in the early 2000 he released several financial self-help books. in this you must recent books time to get tough and crippled america he writes about politics and outlines his vision for american prosperity. several of these books have been discussed on book tv and you can find them on our website book tv.org. every sunday afternoon they will bring authors who provide different perspectives on specific campaign issues. this week our focus is on economics. the publisher steve forbes. followed by service employees international union who advocates for an increase of the minimum wage. [inaudible]

>> we are going to get started. there are a lot of books to mentions i want to make sure i get them right. thank you for all being here. thank you especially to the folks on a panel. we are pleased that you are here. there has been a lot of talk about the last generation in the last 40 years really highlight the challenges of measuring economic values it's been a lot of people take the view that there hasn't been much progress or growth or economic stagnation over that timeframe. i often try to put the light

that by asking people whether they are low income raise your hand if you want to go back to 1975. there usually are a lot of takers. one thing is undeniable over the last ten or 15 years we truly had been living with an economic stagnation. i joined the cato institution a year ago as president. and over that time trying to explore the reasons of the growth slowdown. i have them as books. one is understanding the growth slowdown in another is reviving economic growth. for the first time in my life we've have a ten year. in which real growth has not reached 3% in any single year.

and at the time i joined this 13 months ago i was hopeful because during the. of my lifetime where we have lived through economic stagnation or sharp economic stagnation it has created a lot of pressure has been the impetus for positive change on the policy front. and i think over the last few months i had realized that i was correct in expecting that economic anxiety would create some turmoil and stimulate some change i was wrong. it's not the kind of change that i had anticipated. they read more books than i have ever read for each of them to come how we can revive

the growth in the united states and continued the coast of progress and prosperity that our nation has enjoyed for such a long. of time. the each had books that have been released. he has a son who will be starting college in the fall. he told me he was considering attending the university in the summer so that when i was getting ready for college i didn't need such an inoculation. in my senior year it was

released. during the summer i read it. game is us no shortage. i encountered including in such classes as capitalism. some things haven't changed. the physical philosophical makeup is about the same as it was at that time but i felt like it in my classes we were able to engage in lively debate it does a great without. as many students do today that it can hurt their grades. actually thank you george for providing me so much ammo to use against fraternity brothers and professors. the case for enterprise and free markets. thank you so much for that.

is the scandal of money we are delighted i think one of the ideas that they have promoted from longtime is the fact that her money system was a great threat not only to our economic well-being but to our freedom and that's one of the reason for 34 years they've held a prominent in your monetary conference that we started under the direction it's very important and timely. in a dissent the last book was a similar topic. having a threat with the lack

of sound money poses to our country. i'm not been isolated with other major party. for the case for freedom. he is still at work. the book that he wrote reviving america how replacing the tax code and reforming the fed will restore hope in prosperity and i think he does a fantastic job really prioritizing three key areas

with health care and money where many of the problems are actually created by government but many also know with the freedom fest which he accurately called the largest gathering of free minds. i mentioned at the outset that while we can agree that there has been income and economic stagnation of late the measurement problems reflected in our economic aggregates i think do fuel us because there are many things that are captured and i reject the

assertion that americans in alternative it is called gross output. one of the reasons and improved and accepted version of the economy you don't really take the action as an endorsement. i am looking forward to his

remarks with the work he has done developing and promoting more effective measures of economic performance. and we will proceed with the process speakers in the reverse order. please join me and welcoming our speakers. the comments about the slow economic growth and the fact that we haven't experienced 3% growth and at some time making that. it was set up with the 4% growth plan. and when i talked to the organizer of it i said did he mean growth of the economy of growth of government. she did not appreciate that comment. unfortunately under george w. bush the economy never did grow 4% during the entire time

of full employment. it's kind of unfortunate. what i would like to talk today is what peter mentioned gross output. it's a very important statistic gross output offers a very there --dash mac a better comprehensive picture of the economy. between accounting finance and economics. it links micro with macro in it appeals for all of the major schools of economics. it is the missing piece of what the latest economist calls the prosperity puzzle. it is their latest issue they talk a lot about the problems which i think will will come up in this discussion but in

any case my argument that this is a unifying approach that it's a more comprehensive picture of the economy it's a tall order. i would like to get started. we start off with basics what is gdp what is it supposed to measure annual spending in one way of looking at in the economy consumers, government and business it is the way they normally talk about it in classes there is a problem with gdp according to gdp statistics what drives the economy. and so what we find out.

