Daily Bell: Thanks for sitting down with us again.
Sheldon Richman: My pleasure.
Daily Bell: Let's go over some of your current responsibilities. You are vice president at The Future of Freedom Foundation and editor of FFF's monthly, Future of Freedom journal, a research fellow at The Independent Institute, chairman of the board of trustees and a member of the advisory panel for the Center for a Stateless Society. and your own blog is at Free Association.
Sheldon Richman: Nothing new there – just trying to keep a lot of balls in the air at the same time.
Daily Bell: You have numerous specialties and have written on taxes, foreign policy and education among myriad other topics but first, tell us about health care. What's your position on the failed Obamacare rollout?
Sheldon Richman: I think it's doing exactly what we free-market advocates predicted, that there were bound to be numerous problems. I think the website rollout problems are actually the least of the problems because they are potentially fixable. You can fix a website. What are not fixable are the core flaws in Obamacare and there's no way to repair that.
The reason it's a problem is that the whole setup was supposed to expand the demand for medical care – that's what it means when you basically give people medical insurance – so you're going to expand demand, which we know from economics will force prices to go higher. They promised to bend the cost curve down because in the medical area inflation has outpaced the general rise in prices every year, and that cost increase is going to cost the government a lot of money because the government through Medicare and Medicaid and the Veterans Administration buys a lot of medical care. It's crushing the budget. If they don't do something I think in the next decade the whole budget will go toward Medicare, Medicaid, Social Security, and interest on the debt. They won't have a penny left over for anything else.
The politicians are in a panic over that. They don't want that. There won't be any money for anything else. How can they do all the crazy things they want to do if all the money's going toward medical care, Social Security and interest? So they think they can fix this by this ridiculous contraption called Obamacare. They think they can bend the cost curve downwards, stop that inflation in the cost of medical services. They're going to end up rationing. They're going to find out that's the only way to do this, and that's beginning to happen. In an effort to keep the cost of health insurance down – because the Department of Health and Human Services is putting the screws to the insurance companies – the insurance companies are setting up networks that are very narrow. They exclude a lot of doctors and hospitals. So if you go on one of these exchanges to buy a plan and you're buying, say, a Bronze plan, which is the lowest, cheapest level, you may find out that the doctor you like is not in the network.
Daily Bell: Are there any redeeming factors to the legislation?
Sheldon Richman: I don't know of any except that I hope it will illustrate to the American people what a mess the government can make of something. Maybe that's a redeeming feature, though I don't think they intended that.
Daily Bell: Was the Supreme Court accurate in calling the consequence of not buying medical coverage a tax? Is it a constitutional law?
Sheldon Richman: I don't know how to answer that question because I don't know what it means to be accurate. It seems to me the Constitution allows a lot of wiggle room. We have this idea that the Constitution was written in a way that settles all these issues, that all we have to do is read the text and we'll know the answer. I don't think that's how constitutions work. There's always plenty of room for interpretation. So I don't think there's a right answer. I don't put confidence in constitutional challenges.
When it's convenient they call it a tax and when that's not convenient they call it a penalty. I know the administration is calling it at tax and, in fact, recently said there's not even an insurance mandate. You know, businesses next year are going to have to provide insurance for their full-time employees, and that was delayed a year. That is known as the mandate, the employer mandate, and those in the Obama administration said, "Well, look, it's not a mandate. It's not a legal mandate. There are two legal options. Number one, provide the insurance. Number two, don't provide the insurance but pay the tax. Those are two perfectly legal options." So they don't want to call them mandates. But you have to pay a tax if you don't provide the insurance. It's Humpty-Dumpty, who said words mean what he wants them to mean.
Daily Bell: We noted Mexico now has a single-payer system and that Obamacare is surely intended to force people into the same sort of mold sooner or later. Is this sort of legislation a precursor to a North American Union, which would include mergers of Mexico, the US and Canada?
Sheldon Richman: I don't know. I don't know if they intend to push us into single-payer. That might have been on some people's minds but for the other people it wasn't. It's hard to say what any given individual intended. It seems to have that logic.
