would have been otherwise. And if you want to win as an entrepreneur, you have to compress your time, too. And you definitely can't afford to waste it. Waiting weeks on a big bank for capital? Your best bet's to work with my friends at Cardiff. They know how to compress time for entrepreneurs. They get your business approved in minutes and funded the very same day. They're America's favorite small business lender, and for good reason.

• 0:45Ed Mylett?

  Over 20 years in business, over $12 billion deployed to small business across America. Stop letting bank delays slow down your momentum. Head to cardiff.co/ed. That's cardiff.co/ed. Cardiff.co. Real growth, fast funding. Cardiff. Borrow better.

• 1:01Speaker 01

  Mr. President, my company, for me, of the explosion on our rig.

• 1:05Speaker 02

  On October 2nd.

• 1:06Speaker 01

  Causing massive water displacement and triggering a tsunami. They all heap the blame on me.

• 1:11Speaker 02

  Tom Cruise is. Digger got us into this mess. And Digger's gonna dig us up. From the director of Birdman and The Revenant.

• 1:18Speaker 01

  What would happen if I stopped drilling? You stop, you freeze to death, that's what.

• 1:22Speaker 02

  With great power comes great deniability.

• 1:25Speaker 01

  I'm not the first nanny.

• 1:27Speaker 02

  Digger. See the trailer online. Only in theaters October 2nd. Rated R. Under 17. Not a minute without parent.

• 1:38Speaker 02

  This is The Ed Miliband Show.

• 1:46Ed Mylett?

  Welcome back to Matched Out, everybody. I'm excited today because last week you all heard sort of the more conservative perspective on the economy and on money with one of President Trump's advisors, Stephen Moore. And today, I'm really blessed to have to my side here Austin Goolsbee. And Austin was a member of Barack Obama's cabinet, was also the 26th Chairman of the Council of Economic Advisers. And there's a whole bunch of other things I could do to introduce him. But the reason I wanted Austin on the show is because I've been a fan of your work for so long. Some of the ways you think and the way you handle yourself and the various interviews I've seen. So thanks for being here today.

• 2:20Speaker 03

  Ed, thank you. It's a real thrill for me to get to meet you in person.

• 2:24Ed Mylett?

  And likewise, and we are at the University of Chicago, by the way, which is one of the most beautiful campuses I've ever seen in my life. So I really appreciate you.

• 2:32Speaker 03

  It's a great place. It's not for everybody, but if it's for you, it's.

• 2:36Ed Mylett?

  Well, it certainly wouldn't have been for me with my grades or my SAT scores. By the way, Austin's Yale undergrad, Yale masters and MIT PhD. So we're on the pretty much even footing intellectually here today, Austin.

• 2:52Ed Mylett?

  In any event, I'm not endearing myself to my audience with these interviews because I'm going to take the devil's advocate position in both interviews, right? So with Stephen, I sort of took the more, I guess, more liberal kind of perspective on the economy and challenged him. And I'm going to do more of the conservative viewpoint with you today as I ask questions.

• 3:08Speaker 03

  That's fair.

• 3:09Ed Mylett?

  Let's start out with the elephant that's in the room, which we're hearing a lot about lately, which is socialism versus capitalism. This is great debate that we keep hearing. First, do you consider yourself a socialist or a capitalist? And how do you feel about the debate that's happening?

• 3:22Speaker 03

  A hundred percent capitalist. I'm a free market economics professor at the University of Chicago. So socialism doesn't work and I found the debate a little frustrating there. It's true Bernie Sanders is a self-professed socialist. I don't think if you look at the other Democratic candidates, my point of view has been being for social security and Medicare, paid for by payroll taxes, that doesn't make you socialist.

• 3:57Ed Mylett?

  Okay.

• 3:57Speaker 03

  Saying you think tax rates on high income people should be higher or should go back to what they were, you know, in some previous period. That's not really socialism.

• 4:07Ed Mylett?

  Okay. Could I challenge that on a couple of them? So Elizabeth Warren has this wealth tax at 2%. That seems like redistribution of assets to me, which is sort of a socialist concept.

• 4:16Speaker 03

  Socialism, as I conceive it, the thing that doesn't work is the government runs the means of production.

• 4:24Ed Mylett?

  Okay.

• 4:26Speaker 03

  And that, I think, is a terrible mistake. And if you look around the world where the government runs industries, takes over the industries, and we don't have incentives or markets, you got problems.

• 4:38Ed Mylett?

  Okay.

• 4:39Speaker 03

  Tax rates, you know, whether it's wealth tax, US hasn't, other than property taxes, we haven't gone that far down the road of wealth taxes. I could see why if you have wealth, you don't like to pay a wealth tax, just like if you have income, you don't like to pay income tax, if you have, if you buy things, you don't like to pay sales tax.

• 4:59Ed Mylett?

  Well, I have wealth.

• 5:00Speaker 03

  But that's not really socialism. Okay. That's not socialism.

• 5:02Ed Mylett?

  Fair enough. So let's just use that idea then, in and of itself, as it stands on its own. I'm curious how you feel about that, because I, I am wealthy, but I also, well, I'm not gonna tip my hand where I land politically, but I feel like that's confiscation of assets. I mean, that's something you've already paid income tax on or capital gains tax on. It's an asset of your family. And then, secondly, how the heck do you even, how do you, you know, hunt down people's paintings and how would that even work in application?

• 5:24Speaker 03

  Now, in the, in Europe, where there are a lot of countries that have had wealth taxes, it founded on these problems like this. What the, Warren, I haven't been advisor to Warren, so I'm not

• 5:41Ed Mylett?

  Right.

• 5:41Speaker 03

  total expert on their, on the plan, but theirs only starts at $50 million. So if you have $50 million, you pay $1 of, of wealth tax. I think it's not unlike property tax, and, you know, when you pay property taxes on your, on your houses, they still, they have to value what's the value of your property. I'm just saying, in a way, I guess my question would be, what did you think was gonna happen if Donald Trump's elected, cuts taxes for big corporations and high-income people by $2 trillion, promising it's gonna bring down manna from heaven?

• 6:21Ed Mylett?

  Right.

• 6:22Speaker 03

  And it basically doesn't.

• 6:23Ed Mylett?

  Okay.

• 6:24Speaker 03

  And it's the most unpopular tax cut in the history of American polling, because people look out and they're like, we just gave $2 trillion for a thing that didn't do a whole lot. And so I think it's completely natural that there would be a blowback. Where people would say, let's go raise tax on high income people back again. Cause we just cut them so much and it didn't do anything.

• 6:47Ed Mylett?

  I agree with you, by the way. I do think that's part of the ebb and flow. Having said that, though. A guy like Stephen Moore would say, well, wait a minute, it's working incredibly. We've got unemployment lower than it's ever been. There's seven million unfilled jobs in the country. Wage growth is finally, the thing that I looked at. I've always felt whether it's under President Obama, even all the way back to Reagan, there's just been no wage growth. I mean, the quality of life for most people in the middle hasn't gone so good.