it breaks into consumer spending business spending a poor third. and what is what is that say in terms of policy implications because of the spending represents two thirds you get the media constantly making and creating a myth. it's one of the most common myths and economics and this is an example of it from a wall street journal. you get from all the publications. they generate more than two thirds of output. as consumer spending gains should translate into economic growth. that's all it takes.

he of the new york times and the consumer spending. it makes it more than 70% of the economy and it usually drives growth during economic recovery. another one from the wall street journal. consumers not producers consumers accounting for about 70% of the economy. you can see the problem that is inherent with using it gdp as a statistic is this. are we coming to an conclusion. what is missing from gdp. there was $18.6 trillion economy. is that the economy. we break it down into consumption. investment 3 trillion. so what is missing in gdp this

is a surprise factor the supply chain. it does not measure the supply chain. to bring the products to their final use. they just measure the value of finished goods and services. your close, your shoes the internet. all of the things that we are enjoying right now. that is all counted in gdp. but the spending by business to get you to that finished product is left out. and that as an achilles' heel in many ways. it has been measuring and now the government is measuring economic analysis $20.3 trillion. it's more than consumer

spending which is 12.4. it's more than government spending. the eye part is fixed investment. now, what is gross output. it can be the equation of exchange measures total transactions. it's also a measure of high acts triangles. it is taken is taken from prices in production. when it was lecturing at the london school of economics and there is a picture of that triangle that he used. it's purely theoretical he is no breakdown he has no statistics backing it. it has have a rough road of acceptance. what i'm suggesting is the

triangle is being measured today now by the government. i am pleased that this program here today is taking place in the high or it auditorium. considering the fact that the government is now measuring the triangle. we all know the background of that. i just thought i would post this up here. is known more. who's also offered this work which formed the foundation of my own work on the structure production called prices and production. today i have come out with that. they asked me to write to the introduction. here is a modern-day version

where it shows the four stages of production you can see they are in there but then so are the stages. prior to that. this is a great way for students to capture and what i call the four state model of the economy. they have gone through the resource stage the distribution the big news is in april 2014. they put out statistics it now started to measure gross output the measure of high x

triangle or total transactions we have steve landfield as the director who says gross output provides an important new perspective on the economy and a powerful new set of tools and analysis one is closer to the way many businesses see themselves. moving the product along. so what is really interesting a lot of people have noticed but whenever come out with the announcements with the release which they did just recently notice how they define they

define it in terms of gross output. so gdp another way. gross output minus intermediate input. the giving you the audience a top line of income accounting in a bottom line. also for those of us sector by sector i am delighted that they have also done that. and based on stages of production. so based on this announcement

i wrote a lead editorial commentary in april 2014 in the wall street journal at last a better economic and major. basically my book have disappeared nobody was reading it but suddenly when they start using the statistic it has come out of obscurity and now has been used and we had copies here for you to purchase after the presentation what can we learn from the statistic. so what that there is a new statistic. first of all you can see that the gross output is much more volatile it's a much better indicator of the business

cycle you can see the gross output it dropped. it declined 2%. is that accurate reflection during the great recession not at all. you can see what happened in the intermediate stages there was a significant drop that is a better evidence everything is in reverse. it was number one. no suddenly when you include the supply chain is nearly 60% of the economy. it's only a third in government spending is

8.2 percent. when you see those two models next to each other essentially what you see is that business sector is by far the most important sector in the economy. and policy that steve forbes is talking in his book it focuses on the business sector the supply chain productivity these are the factors in now we have a model that is consistent with economic growth. it's also supports the law. with the that monopoly it will be broken. as a u.s. government will provide official data on the supply side of the economy in its structure. we are supply-siders. we have our own statistic.

