Ep 112 | The Government’s Plan to DESTROY Small Business | Carol Roth | The Glenn Beck Podcast

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Goliath is on a winning streak.

Today's guest fights for the little guy, the David.

Except David is a her.

She got her start in investment banking and quickly rose in rank.

She calls herself an investment banker in recovery.

She's worked as an investment banker on Wall Street where she specialized in corporate finance, which basically means she helped big companies become bigger.

She's now a New York Times best-selling author who advocates for entrepreneurs and small business owners, and she is very alarmed.

Throughout the pandemic, she watched as cronyism replaced capitalism, as power became centralized, and everyday Americans lost their livelihoods, their business, even their freedom, all as a result of powerful elites willing to betray our American values for profit.

Today's guest examines this in her latest book, The War on Small Business, How the Government Used the Pandemic to Crush the Backbone Backbone of America.

It's a book about freedom, but it's also a book about power, government power, corporate power, and the strange and terrifying power that merges when the two combine, which is exactly what led to the enormous transfer of wealth from Main Street to Wall Street.

Small business is, as American baseball and cheeseburgers and the Fawns smack in the jukebox.

Small business represents the possibility for freedom, a realistic chance at the American dream.

It's what built us in so many ways.

Today's guest has a powerful message.

This is America, the land of the little guy.

Today, on the Glenbeck podcast, Carol Roth.

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Welcome, Carol.

I want to start with the black swan.

What is a black swan, first of all?

So, a black swan in the financial world is an unpredictable event, something that comes out of nowhere and takes over everything.

And it really became popularized by Nicholas Nassim Taleb, who was a former quant trader.

And he made this big argument that we really need to be paying attention and worried about these things that we can't see because we're always kind of heads down in things we can't see.

So when 2020 came around, everyone said, oh, the pandemic, it's a black swan.

And it's absolutely not the case.

I mean, in 2019, there had been a set of drills called Crimson Contagion that were run that for this exact scenario.

People have been talking about preparations for a pandemic for a long time.

Correct.

So that was not the black swan, but a black swan did happen.

The black swan was the government reaction to the pandemic.

There was nobody who was sitting around going, you know, I really think that the government is going to shut down large swaths of the economy in reaction to this virus that came out.

We, we, what happened to us, you would have said just a couple of months before, never.

No one, A, the government would never do it, and no one would accept it.

Both of those things happened, and it is crushed.

I think it has fundamentally transformed America, possibly for at least the foreseeable future, but possibly

a knockout punch on getting back to where we once were.

Yeah, it's so interesting that you say that.

I remember being February 2020, and the news had come out of Asia, and everyone was trying to process what was going on.

And my husband and I were having, you know, one of those dinner time conversations, going, you know, like, what if this actually became something here?

What would happen?

And I said, well, like, just hypothetically speaking, what if you could just lock everybody down for two weeks?

Like, do you think we could do that?

And we sat around the table and we like, we, you know, played it all along.

We're like, nah, there's no way that you could do that, that people would stand by and allow for that to happen.

And so what was very clever about what happened is that they actually didn't pursue that.

They pursued partial lockdowns.

This idea that we had a lockdown, that we were all in this together, that everybody had the same fate, was completely not true.

We had the government picking winners and losers.

We had them deciding who was going to thrive and who was going to fight to survive, not based even on data or science, but based on political clout and connections.

So this concept of us all being in this together, if Wall Street hadn't been propped up, if the big businesses had been shut down too, I mean, I'll ask you, do you think that we would have lasted two or three weeks?

No, we wouldn't have.

And it was a massive transfer of wealth.

But also,

what happened that nobody's talking about is

small businesses, and you talk about this a lot in your book, small businesses account for over half, sometimes 75% of all job growth in recessions and depressions.

It is the way that America fires back up.

And they have done and are still doing everything they can to kill the small business.

Yeah, and it's so interesting.

I think when we talk about the concept of small business, people think, oh, it's small.

It must be niche.

It must not be that important.

But if you look at the economy, like on a spectrum or a pie chart and you just slice it down the middle, about half the economy, half the GDP and about half the jobs are in the hands before COVID of 30.2 million small businesses.

And that is a group that's a free market, right?

They're all

very decentralized, different industries, different sizes.

And that's what we want to see more of.

We want to see more of that decentralization.

The other half of the economy is in the hands, depending on how you want to count big or medium businesses, about 10 to 15,000 big or medium businesses.

So think about that imbalance of power when you divide the economy in half, and then you can understand why the politicians want to align with the side that's easier to control and easier to get lobbying dollars from and have the financial wherewithal.

So for those of us who believe in free markets and capitalism as that best path to prosperity and believe in economic freedom and wealth creation opportunities, we want to see more of the 30.2 million.

We don't want to see more of that economy going into the hands.

And you hit the nail on the head.

This was the biggest transfer of wealth we have ever seen in history.

Explain that.

So, from Main Street to Wall Street, we had two different things happen.

One, I think most people understand,

and one, people don't understand at all.

The thing that for people that's easy to get their head wrapped around is the government shuts down small businesses.

And if you're going out and you still need to spend, you're going to be spending at Walmart, you're going to be spending at Target, you're going to be spending at Amazon.

So, those were the companies that were the beneficiaries of the dollars that were spent in the economy last year.

And Amazon had blowaway quarters.

I mean, for the first time, December 2020, first $100 billion quarter ever.

Same in terms of revenue.

Same thing happened in the second quarter.

I mean, it really boosted their revenue.

So from a financial perspective, that's what happened.

Then there's the monetary policy piece.