• 7:10Speaker 03

  It's been squeezed.

• 7:11Ed Mylett?

  It's been squeezed. Now, a guy like Moore says, well, hey, unemployment's low, obviously crazy low. Um, there's seven million underfilled jobs. Wage growth has started to tick back up. GDP's back up. What's so bad about what we did?

• 7:22Speaker 03

  Well, let's just back and unpack each of those. And Steve Moore has said that, and the administration has tried to say, oh, no, it was everything that we expected. I think it's, it's tough if you just sit down with the data.

• 7:37Ed Mylett?

  Yeah.

• 7:37Speaker 03

  It's not true. You can take their, what they predicted, here's what the tax cut will do. That it will pay for itself, that it will generate massive business investment. That it will lead to family incomes to go up $4,000 each, each family. The unemployment rate is very low. And it has been improving for nine straight years. And if you look at job growth. It's just a straight line of improvement. And that's the strongest part of the economy. There's no doubt about it. It's a very strong job market. Consumers look pretty confident. Wage growth starts to tick up in 2016. It's up a bit in 2017, 2018, pretty good year.

• 8:22Speaker 03

  That's great. That's the best part of the economy. It didn't generate its own revenue. Corporate tax revenue is more than a hundred billion dollars lower than what it was projected to be before they cut taxes.

• 8:37Ed Mylett?

  Okay, Steven said, told me tax revenues were at their all time high. But you're saying that's overall tax revenue, not corporate tax.

• 8:43Speaker 03

  It's overall tax revenue and Steven, who is a guy that I personally get along with very well, and we've debated many times. He is always prone to take nominal money, that is, don't account for inflation, just there's economic growth and say, see, look, revenue went up.

• 9:05Ed Mylett?

  Right.

• 9:05Speaker 03

  So that's why I wanted to start us with, right before they pass a tax cut, the Congressional Budget Office makes a projection of here's how much tax revenue is gonna go up over the next five years.

• 9:18Ed Mylett?

  Right.

• 9:19Speaker 03

  We're coming in way below where it was supposed to be and where it's, where we're failing is on exactly the spot where they said it was gonna pay for itself. That is, corporate revenues way below what was expected and business investment, which was supposed to be the massive thing that this was gonna do, it's nowhere.

• 9:39Ed Mylett?

  It's stock buybacks.

• 9:40Speaker 03

  It's actually stock buybacks.

• 9:42Ed Mylett?

  Right.

• 9:42Speaker 03

  And so you can see why people would be frustrated. Now, that doesn't, that doesn't automatically mean, oh, well, then it should be a 2% wealth tax on over 50 million dollars. Fine.

• 9:53Ed Mylett?

  Okay.

• 9:54Speaker 03

  But again, I go back to, if you try a $2 trillion thing that basically doesn't do what you promised, you can't really be surprised when people come back and they're like, let's raise taxes $2 trillion.

• 10:08Ed Mylett?

  Yeah, cuz I, I am not a corporation, I'm an individual. I actually pay a little bit more in Trump's plan than I paid prior.

• 10:14Speaker 03

  Is that right? Cuz you're in California.

• 10:15Ed Mylett?

  I'm in California, so I don't get to deduct my state income tax or property tax. So that's changed. But let's talk about that point for a minute, then I want to talk about the overall economy and kinda go a little more basic. But having said that, I, I agree with you, the revenues aren't where they said. They said it would pay for itself, it hasn't paid for itself, hasn't even come close to doing that. But GDP's been pretty good, it's grown, it's obviously a much stronger recovery than yours was with the president.

• 10:37Speaker 03

  No, see, go look at the GDP numbers.

• 10:39Ed Mylett?

  Okay.

• 10:40Speaker 03

  The the much heralded, oh, well, Obama is the only president to ever not hit 3% growth. Actually, there are now two presidents who have not hit 3% growth. It's barely been any higher than it was under Obama.

• 10:55Ed Mylett?

  Okay.

• 10:55Speaker 03

  Post the recession. So the you can't count the recession. And now the projections for the second half of this year are literally in the 1%. Now, I I will say, I do not attribute that to President Trump. So if the economy deteriorates or even goes into recession, we can talk about what would be the dangers of recession and what would be the signals to look out for.

• 11:22Ed Mylett?

  Yes.

• 11:23Speaker 03

  That's not Donald Trump's fault.

• 11:25Ed Mylett?

  Okay.

• 11:25Speaker 03

  And I, when I was in the White House, I used to say, when we'd get good news, I'd say, 90% of what happens in the economy has nothing to do with Washington.

• 11:36Ed Mylett?

  Right.

• 11:36Speaker 03

  And so when it was good or it was bad, I feel like I have some credibility to say.

• 11:41Ed Mylett?

  I think so.

• 11:43Speaker 03

  For the best parts of the economy, it feels like the Trump White House is trying to say, we did that. And for anything that goes wrong, they're like, that has nothing to do with us.

• 11:52Ed Mylett?

  That's absolutely true.

• 11:53Speaker 03

  And you can't do that.

• 11:54Ed Mylett?

  That's true. I don't know that that wasn't true with President Obama either, because he did inherit this mess. But before, I want to get out of the weeds a little bit. I just want to ask you this corporate tax cut thing. Because prior to that, those corporate rates being cut, I thought it was almost kind of a bipartisan agreement that we needed to reduce corporate tax rates to be competitive in a global economy, because our corporate tax rates were so much higher.

• 12:12Speaker 03

  You could have quoted me and you just say, wait, didn't you say that they needed to be lower?

• 12:16Ed Mylett?

  Then why come back later and criticize that?

• 12:18Speaker 03

  No, because I'm not, but my my criticism is not that we cut the rate on the books. Okay. The great paradox, or whatever you want to call it, of the US corporate tax system is we have the highest rate, we had the highest rate in the world. And if you look at how much they actually pay.

• 12:38Ed Mylett?

  Yep.

• 12:38Speaker 03

  It was no higher than average. And so you'd be like, how is that possible? How can we have this high? And it's because we had the goofiest system. We had a very narrow base and a high rate, which is the The opposite of what you want. So what I always said, and what I thought there was bipartisan consensus on was, let's get rid of a lot of deductions and lower the rate, but not cut the amount that corporations are paying by $2 trillion. Let's just try to cut the rate on the books, so it doesn't give these weird incentives. They took that on its, on it and it kind of flipped it on its head. They were like, oh, you said we need to cut the rates. So we just cut them and just run the bill off.

• 13:20Ed Mylett?

  Okay, fair enough. That's a nuance I'd not heard before. So that's fair. So let's talk about, um, there's something that frustrates me as someone who came from the middle that's now a top earner. And I know I sound like I'm crying here, but, but one of the things that's frustrating, and by the way, it's why there's these blowbacks both ways.

• 13:35Speaker 03

  Yeah.

• 13:36Ed Mylett?

