the mayor is committed and the council is committed. if you are around 10:00, 16th street. >> you heard it here. [applause] >> thank you so much. we have books by the register. [applause] >> [inaudible conversations]

good afternoon from washington washington it is 12, noon eastern on c-span2 book tv. and once a month, we spent three hours in depth with an within author and this month our guest was scheduled to be steve forbes who this morning you might have heard was on a train en route from new york to savanna georgia when a derailment took place just south of philadelphia. he is safe and now en route back to new york city and joining us live on the phone. thank you for being with us. >> good to be with you. >> what a morning you have had. explain what happened. >> outside of philadelphia the

train was moving along and then it made a sudden jerk like it was going to make an abrupt stop. it wasn't a normal slowdown you have when you come around the curve. then it moved a little bit and another stop. then it came to a complete stop and there was smoke and it felt like the brakes were smoldering so we just sat there wondering what had happened. the electricity was knocked out so there was no system. so the rumors started to fly but after about 20, 25 minutes one of the crew came back and then started to explain what happened. but the first two cars were hit pretty badly. but we were fortunate we are in the paper in the last part of

the train so we felt the impact obviously that didn't get a smashup of the first two cars where it was explained the explained by some attractive reducing maintenance and an between maintenance and an investigation will have to be had why was it going on when a passenger train was coming back on the track and the engineer was trying to slow down but one of the things you are taught at an early age in science is when an object like a train is moving ep miles an hour it takes a long time for it to come to a halt. >> it happened about 8:00 eastern in pennsylvania. this is a debate tournament at around the same area and other derailment took place just outside of philadelphia.

it was and the question why there's a maintenance problem was a maintenance problem and a communications problem. but we will certainly try to get to the bottom of this thing but the most disconcerting thing is there were no injuries in our car but not knowing what had happened. when something happens the captain comes on and says something has happened or don't worry we are going to be all right. but we know you don't come to that kind of an abrupt stop without an emergency not knowing what it was. and as the time passed and they took care of the injuries in the first two cars with they came back and were not off the train. they admonished us at the beginning don't leave the train because there are two live

tracks on either side so don't leave until we see that it's safe to do so. we eventually made our way off and went through for the path of the woods and came to this church and the united methodist church they had a large gymnasium so there's plenty of room over about 350 people overall. so that was a good place to make our way but by tomorrow morning as you say -- spin again we have to thank you i know you've been in touch training every effort to make it for the conversation and everything that has happened to you this morning we wanted to make sure that your first safe and desist from new york to savanna georgia the passengers

on board 31 injuries according to amtrak none of the injuries hospitalized with life-threatening if we did intend to talk to you about this but as someone that travels what does this tell you about the state of the infrastructure and for the next president might need to do when it comes to the roads, bridges and the rail? >> one of the things looking at the larger picture is figuring out how to get more of the public-private partnership because when you have a government agency the maintenance tends to not get the priority that it should. with airlines you occasionally have access but they are very up-to-date on maintenance and there's no problem in terms of availability of aircraft. you may not like the seating

arrangements but they are kept up to speed. the same thing in the freight trains. we have to make sure that the unglamorous things like maintenance which isn't like the same thing that happened in newbridge basic maintenance is given a high priority because that's where the bad stuff happens. so the private public partnership just not private mobilized money with private capital with a little bit of imagination can be brought in and the only way that you will finance a lot of this. governments don't have a lot of money these days especially with their pension and health obligation so we have to come up with new ways to get the infrastructure in shape.

it can be done but then you also have to pay attention to the glamorous thing that glamorous thing known as maintenance. >> host: we have been monitoring the development that you were a part of. final question i want to go back to the fact it took 20 minutes for you to be notified by amtrak officials of exactly what was happening. just describe what was going through your mind into those fellow passengers as we watched outside of philadelphia. >> since they didn't know what had happened we didn't know a couple passengers that were veterans of amtrak were wondering if the brake system had gone wrong or something like that. there was no panic and when the officials came back they were relieved because a couple of cars there was panic when you got closer to where the hits took place but it was just

waiting and waiting and wondering when they were going to tell us what happened. but we all knew, don't beat the train. we didn't have to be told that. >> we are going to show the audience from politics and prose the book called money give us a quick primer on what this book is about the latest in the series you've written about the economy and the u.s. dollar. >> the book that you made reference to it so the subject that isn't very glamorous but absolutely critical in this country are the monetary systems and what the book was designed to do was to explain many very straightforward way there's a lot of mystery of a language that surrounds it but it's very basic it is like a claim check. it has no intrinsic value but it's the claim on a certain

