economic opportunities to all kinds of workers and all kinds of skill levels. almost immediately after the war that consolidated nation started a long process of unwinding and fragmenting. it's important to recognize we don't think about the scale of its quite enough to. a low level of cultural diversity until the restrictions were lifted in the mid-1960s. in the 1970s census it had

been born abroad at an all-time low at 4.5%. today it is back at an all-time high of 20%. that is part of what has happened to the economy "after words" is next on booktv. this week the virginia representative remembers his victory over the former house majority leader eric cantor interviewed by the former republican committee chair ed gillespie. >> host: it's great to be with you.

>> thanks for taking time to talk about the book american underdog. you can tell i have some dogeared pages. as an economics professor, free-market economics professor had a big impact on the health and the underpinning. in the house of representatives -- >> guest: they've been role models and you can't put them together economics and values together into your politics. >> that is what i was so fascinated about in the book

because it is a as you talk about faith and ethics, economic service. and as a lot of people came to know you and your surprise victory of the house majority leader. majority leader. you were the only person in the house to beat the house majority leader and as you know in the book when a lot of people came to hear about all the media showed up at it tells you who dave is and i wonder if you can talk abou about the synthesis we won't go into detail about some of the things about how there is a synthesis in the economics and politics. >> guest: that is primarily why i wrote the book going back to the founders and the primary goal of the book was to show it's about a 4,000 year

tradition. i wish everything was a synthesis but when you go to graduate school, phd, economics, all the incentives are highly specialized. whereas all previous scholarships for the last 3,000 whatever hundred years it was all about the synthesis. from socrates, the tradition all the way up to the enlightenment issues jefferson madison committee took the classics, greek and hebrew, latin and the rhetoric in english and that was the liberal arts education. and i thought in the liberal arts college i only applied to teach in the liberal arts colleges because i believed in the synthesis and i wanted to show folks i don't know whether i did a great job or not, but it's still possible. it should hang together. if your ethics don't match up with the economic logic like karl marx, he couldn't line up

the economic incentives and it is doomed to failure, whereas adam smith and the enlightenment over here those ideas to line up a mesh. both of them go right together. >> host: one of the things i was struck by is the complementary aspects as you put it the economics and politics are linked. this is from page 27 and a page set god works six days and rested on the seventh. that presumes private property. do not covet is the right to hold things that may be coveted

as you said on page 28 our founding was an important chapter in the history of faith. can you tell us a little bit more about how you see the founding as an important history of faith? >> guest: they saw very clearlclearlyclearly the incente structure but you kind of got added they couldn't see the day that the tradition wasn't taken as a given and we are there right now. that is debatable so there's all this debate of the separation between church and state. the first amendment is about the outcome of the separation of church and state and no establishment of religion but free exercise thereof so that's the tradition.

but it's interesting the soul of the american university and i went to princeton seminary we are a seminary across the tracks, we found it, the presbyterians and puritans, 1640, same thing. we said here we are sharing the groove so we will move them across but you have to teach ethics. socrates, plato and the protestant tradition. now they said you can no longer teach ethics if you bring up religion you get laughed out of the room so this is for real everyone talks about the separation of church and state.

do you mean that kind of a separation, no wall or ten commandments in the society, i don't think so. then i show compassion and love. rome wasn't the most loving. it was the example of the society that comes a doctrine of love and zero. you want a separation of compassion and love i know what they mean. they don't want religious establishments but a total separation we also all assume the left agrees with us on human rights claims and human rights emerged only in western europe. so those rights we argued are traditionally some o thought the founders that they precede in the existence of government. so do you want a separation of that, do the right to exist, yes or no. i wanted to push the thinking a little bit.