i know a lot of you don't like aggregate but they can tell you a lot. i love this quote by larry kudlow not one in the thousand recognizes it is business not consumers that is the heart of the economy when they produce profitably and then consumer spend. profitable firms also purchase new equipment because they need to modernize and update all of their tools, structures and software. this is a new approach. i'm not saying replace gdp i'm saying it's complementary. the gross output. in a financial statement you top line and bottom line. my business students loved us. the top line and bottom line. bottom line is our needs. now finally, they have caught up after 100 years with the accounting and finance

professions. now we have a top line in the bottom line. our bottom line is gdp value added. similar to gross profit. and this is a croaked here from three great economists including stephen land felt. and bill norton house who is from yale university it is the natural measure of the production sector walnut output is appropriate as a measure of welfare both are required in a complete systems of accounts. here is a general model of the economy where you see the production side reaching final use. and then consumption when it is used up. in my textbook a general model of the economy and had time to

go into that because i had run out of time. if you're interested by the way in my powerpoint because i've gone through pretty quickly maybe we can send it to the attendees or they can give it a card or whatever. this is the sign of success. not just in my textbook which i have economic logic but also in the number one textbook in the country although greg disputes that. and we have it in john taylor's textbook and roger lee roy miller. it's in all of the textbooks in this developing to be in all of the textbooks. i have a few quotes here what others are saying about it steve has been very supportive

feeling like this is the great income accounting. and they had suggested that vital learning accumulates through all of the processes of production measured in gross output. i don't had time to read any of the other quotes but we have the academic economist, we have business economists and so forth recognizing the value of the structure of production. my basic conclusion is simply the structure of production does matter. thank you very much. [applause]. we are getting a weight for wait for questions until the end. you pointed out that the government now publishing the sales of books i'm assuming that didn't have anything to do with your desire for them to publish it otherwise we could probably count that as rent seeking.

mark, thanks so much. >> thank you very much. congratulations mark on measuring the whole economy inches mesh -- instead of just part of the economy. today the economy sucks. there's no way around it. it seems stuck in second gear. profits are what they should be. new business formations are not what they should be the economy is in a rut. and there's a lot of talk these days about the new normal that we must accept this below-average situation larry summers the president knows what he will be at the

democrats get in again. talks about secular stagnation. and there's nothing we can do about it. it's all nonsense. the right that we are in today which is having profound implications we see that everywhere around the world. it comes from mistakes and the nice thing about policy errors they can be corrected. they can be corrected. they focus on three big reforms. you have to have priorities.

some say it's because there's too much demand. people like me are getting older and therefore the prices keep going up and the system goes cablui. step back and ask yourselves why is demand for health care demand for crisis where everything else a great opportunity. people want more enlightenment. cato will be glad to help out. is that good, peter? sucking up, good. [laughter] >> trying to make sure i get my free lunch after this. [laughter]

>> and in terms of apps, you want more apps, you want more cars, glad to come to your assistance, why is demand for health care considered a disaster while everything else a great opportunity. the answer is we don't really have free markets in health care. all third-party dominated. the real custom, insurance companies and employers, prove of -- proof of it is system and you go to clinic or hospital and ask for advance. why would you want to know the price? just be passive about it. the proof of it is, another proof of it is the crumbiest

motel in america. you go to a hospital and robes they give you, looks like they came out from salvation army dump, dumpster that these things that humiliate you. and so the problems when you have a top-down system, party-party system, they try to cure with regulations, one problem comes up, you whack it, whack, whack. that's why doctors and hospitals spend time filling out forms than practicing medicine. nobody is happy with the system we have today. med costs are still going up. you go to a hospital, but people -- it's unsatisfying experience,

you do talk to each other, do the specialists talk to each other and they give it to her anyway, it's an unsatisfying experience. deductibles under the so-called obama exchange, you may get the insurance but if it becomes more unaffordable than ever, $500,000 deductible, not quite that bad but best practices are quickly imitated. samsung, iphone, you don't get that kind of thing of hospital. i will give you one quick example. breast cancer. you're supposed to have mammograms. the mammograms and improvements on it don't discover. they only discover one-fourth of a time. there's a new treatment where they put a tracer in and it will