product on the products and services it depends on trust and stability. we made a series of catastrophic errors which led to the housing debacle. there's a lot of contributors to the dollar was critical to it and when it's gotten stronger it's like a watch is either too fast or too slow so we argue from the book the have to undergo drastic transformation. what what we've done in recent years has been a disaster and it's hurt the investment. it's like a watch that matches the number of minutes in our changing each day. we all know they would be

chaotic. we have to figure out is that nominal, inflation-adjusted, new york minute, dc minute. we know in terms of things like the number of minutes to an hour having that instability would be crazy. but that's what we do with money. we know we need 12 inches in the foot. but since the destroyed the towards international monetary system we have had nothing but problems. the 80s and 90s have a little bit of stability, not great enough to get some prosperity that in the last 50 years this started eight years this started under the republican administration. the volatility continued under the obama administration in the democratic administration so this isn't a partisan thing. there's plenty of blame to go

around. we have to get that back again. we explained very simple ways to do it. starting with the federal reserve to start reducing its oversight portfolio and lots more money money go into the banking system to explain how the entities of the economy that are hurt by this are small and new businesses. the job creators no problem problem, for the government, no problem getting credit. but the guts of the economy are very difficult and that has been very damaging so we explained this in the book providing america we also have a section as well. >> a lot to talk about when they get you back we get you back here to talk about your books. the one question i was going to ask donald trump in the interview that is in this mornings front page calling for what he said would be a potential economic collapse in

the catastrophic collapse of wall street looming ahead do you agree or disagree in that scenario into those concerns by donald trump backs >> you never rule out anything these days. but i don't think think that barring a disaster overseas there will be real problems. i don't think that we would have this recession. what we are stuck in as the second tier then it's followed by the disappointing report so it's like a patient you feel pretty pumped about it and that's where we are now we're about to begin the baseball season hitting 350 and instead we are heading to 50 just can't seem to get out of the rut. that's where we see the evidence

in the political system today. the panic was a downturn disaster but since the early 2,000 we should have made a quick recovery but we haven't and people feel we are in the slow-motion decline and that's what has people worried even when things start to get a little better but not at the peace we had in the past. that's led to a lot of anxiety and worry and frustration which is now expressed in both parties with donald trump on the republican side and bernie sanders on the democratic side. >> steve forbes on board that train 89 en route from new york city to washington, d.c. he is safely heading back to new york city and they will reschedule. thank you for being with us. safe journey back and we look

forward to another time on c-span. >> thank you. >> we want to continue with our coverage on and eventually covered politics an event we covered politics and prose and again the book is titled money how the destruction of the dollar threatens the global economy and what we can do about it. we are privileged to have a recognizable figure in the media and the business world. he is the editor-in-chief of forbes magazine the nation's leading business magazine and he has headed the media company that includes not only asian and european editions that the number of web properties focused on politics, sports and financial market. many of you will also remember his spirited campaigns for campaign for the republican

presidential nomination in 1996 and in 2,000 during which he promoted the idea of among other things a flat tax along with a new social security system, medical savings account, term limits and a strong national defense. this evening, steve comes to us as an author which isn't a new role for him. he's she's written five previous books. his latest one money how the destruction of the dollars in the global economy and what we can do about it is every bit as emphatic. anyone familiar with his free-market libertarian views will not be surprised to read his criticisms of the central banks and existing monetary policy with the fed winding down its quantitative easing he sees an opportune moment to rethink

our monetary system and ensure a sound and stable currency by returning to the gold standard. he writes in the book freeing up the dollars from gold was supposed to make the united states stronger but instead it has made the country weaker. something has to be done. ladies and gentlemen come up here to explain what needs to be done along with his co- blogger who is a communications if it is steve forbes. [applause] thank you very much for coming out. as brad indicated the book is about money, monetary policy command of money particularly the monetary policy is one of those topics that seems to intimidate a lot of people for some strange reason and as a

result, the federal reserve for example has less formal oversight from capitol hill in congress then do our intelligence agencies. and the thesis of the book is that the topic of money is very straightforward and simple even though it is shrouded in a lot of thought e. creations, the idea is very basic. we've gotten away from it and our policymakers today know less about money monetary policy than they did a hundred years ago and since the early 1970s even though we had the booming decades in the 80s and 90s overall, the growth rate since we went off off brendan woods system in to print in one system and the gold standard in 1971, the u.s. average growth rates are less than they were before 1971. if we maintain the rate that we had from 1971 if we maintain the rates after 1971 on average, the