And this is the opaque piece, which seems a little wonky, but that's why I went into it in the book in a very sort of sesame street sort of way so people can better understand this but the fed came in and decided that they were going to further intervene in a market that they had already been intervening in basically since the great recession disrupt risk take interest rates back down to zero and just inject trillions of dollars of cash and it's not like they have this cash right this isn't like a pile that they're like oh we're going to put it in this is made up out of nowhere this is they say it's very different because they're not printing it, they're digitizing it.

No, they're digitizing it, right?

So, if you and I went into our accounts and we changed the numbers and we said, now we have trillions of dollars and we're going to go buy securities, that would be called counterfeiting.

Correct.

For whatever reason, when the Federal Reserve does it, this is

monetary policy.

So, they went in and they injected trillions of dollars to the point that they now have more than $8 trillion on their balance sheet.

And this enabled these big companies who already had access to capital and weren't the ones being hurt to continue to grow.

There were seven tech companies that gained $3.4 trillion in value in 2020.

It was a record year for IPOs.

It was a record year in terms of the value that was created through SPACs, these highly speculative special purpose acquisition companies, which is basically a hybrid of a private equity company and an IPO.

So if you had access to capital, this is a bonanza for you.

At the same time that hundreds of thousands of small businesses had been completely murdered by the time June had come around, millions more were struggling to survive.

And then you have the sort of imbalance of your small business just trying to find your footing, and your competitors have access to additional capital, additional value.

I mean, just an insane transfer of wealth and value.

I've been watching this happen since 2008.

And,

you know, people were upset in 2008 when we bailed out the banks.

They don't have any clue as to what has been going on since 2008.

It is much worse.

They've made everybody bigger.

And, you know, I was watching something.

I'd love to hear your opinion.

Before,

let's see, it was probably in October, right before the pandemic.

And the bank started, you know, at the old discount window that doesn't exist anymore, just started giving money to the banks overnight.

And I think it got up to, what, 100 billion a night or 150 billion a night.

And then they started saying, you know, you can keep it for 30 days and it's unlimited on what you can take.

Something was wrong.

And I don't know what it was, but something was very wrong.

And now we don't hear anything about that.

And now the banks seem to be fine again.

I mean, what happened?

Do you have any idea?

All right.

So

there's a lot to unpack in this, Glenn, because this is a piece of.

Can you explain it to me like I'm Elmo?

Because I practically.

You sure can, Glenn.

So two pieces of this.

The first thing I want to hit on is the whole idea of too big to fail versus too small to matter and too small to control.

Because I'm glad that you brought up the Great Recession.

What happened then is the banks took on too much risk and financial services companies adjacent to banks took on too much risk.

That disrupted the entire financial system and we all paid the price.

And so this was the outcome of something they had done.

But they were still deemed too big to fail.

They still got a taxpayer bailout.

So

they did not learn a lesson.

They learned the wrong lesson.

Well, it goes even further than that.

So the slap on the wrist that they got, Dodd-Frank, the big regulation, we're going to come in.

We're going to rein in the big banks.

Have you seen this movie before?

Do you know what happens?

For those of you who haven't seen the movie before, what happened was because these regulations were so onerous, it ended up killing the formation of small business lenders and community banks.

A lot of them went under.

And as you can imagine, those who have smaller capital pools can lend to smaller businesses.

So small business lending just went completely off a cliff.

At the same time, because the Fed's still intervening in the market, which is the second piece that we'll get to, the big banks now have fewer competitors.

They have access to all this capital.

They went crazy.

Big business lending went through the roof.

So let me ask you,

was that,

do you believe that was intentional?

Like when FDR in the Great Recession or Great Depression, he went to the big three automakers and said, you help us make the rules.

And of course they helped to make the rules to keep the three big, you know, putting everybody else out of business.

Do you think that happened or is this just bad policy?

So it's interesting.

The people who advise on policy, the lobbyists that get in there, the experts, they're coming from industry.

They're far more intelligent and

perhaps a little bit more nefarious than the folks who are elected by our popularity contest that we have in there.

So I think

outcome that the people who were lobbying knew what was going to happen, and the people who were writing the legislation were just too stupid to know.

But there is a bigger thesis that I talk about, which again is that when you look back to our spectrum of the decentralized economy versus the centralized power, that is the big battle that's going on.

And so, you know, to the extent, whether it's intentional or it's like, hey, if that happens, like we just don't care, they want to be in bed with these big companies.

They want to, it's that unholy trifecta of central planners and government, big business and special interests.

So, you know, they might craft something that's a little bit more favorable.

And if a few small guys get hurt, you know, that's just the price we have to pay.

We are living

the same thing that our grandparents live through

in the teens and the early 20s and the early 30s before fascism was known as a bad thing.

We're just not calling it that.

But this is a fascist, there is a love from the government and from big business of fascism.

They just don't call it that.

No, and that's why I've used the phrase central planning.

If you look at the spectrum, people get so caught up in capitalism versus socialism, communism, democratic socialism, pretty socialism, whatever you want to call it.

I look at capitalism as just freedom, choice, transparency surrounded by the guardrails of property rights.

That's it.

That's all it is.

And so if you believe in freedom and choice, you believe in capitalism.

Central planning, and again, I don't want to have a like a discussion about which one you want to call it, but it's a handful of people that make decisions on the behalf of everybody else.

They're using force, coercion, control, and usually opacity.

So it doesn't matter which format or which name you want to call it.

And I think that's where the debate always gets derailed because people want to say, oh, well, this hasn't been tried.

Well, does it look like this?

Does it look like force and coercion?

Are a few people making the decisions?

And that's the spectrum that we've moved along.

We have moved away from capitalism.

We've actually exported capitalism around the world to our detriment.

And we have imported central planning.

And that's kind of the big battle that we're seeing, which has allowed this to happen over the last, you know, call it 17 months.

And, you know, even in the days when we're having this conversation with the eviction moratorium coming back in place, oh, well, the Supreme Court said it was unconstitutional.

