Where we are right now in las vegas. What is freedom fest . Its the intellectual at the entertainment capital of the world. This is the most unique events in las vegas because usually las vegas is about entertainment and so forth. But we are renaissance gathering where we taught philosophy, history, science, technology, healthy living, music and dance. A liberal arts education. We have over 300 speakers, we have many authors. One of the subtitles is great ideas great books and great thinkers. We are one of the few organizations that has a conference where the center of our exhibit hall is a bookstore. We sell people hundreds of books and freedom fest. We are delighted to have book tv as part of the freedom fest. Host what political philosophy is behind freedom fest . Guest we are nonpartisan, we have a lot of wealthy investors here and its hard to pinpoint politically what investors are for example two years ago we had donald trump came at the last minute. He appears seven 11 on 2015. His poll numbers were down, he had been fired and the Media Coverage before for donald trump was incredible freedom fest. What shocked me was the Audience Response to donald truck. I expected it to be up pure libertarian audience which had have serious reservation about what he said about immigrants, mexicans, the wall, libertarians tend to be more openminded in building bridges rather than walls. At least half the audience gave him a standing on ovation. I was in shock. So, we have an eclectic audience. We like to do a lot of debates. I mentioned paul krugman, he was here two years ago. He actually convinced quite a few people to change their mind. But i dont like to think of ourselves in a political way. We discourage people from using the terms left and right. I think these are divisive terms. There terms for smearing people you do not like. So, we like to take more objective stance. Our debates are formal debates, so we discourage talking over each other and yelling because its not who is right but what is right. What is the solution to our problems rather than this is the republicans or democrats. Look, we have a healthcare crisis. We have several sessions on healthcare here. We dont care who proposes a but we have Serious Problems and we want to resolve them. Host we talk to an economist author yesterday who said that she thinks that paul is a classic liberal economist, do you agree with that . Classically liberal economist . No, Classical Liberal would be in the adam smith mode. Krugman is definitely so adam smith advocated for sound money, anti inflation Gold Standard type of policy. Limited government. He called it system of natural liberty. A balance budget, free trade. Krugman woods probably be more or less a free trader but he is not an advocate of balance budgets especially during recessions. Hes more of an inflation is an interventionist. I would be curious what if they spoke if they gave a reason why . Host were talking about milt friedman. Right, on chicago and he said that he thought paul krugman would be more of a Milton Friedman then perhaps a libertarian. Well, we have here to did debate steve moore. Lanny is an interesting person because his background is in classical economics and John Stuart Mill is his favorite economists. He has written a biography of hayek and friedman. You think he would be in that camp. He lives in santa monica or santa barbara. He teaches there and i think hes been affected by the purple koolaid their little bit. She was in favor of a progressive tax a rather high progressive tax a Milton Friedman and hayek were very skeptical of a progressive tax, as a my. And the idea of transferring wealth from the private sector to the Public Sector and i cannot see how that would be beneficial. I question his prism of how he is seeing things the stay. Host you mention the term found money, what does that mean . Guest sound money is that you need some type of Monetary System that imposes a discipline on the central planners. Because how much does it cost, we have paper money, a lot of paper money, 20dollar bill with Andrew Jackson on it. But it cost 3 to mint that. A cost 3 to make a 20dollar bill . Guest thats the cost of production. A hundred dollar bill is the same thing. I 1 dollar bill . Three dollars. I mean 3 cents. So that was the liberty bell by the way. People are ringing it for how often they have been there to freedom fest. If they been there ten years theyll bring it ten times. So 3 cents to matter what the bill is. Obviously youd want to print hundred dollar bills and you get more bang for your buck. So we need to find a discipline. The discipline was the goal. Real gold . Guest thats a mexican 50 peso, 1. 25 ounces together its probably worth about 1500. Guest i keep this on me despite donald trump because its mexican. [laughter] host are you not a fan of the current president . No, i think mike pence would be a better choice. I like some of the things that donald trump has done shaking up the system and that sort of thing. His negative comments on immigration and trade are totally out of the mainstream of what we economists have found to be eternal truths. Free trade is good, no country was ever ruined by trade. You have individuals who have lost jobs but they hopefully discover new jobs and most have. So more open borders, im a believer in building bridges than walls. So do you think that nafta is a good system . To think the tpp should of been approved . Absolutely. Anything that reduces barriers between countries is beneficial. In this my optic view of America First and so forth and make sense militarily perhaps. But from an economic point of view i think again ill quote ben franklin, the policy of america should be commerce with all and were with none. At least on the trade side open borders in terms of trade is superior policy. On the buy American Products first, you buy the best product at the cheapest price and you let people the decide. Its all about freedom thats what freedom fest is all about. Free choice and not imposing your view of what a person should buy. If you want to buy american thats fine but dont tell other people that i have to buy american. So