u.s. economy today would with the 50% larger than it is now. 40 years compounding and effect reverse compounding adds up to a lot. savor for a moment having 50% higher incomes what would've would it mean for the deficit what would it mean for social security and what it would've been would mean for a lot of the social divisions today, this thing over time adds up. this is why it takes the families to do with the generations and taxes are a large part of it but the dollar since the early 70s as a critical part of it as well. when this happens and you don't have a stable currency, you end up with people not getting ahead of the way they should end the incomes are and the incomes are growing the way they should end up and bleeding as my co-author

will discuss in a few minutes the social fabric and social trust and more divisions in this set is a process that is not one in a million will be able to diagnose. that's why we wrote the book. since the monetary policy doesn't usually get the heart beating in the way that some of the reality shows to come i will begin by just giving you an advanced reward and that is to give you a travel tip if you ever find yourself in an airplane and coach on the runway watching your life pass away and he was a little bit of elbow room, starts talking about monetary policy. [laughter] as a result of the chaos that we have had since the 1970s, the

federal reserve has got enough in terms of more and more power. but the more power it gets, the worse we are. you take the quantitative easing which i will discuss in a moment even though they are teetering which is a good thing that ended up contracting rather than stimulating the economy. in terms of money it's very basic. it makes transactions, buying and selling such as how we prove our standard of living and how we exist it makes it much easier. in the old days we had the barter which was inefficient so how would i get paid? perhaps with a herd of goats. i'm being a little facetious but let's say i wanted to buy ipods for the writers so we went to the apple store and they say i

don't want want to go buy one cheap so i have to figure out how to swap them for cheap and maybe have to hire a sheepherder because the sheepherder you don't want the wolves to keep the sheep. i had red wine and he wants white wine and it becomes efficient. imagine if we still have it today imagine trying to deposit it just becomes very inefficient. so in essence, what it does most of the time it doesn't have intrinsic value unless you have gold coins and the like but it makes transactions easier and in that sense it measures value. that's all it does delay scales measure weight and rulers measure length, money measures

value. so because it represents value and it makes transactions easier in that sense it is a form of communications. it lets you know the information to do the billions of transactions we do around the world each and every day. so in and of itself isn't qualified it represents a claim on products and services. think of it as you would a coat check. they have no intrinsic value. but it represents a claim on the coat so it represents the products and services that have already been produced. so if you we stimulate the economy would be like saying if we create more coat checks that will stimulate the production of more coats. no, it does not. it is a claim that represents the claim on a product or service of money. so it works best when it has a

fixed value. imagine what the world would be like, your daily life would be like if the federal reserve did what it does to the dollar imagine floating the clock so you have 60 minutes now and monday 48 minutes the next, 22 minutes the next that sued to have the hedges to figure out how many hours you are working each day but say you're baking a cake. you have to figure out is that inflation-adjusted minutes, we'll minutes? it makes it much more difficult. imagine what would happen if they change the number of inches in a foot you are building a bridge into some of you learned that instead of 12 inches it is now 10 inches. it makes things much more chaotic. so it works best when it has a

fixed value and then the question becomes what is the best way to do it and even though it is out of fashion still in the economics profession the way that it worked in this country for the first 180 days of existence is you fix it to gold. ..

>> >> you don't have to coated

nelson gold. the british with the goal standard with very little amounts of gold but they knew what they we're doing and responded to the marketplace and that works through world war i but the fact 1 mile has 5,280 feet does not restrict the miles of highway that you build so to give you one little factoid to show how brilliant you are from the time of our existence of the revolutionary war would reread small agricultural nation, whether through a tender the population increased 25 fold to the biggest and distribution of the world. the immelt only when it 3-point fivefold even though

the dollar was fixed so golden just make sure the value is fixed it does not restrict supply would you have a stagnant economy it is very, very basic. when people lose sight of that you end up with you lurch from one crisis to another with a terrible decade of the '70s we got it set my rights in then 80s and 90s and moved ahead but the last decade we went backwards. this isn't a partisan with the bush administration to with the treasury department and federal reserve to stimulate exports and that is how we got the housing bubble. anytime you undermine the integrity of the dollar.

but it couldn't be knocked up at 110. if you were old enough to remember the '70s. but back in the '70s oil live from $3 a barrel at almost $40. running at a boil going up at $1. will lead to a crashing down a $10 a barrel. average 20 it would be $5 a barrel live is like putting a virus into the computer feet don't trust the value you have less investment and it is less productive but

you don't know if you will get back $0.100 or seven years or 100 or $0.20 or $0.80 but with more uncertainty why we are stagnant dead in the water. to educate about monday to represent values. the goal is the best way and if we do understand that then we can move ahead. obviously there are a lot of other things we have to do but experience shows us if we don't get the money right you can get other things the tax is suspending the regulations but not the money that it will undermine everything else.