  Is this concept that the rich don't pay their fair share. And what I mean by that is I'm not a corporation, but I am a top earner, right? And I looked at some data and I just, I feel like, let's be real about who pays taxes in this country? Who really pays federal income taxes? The top 1%, I know this isn't a popular thing to say, but the top 1% earned 21% of the country's income and paid 38, almost 39% of the tax revenue. The top, hang on, and the top 1%, the top 1% paid a greater share of the tax revenue to the US Treasury than the bottom 90% did combined.

• 14:10Speaker 03

  Of income tax.

• 14:11Ed Mylett?

  Correct. But what's what we're talking about here is income tax. By the way, they also pay, they pay more in, they pay more in property tax, they pay more in sales, and more in sales tax.

• 14:20Speaker 03

  Well, and not as a share of their income. But so the, the only, yes, that's true about income tax. But the, the big taxes paid by the middle class,

• 14:33Speaker 03

  they pay more in payroll tax than they pay in income tax.

• 14:36Ed Mylett?

  Okay.

• 14:36Speaker 03

  And so the, the Romney argument that like, ah, there's 47% of people who don't pay any income tax. So they're living off the state. That's totally misleading because that's not counting the main taxes that they're paying as tax. See what I mean?

• 14:52Ed Mylett?

  I do. I'm following you.

• 14:54Speaker 03

  And so.

• 14:56Speaker 03

  So the, once we add the fair share, I agree with you. Now we're, now we're into a non, that's not an economic thing. There is no economic definition of what is a fair share.

• 15:09Ed Mylett?

  Right.

• 15:09Speaker 03

  And so now we're just explicitly in the political sphere.

• 15:13Ed Mylett?

  Right.

• 15:14Speaker 03

  And some people are like, no, I think they pay enough. And other people are like, no, I don't think they.

• 15:18Ed Mylett?

  When I tell, when I tell my friends that are in the middle who want to get to the top earning brackets, when I tell them what I actually pay in income tax, between federal and state, especially in California, they tell me, they think, wow, they had no idea that I like me, I'm over 50% in, in between.

• 15:34Speaker 03

  Is that right? But now the thing is, I can tell from that, that most of your money comes from direct earnings, ordinary earnings.

• 15:44Ed Mylett?

  It does.

• 15:44Speaker 03

  And you live in California, so you got a high, you know, a high tax from that. Now, a lot of the very highest income, highest wealth people in the country, that's not true.

• 15:55Ed Mylett?

  Their capital gains.

• 15:55Speaker 03

  They got capital gains, they have other forms of income. So then they, so, so then you get into this, you get into these arguments about.

• 16:05Ed Mylett?

  Which lands us, I think, I didn't interrupt you, which lands us where people think, you know what? I, the socialism idea may be a good idea.

• 16:12Speaker 03

  But it's, it's your back. It's not socialism to say that, that we should have higher tax rates.

• 16:17Ed Mylett?

  I'm with you on that, I'll, I'll acknowledge that. Whether I completely agree with that or not, I don't know, but I, I, I'll give you that. But I think you would agree with me that your party has been, is starting to be hijacked by a pretty large segment of people who at least think they believe in socialism. It may not even be.

• 16:31Speaker 03

  For sure Bernie is there. He's, he says, I would have argued, no, it's not as big as you think. It's been mischaracterized, but I can't deny, Bernie Sanders says, he's a socialist. He criticized Elizabeth Warren publicly and said she believes in markets and I don't. And I, oh man. So for, for sure Bernie's folks don't like me and part of that dates back to 2016.

• 16:57Speaker 03

  He outlined a health plan that they, somebody had scored it was gonna cost 20 trillion dollars. And they asked him, how would they pay for it? And they had an economist who said, well, it will raise the growth rate of the country to 5.5%. So it not only would pay for itself, it would eliminate the national debt. And I wrote a letter with three other previous chairs of the Council of Economic Advisers where we said, don't, don't do this. Like, when the, when the Republicans go for tax cuts, they do stuff like that. And we all, we're always out and saying like, wait a minute, that's bogus.

• 17:39Speaker 03

  So we said that to Bernie. My experience was Bernie's people do not take criticism very well.

• 17:46Ed Mylett?

  Right, but, well, facts are funny things, right? So you touched on something earlier that I'd like you to speak on, which is, I asked Stephen this question. Where is the economy? Do you feel like we're in danger of a recession? Because everyone listening to this wants to know this. They may not care that much about top earning taxes and some of the other things, but are we, what, what signs are you looking for? And where are we at on the economy?

• 18:08Speaker 03

  Okay, super important, and look, I'm, I teach at a business school. 90% of the economy has nothing to do with Washington, and 90% of what I think about economics is not, is not about politics. So, everything I'm gonna say is I'm not intending it in any way as evaluation of the White House. Like I said, I am afraid, I think there is a pretty decent danger that over the next year, we could be facing recession. Not, not from Donald Trump, not, not from any policy, but, but the way I view it, if you take a step back and ask, since World War II,

• 18:50Speaker 03

  we've had 14 or 15 recessions, depending how you wanna count some of the, like the double dip recession. And a very small number of things have caused all of the recessions in the United States. The Fed, either raising interest rates overly fast from what the economy can handle, or keeping interest rates higher than the economy can handle, is the major cause of recession in the United States. On that, we've gone through a long period, multiple years in a row, where the Fed has been over optimistic in its predictions of how well we'd be doing a year or two years from now. In a world like that, where the Fed, as I say, is kind of thirty-six quarters in a row,

• 19:34Speaker 03

  thirty-six times in a row, wrong in the same direction, that's at least a yellow light. That could be a cause of recession. Two, asset bubbles popping. Weather, equity, the first internet bubble leads to 2001 recession. Housing bubble popping leads to our last recession. I don't know if we're in a bubble, but the prices of a lot of things look pretty high. You know, if you, if you try to buy a house in Laguna, it seems expensive. Sure does. And so you at least got to give a yellow light to that. Third, oil prices have caused recessions. That's not as big of a danger.

• 20:17Speaker 03

  Oil prices aren't up that much, and we became a big oil producer, so, you know, at least part of the economy would do well if that happened. And then, fourth category, I'll lump in, hasn't really caused recession in the US, but has caused recession outside the US, is major national policy action by the government. Okay? And in that one, I would say there's at least a yellow light of caution around escalating trade war between the two biggest economies on the planet. So, three out of four are at least blinking. Yeah. And we're in the longest recovery in US history. So, we're long in the tooth. You know, in a way, we're due.

• 20:59Speaker 03

  So, the strongest parts of the economy are the job market is very strong, and the consumers still quite confident and consumer spending strong. The weaker parts, if you look at manufacturing, so if you look at, say, normally I would tell you, if you said, "What should I look for?", I would say, "Look if the yield curve inverts", that is, if long rates get to be below the short rate. And then I would say, "Look at the most cyclically sensitive parts of the economy", like manufacturing, durable goods, business investment. Manufacturing might already be in a recession. And not just in the US, around, around the whole world.

