where did the money go? this is a crisis we are enduring that has to require liberals and conservatives to say we can't afford this this is off the tool for cuts. the particular -- it's not that they've thrown money out the window. it's the way they do it because there were two techniques they used to get the tax payer going so we have political engineering bikes once a program gets going and missile program, weapons program, it doesn't matter if the enemy it was made for no longer exists or it can't really work as promised. you try to get the project spread out among the districts

with congressmen who happen to sit on the appropriations committees so the profits and the jobs could spread around everywhere you can't stop it then there's the other techniques to overpromise what they can do and under promise of the cost will be so you combine these techniques and get an extremely on responsive system and meanwhile conservatives who say i don't believe anything the government says and we have to cut things back but when it comes to the pentagon everything they see as likely scripture this is a recipe for bankruptcy. >> what is the myth of good government, the title of one of your tractor's? >> this is when to strike at the heart of the civics textbook platitude which is that the government is there to provide indispensable service but we couldn't do without or provide ourselves and the government is composed of by and large the public mind servants looking out for the common good and i am

suggesting this is less of a fairy tale but i accurately describes we have a say fiefdom where people were seeking to increase or maintain the power bases and the budgets and authority. maybe they're thinking in a way that this public spirited and they've come to associate the department with the public could they can't think of any other way that anything is an improvement but they are thinking of the end of the year we have to spend every last dollar that was appropriate and otherwise next year they will say i guess you didn't need that money so you have to blow it on what you can. this mentality is everywhere. >> without the government science funding. >> that's one of my lines and i believe this for a long time because for a long time i was a free market guy but i would say

there are exceptions let's not be extremist it's important to have a free market but there are some they can't provide and i would have obviously sciences and one of those. you can't always capture the profits from science this is the typical neo-classical how it's going to work it's just not going to work. it turns out that this is not the case at all. second, the old model that we sort of of light from francis bacon centuries ago is the way science operates is to gather sunday the. you come up with some experience and neither confirms nor does not confirm, provisionally confirms or does not come from the hypothesis and that is the way that it operates a store for the basic examination and that

sounds possible but it turns out none of this describes how science has worked. my goodness i discovered the steam engine. it develops out of people looking at current technology, practical people and thinking i need to adopt this to my needs. then they solve their problems sort of on the spot. when the department of defense did a study not long ago and they said how many of our great research breakthroughs came as a result of basic science starting from scratch packs they looked at 700 projects what science comes from is applied science and so it turns out that there has been far more funding of science as a percentage of gdp by the private sector research foundations, and letcher science in the age before we had income

state taxes. governments have been far less generous towards the sciences than the voluntary sector of society. this was the opposite of what we would think that so often we casually assume things have to be the way they've always been and what i am trying and to do is what bertrand russell recommended that once in awhile you have to hang a question on things you've come to believe for a long time. >> what is the difference between a conservative and libertarian? >> this is a tricky one. my heart is on the table because i feel like i have sympathy in both camps but i identify myself as a libertarian. the libertarian has a basic principle which is non-aggression. you cannot initiate force against anybody else. i think a lot of people would agree with that instinctively we know it's wrong to what your neighbor over the head but libertarians would take that to the logical consequence which is you get the things the

government does they typically involve the violence against people who themselves have not initiated violence so it's considered to be legitimate. a conservative is less i guess it the logical, deliberately or a least in the classical sense bonds systematic and i say that not as an insult because they have good reason for being on systematic that life is too complex to be reduced to the one principle or left liberal terms that we impose on the whole world. we have to use experience and our knowledge of the past and then move cautiously so i speak with some sympathy at this point they would view the libertarian as a hopeless ideologue that wants to force the world to conform to his principle but my

sympathy for the position is at least i can been in doubt that one principle whereas sometimes trying to identify who is the conservative, what is the conservative position is like nailing chellie turtle wall. >> you're right federal bankruptcy in short may turn out to be one of the best things that ever happened to america? >> i got in trouble for saying that. media matters' pounced on that one. when i see federal bankruptcy may be a good thing let's think of the sense that any bankruptcy is a good thing. the owners of the firm are not happy about the bankruptcy but the idea is the you take the firm agreed to let and sell off the assets then see what the good, but sometimes bankruptcy is the best thing to happen to read in this case i'm saying it's the best thing to happen to american society in the sense that right now we've got interests that are so entrenched

that nothing that doesn't matter what candidate you for coming establishment candidate in your beat you are going to get the same programs by and large, marginal tinkering you'll never get the programs out of there until the checks start bouncing. i rise to a good college professor talking about the job corps which is a relatively small budget program from the 1960's that persists to this day to give people job training and then they go back into the market and find jobs but the fruits of that have been abysmal. most people who go through -- about one-third of the program don't even show up and then the ones that do most of them never find work in their field or the wind up at a barely over minimum wage job and the program costs about as much as it costs to put a guy through harvard for a year. clearly this is a failure if it were a private sector program we would laugh at it and how corrupt the capitalist people are but if it's a government program we say it must just be that they haven't spent enough money on that.

