brain from the alcohol. [applause] ..

>> well, obama is the same kind of antibusiness president and anti-enterprise president, the same kind of managerial, interfering, strangling, suppressive, suppressive president that jimmy carter was. >> the writing here about president obama. and i want to get to the right page. under the obama administration, the u.s. experienced a morbid, subversive of the structure of the economythe public sector has become a manipulative force, in the venture of financial sectors with subventions that attract talent and debauchery. >> the worst of this is the grim

task of the obama administration. the epa now has gained control, it is deemed a pollutant, co2, and has been deemed a pollutant. it keeps the breath of life to live. and to attempt to suppress the co2 epitomizes the kind of anti-major, anti-enterprise spirit of this administration. and it is the reason we need another revival of his same kind that we had under ronald reagan. >> would you change anything he wrote in the original "wealth and poverty"? >> i would have changed quite a lot. there are all kinds of details that have changed.

but i found that you try to change one thing would be to change everything. instead of changing it, i essentially retained the old book, and i added 47,000 new words. to beginning and end. and revision of my monetary policy in the middle. >> so it is a new book, but it contains the old book. >> when you say a revision of your monetary policy, what you mean by that? >> well, i failed to make clear in the original version of wealth and poverty, my book, "wealth and poverty", i believe in stable currency and not i do not believe in floating currency grid i agree with forbes that float currency, which is the standard of value in which every entrepreneur has to guide his investments and decisions, is

like floating the our so that people wouldn't have to work so much. one month you would have the our and 50 minutes the next, 70 minutes, and soon you would still have an hour of insurance policies, just to guide the economy. one of the things that has happened over the last decade is that we have had high purchases of finance and an entropy of enterprise. and the reason for the excess of finance from the reason why so much of the wealth and economy has migrated to finance come is because the currency is so unstable. that so much money can be made on the ups and downs of our currency against foreign currency.

and this is a big danger today. a lot of people the chinese for manipulating. but the chinese just want to keep the currency stable. that is all that the chinese want to do. they want to maintain the dollar as the standard of value. it is us that is debauching the currency they defend the dollar, the threat comes from washington and wall street. i make that new argument in the new edition of "wealth and poverty." >> any right in the prologue to "wealth and poverty", the united states has witnessed a classic confrontation between the forces of entrepreneurial capitalism and those of established institutions, claiming a higher virtue expertise and political standing. one side subsists on profits of

enterprise. the other on the tools and privileges that the white house has. >> that is exactly what we had heard when michael lewis wrote the book, the big sure, he was writing about all the gaggle of hedge funds and the bat against the big banks who are all supporting the subprime mortgage concoctions and things like that. and scams. it was all the most prestigious forces in the u.s. and the economy. the blindside, as i call it. people who were investing in these crazy concocted the mortgage securities, in which the value was totally unknown by

the people who were investing in it. the people were shorting these. there were these hedge funds. and venture funds and private equity funds. all these are entrepreneurs who are not seeking special government savings. the goldman sachs of the world were all intimate with government. and the government itself was mandating the purchase of these credit default swaps and other devices, which ended up bringing down the economy. >> it is not procapitalist that support goldman sachs. and their intimate embrace with the department of the treasury. >> the bright side of economics? >> the bright side is to economics. and i actually am quite excited

to have mitt romney run for president. because bain and company really was one of the providers of the foundation who supplies those economics. they applied it to business. they showed of the most effective way for businesses to gain market share was to cut their prices. and you could cut prices if your business gains market share. because costs drop by about 20 to 30% with each doubling of total units sold. your costs in general. economies of scope and scale and learning. it is called a learning curve. and this is really the foundation of economics. when you cut taxes, which is

just like a prize committee reduce costs across the economy and a lot of united states to expand the global share of the market for enterprise and wealth. that is why supply-side economics works. it is not merely by balancing the budget. overcoming death for one of these accounting gimmicks that are often true to the conservative economics. it is opening the horizon to the economy to human creativity. creativity always comes as a surprise to us. you cannot plan it. if you could plan it, you wouldn't need it to mr. gilder, can mitt romney used the phrase politically, supply-side economics, for a talk? >> i think that he could if he

says that, you know, he is reviving the reagan inspiration. that book there was quoted more by president reagan's most quoted living author. he quoted that regularly throughout his administration. reagan did not balance the budget. actually, during the reagan administration, there was a trillion dollar increase in government debt overall. he was winning the cold war. but the private sector encouraged their assets by some $17 trillion. under president carter, we had pretty much a balanced budget and a balance of the trade. but the people, the private economy was all in the red. and what really matters is not