Oh, that's okay.

Like, it doesn't matter.

We'll just go ahead and have the CDC talk about economic policy.

Like, where did this come from?

Like, is the treasury now going to make food pyramids?

And I don't.

I don't know what's happening.

I mean,

can I make

an edict out there?

Because it seems like it doesn't matter who you are.

We have like multiple branches of government that I didn't know existed.

Trevor Burrus, Jr.: Just a quick thought.

I don't know if you know who Stuart Chase is, but he was the guy who came up, coined the term the New Deal.

He was a big central planner.

And he wrote a book called The Road on Which We're Traveling.

And

it was

a synopsis of 1941 to 1946.

And at the end of it, he says, you know, we thought fascism might be good, authoritarianism, but now we're seeing the lies of that.

But we've begun to build what we'll just have to call now System X.

And he lays out everything we're doing right now, everything we're doing.

And he says it's too late to turn it because the forces are already in and the rail has already been put in.

And it'll be a good thing.

But

it was hard for me to get my arms around that when i first read that in the 90s yeah

but that is

whether that's the same rail that is we have system x you know when i i know people have heard really good economists capitalists say you know china the 20 years ago china is the future China is the future.

And they didn't mean that China would be dominant per se.

They meant we're going to be doing things like China.

Yeah, it is staggering, and it's one of the reasons I included the chapter on China and called it trading places, because I do feel like there are so many times when it's like we're holding up a mirror, and the things that come out of the United States sound like policy that would be coming out of China and vice versa.

And it's very staggering to sit here and to say, wow, this is what we've become.

And all of this has come out of central planning and their missteps.

And the Fed has accelerated it.

I mean, the reason why this didn't seem like it was such a big deal for so long is because the Federal Reserve, even though they were interfering in the markets and

slanting the playing field, they weren't doing it at the level that they did.

After the Great Recession, all bets are off the table and this thing has just been.

Is this

do we really have?

I mean,

I have my money in the market

because it's going up.

I don't have all of my money by any stretch of the imagination in the market because at some point it's going to come down.

But

will it?

Because you can't really look at a company's earnings or what they're doing.

Nothing makes sense anymore.

And

the Fed is just printing up money

and giving money to people who are buying, who are like-minded and buying more stock.

There's no,

is there a real market anymore?

I mean, it's definitely not a capitalistic free market.

I mean, not that you can make the argument that there's always been some element that was slightly less than capitalistic.

But when I got into investment banking, I consider myself a recovering investment banker.

When I got into it a little bit more than a quarter century ago, we would run analyses.

There would be valuation metrics.

And you could say, for most companies, you know, this is kind of the standard multiple of cash flow or multiple of revenue or multiple of earnings that we would expect.

And sure, there were some outliers in technology or biotech that were harder to assess, but there was at least like some semblance of rules that were agreed upon.

What's happened when the Fed comes in and they say that

interest rates are zero, they're basically saying like there's no compensation for taking risk.

Like you're taking on risk and you get nothing in return, which is the whole point of taking on risk and sort of the principles of economics.

And when you have that scenario, it's impossible to use valuation metrics and everything becomes sentiment and momentum.

And so, yeah, I mean, it's, you know, as somebody who is asked to continually commentate on the market, it's kind of like, I don't know what to say.

I saw a research report that came out today on Robin Hood, this trading app that's supposed to democratize investing, but is backed by, of course, the big guys.

And at this point in time, the research analyst is like, I don't know what to tell you.

Like, this is too risky.

I can't tell you whether you should be long or short.

Like, I've never seen that in the history.

And is that just because

there's so much manipulation that's going on in the market because there's so much cash that's been brought in, because risk has been disrupted, because all of these factors, they just don't know what to make of it anymore.

So I've been watching the economy since 2004 and ringing the bell on the collapse of the banks and nobody would listen and I was crazy and yada, yada, yada.

And I have been shocked at

the amount.

that this country and the our financial system, the beating it can take, it has just taken a beating.

You know, for the last 22 years, it's just been non-stop.

And we're still standing.

But

Rudyard Kipling wrote a poem that said, you know,

it was about the gods of the copybook headings with

the blood and terror.

The truth returns in the end.

And

it has to,

I mean, right?

I mean, what are we headed for?

Yeah, this is the debate that we're having on, you know, amongst financial folks every day.

And the reality is that when you take actions, they ultimately have consequences.

And I can't tell you, you know, over time what happens.

The crazy thing that we have going on, which makes this so hard to peg, is that we are the world's reserve currency.

And we are what I call the skinniest kid at Fat Camp.

Yes.

So if you look around the world and you say, well,

okay, you know, the dollar tanks, the financial market tanks, this whole thing unravels, the amount of epic devastation that that has for the rest of the world and the lack of somebody else to be able to step in and take our place.

I mean, I know a lot of people are like, oh, China's going to be the reserve currency.

Nobody's going to let a communist country be the reserve currency, other than maybe like if you're Iran and nobody else is giving you money.

I don't know.

We seem to love communist countries right now.

It's a fair point.

But

in an intellectual standpoint, if you're France, if you're the UK, if you're any of these Germany,

are you really going to trust?

the financial system that keeps producing financial frauds.

I mean, the number of companies that we've had to pull off US exchanges because of financial frauds, because nobody can trust the number system that's coming out there.

So, the good thing we have going is that everyone is like invested in this scheme.

And I use the word scheme intentionally.

So, they kind of can't afford to let it collapse.

So, you know, I've been playing around with like wild concepts and talking to people.

And I'm finding out that there are other people who are playing around with the same wild concepts.

Like, could there be a situation where everyone just agrees that we're going to just cancel a bunch of debts and there's going to be no consequence because the consequence of doing it on everyone ends up being worse.