• 21:43Speaker 03

  Manufacturing's kind of already in a recession. Consumer durable's still looking pretty decent. Business investment looking kinda weak, so all of those I think are are points of concern. I think they're points.

• 21:57Ed Mylett?

  And that's a consensus, right? I think most people that I've talked to.

• 22:00Speaker 03

  Yeah.

• 22:01Ed Mylett?

  Well, it wasn't with Steven.

• 22:02Speaker 03

  Yeah.

• 22:03Ed Mylett?

  Um, but it with other people I've asked whom I respect like yourself and I respect Steven too, but they that is the consensus. And one of the other concerns I hear, and I want the audience to hear your thoughts on this too, is if we did slip into one.

• 22:14Speaker 03

  Yes.

• 22:14Ed Mylett?

  That perhaps may not be quite as deep necessarily as the last time, but it may be longer because there's not a whole lot the Fed could do from where it is now. And that that that's a concern I have.

• 22:25Speaker 03

  I think that's a good concern.

• 22:28Ed Mylett?

  Meaning valid.

• 22:29Speaker 03

  Valid concern. I think that's a valid concern. On two grounds. One, Fed toolbox is smaller or the runway's shorter, as they say. Normally, the Fed cuts the cuts interest rates four percentage points. And you can't do that if the rate is not, you know, less than 4%. Although I guess in Europe now they got negative rates.

• 22:52Ed Mylett?

  Negative rates, right, right.

• 22:54Speaker 03

  But but I think the short runway problem. The second, and I I even wrote a little thing about that in the New York Times.

• 23:04Speaker 03

  Often, one of the most powerful bits, economic bits of a Fed rate cut is the fact that there's pent up demand. So if the Fed cuts rates and it leads mortgage rates to go down, there's a there's a mass of people who've been waiting. Ah, maybe if the rates come down a little, I'm gonna refinance.

• 23:25Ed Mylett?

  I'm gonna jump, right.

• 23:26Speaker 03

  We've had nine years of rock bottom rates. So if anybody was waiting for rates to come down, they already did it.

• 23:33Ed Mylett?

  That's right.

• 23:34Speaker 03

  You know, so um, so I think that's a valid concern.

• 23:37Ed Mylett?

  Okay.

• 23:38Speaker 03

  The other thing I will highlight is, and maybe it destroys my own credibility, but economists are terrible not just at predicting recessions, at predicting recessions that already happened. They're terrible at predicting. Okay, so in 2001.

• 23:55Speaker 03

  I think that the recession began in April of 2001.

• 23:59Ed Mylett?

  Okay.

• 23:59Speaker 03

  And in June of 2001, they had a survey in the Wall Street Journal. And I believe only 7% of economists.

• 24:07Ed Mylett?

  Wow.

• 24:08Speaker 03

  Thought we were in a recession.

• 24:09Ed Mylett?

  Wow.

• 24:09Speaker 03

  Okay, but the recession's been going and it's almost done.

• 24:12Ed Mylett?

  Mm-hmm.

• 24:12Speaker 03

  And they, they didn't see it.

• 24:14Ed Mylett?

  Very interesting.

• 24:14Speaker 03

  So we only see recessions.

• 24:17Ed Mylett?

  In the rearview.

• 24:17Speaker 03

  After the fact, in the rearview mirror.

• 24:19Ed Mylett?

  You said earlier, one of the four concerns was trade, and I was gonna ask you about this anyways. Aren't you, isn't there a part of you that is glad that President Trump is trying to do something about China this way? With the trade, with our trade issues with them?

• 24:31Speaker 03

  Not if you add the phrase "this way."

• 24:34Ed Mylett?

  Okay.

• 24:36Speaker 03

  I saw, I saw Donald Trump say something to the effect of, "Nobody's ever got, asked the Chinese to do anything. And I'm finally am." That's not actually true.

• 24:49Ed Mylett?

  Okay.

• 24:49Speaker 03

  Okay, so if you looked, if you look at the past history, one of the biggest confrontations, sources of friction, or whatever, with China that we had in the past was that they were constantly devaluing their currency.

• 25:03Ed Mylett?

  Mm-hmm.

• 25:04Speaker 03

  And we got them to stop devaluing their currency. And the way we did that was, A, we had very specific demands. And B, we got all our allies on the same page.

• 25:20Ed Mylett?

  Right.

• 25:20Speaker 03

  And we went to them behind the scenes and said, "Look, we don't wanna make a big public battle about it. You're, but you're gonna have to stop doing A, B, and C specific thing, or else all of us are together gonna come punish you." And they stopped.

• 25:37Ed Mylett?

  Okay.

• 25:39Speaker 03

  This approach that, that the administration has taken, which is, "Let's try to publicly humiliate and confront China to get them to do what they want." That's not, my, my, it's not like I'm the world expert at negotiating with China. I was at the S and E D meetings, I've talked to the Chinese economic officials. This is a recipe to get them to not do what we want.

• 26:08Ed Mylett?

  Hmm.

• 26:08Speaker 03

  Because they can't, if you're the head of China, it's not a democracy, but you got to answer to your own people too. You can't be like, oh, you know what? I'm gonna do everything Donald Trump said. And, and you know, he's right, and I should be ashamed of myself.

• 26:24Ed Mylett?

  Right, publicly kneel down, right.

• 26:25Speaker 03

  Publicly kneel and do as I say, they won't do it. And they're not, and we've, we've declared and threatened trade wars with all our allies. So they're not on board with our, what we're doing.

• 26:37Ed Mylett?

  Yeah.

• 26:38Speaker 03

  And we don't have any specific agenda. We're, we're saying, we want them to stop violating intellectual property. Okay, but how, what, like, what do you want them to, if you gave them a, they, they think that they've been making concessions.

• 26:56Ed Mylett?

  Hmm.

• 26:56Speaker 03

  They opened up their financial markets, which is a thing that we, the US, have been asking them to do.

• 27:02Ed Mylett?

  Right.

• 27:03Speaker 03

  And they're kind of like, well, if we do that, what will you do?

• 27:06Ed Mylett?

  Hmm.

• 27:06Speaker 03

  And so, I don't know.

• 27:08Ed Mylett?

  So you don't like the, you like that it's being approached, but you don't like the nature in which we've done it?

• 27:12Speaker 03

  I kind of don't like the nature in which we've done it.

• 27:14Ed Mylett?

  Okay.

• 27:15Speaker 03

  I, so I don't object, I don't object to the approach that says, hey, we want to be tough on intellectual property in China. Bearing in mind, if you get tough on that, they probably will go back to devaluing your currency. But, yeah, that's okay, if you decide one is more important than the other.

• 27:32Ed Mylett?

  Okay.

• 27:32Speaker 03

  Then just have a strategy about it. This strikes me as, as a lot of, a lot of the people who want to cover for the president.

• 27:42Ed Mylett?

  Hmm.

• 27:44Speaker 03

  If he does some things, some of the things that he does, that you can agree with, they'll say, see, that was a good one.