But I don't think there's some grand plan for a North American Union. I certainly would favor a free-trade union but not the kind of free-trade agreements we typically have, where the government is involved and makes various exceptions for special interests.
I think people should be able to cross those borders at will, do with their capital as they will, and there should no be restrictions. If that creates a North American Union then I'm in favor of it. I think if government was not involved then those borders would become useless. They're accidents of history.
Daily Bell: Let's talk about the "war on terror" and the wars the US is involved in or fomenting at this point. What are hot topics right now?
Sheldon Richman: I think the war on terror is just an idiotic phrase in the first place from the Bush administration. Who has a war on terror? Terror is at most just a tactic, so how do you have a war on a tactic? It didn't make any sense to begin with. This was after 9/11, those horrendous attacks that took place, but history did not begin on 9/11.
The US government was not minding its own business on that day, and this attack comes out of the blue. There's a long history there. It goes back through many decades of the US coercively intervening in the Middle East, in Muslim countries, supporting dictators who were corrupt, repressive monarchs like in Saudi Arabia who do terrible things to the peoples of those countries. And then we add to that the support for Israel and its brutality over the Palestinians. The US government has done a huge amount over many, many years to make people hate the United States of America and that culminated, I believe, on 9/11. People have warned about it over the years before that, in the 1990s, and then of course, there were events in the 1990s. There was an attack on the World Trade Center in 1993. It was a truck bomb. It didn't take a lot of lives and it didn't bring down the buildings and so it got kind of forgotten. But this was not a bolt out of the blue.
I agree with what Ron Paul was saying in his campaign in 2008 and again in 2011/12 that this is the result of America's foreign policy. So the proper response was not the war on terror, whatever that means. It was changing America's interventionist foreign policy that makes people bent on revenge against Americans or America. And that's not what we got, of course. The government went in and is still in Afghanistan, which is still very violent after more than 12 years there. It's a still very violent place run by a corrupt dictator that the US helped install through a rigged election.
In Iraq there is now a huge upsurge in violence with al Qaeda very active. The funny thing is we supposedly went in to erase al Qaeda from Afghanistan and all we did was help spread al Qaeda. Al Qaeda is now in Iraq, Syria, Mali, in Somalia, in Yemen; we've helped spread it like a dandelion that we blew on and now it's flown all over the place. So it's been a total failure. Well, it's been a failure for the American people but not been a failure really from the point of view of policy-makers who like doing this stuff and also the military-industrial complex, which makes a huge amount of money off of it.
Daily Bell: Where do you see that going next?
Sheldon Richman: I don't know. I guess in Iraq there's no public appetite to get back involved in it, so even though John McCain and Lindsey Graham are complaining that we should be doing more, I guess the US government won't do a whole lot more. They may send some drones, which I think is wrong. I do not think they should do that. But I don't think the troops will be reintroduced in Iraq.
In Afghanistan, the Obama administration is trying to get the Karzai admin to let American troops stay as late as 2024 and beyond. Obama promised they were going to be out before the end of 2014, this year, but they're negotiating. They're trying to get Karzai to accept an agreement to let US troops remain there, a smaller number than there is now but still a number of troops, to stay there beyond 2024. Karzai doesn't seem to want to do it, which I'm very happy about. He's expressed the desire for the US government should leave.
Daily Bell: Last time we talked you stated, "American foreign policy has been in the hands of people who think the world would be unacceptably disorderly if America were not the de facto global government. This policy also happens to make some people very rich." Lately you've been writing much on American foreign policy. Are the same people in charge now? Do you see any changes – for better or worse – on the horizon?
Sheldon Richman: It is the same people. The military-industrial complex is large and pervasive, and it does very well off this stuff. And of course, they will lobby for various interventions. I don't think that's the only thing pushing it or maybe even the major thing pushing it. I think a good deal of the push comes from something that seems much more petty. Namely, from the president on down you have a lot of people who want to "make a difference." They think, "This is good for my career, my legacy, prestige," and they will not pull out because, "Gosh, what would I do then? If we didn't have some grand policy, what good is my life?" There are people who think that way and it sounds trivial but I think that's a very big reason for why the US gets involved in places.