with basis of trust and when it works we don't realize what makes it work. we take it for granted. here is important. the with one aspect of money thinking of economics and gdp is social trust. with the chapter talking about the basis of society to undermine the social fabric in ways that go beyond simply the gdp numbers and exchange numbers. one thing to keep in mind when it is static and value it is a productive use when

the currency's didn't fluctuate because we were stuck to gold now currency trading is a huge activity all around the world daily volume of $3 trillion tens of thousands of the best brains in the world focused that would not exist without the brain power to be used for medical research hand productive things it has consequences nearly beyond the gdp or whatever other acronyms they have. now i will turn over to my colleague. [applause] >> good evening. is good to be here i would like to talk about the chapter five money and morality.

and to find this chapter thought-provoking. to see that post the. >> but what did was right to. there is an assured means to overturn the existing basis of society than to debauch the currency. the processing cages all hidden forces of economic law on the side of obstruction and in a manner that not one man in a million could diagnose. as we say in the book is like carbon monoxide odorless and colorless, you don't know the damage it is doing until it is too late and people are not aware when the government alters the currency until see the effects that is why debasing money is so corrosive. people save money is about

greed but in fact, it is about trust. freddie strangers from all nations in all walks of life come together to conduct transactions on a commonly agreed upon measure. it promotes cooperation to serve as an instrument of communication but what the priorities are. with the ability to act as a facilitator of trust is corrupted as well. it undermines the of titles relationship between buyer and seller. the philosopher to produce at society's core and wrote whether the creditor is forced to receive less or the debtor pay more than the

contract with the damage and injury is the same purpose whatever a man is defrauded. a and during periods that our unstable you see a particular scenario unfold to scapegoat and corruption and social unrest and increasingly coercive government. in the worst cases it could unleash the forces of political extremism leading to the rise of a dictator and recently writing a good piece with the classic scenario that has occurred from history that monetary to date -- debasing with the pre-world war two germany picasso that evolution rain of terror of though which -- the witch trial. but this destruction of trust is in just a remote

historical currents but it is taking place in many areas of the world today including the middle s -- the middle west. after with the african investment advisory house that predicts the most trouble spots. the firm can forecast of breast based on monetary abuse is syria has suffered 200% hyperinflation followed by argentina and south africa and turkey and india that are in flavors. there are political causes and it takes different forms in different countries but it has spent a catalyst with the arabs praying you may remember starting over with the increasing food prices.

the financial crisis was a betrayal of trust to create a housing bubble that pull the rug out from under borrowers that led to the collapse of a wave of foreclosures that led to the collapse of major financial institutions with the stock market meltdown of 2008 and turned to set off a world wide destruction of trust that ricochets from one continent to the next it to help bring on the sovereign debt crisis over there. once said that this stage it runs around the world not to the block. then it doesn't matter if you have good or bad loans. people's confidence in you.

that is obviously showing this is about trust. and this loss of trust turns to rage and riots and protests echoes from balance sheets to the streets. and in 2012 there was the pole from the pew research center that it is more right now than it did neither time and with the increased polarization to take place not just in the last few but during that a presidency that both the bush and obama with that administration but but it has coincided with the weakening of money. but basically there is a sense of fun -- increasing and fairness that you are being defrauded with incomes

and the salaries while other people are reaping the unfair windfall game and the link between effort and reward is severed. that is why you get more corruption in the number of studies have found it has a stronger connection to crime than joblessness. it drops immediately after the financial crisis but then they begin to move up in 2010 during quantitative easing. these adjusted you highlights from the chapter we will agree it is a period of malaise but we hope this helps them criticize the figure pointing taking place to help them recognize the

role of the of unstable dollar. thank you. >>. >> please come to the microphone. >> with rather than trying to debate you on any ideas but the concept of stable money i would ask, why is it so many countries including the united states has dropped to the cold studer

and it is unpopular but you mentioned the fact he gave the'' who said one in a million so that this is the is for this other economists except to the theory says -- but the reason of the dominance that had was the results of to catastrophes. was a first-team -- to

destroy the classical standard and because they work so well they do realize what with that led but then they tried to ignore at the pre-war price rich jews and to which is ridiculous if you when recognized has a your some a and this move will save then it is very basic. class clinton's said is the production of products and services. the economy is the symbol economy of products and