Like, I don't know.

I mean, this is all so outside of the realm of just, you know, basic economics and markets.

It could be any spectrum of outcomes.

It could be like massive deflation to massive hyperinflation.

I've been pushing, at least in the interim, that we probably will have some stagflation.

But the ultimate outcomes, at least for some period of time until somebody fills that void,

are huge.

And frankly, that's why the whole crypto thing has become big.

I remember reading the first time 20 years ago about rehypothecation, which

scared the hell out of me.

You know what I mean?

You get to a point, I've said to the audience several times, if you ever read that

in the Wall Street Journal and they're seriously talking about rehypothecation, run.

The idea is that really nobody owns anything because everybody owns a little of something.

If this thing starts to fall apart,

that's,

I mean, that's reality.

Nobody really knows who owns what because everybody kind of owns a little bit of everything, right?

Isn't that exactly what they're trying to do?

Yes.

And this is, you know,

the whole concept of wealth creation opportunities and economic freedom has made the United States the most successful country in all of history

and has drawn people from all over the globe to want to come here to pursue that.

What they have been doing is making it impossible for you as an individual to create wealth.

The war on small business is the war on wealth creation opportunities.

Because how do you get wealthy in the United States of America?

You get wealthy through ownership of assets.

I mean it's not just, it's not income, it's really the asset ownership.

So it's owning a business, it's owning a home, it's investing in stocks, it's, you know, maybe having options in a company that, you know, you own privately, all those kinds of things, that's what creates wealth.

And that's what everybody should have available to them.

So they're making it more difficult.

And for you to have to think really hard about whether you want to own a small business.

That's a wealth creation opportunity.

They're making it harder for you to own a home.

And by the way, they're giving basically free capital to private equity firms to go and compete with you for those homes.

They're just hanging just

because a lot of people don't know this.

Yes.

Home prices are through the roof.

Yes.

Explain what's happening.

So there are a lot of dynamics, obviously, coming out of the Great Recession.

There were a ton of foreclosures, so there was a lot of supply in the market.

And because of that, there was a lot less building that was happening.

But as that kind of got cleaned up, you then rolled into this quote-unquote government created crisis.

And so not only do you have what I call government inflation, the cost of a new home has $94,000 added to it, according to the National Association of Home Builders, for every new home based on government regulations.

That doesn't even get to your property taxes.

So you've got the government inflation piece, and then you have

this capital bonanza.

Interest rates are next to zero, so people want to take out mortgages.

But it's more sinister than that.

Because there's all this capital in the market at these very low rates, these big firms,

biggest investors out there, BlackRock and some of the other really big names, they're trying to find a return on investment for their investors.

And they're out of options because all of these sort of other options have been exhausted.

But they've got all of this capital.

Oh, and they can borrow cheaply as well.

So that has allowed them to set their sights on the housing market and the individual housing market.

So we have these big companies over the last 12 to 16 months who've been going out and competing for neighborhoods and for individual houses with you as a homeowner.

You like, it's hard enough to have to compete with all the other people who want to go out and buy them.

Now you have to compete with big companies that are getting free money because the Fed has completely disrupted risk in the market.

It's insane.

So that's taking away.

a wealth creation opportunity.

And then just the normal investment in the market.

If you're coming into the market now as an individual investor, you are taking on more risk to get the same return.

And God forbid, you're a saver or retiree or somebody who wants to retire.

So you're basically earning nothing.

And all of that capital, all of that money is being given to these big companies who are going out and, as we talked about, increasing in value.

Like that's not capitalism.

That's central planning.

So we are not a capitalist country anymore.

I would say we are a hybrid right now.

We've been a hybrid for a long time.

We are a hybrid that is moving closer to central planning.

Absolutely.

And this has been accelerated over the last 16, 17 months.

So can I get

some would say conspiratorial, but

there's conspiracy theories and then there's conspiracy facts.

Right.

This is a conspiracy is hidden.

This isn't hidden.

You know, the London School of Economics just issued a paper on the

central planning and how it is the future.

You have the great reset

from the World Economic Forum, which is being denied everywhere, except

Boris Johnson uses Build Back Better.

The Prime Minister of Japan uses

Build Back Better,

which is

the phrase from the World Economic Forum.

And everything that is happening

just happens to be coincidentally

following the same structure.

Aaron Powell, Jr.: Yeah, for anybody who hasn't seen the video, there's this like really crazy kind of like teaser for the great reset

that says, here are predictions of what's going to happen by 2030.

So like not even that far, not like 2075.

Like we're talking like less than a decade from now.

And two of the key points was like people will like own nothing and be happy.

And be happy and that people will rent instead of own.

But wait a minute.

I keep saying after they say, you know, you won't own anything, you'll be happy because it's going to be a renter's thing.

Well, first of all,

who are you renting from?

Right, it's right you may not own, but somebody does.

And they're going to be

absolutely

that's the

lords and the serfs.

Right.

And as said, like, I'm,

you can go through my stuff.

Like, I'm very grounded in facts and numbers and data.

But like, yeah, they pretty much said it.

And while I don't necessarily think that all of the governments are joining together to do it globally, but maybe they're doing it on a one-off basis.

Maybe they're like, hey, here's a good plan.

Why don't you try and roll it out individually?

We're all in the same boat.

You know what I mean?

We're all in the same boat.

So it's not, I don't think you have to.

They're not calling each other at night going, okay, now step two.

I don't think that's happening.

Well, and the hilarious part is that they're doing it under the guise of, oh, inequality is so bad.

I mean, is there anything that creates more unequalness than a few people who are in the club absconding all of your property and saying to the rest of you, you will own nothing and be happy.

So

help me out on this.

How did suddenly everything switch to where

I've never been one who says, ooh, big companies.