find breast cancer. that's why many times a woman has a mammogram, oh, you're great and a month lathe they find out they have a tumor the size of the baseball. why didn't they fine it? now you think that something like this new way of discovering breast cancer, mbi, which a handful of others maybe quickly imitated and this is the way to go. so if you have a mammogram, ladies request on mbi because otherwise you may miss it. key thing in health care, the key thing and we outline in the book is getting the patient in control again for the first time ever, as you know the system came about as world war ii, wage in price controls, they couldn't pay people because of labor shortages and so they had to pay people in kind government said you could do it with benefits rather than cash and after the war in the 50's, the irs made a tax ruling and so they have

the crazy system today and so the thing about free markets as you know always turns scarcity into abundance. we see it in what we used to call cell phone, we know the mister one for motorola. big as a brick and weighed like a brick, 40-minute battery life. smartphone, $100, about to go down to $50. one would be nationwide shopping for health insurance instead of having all the stake cartels, equalize tax treatment, why shouldn't patients and individuals have it or equalize it. how about transparency, how about having hospitals pose prices and clinics pose prices for all of their services so one charges 2,000 for mri and

another 350, have transparency, how about requiring transparency on how many patients die from infections received after their admitted to a hospital. it's a national scandal. no restaurant could get away with that, chipotle didn't kill anyone thankfully but the stock and company took a huge hit. yet thousands of patients die unnecessarily in our hospitals. how about readmission rates, choice of insurance, i don't need pregnancy service. do away with employer mandates and safety net, you can have more effective safety net such as high-risk pools, put aside how they are administered but no one need starve in this country. thankthankfully doesn't run it. but that's what happened in

russia and china. you can have safety nets and health care. taxes you all know, this is a second reform, price and not just raising revenue. the federal income tax code. abraham lincoln gettysburg. money magazine several years ago did a survey, gave a finances, numbers to 46 different tax payers, people considered experts in the field, you know what they got back, 46 different returns and estimates of the families of tax liability, thousands of dollars of

difference. the answer is we have to jump this thing. it is beyond repair. we used to say we should bury the thing. i'm not sure they would allow for it to be buried. it's so toxic and replace it with a simple black tax. the plan we outline in the book, first family of four, free of federal income tax, only 17% above that, no tax in savings, no death taxes. do the same thing in the business side, reduce rate from 35 to 17. capital expenditures and just do it and people say, why not just throw them a bone and have two tax rates? some of the republicans propose, no, you don't. we should have learned from 1976. ladies and gentlemen, when you put two tax rates together it's

like putting two rabbits together. they breed, they multiply. [laughter] >> let's go to single rate. 40 countries have done this and jurisdictions have done this. the real thing is this is a moral thing. think of the opportunity costs. the irs estimates we spend 6 billion hours a year spending filling out tax returns. just go back 20 years. add up all the tens of billions of hours all the brain power in useless corrupting complex activity. think if that had gone to new products, new services, no medical devices, new cures for diseases how much better and richer our lives would be instead of source of corruption that bringing out the worst in everything. it's not 50 shades of gray. it's not like going naked in the jungle.

absolutely crucial. it's absolutely cruk all because this is the way we make progress in the word. we do it billions of times a day . progress easier to achieve rather than trying to do barter. you get a tone piece of paper, plastic in and of itself worthless but claim on real product must be and claims on product and services. it works because it's based on trust. so money measures value the way clocks measure time and imagine the federal reserve wasn't in charge of the time bureau, 60 minutes an hour, one day, 48 minutes, 90 minutes the next day. you know life would be chaotic.