service. also if you print up money that can stimulate the economy. but the oil boom the last two years, the '70s, the housing surges in of the southern states but it is like a virus in the computer you get activity but it is false. id 19 at eighties agriculture commercial real estate but a lot of those who had to be liquidated in

the '80s and you saw housing today and who knows if we get stable money when others will be investments of but we have out there. so world war i then the great depression. nobody knew why it came it was like a bolt out of the blue they ever desperate for solutions to be explained it was triggered by a hideous trade war that we triggered with the somali tariff to employ up the global trading system and everyone retaliated. and then made it worse by massively raising taxes going for an 25 percent up at 63 percent. the excise tax was enacted including the stamp tax context but he had to pay a

tax to the governments of these massive increase germany went to war in had one bad day was done after the other but despite that you still have a gold standard after the war from the system designed in 1944 at bretton woods worked perfectly well but then the idea to use monetary policy to drive the economy was so prevalent and they didn't know how to preserve the system. i've mentioned that abc into '90s.

and had some fluctuations but we got growth but not what we could have done in the only parts of the decade of world war i and great depression but now it is below the radar screen as thinkers say that this study many he abolished the idea of maybe he had a right this is what the book is contributing to to get back to the basis points but the bureau of weights and measures inside the commerce department. by the way if you ever read to the federal reserve

official ask them in terms of the powers by the said committee said they went to work to a half percent inflation to create extra money for the economy. that translates to a typical -- a typical family. ask them, who gave you the authority to get $1,000 per year extra and why it is that stimulate economic activity? i have fasted but i haven't gotten an answer. >> you are correct something is wrong with the money. and don't believe it is a broad enough discussion stricken a belief.

>> live the value is through shorten life fourth select but that fold up with the center roosevelt you so wish had the reverse effect. -- but the point is prodigious seems to use simplified and it does not

influence the money supply but just make sure the dollars created have a fixed value. now for your point on the fluctuating price, that is less about the intrinsic value than the market's a high-value of the u.s. dollar. now with hopes for the future. so when people thought the world was coming to an end in 2011. >> but as far as legislating in value the reason there rose up is that because the bankers got together to say

let's do this by the people do these transactions for each other and in but what he did with britain and the gold was to codify the small population but because of sound money to lead to a sophisticated capital markets to become the financial center of the world. even though on paper this country had nothing and so

are brings it together that is the most head and in doing is getting more complex. is the sure for application insolent. >> area looking for monsters? you cannot even if it is a fixed measure. >> and then would have to grow up when the and that is

what you get with fixed money for have:but about the fed's monetary policy public does that ghosted this league end what that means

over time the seven much bigger the economy. to discuss the it is a bad time for the former ellen dash farmers know. hess. said justin acorn that popped into my mind. typical acre was 27 bushels but is around $150 if we write about a fellow who lives in iowa who has breakthroughs of corn that will lead to $30,400 a

bushel per acre. agriculture today is 2 percent of our economy 100 years it was about 70%. employing 1.2 million today it is less than 200,000 to carry 10 times as much freight. the economies are always adjusting. >>. >> i am the of minority that agrees with the principles.

and what i realized after righty new book is that gold and silver if they buy the same amount of gasoline as you could be for 64? all quarters, dimes and that was just a mind-boggling fact but it could be $1. you see the dollar at $20. and that tries to say and -- to stay constant whereas the price today of gasoline rose but the purchasing power has gone down. the second most interesting ongoing fact is that ted and

dimes is the same weight as this quarter as a silver dollar items are in four quarters is the weight as the silver dollar to half dollars is to save weight so before the divers were smaller for reason to .5 is the same as a quarter. so my question is will reduce the silver come to that picture? >> in terms of society's band with the applause of most economists and experts

and dash a gallon of gasoline is $1. put putin in silver had the same relationship. 15 oz was worth 1 ounce of gold. but then people started to use more and more paper money and small coins so people could get accustomed to a the economy with the rise of paper so demand for

silver fell but talk about oil and gasoline that have remained constant to make a fundamental point what you think of as the rising costs so without the silver dollar debt as jury got the terms sound of money. [laughter] fate q.. >> with your thoughts of a concentration of the baking industry with consolidation of the concentration of

deposits? >> and as a result of regulations and fiat the first part is we had a lot of extra bakes' because of regulation not because politicians didn't know but when the bank of america started in california and when he took the bait to cross state lines using a bank holding company if you own the bank in one state cannot boy it but today dodd/frank had the implicit purpose dash to a small bank

his. >> of that consolidation now is as much artificial bin then nature dash check it -- just of what is grasping the power to put their money into the insurance industry that they go mutual equity hedge funds and the thing that moves they will go