just the accounts. it is ultimately too much debt is unfortunate. but what matters is not so much the liability to the economy, it is the assets. and under the reagan supply side, the movement, the private assets of the american economy boomed. so the liabilities became significant. you know, economy thrives throughout this period. >> george gilder from a lot of your fellow travelers from the past on the supply-side have let go of that period. >> yes, a lot of them have become embroiled in silly analysis of what happened after

clinton raises tax rates. it drastically lowered the capital gains tax, and that was where most of the new news came. but in general, 50 nations around the world have reduced their tax rates since wealth and poverty was published. drastically reduced their tax rates. most of eastern europenow has flat taxes. and in all these countries, revenues have boomed. there hasn't been a big crisis of spending and estonia. there has been a vast boom in estonia with 12% flat tax, the fact is supplies in economics is booming around the world. it is only in the united states that it is shrinking from this economics of enterprise.

>> what is your analysis of what is happening and what donald rumsfeld were called old europe? >> old europe is indulging inclusions of the welfare state. they have all accepted dependence on centralized government. and that has discouraged the value of the assets. when you destroy the value of your assets, that ultimately, ultimately the human being is the one who makes your economy go. work effort and what needs to be depreciated in those assets, though in the liabilities become impossible. but if you unleash the assets of your economy, allow the stock market to boom and thrive again,

then, all of a sudden, these liabilities that seem impossible today, become manageable in the future. >> bally's, when you see the fights in congress over the debt ceiling or tax rates or balanced budget, what would you like to see congress do, and how important is raising the debt ceiling? >> i don't even say. that is all just a kind of fit of the absurd. what we need to do is to flatten our tax rates and deregulate. you know, in this book, i tell the stories of new zealand, israel, a number of countries, which face crises far exceeding our current predicament.

this was one of my favorites. it was the third richest country, new zealand, in the 1930s. and by the 1980s, it was the third world country. it couldn't even feed itself. 45% of all agricultural revenues came from the government. it is essentially a socialist country. they flattened out all the government spending. eliminated all our cultural subsidies, and new zealand started not only feeding itself, but became one of the great sources of food around the world, and competed in dairy products so aggressively with wisconsin, that the wisconsin dairyman accuse them of unfair trading practices. all the way from new zealand.

it is just a great vanity of bureaucrats that somehow their jobs are awfully important. but after the second world war, we eliminated 150,000 bureaucrats. millions of federal workers, and the same economists as the forbearers, they declared that this would cause a new great depression after the war. that it would be the worst dislocation and the economy had ever faced. instead, the growth rate doubled , 7 million new jobs were created, and we entered the 1950s, which to a great extent, started to boom in the u.s. economy. this was after reduction of government spending, equivalent

to eliminating the entire government today. the same thing happened in new zealand, canada. whenever you reach a crisis and really drastically retrench government interference and interference tax rates, the economy takes off. everybody is done. particularly, demand side economists are stunned. because they cannot understand the creativity that always comes as a surprise to us and it is the heart of capitalist economics. >> george gilder, one of the solutions it is often discussed is a balanced budget amendment. something to you discussed in "wealth and poverty." >> yes, i think a balanced budget amendment is stupid. it is a gimmick. it can be kind of countermanded by other gimmicks and mandates and special regulations.

it is almost meaningless. but it gives politicians a sense that they are doing something to address the problem. they aren't doing anything to address the problem when they attempt the balanced budget amendment. but what we need is not accounting gimmicks. we need to unleash america's entrepreneurs on the frontiers of the world economy. and we need to unleash america's energy entrepreneurs as well. you know, the u.s. can actually overcome the energy crisis in a few years merely by unleashing natural gas and oil, technologies that have transformed the petroleum industry in the last five years. as far as tracking and other development has made it possible

with a much smaller footprint on the surface. we have reached larger troves of fuel than in the past. it is the green energy sources that have consumed the most valuable part of the global environment, which is the surface of the earth. you know, you have solar cells and windmills and biofuels and all of the systems. wasting what is important, what is the surface of the earth, while ignoring infinite troves of energy below the surface of the earth that can be reached with a very small footprint on the earth's usable land.