• 27:51Ed Mylett?

  Right.

• 27:51Speaker 03

  And then if he does something that's a mistake.

• 27:53Ed Mylett?

  Right.

• 27:54Speaker 03

  They want to come up with a rationale.

• 27:56Ed Mylett?

  But how's that any different than President Obama? That's what, that's what people around presidents do.

• 28:00Speaker 03

  I don't know. I, I thought, or I at least tried to be more objective.

• 28:06Ed Mylett?

  Hmm.

• 28:07Speaker 03

  In, in, when I was in the administration, and certainly when I was out of the administration. If, if they asked me. What was a mistake that you made or that the president made? I would try to think through and say, well, look, here are places where where we made mistakes. I haven't noticed any willingness to do that.

• 28:26Ed Mylett?

  Tell me one thing, tell us all one thing about President Obama that we might not know. Something about him and all your interactions with him that that, you know, maybe not, people may not know about him. About his personality, the way he thinks, anything like that.

• 28:40Speaker 03

  I would say the popular view, in my, I I knew President Obama. When he, Michelle was way more famous than he was. Here at the university, she had a major job at the university. He was my state senator, you know, here in Hyde Park. And and my daughter, my oldest child is a daughter and she's right between the age of of President Obama's daughters. And they were all in the lab school.

• 29:09Ed Mylett?

  Okay.

• 29:10Speaker 03

  And so we had a bunch of common friends and I knew him as the guy from the birthday parties.

• 29:16Ed Mylett?

  Seriously, yeah.

• 29:17Speaker 03

  So he was teaching at the university and he ran for the US senate. And that's when I first got to know him. I got involved with him then. And they called me and they said, could you, would you be willing to help on policy? And I was like, help Michelle Obama's husband? Are you kidding me?

• 29:34Ed Mylett?

  Are you serious?

• 29:35Speaker 03

  So that was my, so that was my introduction. So I feel like I've known him for a while.

• 29:43Speaker 03

  I would say the popular conception that he's not a guy who gets way low or way high. He's very even keel, that's in my experience, pretty accurate.

• 29:51Ed Mylett?

  Okay.

• 29:54Speaker 03

  I would say maybe is not as well understood. He's got a kind of an introverted side. Okay, so he's amazing speaking, give amazing speech, you know, and the teleprompter and the thing. But he's, he's sort of a private guy.

• 30:12Ed Mylett?

  That's interesting.

• 30:13Speaker 03

  And, and I heard, I didn't, I wasn't in the Clinton administration, but there were a bunch of people who were. And I would ask them, well, what's the difference, you know, is, is it, does he manage the same, what like, what's the difference? And they said, um, President Clinton was much more, like, he'd get to the residence and then he'd like, he'd wanna call you from the bathtub or whatever and be like, no, let's, let's, tell me about this mortgage fund. Obama's not like that. And the only puzzle, and I, and I had this puzzle about him through the whole campaign too, is, he's kind of got the personality of like a writer.

• 30:48Ed Mylett?

  Interesting.

• 30:48Speaker 03

  And how did a guy who's got an introverted writer's side end up wanting to get into politics and run for president?

• 30:56Ed Mylett?

  Very interesting.

• 30:56Speaker 03

  I never really sorted that out in my mind.

• 30:58Ed Mylett?

  That's incredible, all the time you spent with him, even to this day.

• 31:01Speaker 03

  Yeah, you know, it's like, it's like a, there's, there's a, I don't know, to me it feels like a little bit of contradiction, but I don't know.

• 31:08Ed Mylett?

  I feel, I appreciate the insight and that doesn't surprise me ironically, only because a lot of the people that I know in my life that are incredible orators, actually ironically, um, are introverted.

• 31:20Speaker 03

  Oh, really?

• 31:21Ed Mylett?

  I'm talking about whether they're a performer, a singer, a public speaker. I'm not in any way suggesting that I'm on anyone's level that way, but I'm also introverted and I speak publicly. It's, it's surprising to me, one of me be like that.

• 31:30Speaker 03

  And you're introverted.

• 31:31Ed Mylett?

  Very much so.

• 31:32Speaker 03

  See, I wouldn't, I wouldn't have pegged that, but so, so then, that gives me a, that gives me a tool or something to analyze this a little different.

• 31:40Ed Mylett?

  So, if you had a criticism of him, of what didn't get accomplished or could have when he was president, I asked Stephen Moore this and he gave me pretty transparent criticism of President Trump. If you had a criticism of, of President Obama, whether that be in something that you observed a decision or just something that didn't go far enough, you wish you would've got done, anything like that.

• 32:00Speaker 03

  I could tell, I could do, we could, I could take that two ways.

• 32:03Ed Mylett?

  Okay.

• 32:04Speaker 03

  One, I could tell you the thing that's like the most disappointing or heartbreaking to me that, that, that it didn't go that way. Or we could get into details of, you know, where was, what was some policy mistake that if you had it to do over.

• 32:21Ed Mylett?

  Pick one, you pick it, you pick it.

• 32:23Speaker 03

  The, the most disappointing to me is that.

• 32:28Speaker 03

  Through the campaign of starting oh six really, but all of oh seven, all of oh eight, we have a horrible financial crisis. We go into the thing. Obama really wanted to be a figure that was gonna try to get us out of these horrible battle lines that had been developing at least since, you know, the end of the Clinton years, but like they had gotten worse over Bush.

• 32:53Ed Mylett?

  You mean red, blue, damn.

• 32:55Speaker 03

  Red and blue and just fighting and just, you know, it felt like every, every policy, every election, every battle comes down to fifty plus one and, you know, forty nine plus one. And for whatever reason, that didn't happen. It, it, we did not, we did not transform politics to be kinder, gentler.

• 33:22Ed Mylett?

  I know what you mean.

• 33:23Speaker 03

  Less, for a change. Now, if, if we then go to say, you know, who was at fault? I can give you a list of a bunch of reasons I don't really think Obama was at fault, but I still, it kind of breaks my heart.

• 33:37Ed Mylett?

  That, that didn't, could have transformed things.

• 33:39Speaker 03

  The night of Grant Park, that, that he wins the election. My wife and I are there, we're standing twenty feet from him, you know, on the stage, and it was an amazing night, and it felt like, you know, as bad as the financial crisis is, as bad as all this stuff is happening, maybe we can open a new door and do something different. And it didn't happen. And that's, that's the, I find most disappointing. When Donald Trump came in, when, when he was first running, there were people who said, well, it's Obama's fault. Obama gave us Trump. There is a sense in which, I, I do think that's true, that

• 34:18Speaker 03

  there is this inevitable pendulum swing, and in reaction to Bush, we elected Obama, and in reaction to Obama, we elected Trump.

• 34:29Ed Mylett?

  I do sort of feel that way.

• 34:30Speaker 03

  And I do, so I do think there is something to that.

• 34:32Ed Mylett?