after to reduce risk. it means when you reduce risk away they want to is you will not have an ovation they never would have allowed the rise and then day regulated but they could pay for interest in those days. the money fund blew that up. it is coming about through fiat rather than nature. that is bad because one of the virtues we have is ever vibrant and innovative capital markets. by contrast to dissolving oriented. because they don't have a system that nurtures from babies to adolescence they

don't have that. with the statistics that is called commercial industrial loans. of 1.1 trillion. if you take europe together it is the same population when you add up the economies. 4.8 trillion. and to bring up a good point. >> '01 to go to the core of your argument. >> but we can cure that. >> for the more realistic

argument everybody has heard about that. to destroy the fabric of society. it doesn't always work that way.

>> there has to be a mechanism. >> a gold standard will not change human nature. period. and the utopian societies only try to change human nature by killing people. automobiles were a big thing. son your old enough to remember the early '80s then it shake of there but then

15 years ago nobody would have to go gold say no. but now the challenge microsoft in search now they're the big bad guys, google. all the gold standard does is make sure it has a stable value. it doesn't prevent people from being depressed but to make sure when we do a transaction that money is fixed in value like when you order a gallon of gasoline you assume it is 1 gallon. you know, what you are getting. so you do get more risk-taking in war people

investing in the future with that experimentation and henry ford had to pay in full bankruptcy's before he could figure how to make that car he could sell. if you don't have that stable money than the thing status same. >> what was nixon faced with? what is he trying to do? with increasing industrial uses in space it is a good conductor what will happen?

>> what happened in the teens 71 the flows in the article with $35 an ounce. nixon was rory rory election and. so the theory is out there to devalue the dollar will boost experts to help -- exports and for one year in 1972 wage price controls to devalue the dollar and it worked he was reelected than the economy crash. it was a bad intellectual theory that brought about no real crisis.

there was no sensible reason to do it. it's a small we have industrial uses but not the we found cheaper and better ways they key you all very much.

[applause]

stick in the age of television in the internet we cannot understand the advertising of images. often they are more important than and text to give a story people believe what they see. to have emotional responses

and they were very effective to use all sorts of propaganda to disseminate their world view. they controlled architecture and had a fantastic display is and created a political spectacle. of those in the american military clock american

military commanders decided to bring the civilians of the concentration camps to bring them to tour that. so many women children are brought into the camp and made to look at the bodies of the victim's head to bury

the victims we go there are least 24 sent to concentration camps. this is the policy again so wasn't period designed but it did fit the agenda at policy at the time. but very clearly explained from the american occupation what it has to do to convince the germans that they were guilty. and these confrontation visits. from german civilians to come with the rhetoric that emphasized these crimes are

a product of germany and german enthusiasm while you were parading around with your swastika. a concentration in campus visits was propaganda for the german public did not last very long after few weeks the camps were closed and the of bodies had to be very to avoid a disaster. then the united states government moved away from the notion of collective guilt that all germans were responsible for the crimes.

soon to remember there was valid competition for control of the so the competition policy dissipates and two of salt of individual responsibility.

of what the allies did the americans did were particularly. it really shaped the germans. with the art in control the situation there are moments of resistance and rebellion and a jew can argue there are but no doubt americans with the propaganda and the campaign to eliminate not see paraphernalia comic images, are to. campaign of censorship not allowing them to be printed called point and with that message but don't they have europe their own voice.

>> is their limits? every journal publishes things and commentary even though we intercepted to maybe american military they would turn into a different editor ship. but this was something that allowed the political conversation. greasy clearly it is molded and affected by a bear factor is the way that germans reacted to american

policy really matters and there was a 1/3 point as well with american domestic politics. and the way they can act and what policy could. so i will give you an example. they fight to world war ii in in the defeat and it did feet to imperial japan and there are racial attentions.

even a little cartoon was very basic was how to tell a non complicated story the moral was it doesn't matter the color there is no since

big as the aryan superman there are all colors of people as there is socialized. >> we just need a little understanding. that was the message of brotherhood of man. and to write this says the anti-racist manifesto. and in 1946 as american labor movement to decide to commission the bill and make a film out of the pamphlet because it had to show the

film to convince people in a simple way that we are pretty much the same. in 1946 some officers decide that's why this film translated into german in selling to the german public. it is great for egalitarianism and shows that they were wrong. >> the story gets more complicated it shows the war department the new director civil but there is division thought those to air a segregationist this is not