>> george gilder, what is all tourism and how does that fit into a capitalist system? >> it is an orientation towards the needs of others. and i believe capitalism is intrinsically altruistic. that is to say that capitalism is based on making investments without any assurance that others will respond to them. capitalist investments only work if they respond imaginatively to the needs of others, and that is why i think capitalism is intrinsically altruistic, while socialism is, i believe, intrinsically based on greed. maybe the greed for power. but i believe that real greed leaves an invisible hand to an

ever-growing welfare state. because the truly greedy person at goldman sachs goes to washington to get guarantees for the investments. and guaranteed investments are the definition of socialism. socialism tries to guarantee the work of things, rather than the rights to do things. the property rights are capital strides, but you don't have any right to a guarantee of the actual investments. and that is why all of these green guarantees are so destructive. they lure entrepreneurs away from creative denizens of capitalism toward lobbying governments for special privileges at the top.

>> how often do you get to washington? >> well, now and again. i'm not a very frequent visitor in washington. but five or six times a year. >> what do you think that? >> i think it is too rich. today, washington and its environments contain all the richest counties in america. does that make sense? that the people are supposed to be serving us, they are in fact growing obese with power and privilege it i think that is a symbol of this thing. >> how did you get your start studying these topics? >> well, i begin writing about sex, of all things. i read a book about sexual

suicide. and i essentially showed that civilization depends on family life, that it is the ties of family which ultimately connect men, in particular, to the future, that the man's connection to the future passes through the womb of a woman. and this was men and marriage. i believe that the breakdown of family, way back in the early 1970s would lead to welfare states of the women and children and a police state for the voice. because he female-headed family is inept at raising boys. today, we have the welfare state

that is some 70 programs taking care of women and children, and we have a police state for the boys, a third of young, black boys are in jail or on the limb or on probation. it is a tragedy that we have inflicted on the black family, the family could endure this better than it could endure lbj. when i started studying poverty, it became evident to me that you couldn't really understand poverty unless you understood well. so if you are writing a book called visible man about the welfare state, well, "wealth and poverty." and ronald reagan read it, one of his people read key parts of it. and he voted. and we were off.

we were often the roaring 80s and we want the roaring millennial or whatever it is today. >> how do you define wealth? >> i define wealth is valued. it is the store of value and worth and the foundation of human creativity. it is really the fruit of human creativity. and it is the fruit of surprise. my next book is called knowledge and power. and it is about how all enterprise is ultimately based on surprise. which is, if you could predict it, you could plan it, and you wouldn't need entrepreneurial surprise. it is the fact that it is unexpected that means that it is dependent on freedom.

and that is why all these obama programs like solyndra and all those, based on controlling and governing the decisions of entrepreneurs always fails. because they are based on the past. the propping up of the past in the name of progress. because the future will come as a surprise to us. >> in your "wealth and poverty" book, the nature of poverty chapter, you write that the refusal of american leaders to tell the truth about blacks is more important when it comes to black poverty. the prevailing expressed opinion is that racism and discrimination still explain the low incomes of blacks. this proposition is that once false and invidious. not only does it slender white americans, it deceives and demoralizes blacks. not only does it obstruct the truth. it encourages by its essential and credibility come the

ultimate also held in private by many blacks and whites, that blacks can now now make it in america without vast federal assistance without indeed the very government programs that account for the worst aspects of black poverty and promised to perpetuate it. >> that is back under the carter administration. you know, 40% of kids were born out of that. i guess it is 28 -- 430 that was below 40%. now, it is above 70%. those kids are born out of wedlock. as charles murray shows, this is a white problem as much as a black problem. all the welfare state focused on the inner-city. that much worse in t

that is why the problem of poverty is so much worse in the inner-city. that is because all these government programs focus their attention. when people become dependent on the state, they become dependent. and they lose the ability to launch the surprises of enterprise. we are seeing that in europe today, and we are increasingly seeing it in the united states. but i think that this is a pivotal moment, and i think that the u.s. can return to its entrepreneurial inspiration. >> so are you making a moral argument? you talked about all tourism in the birth rate and wedlock? >> i think that ultimately, economics has to have a moral foundation. capitalism is not based on dog

eat dog competition. winners don't eat the losers. the winners conduct experiments and expand knowledge that benefits everyone. that is why capitalism is not a zero-sum game. it is a positive spiral of games for all. and it ultimately proposes the golden rule of judeo-christian morality. it is the good fortune of others is also your own. and just the image of capitalism is some vicious predatory system, it is the opposite of the truth. socialism, with when you cut off the future or socialism, when you block off their horizons of change and creation