  And I don't want to be overly critical of either of the two presidents, because I, I have admiration for anybody who seeks that office and, and, and leads our country. So I don't, I want to make sure I've said what I thought on that.

• 34:42Speaker 03

  Yeah. Look, it's fair, and you were very, you were very fair. I've heard a lot meaner things than that.

• 34:49Ed Mylett?

  Put it this way, he didn't fix it. It certainly existed. Certainly, we can go back to President Clinton.

• 34:53Speaker 03

  I would say, look, if you still, I think. He's gonna be remembered as the Democrats Reagan. And they are going to point to that there was no depression despite the massive crisis that we experienced. That they put in Dodd-Frank and re-regulated the financial system and that they passed a massive expansion of healthcare coverage for millions of people in the United States. Those are gonna be-

• 35:19Ed Mylett?

  Can we say on that last one?

• 35:20Speaker 03

  Sure. Those are gonna be major era-making, historians, whether conservative or liberal, are gonna remember that as that first two years of the Obama administration were a period of massive doing, like the first year of the Reagan administration, like the first year of the Lyndon Johnson administration.

• 35:41Ed Mylett?

  Yeah, I certainly agree with you on the first point. No question about it. The third point, though, and I wanted to ask you a question about this anyway. I thought when I asked you what he didn't get done, or that you were disappointed in, that you were gonna tell me that what he really wanted was probably universal healthcare or Medicare for all. But he just couldn't go there, so he sort of, you know, Obamacare was sort of a compromise of what he assumed could probably get done realistically in that short window period of time. And in that question, how do you feel about universal healthcare, Medicare for all, as a program on its own?

• 36:12Speaker 03

  Well, I think the ACA is gonna be remembered as quite an important move, and I mean, the number of people in the country losing insurance was rising by the millions every year, for year after year. The ACA's passed and millions of people get coverage. I think it's a tremendous achievement. It's one that many Democratic presidents before tried to do and were not able to do. As part of the, I mean, it came down to one vote. So, along the way, they did have to get rid of things like, they started wanting a public

• 36:57Speaker 03

  option, that it would be like Medicare, you could choose Medicare. And there were Democrats who said they can't support it.

• 37:06Ed Mylett?

  Right, I was gonna say, all these votes came out of Democrat votes.

• 37:08Speaker 03

  So it was like, goodbye, you know, that's not, that's not gonna be in there if the Democrats can't vote for it. So, I am a little frustrated to see the critique from the left, let's call it, of Obamacare.

• 37:26Speaker 03

  That it's, that it's like, oh, well, obviously, we should have done five times more.

• 37:32Ed Mylett?

  Right.

• 37:34Speaker 03

  Because that's a purely academic exercise.

• 37:36Ed Mylett?

  Yeah, but I think a lot of-

• 37:37Speaker 03

  Everyone knows.

• 37:37Ed Mylett?

  And I don't want to get into the weeds. I think a lot of people feel like it wasn't a very effective, uh, well-done piece of legislation in terms of some of the things that were promised with about keeping your doctor, that rates were going to be precipitously lower. However, on my side-

• 37:49Speaker 03

  Yeah.

• 37:50Ed Mylett?

  Um, or from my perspective, one of the great things about it is the idea that these pre-existing conditions, um, are no longer going to be an issue. I think that that is a winner.

• 37:59Speaker 03

  And, and, and I, I think that's right. And look, the, step back from the politics of the specific bill, the basic concept of what was going wrong in the insurance market.

• 38:12Ed Mylett?

  Mm-hmm.

• 38:12Speaker 03

  Everyone knows. And that is, rather than like in every other business where the companies are competing by getting better and faster and cheaper, what was happening is the insurance companies were getting better at figuring out who was going to be expensive and dropping them.

• 38:29Ed Mylett?

  Correct.

• 38:29Speaker 03

  And they go, "We, we won't cover you. You got pre-existing condition, whatever. You're, you know, you know, your dad had terrible heart problems. You know, we, we're not going to cover you." And the ACA fundamentally changes that, and that is an important-

• 38:44Ed Mylett?

  I think that's the big win, for me.

• 38:45Speaker 03

  That's the big win.

• 38:46Ed Mylett?

  Some of the other things we certainly disagree with.

• 38:47Speaker 03

  And then, look, there's details and would it-

• 38:49Ed Mylett?

  What about Medicare for All, though, Austin?

• 38:50Speaker 03

  Okay.

• 38:51Ed Mylett?

  Cause, cause the major, major candidates in your part-

• 38:53Speaker 03

  So now, let's move to Medicare, now let's move to the Medicare for All.

• 38:57Speaker 03

  Everything hinges on what does that mean?

• 39:00Ed Mylett?

  Okay.

• 39:01Speaker 03

  Okay? The Bernie Sanders version of Medicare for All is not Medicare. Okay, that's not what Medicare is. So that is all mental health-

• 39:14Ed Mylett?

  Right.

• 39:14Speaker 03

  Physical health, dental care, optical care, for free, with no copay.

• 39:20Ed Mylett?

  Okay.

• 39:20Speaker 03

  Okay, that's what the, that's what one version of Medicare for All is. That costs thirty trillion dollars, I think. And then the question is, could you save money? It is true, if you look at single payer systems around the world, they're way cheaper than the US system. So if you could get their costs while by doing that, that would go a long way to paying for it. The only thing is, there are a lot of things about the US system that are not the same. You know, doctors are paid more, we pay more for prescription drugs, we have a different lawsuit in the tort system. There's a lot of things are different.

• 40:00Speaker 03

  And Medicare has a private option in it, the Medicare Advantage.

• 40:07Ed Mylett?

  Sure.

• 40:08Speaker 03

  And it's not, everything is not free. It doesn't, it doesn't cover all of that.

• 40:11Ed Mylett?

  And you've paid into it for many, many years.

• 40:13Speaker 03

  And you've paid into it.

• 40:14Ed Mylett?

  Prior to collecting, isn't that the biggest distinction?

• 40:15Speaker 03

  So if you add up what you've paid into it.

• 40:19Ed Mylett?

  Agreed.

• 40:19Speaker 03

  It doesn't nearly add up to what it costs. But, but yes, you have paid into it. So that's why I say,

• 40:28Speaker 03

  to me, the phrase Medicare for All on the Bernie Sanders bill is, is, it's mistitled. It's just, that's not what Medicare is.

• 40:37Ed Mylett?

  Okay.

• 40:38Speaker 03

  Now, if you, I was in favor when we did the ACA of having a public option. And I still favor it now. That is to say, there are subsidies in the ACA, if your income is middle income or, or, or below middle income, you only pay a share of your income and you get a, you get a subsidy. And if you use that subsidy to pay the premium for Medicare and you could just buy, like you went to an exchange and you could buy into Medicare, just like you buy a private plan, I would be in favor of that. And actually, that's cheaper, that doesn't cost anything. That's actually cheaper than the system we have now.