bringing manufacturing back to the United States is that a freedom proposal and economically viable proposal . I teach economics at Chaplin University and i was show my students all the Manufacturing Products that america still produces and exports. We are still very much a manufacturing when it comes to turbines, automobiles, all kinds of scientific instruments. Its fun to go down the list of all the things that america produces and exports. We even export oil. We dont just import oil. We also export oil and oil products. So this idea that manufacturing is dying in america i think is a myth. I think theres lots of dynamics going on. Its true that our government has opposed on the local state and federal level but those that have really hurt and put us at a disadvantage. I went might see those reduced so we are on more of an even playing field. From an economists point of view why are there rusted out factories in the northeast and midwest . Using them as well. Akron ohio is a classic example of the rust belt that has transformed itself and you do not see the problems they see detroit and other rust belt areas because they were very active in encouraging other Information Technology and other new industries to come into akron ohio. Its a Great Success story. The media doesnt play that up like i should. I bring it up to let them know that there is a transition time but government has to be active to make sure you dont just sit on your laurels and say it will come together on its own. Host you talk about the transition time, at some point did industry get overregulated and so the factory owners and producers moved out . I think there is just new competition that came in. We have a free trade environment so for the Automobile Industry a textile industry these cheap labor produce products with Good Technology were able to find a market in the United States. It decimated the clothing industry unless not sugarcoat the problems we had. We did lose jobs but as i tell my students, labor we look at labor, capital which is the most but can be retrained, a tractor or an oil rig when the demand drops what can you do, other than melted down this machinery pages sit idle. Labor but can become temporarily unemployed but you can be retrained and get a good education. You can go back to school. All of us are flexible, heterogeneous as we say, labor is extremely flexible. Unemployment can disappear quickly if we are quick enough to retrain our people. Mark in some of those we have heard about, income inequality and shrinking middle class are those serious concerns in your view . They moved to the uppermiddleclass, if they drop down that could be a problem. You have to be careful with income and wage statistics. I focus on quantity, quality or drive in a variety of goods and services. People say wages have stagnated for 20 years but is that true . No. Theres an increase in all of those. Rather dramatically. We have people using the products they didnt have 20 years ago and you have people doing away with products they have now. So there is a dynamic going on now in the economy thats very positive. I think our standard of living is rising even as regis may be stagnated. Host kim writes about your accomplishments and economics. His contributions to economics and he talked about a term called gross output, what is that . Guest im glad you brought that up. This is a big thing. A big thing that is happen. Since the 1940s weve used one statistic to measure the economy, Gross Domestic Product. Theres a lot of misconceptions about what that is. Turns out when they decided to use Gross Domestic Product is a measure of the economy theyre only measuring final output so, clothing, suits, drinks, watches, the penny having her hand, thats all counted in gdp. As it should be. But what it does not count as the supply chain. What got you that. In other words all of the stages of production in the intermediate stages, whats behind the gross restored. All of the work and effort not counted in gdp is left out. So, the supply chain is left out gdp. This is a shock to most people that what we have is kind of a narrow view of what the economy is. It turns out the supply chain is bigger than gdp itself. Theres a lot of buying and selling as you move the production process along. It turns out theres a huge sector in the economy. In fact, retail final sales is only 20 of employment. Most people are void in the manufacturing stage, and the mining stages and so forth. So, gross output is my major. I wrote a book called the structure production in 1990. Its an academic book. Host recently updated as well. Guest yes. Because part of the Commerce Department are the ones who put out quarterly gdp statistics. In 2013 i would like to think i had some influence there. Theyve now decided to publish gross output on a quarterly basis like gdp. I look at it like top and bottom line. In accounting, when a publicly traded Company Comes out with earnings, its Earnings Report theres a top line and a bottom line. The top line is total Sales Revenue bottom line is profits or earnings. Every publicly traded company when they release these quarterly reports have the top line and bottom line. Sales and earnings. Both are critical and no analysts would be with his soul if he didnt look at that. You dont get to earnings without looking at the sales. So as i have advocated, we need the same top line, bottom line for National Income economy, what is gross output . It measures spending out all areas of production. And they just released its first quarter, 2017 just today. Turned out to be 41 trillion. More than double gdp. I had to adjust that statistic a little bit because the government statistic does not include, it leaves out some wholesale and retail trade. So i call it adjusted gross output. Its 41 trillion. So gdp is 19 trillion. Host so its more like the gross prophet it does not include some other aspects. Host so here in the 21st century economists have finally caught up with accounting and finance which have been doing this for years. So now we have topline and bottomline accounting. They dont come out at the same time. They are planning to issue