the message we want to spread. the war department says he will not show the brotherhood of man but he is an able to do anything because that will fix with his agenda united states is anti-colonial there is nothing you can do the war department has never been shown. a few years later those were involved to make their film and then there were charges said they were communist. the story is called the film is just 11 minutes but it shows how we created rational policy when you

have to worry about what they bought it would favor doing and what the congress wanted. one of the most important elements of soviet anti-american propaganda at the time was american racism. kate and so to share that democracy is a racist and a segregated country. "gone with the wind" was not allowed because they sold slavery. to show political problems with labor unrest they tried

to kraft a positive message across the united states that is actually pretty problematic because it wasn't obvious of the image of but we wanted to project it was. it is hard to know it is the topic of conversation can they teach us lessons? when i started to work on this project in the '90s at the university of chicago in the department of political science i thought this is a great project but the

military occupation is is a thing of the past foreign policy has stated quite a change and there are certain issues but at the same time it is a very distinctive case the very different from the war in iraq to end with an unconditional surrender of the third reich. when we go into germany we go into occupied. we are liberating the government was clear about occupation it is seems quite comfortable using the threat of force with that

iconoclasm with occupied germany. it has changed things so greatly that is a lot more difficult there are so many more voices in the conversation somebody more want to be involved in the conversation but it is harder not only to control information but to have that solesmes propaganda message that isn't contradicted. so it does exist and is important. no doubt about that.

[inaudible conversations]

but the recent moron drugs have been increased people's awareness in they need to tackle using a different approach to argue the economic perspective to understand the drug industry and was leading free-market economy is to use the equal roles of supply and demand with prohibition this approach was by a neck and other former mexican president philippe called

the wrong. -- president calderon. he said of the price of drugs goes up stakes to interdiction efforts you will increase profits he also with don to say it is a case for this system the more successful you are the more criminals who are creating. this is precisely what the warren drugs has been doing prohibition has driven the price of commodities i want a formidable industry some cartels have shown tremendous with all entreprenuership to satisfy

the 4 million customers worldwide. for anyone interested in understanding of why they are likely to fail. to have that revert to -- vertically integrated business model but when it comes to cocaine trafficking it is very specialized. inches in the business model and then to explain the conditions but the author of the book i want her to find me so it takes me from

where the tops of colorado. will also hear from one of the leading thinkers is transforming the economy's. now arledge reduce the assistant editor of the columnist dan now they've your chief for the magazine. as well as parts of south america and the border regions. he is also a commentator on the bbc and npr among others. with politics from oxford university.

[applause] >> they key for being here it is said great privilege especially with one of the great authorities on the subject and here we have practically a full house it is great to see so many people here but i am concerned how many people want to know how to run a drug cartel although it is purely academic but i should start by explaining myself and how i wrote this unusual book and i thought i would be writing about whether the oil industry but it is 2010 and this was the time when

the murder rate was spiraling and almost doubled so quite quickly i found it was the subject that people want to talk about. and about business round tables so i started writing about it more than i expected. business stories one week and drugs the next week and said to were not as different as you would think i wonder if that was the story we needed to be missing that i will give you an example the extraordinary case where the of the governor has said gigantic cash of marijuana the biggest seizure with more

than 100 tons. they got all the marijuana and made a bonfire to douse it with gasoline and it was incredible to make sure nobody was standing downwind [laughter] is like a 100 than joint. [laughter] i was marveling at this and what that meant for organized crime but it was reported this represented the blow against organized crime, isis was valued at and it seems to be there are not many companies and though world beckons stand that shock. i got to look into it a bit more and how this had come about and this sounds

sensible the conservatively estimated worth $5 a gram in the united states this sounds plausible at first but if you apply that you can see immediately imagine if you tried to do this with a product like coffee. the retail price at starbucks said $34 when you get 2 grams of coffee soviet couple of dollars per gram so that this be worth $2,000 coming from mexico. so magic and tried to calculate the price of a cow using stake in washington d.c. but that is what we're doing. so i did a rough calculation

what i thought it should really be worth using wholesale prices in mexico sell wholesale prices maybe $0.8 per gram so this wouldn't returns is about $10 billion rather than the 500 million we were told. so if in fact, what we're doing on the supply side is less effective than we believed then what else are we getting wrong? and in some doing it more closely resembles then you would think the cartel's take part in franchising their brand. they are very concerned with public relations somebody

told me to avoid going aside because that is with the cartel's have the news bulletin. today are experimenting with the commerce. and i will highlight a couple of maps but what i thought was most interesting is seems that we focus on the supply side rather they and the demand side. i went down to bolivia to research this book where all the original cocaine comes from bolivia the or colombia or peru.