it was part of a tradition in a hard time in the first amendment and in toleration so i wanted to push the ideas out there and get the debates going. so that is part of what was going on. >> host: you mentioned the catholic tradition i was struck by later on in the buck. it's clear in your book talk about how the faith informs the public service in your approach to service in the u.s. house of representatives. >> guest: that is kind of biographical. i was born in detroit and michigan and moved us to ninth grade. i just dropped my girl off at school this morning. so that was tough. you go to hope college in

michigan, the protestant tradition, went to work at arthur andersen and then princeton seminary. then i went on to the wesley seminary in dc and next to the american university is a great liberal friend of mine who wrote economics and ethics in the same book so that was the fire i knew i wanted to teach philosophy and theology in college then once i saw that go to the combination of ethics in the book, that was it. i went to work for the army for a little bit and the world bank and the philippines on education sector staff and then i met my wife and was lucky enough to move down to teach economics and ethics. keeping the conversation going is a lot of the old lecture

notes. it's about economics, ethics, philosophy but you did touch on what you mentioned here. it's not a memoir. there's not much detail on that. i'm sure the viewers would like to know a little of the story. we consider you both friends. it was awkward at first, one of those how are you doing and we started talking and then we just had values and common. we all had some of the kind of same outlook catholic,

protestant, and i love where we are going. >> host: married how long? >> guest: 20 years. we have been a sad household. >> host: any tears shed? >> guest: gues guess it'd be way harder. she has been home more and i'm now three weeks out of the month. it hits me when you see an empty room walking by every night. something else i want to talk about in the book that is really telling because you touch on obviously our founding which is something those of us from virginia, the great virginia so

many of them and you talk about not just the horizontal separation of power, but also not just across the three separate branches of the government but the vertical as well. it didn't seem to be working out in that regard. can you talk about what you are seeing in the horizontal and vertical checks and balances? >> guest: yes i will go back quick to madison he went to the princeton seminary roughly speaking and after he was done with his undergrad he studied hebrew. so the hebrew tradition how long did it take human nature to fall three chapters.

if that is the tradition that informs your thinking and you are the author of the constitution what do you do, you separate power every way you can, vertically, horizontally comes with ,so the vertical sepf federal, state, local there are 18 and enumerated powers and the government knew that and since then, we've violated that beyond comprehension that there is a picture in his office in 2013 the house did about 5 inches of bills. we know that the executive overreach over. you see the bottom line and the date of the federal programs are the ones that are insolvent. medicare, social security are both insulted by vera on the board of trustees report. and everything the fed touches

will go to just those entitlement programs. we won't have a dollar left for the transportation etc.. that's not me. it's the main graph of the budget committee. so that his evidence whereas virginia is a well-run state so people think those of us are constitutionalists we are not antigovernment. if you want flowers at the local level, vote on it. you want a well-run state with good transportation and education and by the way education is in the constitution of the state, excellent education.

at the federal level the founders were smarter than us. >> host: you mentioned in the checks and balances that it is federalism and returning the governments to the state and local level where it was intended to be even if the implications are ones that few conservatives may not like and i thought that was an interesting point. >> guest: the key is we are supposed to be a democratic republic. that doesn't mean that you get to win it just means you have a fair process democrat, republican if they vote for more flowers you are a fiscal hawk and you lose. then you move with your feet into these things. the federal government is the creation of the state into this

remarkable how few people realize it. i thought your point about the federalist checks and balances get overlooked a lot of times because we are concerned about his handling of the separation of powers between the legislative and the judicial anl branches and executive branch. but it is evident when it comes to the prerogatives of the state and we see so many cases in this regard obviously for virginia we know how important it is for the clean power plan and overreach. 23 states have said no, we need to stop it but unfortunately we are not among them. but i sure hope that the legislative branch and federal level upholds the state prerogatives when it comes to the executive branch overreach. >> guest: it's important to

know how this came about. in some respects, it is our own fault, too in congress roe v. wade on the judicial side there are some hot button issues and politicians don't want to vote. you take two or three and you might get kicked out. so we arranged it and said you over here now we are doing the same thing and getting all sorts of power. we tell them you are going to make the law, implemented and you've just given the federal government tremendous power and now like you say the ranchers in virginia and everybody is learning what that looks like and they are having a hard time staying afloat. we need to maintain article one. >> host: is that one of the reasons that you were a proponent of term limits.