i have one student that said if the program failed why does it persist? i thought there was a wonderful and beautiful question. it persists because congressmen are around the country would say this is a feather in their cap. i voted for the job corps and that helped bring a lot of helpful programs here to the state but what nobody ever asks is how many people went through the programs and got in played again alabama where i live a number of years i have a friend and economist who did a study of all the job training programs to get how many of them train somebody for a job he got in the state that here? the answer was one person. one person came through. obviously there have to be better ways of doing this. but we are never going to crack through -- there is so much entrenched bureaucracy you are never going to chisel your way through. we might say it is a shame that 1 dollar out of my tax dollars every year goes to this. who's going to waste his breath

over that but if you're in that bureaucracy is one defeat the more than 1 dollar. you are going to fight tooth and nail to keep those programs. that is why a clean slate seems to be what we need. it's been a clear and freedom fest in las vegas on c-span2 we are talking with author thomas what's about his recent book lack dealing with big government for the coming fiscal collapse. where does the fed fit into this? >> good question. the fed is another one of these topics that again we are taught not to think about or subject to critical scrutiny. it's one of these things that is there for the common good and if you have a question about the federal reserve you might need some psychological evaluation but because of the recent financial crisis in this harder to make the argument. people who are clearly seen are asking questions about the federal reserve. what is this thing with visit

to? what i am suggesting is the fed is not the institution that when we spontaneously have business cycles with no explanation they come to the rescue and solve the problem. i'm suggesting they typically intensified the problem and what we need to do is roll back the fed as well. the wisdom surrounding the fed is dead wrong. this is going to some -- i know i'm not supposed to say this but when you look how many economists are in one way or another directly or indirectly on the federal payroll it is like a giant cartel. everybody knows you don't speak ill of this institution if you want to get a research grant you shut your mouth. most don't even think consciously this way. they don't have to. nobody's going to bite the hand that feeds them but the fed was responsible for the most recent financial crisis. this was the time when alan greenspan is pushing interest rates at the super low levels and then telling people the

fundamentals of the housing market are sound you should take out adjustable rate mortgages, interest only, everything will be fine. lending standards are robust. absolutely went over their heads where meanwhile free-market which is blamed for the financial crisis was trying to say to people stop doing this. don't buy the five houses of investments you are not living in and have no job of free economy was trying to put red lights on this in 2001. stop, stop. but when your allin greenspan, the federal german all you have is a hammer that is lowering interest rates. we need lower interest rates so we got 11 cuts in 2001 and instead of the red lights saying stopped speculating in real estate lending interest rates go up to tell people do something else don't think you're going to get rich sitting in your house, he wouldn't do that he kept pushing them down and so instead

of the light being read, everything was green. this is a problem caused by the fed so it's about time we talk about it. >> thomas e. woods, what of your other books, what are the ever topics you've written about? >> a few years ago i had meltdown, i talked about what caused the crisis because i knew -- i had pretty much the first book on the financial crisis that include the bailout's because they said if you're going to get a book out on this you have to understand the whole world will have a book published so i worked like an insane lunatic on this book just to give the public something other than the paul krugman explanation of what happened. the federal reserve, and this topic that's getting a lot of topic these days. why did they know there was a crisis coming. were they using an allegis board, how did they know?

it's the guide to american history which is one of these books the title sells it. my favorite memory was i was at a barnes and noble and i was there today book signing. my publisher i won't mention forgot to tell me c-span was coming so i thought i will sign a few books and come home. i get there and the manager says c-span is setting up over there. i sign sorry, what? i had to spontaneously come up with a talk on the spot and it went great. i can to the conclusion i should not script my talks it was a turning point in my life. >> what is your background? >> educationally a bachelor's from harvard ph.d. columbia in u.s. history and i had been a senior fellow at the ludwig von mises institute and now i pretty much run my own a little

educational thing called liberty class from.com because now that we are living in this information revolution it's a revolution that mix gutenberg look like a lazy bum like every but he could have his own blog. i teach history to anybody that is interested in learning about through that site. islamic and you live in kansas? >> i do to the >> is it advantageous in your view to live outside of some of the major cities of the u.s.? >> it could be. there are pros and cons. we miss living near new york city. there are advantages to that. if we haven't had a severe crisis, which i hope we don't and we could avoid certainly i'm not sure that large population centers are where somebody would want to be. and then obviously if the unthinkable should have in this is and why we moved but if there were a bad attack of one type or

another we don't live in a concentrated area there are advantages. >> we have been talking with thomas e. woods of his book published by regnery. repealing big government before the coming fiscal collapse. this is book tv on c-span2 on location in las vegas. >> kuran book tv on c-span2 we want to introduce you to the author who's written a book with steve forbes how capitalism will save us and why three people and free markets are the best answers in today's economy. first of all tell us about

yourself and your personal experience particularly when it comes to economics. >> i've been a financial journalist, but i've also been on both sides of the press release so i started as a journalist and i also the project's other communications projects among them this writing and basically i worked with steve on his tax bookend conversations led to the idea for this folk. >> how did you meet steve? >> i met him years ago at an event that i did when i was working at the university of southern california, and one thing led to another. i moved to new york and actually i am from new york and i started working at forbes to reassess the mexican elizabeth ames from your experience prior to working at forbes how do you inject that

into how capitalism will save us? >> i've learned a lot since. when i was there learned a lot about the market's, and again i was a journalist, began as a journalist and i worked at business week many years ago as a journalist but when i started to work as an entrepreneur i learned then you really need to have economic freedom to create jobs and it's something i learned personally and if you are just getting a paycheck you don't really understand how the government can affect a small business and job creation and i experienced that firsthand said the was one of the things that led me to think this would be a useful idea for a book. >> overall philosophically how do you see the role of government and -- congress in the economy? >> this book raises and answers the questions. we need the government to create

a stable environment for businesses to function and create jobs. when the government meddles too much into the economy its decisions and its policies are driven by politics, and markets are driven by the desire of individuals and companies to meet the needs of the real world people and that is the difference between what the government does and what the markets to so you need the government to protect us from fraud come from the wrongdoers the government can protect us from them that if the government goes too far you in that suppressing the enterprise and innovation and job creation. >> the 2008 financial situation and the so-called bailout, are you supportive of that government inte