but cocaine represents for the economist your idea is to cut into supply that you would expect the price to increase the you would expect them to consume less but that doesn't seem to be what has happened if you look past the last couple of decades and has been successful they have managed to eradicate what you need to make cocaine every year to eradicate an area 14 sigh times the size of manhattan it is an incredible feat the yellow cab the price of cocaine if you go back a

couple of decades to remain around one 1/5 to dollars but that hasn't changed much it is something of a puzzle. so there are a couple of things to bear in mind. if you see a role and it is important to make their decision wrongdoing but you did see something similar acts like a monopoly buyer. if you picture the regular market even with the interruption to supply to raise the price as a result.

but it seems it is something very similar happening in south america with the cocaine business you have one cartel it could be mexican or maybe from the far kin columbia and they say sorry this is the price even a supply is interrupted that is what we continue to pay. not that they have no defect but it is the wrong people rather than of the cartel or the consumers of they are affecting the farmers who grow it and the people who are the least interested in those farmers to make a dollar they are bearing the brunt so with the supply business the economics

suggests even if you could increase the price there is very little reason to think there is much of an impact on the retail price to make a kilo of one cookie needed at hand -- a 1 ton of leaves that ton is about four or $500 in columbia now by the time it makes it to the united states it is $150,000 so even if you are very effective to raise the price baby -- 800 now you push all extra cost on to the consumer you will raise the price of about $150,000.400 you'll raise the gramm by

$0.40 that is what you get if you are incredibly effective to double the price sometimes i use the example to say to raise the price of the works of art sri will raise the price in nicosia will not be very effective what will that do to the price of the million-dollar painting? nothing. that is what caught my attention and one other is the business of ricky resources but i saw this year to big gains in el salvador.

i went to och said the head of the game who is currently in jail and his human-resources problem is serious if you picture the group's route central america to say that is that people employed by general motors with a fairly big organization to manage them is difficult the organized crime groups in particular have to the problems with a very rapid turnover of their staff with very high rates of violence if you're not murdered your often arrested this is what i read from the business of trafficking

cocaine one data for gets arrested tried to run the business of a newspaper or a think tank that your staff had to be replaced with every transaction is the pop-up and compacted they cannot look at the paper and getting the people is a problem fortunately the club but the perfect solution is called present where they get all of the unemployed young men if you're not a member of the gang did you were before by the time you left recede simples of prisons being used and for those of you watching

netflix you'll come across the guide who introduced cocaine to the united states in his career began when he was put in jail in connecticut and it was up perfect match use of there with george to end the rest is history they began to traffic cocaine and america had got its addiction i thought it was interesting because it helps the cartel's but also because the risks the impact for violence and then gain is far more likely to 70 employees out to kill and be killed to test the idea i

decided to look at another part of the world with a steady dash ended europe with the european commission what happens when cocaine deals go wrong? each one was at least 20 kilos with multimillion-dollar deals one went wrong because they were fax another because be a sudden was picked up from the whole of the ship and you would expect if you watch breaking batter something you'd expect that as violent revenge the yen in two-thirds of those cases it would be resolved without

the use of violence. so to find new contacts was so high that more often than not to make more sense without resorting to violence. the is very easy to recruit from prison so they don't need to worry too much how they treat to employees.

he has spent the venezuela minister not the current government to. [laughter] as part of the central bank also a member of some of the largest corporations were

holding master's and ph.d. degrees. [applause] >> the key very much for what is published on the subject and i have to tell you this is one of the best books i have read in years. first because it breaks one of the patterns those that go right book sent those that don't know know what they're talking about. [laughter] that is a rare combination to meditate and said the

disco and report he reports sent observers to collect data and then put into context that is larger than just reporting. the other thing that makes this book unique is dominated by a law-enforcement with lawyers sandlike. had to do a better job

bettis essentially takes if you look at the table of contents with the nba and hubert -- to resource management and the items have the subject let's look at paul kwan dash how cartels use these. and with those pitfalls from a work hard drugs. had to set the stage to criticize the book. said to be more

intellectually interesting. the first one there are three words one is money. the third is laundering like money laundering. and then to talk about that but never the to have the chapter. how do they manage their money? not just financially but logistically. they you receive a container with piles and piles of cash. you ejected to it to the

financial system and you pay a fee for that. and it is very indicative. added recent years to have to live major disruptions. what is osama bin in london and other -- yet there is from all street with that distortion end it became clear was chasing the money. if you started to understand the sources of funding so they created a significant money laundering receive.

to have all sorts of conditions or restrictions for those of a vigil institutions to deal with those money market transfers. . .