the leadership if you've got your eye on becoming a leadership or chairman there's nothing wrong with that. wisdom goes along with that. but these days it is so dominant and at the republican side they go to the presidential candidates and get they put in all of the incumbent roughly in congress and so there's an amazing cover of the purse winning elections. people are lining up to be the chairman of the committee. people want to do that. but if you vote in lockstep with leadership to get that you can look at it and both sides do this you're not doing what is best for the country. >> host: speaking of the

founders as you know, we ran for the senate and got closed and then no more than two terms because i think it's important that would be the founder. who and why? >> guest: there's all these guys and we are blessed with history in virginia but washington just for the more that i read it's the one guy that everybody likes she walked into a room and everybody revered him and deferred automatically. the problem with the boxes you don't get to see them live but who is this guy all these great

men turned to him and say this is it. a funny story at a business trip in london i was talking to a historian and i mentioned to him we were talking about the founding and many include the divine inspiration and the divine providence in the founding and we look at these founders and i told them about mount vernon and he made the point it's possible that the british empire could have defeated george washington to george washington, james madison, benjamin franklin, john adams, the whole lot of them really remarkable. you talk about this underpinning

of the moral case for the free enterprise that you make in th this. i believe like you do that the upward mobility is economic justice and you make that point i felt really impressively in the buck on this page 198 freedom and earnings i don't know if the camera can pick it up let me say the next one shows the incomes of the people at the bottom 10% of the earners in four different groups of countries. for those that don't have the bucks, go out and buy the book.

the chart is definitive proof of that. one of the things we also talk about we understand that there is not just economics and labor as the phd and that is the case but there's human dignity and work and the market economy that has dynamic growth allows for people to know the dignity of work. but the data why don't they understand it and where is this kind of enamored by socialism coming from? from? >> guest: i grew up with liberals and he's a classic liberal and so this medicine. the winds got confused but it's not just income. i ran thousands of aggressions on all of the indicators all of the things liberals want. guess where you have the

cleanest environment and where you have the most women in the workforce, catholic country. have the highest degrees for eighth-grade women, catholic country. the most political rights, civil liberties. then you talk about the dignity of work and one of my scholars got the six volume set. a phd in economics in chicago and a phd in literature, well read, just incredibly smart person in her book says because of modern economic growth that started until 1700 every person on the planet made a thousand dollars a year per capita income. and at 170 a 1700 you get a hocy stick. massive economic growth so she takes on the 20 nobel laureates, human capital, industrial revolution, geography, trade etc. those are all common and

causal. she says the primal cause is at about 1700 that is when the first language changed as we start calling it morally good and if you think that' that thr, my tradition hasn't been perfect. abraham, moses, gandhi, confucius, aristotle, augustine, mohammed, etc. nowhere do you find someone saying capitalism or free-market. it's something you put up with that we change the window. right now you ask what are we teaching our kids in school, are we teaching the business and capitalism or do we say it is kind of corrupt and unfortunately there are a few

bad apples but they are basically good and want to give their employees good healthcare. people are basically very good and want to help their employees. we have to reverse that language and teach the kids that it isn't just work. it's a calling and you better be happy and passionate about what you do every waking hour of your life. show them this is good for you and it's good politics because you are telling the kids the truth. you are a college professor and you enjoyed it.

it's to get involved in the politics. >> guest: there's plato and the republicans than augustine. both basically gave the same council. do math until you're 30 and philosophy until you're 50 and the politics of 50 when you are near death which in ancient greece would be the mortality age. so then you have and stil have e wisdoinstilledwisdom and resolve appetite. make sure you are done with that deal. come do some internships on capitol hill. so you learn and go to vacation first and all the major in the

passion. it's something you can make a dollar so follow your passion and that was usually good people come back later and say i'm glad i did that. i don't go any happ have any hae that are not successful. if your goal is the success part you may not find yourself happy. >> guest: all that glitter is these days is the incentive from the video generation.

>> guest: we talked about the economy and kind of a lost generation for what they've dealt with and you make an interesting point on the economic dead-end chapter 12 i want to hit on a couple of things and then come back to them. even as those keeping track of nothing but the dow jones numbers and the uptick in jobs tell themselves everything is back to normal and just find him ofineamong most there is an uneasiness that came at the problems. then a few pages later it's the invisible recovery. it's without increasing regulation, without growing government recession is actualy dangerously optimistic.

misdiagnosing the situation as a typical downturn in implying that all we need to do to get out of it is weight. that's bad news if we've broken the fundamental drivers as you thindothink we have a solid coue things, one, we've been told this flat recovery is the new normal we will never see four or 5% again. your point is that this is because some of the fundamental drivers of the economy are broken. you take them off here but for the viewers some of the fundamentals we need to get right again. >> guest: it's the passion for business in america. people feel beat down. so getting it back in the entrepreneurial spirit.