Tech was the first time I ever said, whoa, whoa, whoa, wait.

And we've given them everything.

And now it is so apparent to half the country, these companies are sharks and they are going to eat everything, all of your rights and everything.

And the half that,

at least I used to go, relax.

They're all in.

They're all in.

How did that happen?

Why did that happen?

It's a hard thing to sort of like get the nuance on because a big company in and of itself, as you said, throughout history isn't a problem.

When you have something that resembles freedom and choice and people compete themselves into a position where they're doing better, that's a good thing.

And we want that to happen as long as they're doing it on

a fair and level playing field and it's not being tilted in their favor by their government cronies.

So if you look at throughout history, even if you look at the Dow Jones, I mean, there's like maybe like a handful, two or three companies that are even still there that were there 50 years ago, right?

So

I don't have a problem with big companies, but I have a problem with cronyism.

Yes.

And that is the direction that we have been moved towards.

And I do think that has some.

All the while being told we're moving against it.

You know, they'll say, these big companies and these big people are getting richer.

No, the millionaire, the guy who's a millionaire, he may or may not be getting richer, but the billionaire absolutely is.

This is so fascinating.

So I don't know if you know the stat, but the top 1%

in the United States, do you know what number you need to hit from a wealth standpoint to be in the top 1%?

Two or three million?

4.4.

4.4.

Based on the last set of data.

So there are a lot of people who are at that range, but there's like a handful of people that are hundreds of billions of dollars.

There is a truck that you can drive between the difference between 4.4 million and 200 billion,

a much smaller gap between zero and 4.4.

And so when we're focusing on the 1%,

it becomes this distraction.

It becomes the, oh, eat the rich and eat the economic opportunity.

That's the call to action.

And that gives them the cover for that handful of people to keep growing and growing.

And then the funny part is, I call them like the terrible capitalists because so many of them want to pull the ladder up behind them and say, oh, we're in late stage capitalism, or there's something where there's a different version.

There's no different version of freedom, choice, transparency, and property rights.

It just is what it is.

There is no version of that.

We've just moved further away.

And you're telling us that we should continue to move towards central planning because you know that it's going to benefit you.

And I go back to the concept of monetary policy.

Us going off the gold standard

and then the

changes in terms of the Fed's reaction, that has just like exponentially grown the capital base, which means the differential just by compounding is becomes bigger, which means that those big companies become more powerful and better allies.

So it's kind of this like one-two punch.

And it's like anything else.

Like once you lose the key principle, everything starts to spiral out of control.

And so as we have started giving up small principles, they end up with these big consequences.

Little baby steps at first, but then somebody comes in and is like, oh, well, I think we should keep interest rates at zero for seven years.

Oh, yeah, that seems like a good idea.

We are.

This one's going to leave a mark.

This one's going to hurt.

And like, normally I'm so funny and such a delight to be around.

And I keep like, you know, talking about these things.

And I wish I had like this bright, shining, like, optimism.

But like, this is the reality.

And I think people need to educate themselves and understand these things that are intentionally opaque because only when they understand that can we move forward.

I mean, I don't know anybody who, like, like, there's no big call.

Like, call your representatives.

Tell them to reign in the Federal Reserve.

Like, have you heard anybody call for that?

But that's potentially one of the most important things that should be done.

By the way, I can relate to, I used to be funny, funny.

I went to a party, a friend of ours was having their 50th birthday party, and my wife, and

they were all finance people.

And

she said,

don't make anyone cry.

I'll try.

I'll try.

But it was somber.

They were asking questions because I see the world differently than the people who are trained to trust the system.

But I don't think that's the case anymore.

I think,

you know, when you look at these big companies and they are bashing America and they're bashing

their clients,

they're calling half of their clients racist, bigots, dangerous, et cetera.

That doesn't make any sense, any sense, unless you're playing for a different game and you're playing for a much larger market.

Yeah, and it's interesting because

I tried to do the gymnastics in my head too.

And these are supposed to be the smartest and sharpest people.

But if you're trying to get rid of small businesses, which are huge customers, if you're trying to take away wealth from these small guys, yeah, I get the fact that you're going to be the only ones left standing and that you're going to have the monopoly power, but nobody's going to have any money.

Like, we're going to destroy prosperity.

Like, we've seen how this works out in other countries, like, whether you're the UK or France or you're Venezuela or Cuba.

Like, we've seen how the options.

I still can't understand why they think that would be universal basic income.

Oh,

this has been a trial run.

This entire set of policies have been a trial run for universal basic income.

It is the most clear and obvious thing.

You know, stimulus checks under both administrations, the extended unemployment benefits,

the early child tax credit.

They are conditioning.

Don't go back to work.

Yeah, the government will be there to take care of you.

They're basically telling people there's no dignity in work.

They're killing that spirit.

They're conditioning them to think that work is a bad thing and the government is a good thing.

It's mind-boggling.

I have tried to think of,

I used to believe that people were just mistaken, or they had a different understanding, or maybe I was lacking some information.

And you could sit down and talk about it and you could figure it out because people are generally good and honest.

I don't believe that anymore.

Not at the highest levels.

I don't believe that they're just making mistakes.

You couldn't,

you, you, this couldn't happen happen by accident.

All of these things are

designed for a different

system entirely by the end.

You would know you can't take people out of school for two years.

You can't destroy small businesses and then beat them over the head with all kinds of new regulations.

You'll never get that spirit back.

We are being trained, and I'm afraid that we are,

I think there's a lot of people that are willing to go along with that, that are willing to go, why do it?

Why work?

Why work?

I mean, listen, in Illinois, if you're getting between all the different programs, $51,000 a year not to work, yeah, I mean, it's hard to blame them, you know, other than just the personal dignity of it.