• 41:24Speaker 03

  In my world, you should be able to call that Medicare for All because allowing anybody to buy into Medicare. But, you know, now, now we're into this semantics of, you know, fighting within the Democratic primary, everyone's gonna fight about,

• 41:38Ed Mylett?

  Right.

• 41:39Speaker 03

  Well, no, that's Medicare for everyone. That's not Medicare for all. And I don't know.

• 41:43Ed Mylett?

  But you'd agree with me. If you went somewhere like Bernie's plan, middle tax, middle-class people would be paying more in taxes at some point.

• 41:49Speaker 03

  I think so.

• 41:50Ed Mylett?

  They would have to.

• 41:50Speaker 03

  I think so. Now, it is worth saying, if you want to call those middle-class taxes premia,

• 41:58Speaker 03

  Because in a way, it's like you're paying taxes for a premium. You do have to think about, well, if you wouldn't have to buy health insurance, you might be better off.

• 42:07Ed Mylett?

  There's a lot of part of you that thinks like I do that, my gosh, like 70 something percent of the country at least is really happy with their healthcare. Do they get through their employer? They like their doctor, they like the plan, they like how it works. Why, why are we, why is this such a significant topic?

• 42:22Speaker 03

  Why mess with that?

• 42:23Ed Mylett?

  The vast majority of people look at this stuff and go, I really like my gig. Why are you people messing with this?

• 42:27Speaker 03

  I think that's true. The only thing I will say is, a lot of people like their insurance and nobody likes how much they have to pay for it. And the prices go up each year. So if by having a public option, let's say, it applied more competitive discipline so that prices did not rise as fast. I think a lot of people, that, that's why that is a very popular thing.

• 42:53Ed Mylett?

  And maybe short term, that's true, but historically, every government program ends up lacking those disciplines long term, right?

• 42:59Speaker 03

  Yes and no. I would be a little careful now.

• 43:02Ed Mylett?

  Okay.

• 43:02Speaker 03

  Because once you get into health, because of this cream skimming problem.

• 43:07Ed Mylett?

  Right.

• 43:08Speaker 03

  It actually is the case that in most of the, unlike most industries, if you look at single payer, government run plans, they tend to do better in other countries.

• 43:17Ed Mylett?

  I'm not necessarily referring just to cost. I'm talking about efficiencies too, and application of the healthcare. You ask people that live in Canada, I travel up to Canada. There's a pro mixed bag up there about how they feel about what they get in terms of service, wait times for surgery, wait times for certain things like that. And I'm not trying to be, it's not a scare tactic, I'm telling you.

• 43:34Speaker 03

  I, I'm not disputing that people, look, everybody is fundamentally uncomfortable with the healthcare system because we all get sick and we all die.

• 43:42Ed Mylett?

  Right.

• 43:42Speaker 03

  And so it's like being at hospitals and we're prone to not like that system. It's not, if you look at Canada, it's dramatically lower cost. They have better life expectancies than us and the Canadians, if you ask them, would you like to have the US system? There's massive non-support. They do not want to switch to our system.

• 44:05Ed Mylett?

  My friends there that have their own means buy private plans because the wait times are so bad.

• 44:08Speaker 03

  That's why I say, in Medicare, we have private plans.

• 44:11Ed Mylett?

  I know.

• 44:11Speaker 03

  If you, if you have in your mind that. Uh, government, a government option is socialism.

• 44:19Ed Mylett?

  Yeah.

• 44:19Speaker 03

  I think you gotta kind of.

• 44:21Ed Mylett?

  Fair enough.

• 44:21Speaker 03

  Figure out why is Medicare as popular as it is, why social security is popular as it is.

• 44:26Ed Mylett?

  Okay.

• 44:26Speaker 03

  It's because universal coverage is, in a way, the cheapest of all coverage.

• 44:33Ed Mylett?

  Okay, so let's put a bow on this and we're almost done for everything. That whole, this whole discussion.

• 44:38Speaker 03

  Yeah.

• 44:38Ed Mylett?

  If we just step back for a second, and this is, I mean this too. When, is there a point eventually where we're, the entitlement programs in general aren't always going to be the fix for things? In other words, how many of these can we have?

• 44:53Speaker 03

  Yeah, look, it's a fair point.

• 44:55Ed Mylett?

  Once this is done, Austin, then what's the next big government program? Like, and I mean that from both sides, but it just seems as if there's one after the other, after the other. Does it become a point where like, the government can't fix all of these things all the time?

• 45:09Speaker 03

  Yeah, look, this is the.

• 45:12Ed Mylett?

  And have a capitalist society.

• 45:12Speaker 03

  This is the, this is the yin and yang, or push and pull, or something of modern capitalism, which is, we're unbelievably productive compared to whatever. We're gonna go back to 1500 or something, and talk to the peasants and show them like, "Hey, look, you know, I can drive to the corner and fill up my car with gas and drive. I got a phone to tell me where to go."

• 45:36Ed Mylett?

  Right.

• 45:37Speaker 03

  So we're massively productive, we have high incomes. But we have, every rich country opts to have a safety net.

• 45:46Ed Mylett?

  Hmm.

• 45:47Speaker 03

  And the safety net includes retirement security, includes health, healthcare security. We have unemployment insurance, we have food stamps, we have mandatory, if you walk in the emergency room, they gotta treat you.

• 46:01Ed Mylett?

  Yeah.

• 46:01Speaker 03

  You know, so, we've got a bunch of, we got a, quite a robust safety net.

• 46:09Speaker 03

  And one point of view of that safety net is it'd be like, well, how could we pay for that?

• 46:16Ed Mylett?

  Right.

• 46:17Speaker 03

  And shouldn't we skim it down?

• 46:19Ed Mylett?

  Mm-hmm.

• 46:20Speaker 03

  I kind of think the 500 years of history tell us it's almost the opposite. What makes us rich is we get more productive. And one of the things we buy with our wealth is a safety net that we don't have to, we don't have to, either we ourselves don't have to go below, or nobody in our society has to go. We're rich enough that nobody does that. So I think the answer is, there's vastly, our capacity for safety net is vastly in excess of where it is. I mean, it doesn't mean that we have to, and that's not social, insurance is not socialism.

• 47:00Ed Mylett?

  No, I don't think that. I think, what I guess we're referring to is, and what you said about we're vastly, we're very productive, I think one of the reasons we're incredibly productive is because there's an incredible incentive still to be productive. And if these safety nets get bigger and bigger and bigger, and percentage of income has taken greater and greater, that those incentives to be productive go away. And that's the very nature of a capitalist society, is that there's incentives to be productive.

• 47:23Speaker 03

  All I will say is, be aware, there are also some arguments on the other side that say, the existence of a robust safety net actually enable people to start their own businesses and not be nervous, like, ah, I just have to work for the man my whole life because otherwise I can't get health insurance. If you can get health insurance on your own, you can go start some company, try it out, and if it works or doesn't work, it's on you. And the...