it's the same thing both vacation. you've got to get that back and regulatorthe regulatory overhant tremendous. you talk to any small business person beginning with obamacare the results are in and the premiums are going up 15 to 20%. the deductibles or two to 5,000 for the poor and wealthy economic studies show lately the average family has about $400 on hand. so you put it together and it's devastating. the average family knows i can't make it through another downturn than the fundamentals of the economy are at 1% and that's with the deficit of 550 billion. so that is stimulative. the fed has 4 trillion on its balance sheet of much but it can be if the loans ever go out.

that is hugely stimulative. so if you are growing at the stimulative what would happen to this economy? it would crash into the markets would get jittery. we had the debate over a quarter-point. 2% wouldn't be normal. >> host: that's what you call the sugar high. then the number one thing the bread and butter is the capital accumulation. who is willing to put millions and millions into a physical capital base with a bet that he will make on the next ten-year window. >> host: such a dampening effect you don't know what the next regulation will be and it

hinders the ability to make a bet like you said. >> guest: if everyone is just looking to see where i can get my two or 3%, that is not the spirit we need. >> host: let me talk about the economics as well you make a point on page 49 and you made it throughout the book washington shouldn't be in the business of picking the winners and losers in the private sector. the best way to ensure the economy is allow the innovators to thrive on the merit and not on the powerful friends they have in washington. they've moved our economy away from where it is based on the premise that what you know is

more important than who you know and the fact is the decisions of 100 million americans a day in the private marketplace on healthcare choices, energy decisions, internet, you name it are being supplanted by the appointees in the city and that has a dampening effect. you are right about the distortion of the incentives and people being rewarded for getting the better targeted tax credit than building a better mouse trap to talk about that in the book. >> guest: the american people figured it out. you just go on the web and for good or bad the educational

upside is huge. people are figuring out what's going on right now so you have 80% going, cruise and rubio and now bernie's getting 50% of the vote unheard of because people see the small guy is getting left behind in the dust. if you don't have access to dc, the big ones do they can get through the tank they don't like it but back in the 50s, general motors, just a commonsense general motors goes so the nation goes. he gets 11 out of 15 exchanges and still test is a complementary things so that shows you someone is scared of the federal government when you

lose 200 million a quarter and savsay the exchanges are okay coming you can imagine the farmer or rancher back in my district underneath of the restaurant for $200,000 that's four years of the ki a kid throa high-priced university so it's hitting them hard. >> guest: it does take a while for that to see then that you have to trust the price system but we allow the prices to dictate. you go to wal-mart how do they know to put that many on the table it's because every time the scam one that is what was purchased so that information

goes to the supply area to face a make ten more and that's amazing no central planner knows that. the day you start picking winners and losers appear it's not a little air or come it is catastrophic for the country going forward and that is the main reason i wanted to run is to convey the logic. >> host: you touch on this in the book you point out that the private sector business folks subject to corruption. no doubt that's true people commit crimes over time and get there is this notion this person in that position and government entity and it's the view of the left, the profit motive is evil and inherently good but that is

the mindset you talk about in the book and kind of exposed the fallacy of that which is healthy. >> guest: the last thing you want is a concentration of power anywhere so when you have a 4 trillion-dollar budget out of hand the teen trillion dollar economy that is a concentration of power and executive branch over the 4 trillion-dollar budget. i wish we were in regular order because i'm on the budget committee and that would mean they would go from committee to the floor for vote by the people's representatives five or six people will determine the budget for the united states in the next month. i tried to call out the red flags on that and tell people to go and educate yourself on all the budget numbers because it is a big deal. >> host: a huge deal and the

other thing you talk about that was interesting in the book, you talk more about the debt and the deficit than we will hear on the nightly news in the next month and you talk about not only the economic aspects of the moral aspect as well. i remember in the past debates and discussions when we got to the balanced budget for the first time in 40 years and it seems to have fallen off the radar the debt has doubled. why is that? >> guest: both sides get overcommitted. they are called economic goods.