But the whole concept of, you know, whether this is intentional or not is a really interesting one.

It's one I get a lot with the book.

And I tell people when they read it, like, I don't care if you think it's intentional or it's incompetence or just cannon fodder.

The outcomes are still going to be the same.

And that's the issue when you have central planning.

And

central planning is about human nature, as is capitalism.

If you think that greed exists, because this is something we hear right, it's like, if you really think that people are greedy, which by the way, they are, which is fine, capitalism, free choice, harnesses that greed to everybody's benefit.

Central planning pretends that it doesn't exist.

So I think there are a lot of people who buy into unicorns and fairies and think, ah, you know, this is all going to work out okay.

And because we don't have the economic literacy in this country, they can't even see those chess moves ahead.

Like they can't see the average person, oh, well, you know, we won't be able to make this up up or we'll get this person over.

Of course, people will go back to work.

Or my favorite one, they'll create art.

Oh, my gosh.

Thank you for remembering that.

Right.

I mean, it's like, I mean, we just disproved UBI, right?

We didn't have like a bunch of banksies that were coming out of 2020, right?

So we know that that's not the case, but there are lots of people.

because we've had it so good for so long in this country that just believe everything's going to continue along at that pace and people are mostly good, and unicorns, and fairies, and we need to take care of things.

And I'm all for good intentions.

Like, I think it's great that people want to do these things, but they have to understand that good intentions don't lead to good outcomes.

And when you don't understand economics, that can create severe disaster.

I mean, even just the discussions around minimum wage and the like,

Everyone I know wants people to get paid as much as the market will bear.

People want people to pay well.

They want them to get in the game, but they don't want people to pay $23 for a slice of pizza and have that wage raise not be meaningful because your dollar is worth less.

People don't understand the concept that your dollar is worth less, and that begets the problem.

So let's talk about the dollar being worth less.

You mentioned cryptocurrency.

They are doing everything they can to kill cryptocurrency.

I thought it was more safe because some of the big boys got into play.

But

Yellen is not helping the cryptocurrency world.

And, you know, in their own documents, they are looking at a DUSD, a digital US dollar.

First of all, do you think crypto

remains and grows or do you think

the governments of the world are going to just choke it to death?

Yeah, this is a great intellectual exercise.

I think cryptocurrency is fascinating.

The reason it got so many people to buy into it is because there are enough people who see what you and I have just been talking about and what the governments and cahoots with the Federal Reserve has been doing to the dollar and to our monetary system.

And so that's been a driving force in terms of it.

As well as I think another part of it is

seeing the writing on the wall wall of

tracking and controlling every aspect of your life.

It's a great, excellent, excellent point.

Yes.

And that's the difference between a cryptocurrency, which is transparent on the blockchain and is not owned by any entity

versus a digital currency, which is

tracking 101.

In fact, China said that they have their own digital currency that might expire after a certain amount of time.

Like, we'll give you some dollars, but three months late, I mean, yeah.

So having them be able to take the money away is like a whole other permutation.

So when I look at cryptocurrency, you have to look at the currency aspect of it as well as sort of the asset side of it as an alternative asset.

So when you think about crypto or think about currency, a unit account of account, a medium of exchange, a measure of value, a store value, it's not there yet, right?

We're still talking about things in dollars.

It's still pretty clunky to exchange.

I will have crypto people argue that it's a great store of value because it keeps going up, but the volatility implies that it hasn't quite found its place yet there.

So I think as a currency, all the things we've been talking about, the people who are in charge of the monetary system do not want to give up that power and they will do everything that they can as a currency to make this

cryptocurrency not be something that

people go to and use as a medium of exchange.

However, then there is the asset side, which is kind of like

collectibles,

wine, art,

beanie babies, anything like that.

And pretty much everything that we have is just a social contract, right?

If you think about gold, it's a long-term social contract.

We've ascribed some value to it.

We all agree that there's some store of value, which is why we used it for so long to back the dollar.

Its useful value is a fraction of its current market cap.

But socially, we've kind of all said, okay, this has some value and we think it's going to have some value.

And that's what people do with art.

And that's, you know, like, why is like a splatter paint on a piece of paper from Jackson Pollock worth millions?

And I spill on a piece of paper and it's not worth anything.

Social contracts, just what we've decided.

So there are a bunch of people who've decided today that there's a social contract around cryptocurrency, Bitcoin being the leader, and as well as some others, and some just for fun.

And do I think that something like that will continue?

I think it's very possible.

It's very nascent.

But you know, from a decentralization, they have a weird problem that you've alluded to, that a lot of the concentration of the ones that exist right now are held by a handful of people, which means a handful of people move markets, which means it doesn't quite look like a free market.

So does that mean a different one comes into play?

I mean, this is like so early on.

Like imagine us talking, having this conversation about the internet, right?

Like 25, 30 years ago.

And you'd be like, yeah, like, I don't know, like social media, yeah, I don't know.

So I think there's a good possibility that there's a social contract around something digital that people agree has some value.

Which one of these things it is, I couldn't tell you, but it's a fascinating story.

So I just look at what

the Federal Reserve and what the federal government is doing now.

You know, the Federal Reserve is looking into a digital U.S.

dollar.

They already have the plans to open a bank account in every Fed bank.

Well, at least we'll know who the Fed banks are.

But

and everybody will have one, and you just go pick up your cryptocurrency.

They'll put cash in it at the beginning.

And

the

fact that we have ESGs becoming a reality,

the

who was it?

The federal government just said, oh, it's Elizabeth Warren's little thing in the Treasury Department, consumer protection.

They now want to take on credit ratings.

The government giving credit ratings is the scariest thing I think I've heard.

And we've seen in

China this concept of social credits.

And there is a lot of concern

that the rhetoric that we're hearing and the actual fundamental steps, as you've laid out, is leading to that.