remember if you went to the super market. pound would change each day. you buy a gallon of gasoline you assume the gallon is not changing each day. you have to figure out the nomna minutes, inflation, are they dc minute. that's what they do. neither one is going to help you very much. the federal reserve today is acting like the soviet union. it thinks it controls the economy by trying to control interest rates and trying to control money. it has been as donald trump would say a dis asker. -- disaster. you know what rent control can

do and what price controls to do to deform a market. they've done it to credit markets. credit to corporations 32%, credit to small businesses and households 6%. absolutely pathetic. on the environment we have today specially with hyperbank regulation, very difficult for small businesses to get reliable lines of credit which is why apple, 200 billion cash goes out and borrows tens of billions in the bond market, why because they can't, it's cheap. they buy in the stock. great for apple shareholders but not use of capital. exxon, gold keeps value more than anything else.

we did it for 180 years. that's the dollar u fluctuating not the value of gold. gold is like the ruler, 60 minutes an hour. fix it, have a fix value like 16-ounces in a pound and you will see economy prosper. in the meantime let's have real interest rates in the market again instead of the bureaucrats setting interest rates, let the price be set by people, free lenders, reduce the federal reserves obscene fort -- portfolio, cease those assets and return that and let those bonds flow off in the financial system and have people determine where the capital goes in creating future prosperity for all of us. thank you very much. [applause]

>> thank you, steve. steve, i heard you say many times that monetary policy is crucial and i've also heard you say that when people start discussing the topic it's usual a signal for folks to go to sleep or leave the group and your exposition is really great and i think it helps a lot of people get the message. george. please join me in offering a welcome to george. >> thank you. it's great to be in the auditorium. my -- the quote at the beginning oh of the scandal money is from hyak and it says the root and source of all monetary evil is the government monopoly and control of money.

this is the heart of the message that steve just gave and it's the heart of the message of the scandal of money. and mark redefinition of economic statistics goes deeper than even he has fully explained, i think because his key thesis is that goods and services are not final products. the final product is the human being and creativity and image of creator, those are the final products and they are measured through information theory as knowledge. wealth is knowledge.

a professor at mit summed it up better than i did, i think. he said that when an expensive car that césar hidalgo, when an expensive car crashes into a wall, all its value disappears even though every atom and molecule remains. value is information. it's another point. the car is knowledge. and i say is all wealth is essentially knowledge. the neantherdal had resources, the difference between our age and stone age is entirely the increase of noll. but this gives us a further

insight because if wealth is knowledge what is growth? i have been studying for years and spent a lot of time with bayne and company and learned learning curves from everything from eggs to insurance policies, to as opposed to ware code and learns curve that with every doubling of total units there's approximately 20 to 30% reduction and costs. so learning curves are ubiquitous and wealth is knowledge, growth is learning.

that's what it is. and this is the real final products. they're knowledge and learning and knowledge and learning does not happen only in the consumption of a hamburger, the consumption of a hamburger, the consumption of housing, the consumption of transportation, clothing, whatever it is all endows human beings with capability to create, to learn, to expand knowledge, to expand wealth so this is the -- this is what geo represents, geo represents all learning at every step in the process. it's not restricted to the final output, it proceeds through the entire economy and knowledge but if learning is growth and growth

is learning and knowledge is wealth, what is money? this has been quite an enigma for a long time and somehow money -- the value of money stems from its value as jewelry. gold is valuable because it's really jewelry. thus money is valuable because it's jewelry. my friend richard said, no. jewelry is valuable because it's really money. and why is money valuable? money is valuable because it's time, it represents time in the

economy. when you have zero interest rates you're essentially slowing down time. everything slows down, nobody scores. everything slows down when the value of -- interest rates are zerred out. that's what forces entrepreneurs to prioritize, to invest in one thing rather than another. without interest rates and this is really the vision that currently governs the fed.