you won't more education, more missiles, mortars, more everything. the debt is 19 truly i 19 trille unfunded liability that promised to pay medicaid, medicare, social security is 100 trillion so in 10-years-old revenues will bten years all revenueswill be y spending so where is the ethics, everybody lobbying is forgetting a group of people called the kids by medicaid and medicare and social security are in in se and in 14 years seniors will get a 20% clip in 14 years. the kids will get more than 20% so that is the ethics. i told those kids and that's one of the reasons i went into this to say no one is sticking up for you guys.

i'm one of the people that goes into the middle and i get tortured because of this. it's my calling and i want to do that so i go out every day. it is a moral calling to say what is going to having to change the mandatory spending you have to run a bill through the house and the senate and overcome a veto. we can't do it on the budget committee and most people don't even know the basic facts and you see why. what are you going to do about it, what have you done, you haven't done anything. i am out there doing everything i can, but i'm writing, trying to influence folks, i have the bills but it is a heavy lift and i am talking with democrats, one of the biggest is the war between the right and left personally. we all get along a pier and we e all get along and debate with my

good catholic friends in the morning we debate religion, economics, policy. the democrats are frantically good people. they are doing jobs and getting along great. there's a big left wing right wing divide and it's not true. the power of the city is right in the middle whoever is guiding the 4 trillion. >> host: they extol the virtues of those and everybody plays a role in the process but they tend to diminish the importance of those like you and those crinkly on the left who are making the argument for either side.

i used to say you can't split the difference until that you define it and they get the glory during a certain extent playing a very important role in the political process marginalized or in some cases demonized. >> host: there's a few key words you have to govern and compromise. we talked fifth-grade classes all the time if you have the deficit, you talk about compromise and i'm willing to compromise with anybody but it's got to be in the same direction if you have one present economic growth i'm willing to compromise as long as it goes up and you will find me at the table. >> host: that would do more

than anything to bring down the debt and reduce the deficits and economic growth and there's a kind of false scents because the relatively low unemployment rate i know as any economist would say there's a lot underneath that anof underneaththat and ine saw a $1.5 billion revenue shortfall. how can that be? we have had a declining labor force participation rate and we are at a ten year low in virginia. people left and that contributes to a low unemployment rate. a lot is because obamacare and the mandate for 30 hours. it is employed towards the unemployment rate and the

high-paying jobs for the low-paying jobs. so there's human dignity and worth and we should value that. that is one of the reasons the revenue is down. peoplwas down. people say we have to throw these taxes that is the wrong approach. we don't need more working virginians paying higher taxes we need more working and better jobs and it seems that is the unemployment rate is down and touting that just like in richmond but the fundamentalist viewpoint we talked about earlier isn't sound. >> guest: the piece you wrote your right on the money on the commonwealth and where we stand and the racial tensions were at an all-time high.

the slow growth economy is causing that and we talk about the labor force participation rate and that is right on the money. then our kids are competing against the rest of the world, and what good students. they are working hard. i have indian friends here that have a phenomenal work ethic. so we are competing globally now. you can't make the decisions in isolation in the u.s. or commonwealth of virginia for the minimum wage of $15. competitors across the ocean are laughing at us saying you don't have productivity but you're going to raise the wage rates and they are getting a chuckle out of it and we have to put our productivity levels up over the last 200 years ago probably know but it's the same as the productivity so if you raise the productivity the rate goes up

and we are not spending. >> host: are they still tracking i thought there was a widening gap. >> guest: over the long run that's what we have to focus on. >> guest: i've been reading in addition to this book a piece in the national review that was talking very much about what you talked about in the race relations in the u.s. and economic dynamic. if you get a chance that is a great book that talks about what is going on in appalachia and virginia as well. let me talk about some other things here while we've got the time. the book writing process. so this is a very thoughtful book and i enjoyed reading it.

if you bid my college roommates 30 years ago -- i found the process of therapeutic and enjoyable. i would kind of carve out some time like a weekend or something because i would have to get into the rhythm to write. some people are up at 5 a.m. before they work out. how did you as a member of the house had someone that prides himself on your home always having a meeting how did you find a book here -- >> guest: i had a couple of books going and then i had a

philosophical reader. if you are really sleepy at night, google dot knowledge. socrates and plato and how do you know what you know and then we had a 2,000 year search for that. no one found it and they broke it wide open about 1900 these world-class philosophers and nothing replaced it. this is what got me to put these ideas they don't have a coherent philosophy. they own this tradition and i said i don't own it i want to give it to you for free. but that crackup and knowledge they don't have any systematic theologians writes now nationally or internationally

etc. after that period there's been little systematic thinking so i wrote a book on that and economic notes from the years and i have a few books here alastair mcintosh wrote on that and neil ferguson, the oxford historian. i had a good friend that helps me write.