both gross outputting gdp at the same time so just like the financial firms, the publicly traded Companies Issue every corner topline and bottomline. So now the have topline gross up and bottomline gdp. Thats a real breakthrough. The reason is important is because with gdp were all using gdp as a measure of the economy. But we hear Consumer Spending is the most important part of the economy because it represents 70 of gdp. Its a consumer that drives the economy. Ive argued that his business. [inaudible] [inaudible] [inaudible] business spending is the big elephant in the room. Consumer spending is 30 of the economy. Gross output measure spending not just final output my students get it when they say topline bottomline, they get it just like that the economists are slow. So what does that the supply side believe. They believe the key is innovation, entrepreneurship, shaving, i actually think ben franklin said it best, hes one of my favorite founding fathers. He says theres three virtues. If you have these virtues you can be successful in by personally as a family, as a business and as a nation, is a government. Those three principles are industry, drift, pregallery. Prudent behavior. If you work hard and are productive but you dont waste your money, your frugal, your thrifty and you live within your means and prudent with your investments. With your spending patterns you can help but be successful as an individual in business and family and destination. This is kinda like a ben franklin economics concept. Unfortunately weve lost the supply side view of the world but now its more Consumer Spending and demand to and then the more debt you go into, weve shifted away from these traditional views which i spouse is mort is not to say that economics has not provided an important contribution. Weve learned a lot about how we deal with recession. But during the recovery during normal times of Economic Growth we need to encourage prudence. And sadly if you look at the last administrations a lot of irresponsible spending going on. All economists agree we should have a balanced budget that even during pushes their, he never ran a surplus set maybe the first year and thats because he inherited it from bill clinton. And then obama did not really improve matters that much either. So we have to live within our means. Government needs to be encouraging entrepreneurship. You dont do by dodd frank and obama care which provides layers of bureaucracy. Do you know not a Single Community bank has been created since dodd frank was passed in 2010. There used to be dozens of Community Banks providing benefits to local communities. Not a single one has been created. I mention this in the labor secretary under obama. And he said im not familiar with that statistic but it should be. If somebody picks up the structure production and is not an economist will they understand this book . I think theyll understand the production. The book is fairly heavy. Its an academic work. Its meant to be written to economists. Thats been the strategy all along. That you have to convince your own before you reach out to the general public. Now on my website every quarter i do a press release on growth output. So well have one that comes out soon. Is it written in laymans term. Yes. The top line total spending activity in the economy rose by the way when gross output is growing faster than gdp thats a positive sign the economy is doing well. When gross output is falling faster than gdp thats a sign your big trouble and headed for recession. So in the last couple of years gross output has been growing faster than gdp. Im 100 invested in the markets even at these levels because the economy is recovering. It has been during the Obama Administration and gross output was growing faster than gdp, so i look for is when gross output starts dropping her doesnt grow as fast as gdp then were in trouble. Thats the supply chain telling us we better be careful where we can celebrate. Also said gdp is slowing down as they been saying recently, look at gross output is growing faster. Im relatively optimistic. Host we been talking with mark, the founder freedom fest and author of the structure production, thank you for time. Guest thank you. Cant do justice to rosa parks letting your tribute and in ceremony. You have to move from ceremony to sacrament. Sacrament takes up where ceremony leaves off. Ceremony is like putting a ring on the finger but sacrament is love and joy to her life every day, every hour. For the past 30 years the Video Library has a free resource for politics, congress in washington public affairs, whether it happen 30 years ago 30 minutes ago, find it in cspans Video Library as cspan. Org. Hillary clintons member on the 2016 president ial election was published this past week by simons schuster. What happened details are run off to the election and her reflections on the campaign and the aftermath. Several Media Outlets have posted reviews from the new york times, dilley beast, npr and the daily tribune, the Washington Post and the guardian. Secretary clintons media tour includes public talks in cities throughout the country such as chicago new york boston, atlanta philadelphia and seattle. Cspan will be covering her first stop in washington, d. C. This monday september 18 at 7 0. It will re air on september 23 and 24th. Schedule information is available on our website booktv. Org run your channel guides youre watching book tv on cspan2. Television for serious readers. At 6 30 p. M. Eastern john recounts the life of patrick henry, a critic of Central Government overstates rights. Thank and alisa rice looks at democracy around the world. On afterwards at 9 00 p. M. The Progressive Policy Institute examines the Charter School movement and offers thoughts on the future of public education. Then john view talks about military technologies changing the way we fight wars and defense ourselves against old and new threats. Wrapping up programming at 11, a report on the trevino others and their rise and fall of the drug cartel. That happens tonight on cspan twos book tv. First is john kugler
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