this is why the return that we say to gold is to critical because gold is really time. as the technology for extracting gold has advanced it has become more widely distributed, deeper and so essentially the costs, the time to extract the gold has remained reasonably constant for centuries so gold has become the source of time in the economy, measured through time and this is really the heart of -- of

what money is. money is time and what we are experiencing today is a war against time conducted by all the central banks of the world and it explains the great slowdown in growth that really began with the abandonment of woods when we entered the malaise, everything began to slow down because of the signal where it was critical of the price signals conferred by money were rather than a measuring stick as steve describes it, it became a magic wand and all of these magic wand for the government and all of these --

and you can't have real growth without knowledge and learning and knowledge and learning depends on real information rather than on this furious manipulations of the fed who try to essentially -- try to fool entrepreneurs into making imprudent decisions. so when we say going to the gold standard, we aren't speaking going back to anything, this is going forward. the gold standard in conjunction with the new global economy opened up by the internet is is a uniquely powerful element in the new world. the bit coin block changes not only potential for global money

but also the -- the potential for innovation insecurity. the swift network got hacked, the swit network is the central nervous system of our banks and it -- and it got hacked $60 million extracted in bangladesh and the centralized model of security is bankrupt anymore than the centralized model of money can work. and the bit coin block changed in part security not through con cealment and transparency and distribution. you need half of the computers of the world to take over public ledger of transactions.

we can now integrate gold standard with bit coin standard which is based on time and they converge and to stop title two domination of the internet, reduction of the internet to pathetic public utility where aggregations of lawyers converge and control and specify prices which is the meaning of title two internet. provided we preserve the global internet and allow to prosper, i believe that gold standard can evolve even if we can't go back to the gringrich, gold standard

legislation that was introduced in 1884 which was the last great hope for enacting connection between gold and the dollar. so money is time and time is real and time can't be manipulated. it can't be redistributed. time is what remains scare when anything else in capitalism becomes abundant but the abundance of capitalism is contingent on the integrity of the information that governs it, the knowledge, the processes of knowledge and learning that embody it. so i think all this introduction of the output model is crucial because not so much because it

shows that consumption doesn't drive the economy, human creativity drives the economy and i think that is tremendous insight and a tremendous advance. thank you. [applause] >> thank you, george. one of the quotes in your book, i have to paraphrase but it's a paradox that's always puzzled many of us who are adherence to free markets accept central planning in the monetary room is really incredible and to the extent we can convince people of that paradox and inconsistencyic it -- inconsistency i think it will help our cause.

i'm not going to do that out of consideration to the audience. i would like you to have an opportunity to ask questions so those of you who do ask questions please be as considerate of your audience members and be concise, please wait to be called on and recognized. wait for the microphone so the folks up here can hear you and the folks listening on the internet can hear you as well. state your name and affiliation and, please offer a concise question that's actually in the form of a question so why don't we start right here in the front . >> thank you, thank you all for your comments. i want to talk about health care, my fame is lou, i agree with you, mr. forbes that transparency of prices is important but frankly outcome is equally important and frankly more important in my view to the

care of patients and particularly hospitals, so the question i have for you in some of the things we are seeing some of the payers, private insurance companies are promoting and sending patients to where the best care is given without interfering with the clinical decision of doctors, believe it or not. so the question i have for you is could you comment on the fact of outcomes measures being important to the decision as to where we send our patients for care? ..

with electronic records. every business in the world has had electronic records for 20 or 30 years because you didn't get into health care and then they didid its soviet style it sylvif one-size-fits-all and it was a disaster. so the key is how do we empower information and patients to be able to make more decisions and then providers will be able to quickly adhere to it and if they don't, people won't go there. they don't have to go there. they don't have to be directed. that's the way to go instead of the top down okay let's have top down oriented because again, healthcare is so personal. and i just gave you one example i mentioned about breast cancer.

there is a chain in pennsylvania that several years ago they put the equivalent of a warranty. legally they can't call it that but if they botch your knee operation, the next one is on them, whereas in the normal system today we go back to paying it even though it isn't done right the first time. how many have put in the equivalent of warranties you can count them on a single hand. let's get the patient in charge and i think a lot of these things we find desirable like electroniwhiteelectronic records what happened naturally because it is about them. >> the only place that exists today is if they amputate the wrong arm, they will amputate the other for free. >> or operate on the wrong side of the brain, yes. >> the jungle man in the middle.