Look, judging by these results, they seem to have absolutely no idea what they're doing. There's no way they understand the complexity of Afghan society if they think they can go in and remake it. Afghanistan essentially is a place that empires go to die. The British got thrown out two or three times, the Russians got thrown out, the Soviet Union. What made these arrogant policymakers, both from the Bush administration and then later under the Obama administration, think they can go in and change this place? These people don't like foreign invaders, and they will make the invaders' lives hell until they leave. What did Obama think he'd do? So it is the same people, and there are still people making a huge amount of money off it.
Daily Bell: What could cause that to change?
Sheldon Richman: Well, we could have a budget crisis in America. That may cause them to pull back. I don't think we'll be seeing troops dispatched to any new places because it is so expensive and the budget is in such a mess, so they're turning to things like drones and more covert operations that are less expensive and are not as visible to the public. The public doesn't support it either, sending troops. Look what happened when Obama wanted to do missile strikes on Syria. The public rose up and said, "No. Do not do this." That was a shining moment in recent American history, and Obama had to back down. The American people don't want to go to war. So it may taper off somewhere because of that, but I still think there's lots of special ops and covert involvement that we'll learn about when some very courageous whistleblower leaks it to an investigative reporter. So I don't think there's going to be any interventions with troops for the foreseeable future because the people don't like it and the budget just isn't there.
But the only way we're going to get a really fundamental change is if the people just say to the people in government, "Enough is enough. Bring the troops home, close down the empire, and let's just be a normal country for a change."
Daily Bell: Let's talk about whistleblowers, especially as you've been writing about that lately. What positive results that we've seen or would hope to see from whistleblowers coming forward, often sacrificing their lives or liberty to get this information out there?
Sheldon Richman: We can use Edward Snowden as an example and look at his courageous actions. We know a lot more about what the NSA is doing than we knew before that. There was plenty of suspicion that the NSA was doing things like this, and a couple members of the Senate, like Ron Wyden, tried to hint at it. He knew of stuff because he's on one of the relevant committees, but he's not allowed to talk about it so he had to try to imply it, with blinking eyes or something, to signal to us that bad stuff's going on. Because of Snowden we have a huge amount of details now and more to come. I'm not sure what public opinion polls are showing but it's been enough to force Obama to at least say he's going to modify what the NSA is up to. I think that's going to be cosmetic. I doubt they're really going to change things very much. It will look different, and he'll create some board that will be watching over our privacy. Yeah. I have a lot of confidence in that. I'm being totally sarcastic here. I have no confidence in it. So I think it's going to be purely cosmetic. I've heard Obama and other people say, "It's good that we're having this debate. It's healthy to have this debate in a democratic society." Well, we wouldn't be having the debate if it wasn't for Snowden breaking an unjust law. Under the old natural law philosophy there's no obligation to obey an unjust law. So all this discussion of whether he's a traitor or a lawbreaker is nonsense. There's no obligation to obey an unjust law.
Daily Bell: What do you see as beneficial actions individuals can take to support or protect whistleblowers after they've come forward and are under attack, or to encourage more to come forward with their information – a way to say, "Thank you and we're going to stand by you"? There have been many examples of courageous whistleblowers in history, other than Manning and Snowden, who've made public significant information, though most Americans don't know their names.
Sheldon Richman: Exactly. That's an interesting question because there's a limit to what "the people" can do. I'm not one who has a lot of confidence in elections. Any one person has only one vote, and one vote doesn't have any clout. It's one drop in an ocean. So that doesn't inspire much confidence in me.
I suppose people could set up organizations and make public demonstrations about how they support Snowden and Manning and that would maybe encourage other people, but the laws are still on the books. You see Manning could spend 35 years in prison, and Snowden can't come home. The consequences are very serious, which just makes them all the more heroic, these people who do this. I don't know exactly what people could do to encourage more whistleblowers.
Daily Bell: Let's move on to central banking and Janet Yellen at the Fed. Is central banking verging on course to not survive another decade?