And if you think that platforming is bad now, imagine when the government has a digital currency and you can only transact

with that and they can manage every move that you make.

I mean, we've seen what they've done to other countries.

They certainly could do that to individuals.

We know they have no qualms in terms of overstepping their bounds and stepping on our individual rights.

So, you know, you as an individual should really hope that cash sticks around for as long as possible.

Yeah.

Yeah.

It's it's very and it's not just reporting to the IRS tips.

It goes much further than that.

But this concept, and it goes back to the broader discussion we're having around central planning and wanting to have a few people who are making these decisions and controlling everything.

I mean, social credit is

terrifying.

Terrifying.

Terrifying.

I know you talk about inflation, stagflation, and hyperinflation.

Can you explain those

to people?

And

when you think of printing this much money,

I mean,

we've printed more in the last 18 months than I think we've printed, you know, in the run.

Yeah.

You would think that that's going to go to hyperinflation because that's what happened in Zimbabwe, that's what happened in Germany.

But that's not necessarily what's going to happen.

Explain the three of them and

what they all look like.

So in terms of inflation, it's when you have more dollars that are chasing the same amount of goods and services.

So it inflates their prices.

It means that you're paying more to get the same goods and services.

So in effect, on the flip side of that, each dollar that you have becomes worth less.

And that is usually an impact of monetary policy, although in this particular case with government stimulus and adding to the money supply in that way, at the same time as crazy monetary policy, that's something that we can see.

So the easy way for you to see inflation is have you been to the grocery store lately?

Are things costing more?

Or what we're seeing with shrinkflation, that you're actually getting, it's the same headline price, but you're getting a smaller box or fewer items or whatnot.

Aaron Trevor Aaron Trevor Burrus, and you can see see that direct relationship in housing or lumber or drying a piece of plywood.

It's not necessarily that there's a shortage of plywood.

There's just so many people with money that want to buy plywood right now.

Right.

So you've got all of this money that's out there chasing and the money supply right now is just at historic levels.

It's insane, as we talked about, because they're creating dollars out of nowhere.

And I should mention is that that's sort of a distinction between monetary policy and just capitalism.

It's not like we've grown the economy and that means that we've created more value.

No, we've just pumped more money into the same economy.

So that drives up prices and that becomes inflation.

And the big words that you're hearing now is whether that is transitory or not.

Explain.

Transitory means short-term in nature.

Oh, it's just a blip because of COVID.

And certainly elements of the supply chain, the fact that you've got shipping containers that know, are stuck all over the world.

And now it costs, you know, four times as much to ship something as it did a year ago.

Maybe that normalizes.

But I would contend on the wage front, you've got 9.2 million jobs left to be filled.

If you have to continually put out higher wages to attract people, it's not like you're going back from that.

It's not like, well, we paid this guy $20, but like you that are coming in, like, we're going to pay you $12.

Maybe it happens.

I just don't really see that.

And how does Target?

I just read today.

Target is saying they will pay for your college and your books if you work at Target.

Yeah.

Well,

okay.

What happened?

Where are you getting that money?

I mean, that's obviously going to be passed on.

Passed on.

So that's the thing.

Price of whatever they're selling.

Everything always gets passed on to somebody.

It gets passed on either to the vendors, who are usually a small business, right?

Well, sorry, we're not going to pay you as much for this.

You're going to have to bear some of the costs.

It gets passed on to the consumer, some combination of that, but the company still wants to make its profits.

And so it's going to do everything that it can, or you're going to get smaller portions, as we said, stringflation.

So that becomes the inflation piece.

And a lot of times that happens, you know, not just with monetary policy, but it's also accompanied by growth in the economy.

Stagflation is something that's sort of a rare occurrence that happens.

It happened, I think, last late 70s, early 80s.

And it's where you get this inflation in terms of wages and prices.

At the same time, the economy stagnates.

Stagnation and inflation, stagflation, right?

And given the fiscal policy that is coming out of the Biden administration and the amount of things that they want to do, the killing of small businesses, half the economy, the disruption of the labor force, the disruption of supply chains, I don't see anything that's a pro-growth policy that we're all of a sudden going to have this great growth.

They will tell you that there is growth because there was such a fall off a cliff last year that we are making up the difference.

But that's making up the difference.

That's not growth is going back to 2019 and saying, like, did we get more?

Right.

I mean, this whole thing.

It's like saying that somebody.

Wait, we added jobs.

No, we didn't.

Yeah, no, we didn't.

We're still down like, you know, what they missed.

I know his heartbeat is 12 now, but that's not good.

Yeah, so they're going to say that there's growth, but the reality is when you get a real slowing of growth and you get that stagnation and inflation happening together because of the monetary policy and all the cash that's in the system, I think that's a very likely scenario that happens at least in the...

12 to 18 months.

And why does that happen?

You have the money,

but

why don't things grow?

Because of the fiscal policy that comes out of the administration.

They're tamping down on growth.

Yeah, they're looking to raise taxes.

They're looking to hurt small businesses.

They're keeping people out of the workforce.

They're forcing up wages in a way that isn't productive to pursuing growth because it's not based on our free choice.

It's based on

a couple of people going, oh, yeah, that seems like a good idea.

So I think in the short term, that's a possibility.

And again, there are so many variables that change every day that...

what causes hyperinflation?

So, hyperinflation is what we talked about when there's just so much printing that

the dollar or the currency that you're printing has no value anymore.

And it's like, why, if you go on eBay, you can get like a trillion-dollar Zimbabwe dollar

that was worth like nothing.

And we saw that happen in Venezuela.

And it's a really good study because, you know, in the mid-1900s, you had Venezuela as the fifth largest economy in the entire world.