>> thank you. onetime cato employee and advisor of ted cruz. in your book i thought one of the most interesting parts was the financial a financial rosace u.s. economy and what that has meant to the triangle of how you describe it wall street, main street and silicon valley. could you talk about that a little bit, please? >> the ultimate scandal of money is what is used as the alternative to the gold standa standard. in the currency today there will be a new accounting and this next month or so from the bureau of international settlements. but it is $5.3 trillion a day. this is 26 times all of the global gdp.

it's 73 times all global output of goods and services. it is a scandal and it's all conducted by about ten banks that conduct 77% of the currency trading. and it's 98% is speculative. it just a complete failure the chinese are accused of manipulating currencies because they refuse to flow. they are fixed on the dollars plus enabling their miracles of economic growth and what's happening is we have created a closed loop economy between the obama administration and the fed and essentially, startups, small businesses, main street has been shoved aside, and 62% of the

money creation goes back to the other two thirds and most of it goes to this carnival of biting up their own securities for the stock market cosmetics and for biting up their rivals. rivals. rivals. there's not as many now as there are in the united states. this is a real catastrophe and why we need a big change right now. >> national tax limitation foundation. i would like to hear from steve forbes and george about what are the concrete policy steps that need to be taken to restore the

gold standard. and you were advising the president of the united states what would you tell him that needs to be done step-by-step? >> the first thing is if they want to do it and then will they know how to do it. the momentum would standard we didn't pitch is how we ended up wrecking the system and we could get easy prosperity. so, you start right away by freeing up the interest rates. they say that will disrupt the markets. just remember in the late 1940s the economic director in occupied germany and overnight he proposed doing away with rationing and they said disaster and he replied my advisors to be the same thing, it would be a disaster. he did it anyway and the german stores started to fill up with

products and food and the german miracle began, soap free interest rates at the beginning. the other thing is to announce and make it the case that this positive because then you can get credit markets starting to work again. second thing is starts winding down the portfolio and let the resources go back into the economy where people can determine where they should go rather than the fed. and on the gold standard you could say we are going to pick set, pick a price, 1100, 1200, and then that would make it very clear pulling away the regulation, right now you try to make a loan today you have to justify it. we deregulated the transportation system in the late 70s under a democrat. got to do the same thing in the banking sector. one of the most wonderful things that happened recently is when

the cords ruled in favor of mass life and all of the regulators had to leave the offices in the name of saving us from their depredations and we need to do that with the rest. the so-called bank reserves don't get multiplies in the old monetary interest gets sterilized. so, start with those. both on interest rates and then the other thing is remove all the carriers to the alternative currencies, tax barriers for regulatory so that way if the government starts to misbehave you can do it and if somebody comes up with something better you know the government can't block if so unless it gets unleashed and who knows what will happen if i knew i would be on the list for rich people but

let the thing unleash. the faster the better. it's not complicated and i think that we will be pleasantly surprised by how quickly we come back like water in the garden, plants grow when they have wat water. >> you are already at the top of your list with your knowledge. >> i'd like to make a comment because from a practical view setting a specific price for gold wouldn't work. i disagree a little bit on this i think it should be used as an indicator whether we are inflationary. the idea that monetary policy is to provide stability. you want to provide basic stability and the problem is what is the money supply because with deregulation is that m1

two, three, four and as a matter of fact it has been moving relatively stable throughout the financial crisis that is quite interesting but biggest problem, you use it as an indicator if it is drifting upwards that suggests maybe too much inflation an you need to pull b. but one of the problems in the fixed price is beneficial spillover price you should be accommodating and the fed should be expansionary. they are overshooting one way or another so you become expansionary and then it goes above the market price and the war restricted and move it back down again and hope we com comeo words a stabilizing point of view but the problem is the overshooting problem with gold.