• 47:59Speaker 03

  If your worldview is that the thing that makes us innovative and entrepreneurial is the lack of taxes and the lack of regulation, then I kind of think the puzzle you gotta answer is what is the deal with California? Where they've always had the highest taxes and they've always had the highest regulation. And why is Silicon Valley there and not out on the island of Vanuatu? Where there's no taxes of any kind?

• 48:29Ed Mylett?

  Sure.

• 48:30Speaker 03

  And the answer is it's not that they go to Silicon Valley because it's cheaper. They go there because they can't afford not to.

• 48:38Ed Mylett?

  Right.

• 48:38Speaker 03

  And if you cut the taxes so much that you can't invest in education or your people, you've done a terrible disservice. And I'm sure you don't disagree with that.

• 48:48Ed Mylett?

  I don't disagree.

• 48:49Speaker 03

  And I don't disagree that you could overtax and overregulate your prosperity. There's no question about that.

• 48:55Ed Mylett?

  I do. I don't, having lived in California, by the way, I think a lot of the firms that end up out there, guys went to school in those areas more than anything. Because you could also argue that Microsoft ended up in the state of Washington and there's no income tax there, right?

• 49:06Speaker 03

  Yeah, that's true.

• 49:06Ed Mylett?

  So I think that might be more through circumstance than necessarily they went there to grow. Although those companies, you know, obviously have been there a long time. Having said that, though, I don't know, you know, I look at California as a state and I'm concerned about what I see in our state. If you go into the cities of California, the homeless issues we have and the overpopulation issues in California, it's a really significant thing. And I know a lot of our folks leaving that state because they feel like there aren't incentives to stay there to start up new businesses, so.

• 49:32Speaker 03

  That does happen. And that's what, look, you can definitely, and we can find hundreds of examples, where government being too aggressive in taxes and regulation and whatever, destroy the golden goose.

• 49:49Ed Mylett?

  Right.

• 49:51Speaker 03

  The question is, for example, now, is a tax rate going back up for high-income people to something that it absolutely has been many, many times post-World War II in the United States? Is that so extreme that it should be called socialism and it's going to destroy the American dream? I think Steve Moore or others are a little too, maybe it's Dr. Narr, they're a little too, it's almost a religious conviction to them. And my thing is, hey, let's just go look at the data.

• 50:31Speaker 03

  It is not the case that, I don't want to have too many negatives in this sentence. It is true that we have had tax rates well in excess of the rates that we have now on high-income people. They've paid more, and we've been deeply innovative, and it certainly doesn't seem like these tax cuts for billionaires are magic beanstalk beans for anything. I mean, Bush cut them more than they've ever been cut, and we had measly growth followed by a real crisis. And now Donald Trump has cut them $2 trillion, and growth is barely, the second half of

• 51:15Speaker 03

  this year, it might not even get to 2%. So, I mean, it's like, that's not a magic wand.

• 51:20Ed Mylett?

  Yeah, that's why I wanted to have this type of discussion. Because it hasn't been about who's, I said this to Stephen, President Clinton said something, I don't know that he believed it or not, he said, "Politics shouldn't be about," in fact, I don't think he believed it, but he said, "Politics shouldn't be about who's good and bad, but about who's right and wrong." And I think the kind of discussions that we've had today, and obviously the discussions that I had with Stephen, helped people at least think through some of these issues. And I wanted to have you on because I wanted to be able to challenge your perspective like I did Stephen's.

• 51:47Speaker 03

  And I would have been disappointed if you didn't. And, and look, in, in society...

• 51:55Speaker 03

  If you could even have one conversation, civil conversation, where you engage on ideas with people who disagree. One thing about the University of Chicago is we've always had that. This was what Milton Friedman was from here.

• 52:10Ed Mylett?

  Which is Stevens hero.

• 52:11Speaker 03

  Yes, Stevens hero. And we've got behavioral economists like the guy Dick Thaler, who just won the Nobel Prize. And we're in the same room having the, in higher education, like in politics, that's gotten rarer and rarer, that you will have people disagreeing. It works because fundamentally, we all kind of love each other. You know what I mean? And so, we're fighting about content. I'm not, I mean, it's not all just milquetoast to happiness. We are fighting about it, but we're not trying to kill each other. We're family. And so, I hope, I hope people can do that more.

• 52:51Ed Mylett?

  I do too. Real quick, armchair forecast here.

• 52:55Speaker 03

  We got the armchair.

• 52:56Ed Mylett?

  Yeah, we got it. By the way, there's also Ben Bernanke's Fed chair sitting right over here too. It's pretty darn cool. Last question will be an easy answer. If you had to predict right now, here we are, many months out. President Donald Trump is reelected, or one of the Democrat, whoever it ends up being the nominee, ends up winning. You had to predict right now.

• 53:14Speaker 03

  Oh, Democrat or Trump?

• 53:16Ed Mylett?

  Yep.

• 53:17Speaker 03

  I feel like Trump barely won last time. And he's gotten less popular. So, if the Democratic nominee is more likable, is a better candidate than Hillary Clinton, that Trump's in trouble. That's what I think. So, I actually, I don't know. Not the vote share, but I think probability of victory, 60/40.

• 53:47Speaker 03

  For the Democrats.

• 53:48Ed Mylett?

  I enjoyed today. I did too. I really did. I really liked meeting you. I did too, and I appreciated the conversation so much. Everybody, now listen, for my audience, I don't want to be hearing that I was too hard on him, or not hard enough, or not nice enough to-

• 54:02Speaker 03

  They're gonna call, they're gonna say, "Why did you have that bozo on there?"

• 54:05Ed Mylett?

  How come- No, I doubt that. Ed is a good guy, and you know that. Don't hold against him. So is Austin, and so, guys, please, I'm trying to ask questions that are fair and down the middle. If you're a conservative, you feel like I didn't push him hard enough on different things, give me a break, and if you're a liberal, you feel like I pushed him too hard, I just tried to get the best answers I could out of Austin. So you could hear his perspective today, not mine. And I'm hoping between hearing both the conservative perspective from Stephen, and the more liberal perspective from Austin, that it's just making you think about what each side has to stand for. And maybe it'll help you make some of the decisions you need to make as you vote, and as you move through your life, and decide whether you're gonna start a business or not start one, stay at your career or not. And so, thank you again, Austin, today.

• 54:43Speaker 03

  Well said.

• 54:44Ed Mylett?

  I want to remind you, every day on Instagram, we run the Max Out 2-Minute Drill. Every day when I post, at 7:30 Pacific, 10:30 Eastern, you've got about 2 to 5 minutes to make a comment. If you do that, or make a comment on people's comments, or third, just comment every day on every post I make at the end of the week, we pick winners, so I can engage with you. I read all of the comments, and it takes a long time, but you win, you know, Max Out gear, tickets to come see me speak, a ride on my jet, possibly, coaching calls with some of my guests, coaching calls with me, all kinds of great stuff, because I want to engage with you. So, follow me on Instagram, participate in the Max Out 2-Minute Drill. God bless you. Max out.