And then you saw between the decrease in economic growth because they nationalized all the industry.

And so growth was decreasing.

And to make up for that, they just started printing more money.

And

the whole thing ends up, you know, where a dollar isn't worth anything or their own currency isn't worth anything.

So that's, you know, one of the things that we could see happen here.

But again, given the fact that we are the reserve currency, we've got the market priced in dollars, we have the IRS collecting trillions of dollars in dollars, we do have some forces that may, at least for some period of time, call that back.

The issue that we're facing, and this will be interesting to see how it all plays out and interesting in not a good way.

And part of the reason why the Federal Reserve hasn't raised interest rates is they've gone away from their mandates.

So their mandate from Congress is two things.

One is to maximize employment.

Obviously, we can't get people back to work.

No monetary policy is going to get those people back to work.

So that's silly.

So the other part is to stabilize prices.

Well, obviously, we're seeing inflation.

They're not doing a good job at that.

And that's where they're getting cover of, well,

that may be, but we don't have maximum inflation.

So we're going to continue to intervene and whatnot.

And they're looking for anything they can to try to not raise interest rates, to try to control some of this inflation.

And you have to ask yourself, like, why would they do that?

Well, they have what I call a secret mandate.

And their secret mandate, which is different than the dual mandate, is one to prop up Wall Street because that's where all their buddies are, and to keep that as high as possible.

And as soon as we start raising interest rates, you're going to see.

the market do the opposite.

And you've seen that every time they've tried to raise interest rates or start tapering on their balance sheet, it's called the taper tantrum.

The market does not like it.

And, you know, so right now they're trying to keep that as high as possible.

The bigger issue is that basically they have been monetizing the debt of the government and allowing the government to continue to spend.

When we had all of this COVID relief that we needed to put out there, we had to pay for it.

We had to issue debt.

It's not like all these, there's these investors around the world like, oh, I'm clamoring to buy up trillions of debt.

So the Federal Reserve is the buyer of that debt.

And we have at this point close to

almost $30 trillion of debt outstanding, $28.6, something like that.

They know what's going to happen is when they raise interest rates, then the rate that we're going to have to pay to service the interest on their debt, on the debt that we have outstanding, is going to continue to crowd out other spending.

And they know they can't pay for it.

So that's the reason why the Federal Reserve refuses to act because they know if the interest rates keep going up, how is our government going to service that debt?

We can't without just completely either taxing everybody at like insane amounts, which I still don't even think it would basically cover what we need to have covered,

or cutting out other spending.

And you know how well that goes over.

So they're really between a rock and a hard place.

And that's, you're going to look for that point in time when the Federal Reserve starts saying like, we've got to do something,

that's when everybody should go, okay, like, what's going to happen with markets?

What's going to happen with government?

What's going to happen?

Is there going to be a war because we need to, you know, have a distraction?

I mean, again, not to be consumer, conspiracy, conspiratorial, but this is the kind of thing that happens over and over again.

Yeah, over and over again.

You know,

borders are redrawn, currencies are, you know, new alliances are made because of war.

And sometimes it's real and sometimes it's just convenient.

Let me go back to small business here because your book is the war on small business.

My dad was an entrepreneur.

He was a small businessman, you know, not very successful, ran his own bakery, but it was good enough for the family.

You know, it just made ends meet and he was good at it and loved it.

So he lived the American dream.

You know, I don't know.

I'm a small businessman.

I run this.

Yes.

And

it's not friendly to do business right now.

And it is terrifying.

For the first time in my life, I'm not sure how my career is going to end.

I'm not sure that it's, it's not going to, it may not come to a natural end.

You know what I mean?

Where before it was like, I'll make a mistake or I'll, you know, whatever.

Now it's, I could just be deemed a loser and I'm out.

With the government pushing pushing unions, good union jobs, this is

devastating, devastating to the small business.

It is.

There's a piece of legislation they're pushing.

And I saw on Twitter today, they're trying to tie it to like

everything, ESG, automakers, everything.

It's called the PRO Act.

And it takes the language that AB5 used in California to basically kill the gig economy and say everybody needs to be a worker and work for a union, basically.

And so we have 59 million jobs that are in the gig economy.

And then you have small businesses, which, because it is so cumbersome for a small business to hire their first employee before COVID, of the 30.2 million small businesses I told you, 24.2 million were solopreneurs because they just use contractors for their businesses or act on an individual basis because it is so hard.

The government has put up so many barriers to have that first employee.

And it's not just the minimum wage, it's insurance requirements, it's all different kinds of regulations.

So it is very difficult.

So this is just another piece of legislation that is meant to help big businesses and to hurt small businesses.

Like the Dodd-Frank, it sounds great.

It sounds like we're coming after Amazon and Walmart.

We're going to stick it to the big guys.

Oh, yeah.

But

I didn't see any exemption for

small gig workers or for small businesses.

No.

And there was no, I don't know why I could go to Home Depot, but I couldn't go to my local Ace hardware.

Or why your dog could get its hair cut and its nails done at PetSmart, but you couldn't get your own hair and nails done at the local nail salon.

It's a scary time.

It is.

Scary time.

Thank you for your honesty.

Thank you for all of your hard work and

for being awake.

You know, I think that

there are so many people that are

bluepilling it right now or just can't seem to wake up.

And it seems the people who are awake are like,

why isn't everybody seeing this?

You know what I mean?

I don't know what's coming.

I just know it's not good, whatever it is.

It's not good.

So thank you for the work you've done.

Thank you.

Thanks for this platform and for being a small business warrior and a champion of economic freedom.

You know, that is our path to prosperity.

We need more people on that side.

Yeah, we do.

Thank you.

Just a reminder, I'd love you to rate and subscribe to the podcast and pass this on to a friend so it can be discovered by other people.