gold isn't directly tied only to the dollar from its also tied to other currencies so the volatility is a problem with setting a specific target price which is a moving target. it's a moving target when you have a floating race in the non- gold standard. you never have the problem of the classical gold standard or brendan woodbrandon woods when e behaving by the rules. how the currencies fluctuate as how they are misbehaving which is why in the standard when people saw how well i was working for us the whole adopted their own version of it so you have very little volatility and no need for the currency trading. so the volatility comes from the lack of having a specificity and in terms of trying to control the money supply, i think it's preposterous for the sort of what you might call the rest of the theory of economics, a

restaurant owner notices a customer's check code then it will stimulate the production of more coats and therefore more people come to the restaurant. it's backwards. monemoney reflects people produg products and services, not the other way around. you look at what they call the velocity of money all over the place, so get it fixed in 60 minutes or an hour and it won't fluctuate any more. he did believe that velocity was essentially a constant coming and it only works on the assumption that velocity turn over the money can be predicted that the turnover is controlled by us producing general output

and that can't be controlled by the fed. by the way, the growth domestic expenditure you should read his paper. the introduction to the structure i got into how to take advantage of that. >> the gentle ma gentleman in tt row. >> from george mason university economics department, my question is here at cato there is no fan of centralized monetary authorities and it opines that even if you sent strict constraints upon the

authority you can have serious problems when the fiscal authority is unconstrained and this is, he lays the problems of the european central bank down to precisely this issue so given that you impose the constraints of the gold standard upon the monetary authority, i suggest that you are touring a symptom and not the underlying problem which is the fiscal prophecy. >> the problems were structural, fiscal and regulatory, and the idea that manipulating money, manipulating the number of minutes in an hour is going to cure the structural problems as preposterous. illinois can if you take the word grease and translate it you get illinois. [laughter]

but no one suggests if they left the dollar zone that the problems would be cured. that would compound. so those are structural problems, nothing to do with whether it has been mismanaged, but trying to use it to overcome these structural problems into the tax increases is the real problem just as in this country. so having a stable measure of money from having an unstable measurmanager isn't going to ove the problems you have to do hyper regulation and overtaxation and all the anti-growth. they took about the republican war on women. how about the war on prosperity

which is the real problem. so having a steady measure of something making it unsteady isn't going to cure the structure of problems that others refer to. >> i would have also they've made a good point about this they are acting like a gold standard and if so it is causing grease and other countries that are irresponsible to suffer as a result of this and get their act together. to use the data and tax system is the gold standard so in love economists argue by the way that one of the reasons, they know the countries that went off the gold standard first during the great depression recovered more quickly. it's an interesting argument worth looking at.

that's the basis of that argument. >> just ask brazil how much that works in argentina and zimbabwe how well that has worked and the countries that have done better over time and those that don't have steady currencies not to get into the discussion of the depression but it got a policy where they all went off on the currencies and the ferry supernovas the miserable decade. you could get a little leap forward and others follow and then you are back to where you were.

it's a mistake to think that it's something called inflation or deflation. it's to give signals of information. it's a manipulated currency dominated by the socialist regime and so it's falsified in the information. it was misjudged the collective level which is almost impossible to compute anyway all we have to do is look at the price of oil when we went off the rails that went from $3 to almost $40 of their goal because the price has gone up and people thought we were running out of the stuff we had huge investments in the ended delete code energy

industry. unstable money and cecil the pee same thing in the last decade is like a virus and a computer that corrupts the information. >> i think we are going to leave it there. one of the things steve started out with in his remarks, we kind of reject this idea that we've got to get used to the reduced level of growth and prosperity because the fact that we are living through this difficult time is a result of the policy errors that are all related to

the reduced level of freedom so obviously something people believe very strongly here. i want to thank you all for being here and especially those of you in the audience that were sponsors. it's your generosity that makes our work possible and especially want to thin thank the presentes today all of whom have books available outside for purchase. thank you so much for being here. [applause] the next progra program in the n issues blog on economics is the service employees international union vice president david ross and his argument for an increased minimum wage. >> hello, everybody.

welcome. i am so happy to see you. good evening. hopefully everyone has enjoyed some wine and food and this is a lovely room this evening so it's not everyday that we get these kind of moments to pause and step back and reflect. we need to and should celebrate the victories for working people that have been snowballing across the country just to think only several years ago 925 was considered ambitious and only possible in places like san francisco. thank god for san francisco. [laughter] but now 15, thanks to seattle and then california and new york and the localities across the country.