Sheldon Richman: I don't think I buy the prediction that it won't last another decade. I think they do have a way of sort of muddling through. That doesn't mean it will be great, but I'm not one of these people who think there's a crisis immediately on the horizon, that the dollar's going to collapse and there's going to be national turmoil. I just don't see that, actually. I think it's more likely that the government will decide to repudiate the debt. But I'm no fan of central banking. I think it's a detriment . If we had a free market we certainly would not need a central bank because money is a natural feature of the market and the government does not need to tend to it or to get it just right. In fact, there's a hubris there and arrogance. There's a pretense of knowledge, as Hayek would put it. The people running the central bank don't know what they would need to know to do the job. They don't know how much money there should be in the economy. They don't know what interest rates should be, and I don't even think they really have the control that they claim to have. I don't think they set interest rates. I think the economy's much too large. We're really part of a world economy. I think it's a mistake.
But they have messed things up. As my friend Jeffrey Hummel has said – he's a professor at San Jose State, an economist and specialist in money and banking – the Fed since 2008 and the recession has moved into a new role that is very bad and very dangerous, which is allocating capital to particular industries. They couldn't do this before. This is really a new area, and they've become a central planner in the allocation of capital. That's an outrageous step for a supposedly free economy.
Daily Bell: Is the US economy "recovering"? What would be necessary to make it so?
Sheldon Richman: I guess it depends on what you're looking at. It doesn't seem terribly impressive. The ratio of people working to the population is historically low, certainly the labor-participation rate is very low and hasn't recovered very well from where it was before the recession. So it's been a jobless recovery, if you want to call it a recovery.
Of course, the stock market's doing well. There have been policies maybe to encourage people to go into the stock markets, but that's not necessarily good for the whole economy or for all the people who are still not finding jobs, especially lower skilled people. That plus the minimum wage and other things keep them locked in a pretty bad situation.
I don't know that this deserves to be named a recovery. I think the lesson is that governments get us into recessions – it's not some natural marketplace phenomenon – and governments can't get us out of recessions except in this way: Stand aside, strip away all the encumbrances on the economy, on people, and let them be free to produce and trade and engage in all these cooperative activities. Instead, the politicians have done quite the opposite. It started under Bush and then all through Obama, who has done a multitude of things to make things worse – Obamacare, Dodd-Frank financial overhaul, stimulus spending, all kinds of stuff. It's the very opposite.
They're actually trying to re-inflate the housing bubble. The government inflated the housing bubble beginning in the '90s and all the way up to 2008 or so, and then it all came crashing down. They think the solution is to get us back before the crash. In other words, blow up the bubble again and get the game back as it was. Well, there's a problem with that: It crashed! So why do you want to start it up again? They don't understand. They think government is at the center of the universe and that if it wasn't doing all these things, we would just be adrift and we wouldn't know what we were doing – we'd be wandering around in the dark. Well, they're the ones wandering around in the dark. They don't know what to do.
Daily Bell: Speaking of Bush and Obama, what will history think of them? Why did these presidents perform so badly?
Sheldon Richman: I don't know if history thinks anything of people. Historians think things about people of the past, and other people think things about people in the past. Most historians tend to be statists in the Democratic wing. They are locked into this religion and ideology of the almighty state. So they will look back on Obama and say he tried his best; any bad consequences weren't his fault; they were someone else's fault. If they don't like Bush for one reason or another, they'll find a reason to blame Bush. So I don't put a whole lot of stock in what history's going to say about us because, again, history doesn't do the judging; individuals do.
Daily Bell: How do you see alternative political movements doing? What about the Tea Party? Is that destined to be a more powerful force or will it peter out?
Sheldon Richman: When you say alternative, I'm not sure how alternative the Tea Party group really is. It's a very mixed bag. Occasionally some of the Tea Party people also promote some good change but they endorse a lot of bad stuff, too. They say they're for cutting government spending but then they say, "No, don't cut my Social Security or don't cut this, don't cut that. Cut somebody else's stuff." So that's just the same old story. They're all for cuts until it's something that affects them. I know recent polls show that about half the people who identify as Tea Partiers favor raising the minimum wage. Well, free market people have been pointing out for decades that the minimum wage prices workers out of the market place. They can't get jobs or the jobs are degraded or worse in order to pay the higher wage. Employers have to subtract the wage increase from something else. Not only shouldn't the minimum wage be raised, but the minimum wage should be repealed – along with a lot of other things; that's not the only thing I would say.