i'm not a get up and write pages. you go in and start cranking stuff and get out th off the cor and carbon together. >> host: you mentioned and here in herei don't think by nai think it was in your graduate school three teachers that have an impact on you. can you share who they were and the impact? >> guest: right on lake michigan i had, i won't name them in the philosophy but the dutch reformed church there was a scottish reform presbyterian teacher who had these great

systematic thinkers. when you are in college you do not have your act altogether. i saw what the christian concern looked like and i said not only am i thankful for this i want to do that with my life i always seem to be a professor based on these three and then i had plenty more. i had one at the phd he went to church with me and the guy that did the economics was the minister to bill clinton's so i am friends of both sides of the aisle. then they got me working on economic development in the world bank and a couple years with the philippines and singapore so great people all along the lines and it helps you grow so i want to pass it on.

then at the end of the day you say i'm done teaching, 20 years of talking now it's time to put some of this in action. >> host: what is a typical day like? you start again on the day that we are having this conversation and then what is it like i know a lot of c-span viewers probably know this but you get up tomorrow and do what? >> guest: it's weird because it's a presidential years we hae have a monthada month at home al is three weeks in a row in dc, get up early, go to the gym, work out with everybody we get along, watch the news, then you start going to the budget committee meetings.

you go home for one week and meet with constituents in the district and promised to be in every county once a month, so that wasn't clear thinking but it's been great. >> host: we just had lights change in virginia and yours have changed somewhat. how has that been in terms of having a district that you are used to and then lose the constituency of voters and constituents that must be a bit of a -- >> guest: i still don't even know how it happened. i lost and over where i taught my students for 18 years and that they were dispersed through the region you wonder if someone designed it. they picked up and i was there

this past weekend twice running through the counties. it's hard work getting to meet people and share new ideas. when you are new, people are skeptical of politicians. approval is 12% or something. you have to say here's what i believe. you almost need proof now. >> host: you do talk abou to tad here is what is in the buc book. i have seen this with you and you say the same thing back home here and anywhere else. my same is if people are receptive to that conversation they are hungry for it and is that your --

>> guest: i ran in virginia and its equal treatment for every citizen under the law and they like that. the problem is not enough people hold of them to the promise when they are up here so they vote for everything that is not free market. i tried to do that and i get in all sorts of trouble. you can predict my votes and every one of my votes and check it out and see if i'm fudging or not. >> host: here's something important to try to get you pressed on. november 12, he plays -- [laughter] what is the prediction?

>> guest: i got to flip the coin at the last game. three captains came out and said good job. we all liked each other and free-market. >> host: enjoyed reading the book and encourage others to do it. thanks for taking the time. >> guest: good interview. >> guest: good interview. you took notes and went beyond. >> host: highlighted and everything, yellow highlighter. >> guest: it's been good working with you. >> host: you bet.

the british empire was huge and the rule of 450 million people and they were spread all over the world and so they were spread very thin constantly putting down revolts but to them the little colonial war that they would fight was all about gallantry and today he's hit losing their red coats. they thought the khakis make themadethem look like dust writs debate could -- look like bus drivers. >> guest: it was the beginning of modern warfare. not that many americans especially know much about it but it was some of the first guerrilla fighting in the concentration camps, the

modernization of weapons and all those things. it's completely different and prepared them from world war i. things are changing a lot. the boards were interesting people. they were very independent, very religious and unabashedly racist and you know, that's sort of you may have heard the great track in 1835 they moved hundreds of miles and that was set up by the fact that two years earlier they had abolished slavery. so even though the british

empire promised the population was living there as soon as they won the war things would be better for them as we all know that took much longer than anyone would have hoped. so of course, there is still a presence but obviously that was a huge breaking point and things have changed quite a bit. .. >> thank you, thank you. well, welcome to the 33rd miami book fair. [cheers and applause] some of us have been involved from the gunning, some of us gray beards realize we've been doing this more than half our lives. [laughter] it's pretty astonng