So I don't have a lot of conference in the Tea Party. Where do they stand on foreign policy? I don't hear them making a lot of noise about foreign intervention. Some of their favorite political figures, Rand Paul and some others, I don't see them taking consistently small-government positions. Rand Paul might favor the sanctions on Iran. I think these sanctions on Iran are a terrible thing, economic warfare, which will lead to a war with Iran – a very bad thing and yet here he is pandering to the hawks and the pro-Israel lobby, saying that he might sign onto the sanctions bill. And he's considered one of the top Tea Party types. Ted Cruz, another favorite of the Tea Party, I see he is blaming Obama for not cracking down on Colorado and Washington for legalizing marijuana. I thought he was a Tenth Amendment, federalist, states-rights guy, and yet he wants Washington to crack down on those states because the people there voted to legalize marijuana. That's not for freedom.
Daily Bell: What happens to these people who start out being "state's rights" guys who then so change their tune?
Sheldon Richman: I think it's a political stance. They calculate what buttons to push to win an election, and so they work this into speeches and get a reputation for being for decentralized power, federalism, or whatever terms we throw out. I don't think states have rights but I am for decentralizing power. Concentration power at the center is always a bad idea. And so I don't think it's any strongly held position. I think it's a posture in order to make a career, to carve out a niche and create an identity. But it doesn't reflect some deeply held policy, and I think you see that in Rand Paul and Cruz and others.
Daily Bell: Are there places in the world where a decentralized power model is working, or where they seem to be moving more toward this?
Sheldon Richman: Not that I know of. In terms of formal decentralization, that would be the case of Switzerland, where the central government is fairly small and quite limited, and the action is at the canton level, the state level. But that doesn't mean that those governments are limited. It's hardly a libertarian vision. I think we could point out that decentralization is a good aspect of it but that hasn't kept them from engaging in intervention. At least they don't get into foreign intervention, and that's something we should model ourselves after.
But no. I can't think of a place that fits the description, which isn't too surprising because there's always going to be jockeying for power. People have pointed out for ages that there are two ways to get wealth: You can work for it, create things, and then trade them to other people and earn wealth that way. Or you can expropriate the fruits of other people's labor through the political means. And there's always a temptation to use the government to steal from other people. That's always going to happen, and that's why you see it in every country. It's not real surprising that we don't see a truly free society because the temptations are too great to get your hands on power and expropriate the fruits of other people's labor.
Daily Bell: What about some of the new monetary developments? Any thoughts about bitcoin?
Sheldon Richman: I don't regard myself as a money expert, and so I don't know a lot to say about bitcoin. It's certainly very interesting, and it certainly bears watching. I've always been of the view, which I get from Ludwig von Mises and the Austrian economists, that a money has to be a commodity that's useful in its own right before it's a money. Gold had various uses before it became widely accepted as money. If you just try to create a money out of thin air, which bitcoin seems to be, the question is why would anyone take it in exchange? How do you know it's going to be good tomorrow? So bitcoin at the moment seems to be going against that logic, and I don't truly understand it. I'm in a position now of reading what other people have to say about it in order to try to sort it out. I certainly believe in competition in currency – Hayek was an advocate of that – and also denationalization of money and free banking. So we'll see what happens.
Daily Bell: Any thoughts on the continued dollar upsurge against gold and silver?
Sheldon Richman: We don't see people fleeing the dollar so that goes back to my point about the Feds muddling through. There hasn't been a huge amount of price inflation so even though the Feds are buying government Treasury bills and also mortgage-backed securities from banks. The money's not getting out into the marketplace. The banks are actually keeping it in their Federal Reserve accounts because the Fed is paying interest and also because there's not much demand from businesses to borrow money. And the banks are also nervous because of uncertainty from new laws.
People aren't fleeing the dollar, and I certainly don't see signs of panic.
Daily Bell: That's an interesting point. Why don't we see signs of more panic among Americans in general, given everything going on?
Sheldon Richman: Well, they're not seeing the signs that would induce it. Prices aren't moving into a hyperinflation so people don't believe that the purchasing power of the dollar is vanishing rapidly before their eyes. And then you also have to compare things. What's the alternative? The alternatives don't look more attractive so people are still lending to the US government, people are still accepting the dollar. I can still go out in the street and go to the store and they're taking dollars, and I don't notice anything. It's not like the German hyperinflation, where by the hour prices were rising. So people don't feel there's a need to take any drastic action.
Daily Bell: Any updates on global warming and scarcity threats in general. Last time you were skeptical. Carbon capture doesn't seem very effective to us.
Sheldon Richman: I still remain a skeptic because of things I read. For example, for the last 15 years the temperatures are essentially flat. They haven't been rising. And I read also from people who have credentials in this area – Judith Curry is one person – who point out that there are places where the ice sheets are expanding or growing and where polar bear populations are increasing, not shrinking. So you have all these indicators that would seem to be are hard to fit into the catastrophic manmade global warming theory.
So I would certainly be against the government spending millions and millions of dollars to address this issue when, first of all, it's not clear that it's happening and that what change is happening may well be natural – they say we've been coming out of a little ice age for hundreds of years and so the warming is perfectly explainable that way. And so I can see no reason for the government spending millions or trillions of dollars on this, which obviously would all be wasted anyway – the government doesn't know what to do with it.
Daily Bell: What about the theory that this whole meme is about carbon credits and controlling energy supply to people?
Sheldon Richman: I'm not up on the details of that, but look: I have no doubt that when there's talk in Washington about passing new laws to regulate carbon or taxation or trading carbon credits, you're going to get what the economists call "rent seeking." People are going to say, "There's an opportunity for me here. I'd better get in there and help shape the legislation because I can sell my goods or I can get in on this and engage in some speculation and make a profit." That's an ever-present feature of government policymaking, and to act like that's not happening, as some of the environmentalists seem to do, is really naive. We know these things will be exploited and shaped in such a way that some people make huge profits. That's no surprise; that's just human nature. Given an opportunity, people will take it.
Daily Bell: Last time we talked you were excited by joint appearances of Ralph Nader and Ron Paul. You called it a "convergence beginning to take shape between people over the issue of corporatism and empire." Any thoughts on that more recently?
Sheldon Richman: I don't see anything big happening. That was very flashy because CNN and some other channels put those guys on together and they were talking about all their common ground. I wish there was more discussion of that. There's certainly a lot of contact between libertarians and individual radicals on the left who have the same overlapping interests as Ron Paul and Nader did.
There haven't been big conferences or things like that. There's just more micro things. For example, there's the website Counterpunch that was run by the late Alex Cockburn, the very well known lefty and radical writer, and his co-editor, Jeff Sinclair. They're constantly publishing libertarians along with other radical leftists so there are ways that this convergence is still going on, this exchange and expression of common interest. I just hope it will get bigger and bigger and we'll see more things happen, like conferences or even joint organizations. That would be very good because we have so much in common on the peace issue, on the civil liberties issue, on the anti-corporate issue. The other side may not be for free markets and we're certainly not for state socialism but we do have a common adversary, namely the corporatists, and there's a lot of work we could do together on that.
Daily Bell: What's next for you? Any more books? What other projects are you involved with?
Sheldon Richman: No grand projects. I'm not working on any books. I'm just writing a couple of articles every week, including an op-ed that's distributed to newspapers, which has recently been on foreign policy. But I write on many things. And then I have my Friday TGIF column where I delve into libertarianism. That keeps me pretty busy. I'm doing a monthly webinar for FFF. Jacob Hornberger and I do our weekly Libertarian Angle, which is an Internet video where we have a freewheeling discussion about some issue for half an hour. So I really have a lot of opportunities.
Daily Bell: Thanks for your time.
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