thought his answer was brilliant, that's the wrong question. there's always a choice between two evils because nobody is perfect. the question that ought to be asked is not who is the lesser of two evils but which of these candidates will lessen evil. and so you can take that, what their views on life, what their views on crime, what their views on the military, the border, and policies matter and that lessons evil. >> jesus is not on the ballot. we have to pick between imperfect candidates. and z, give them the simple test, give them the simple practical instruction and they will rise up to the challenge and we are seeing that with our 1630 project to see young people pray, vote, engage and get going. >> that's a perfect segue into this.

one of the issues people have when they want to vote is more information, we brought that up, where do the candidates stand, where to the parties stand? i know you have done enormous work providing and making available a ton of resources. share with us a little bit about that. >> we are delighted to share the news hour presidential voter guide is up, if you go to voter resources we have a pile that says voter guide and click and that, senate guides will be there soon. our friends can get access to their material as well, it customized voter guide, we will show where they stand on the issues. we posted information about the ten pro-abortion ballot measures in places like arizona, florida, missouri, south dakota so if you are in

one of those states go to frcaction.org, go to our voter resources section and get that information at figure out what's going to be on your ballot and share that with others, neighbors overcoming the fear of our votes being counted, overcoming the fear of what the government is going to do but we cannot allow lack of information to get in the way, got to make a plan to vote industry materials, ask your friends and neighbors how you are voting, get the juice flowing among those people. they are more likely to show up that way. we have information about a scorecard too. if you don't know where your member of congress is on the issue go to our scorecard and get an idea how they have been stewarding responsibly the lord has given them in congress. that's an important one. we have materials on how to register voters. a lot of folks haven't the heart to register voters. you can get access to those

materials and make sure neighbors and coworkers are registered to vote as well. you can text guide, 67442, a voter guide and it is just about getting this information in the hands of as many people as possible. >> they go to church as well. >> oh voter guides are 50 one c3 compliant, we have a qr code in the exhibit hall, you can scan and fill out a form, quantities shift to your ministry so i encourage you to ask our staff are and that will point you in the right direction. >> the question you ask, who those who say my vote doesn't matter, doesn't count, i live in dallas in a very red county,

and voting is -- we have an obligation to vote. without getting too spiritual in hebrews 11 in the famous hall of faith that is recounted, if you go to the portion of hebrews 11 talking about the story of jericho and the battle of jericho, who is the only person named in the hall of faith related to the fall of jericho? it's not joshua, it is one person. rahab. one simple, small act of obedience will have a generational impact. that's what voting is. it's a small act of obedience. it is our civic vote. >> ends up in the genealogy of jesus. >> i want to thank each of you for the incredible work each of you do in different angles on

this issue, ensuring we have fair and honest elections, if leaders are getting engaged, resources are available. people know what they are doing when they go to the polls. let me just remind you biblically, you were saying it reminded me, god instituted three different institutions, the family, the church and government. government is not a man-made thing. it is something god created for all of our good. many believers have no trouble being engaged in a family or church but back away from government. if believers back away from this god instituted aspect of civil society, everyone suffers. give our panelists a big hand. incredible job.

[applause] >> former members of congress will discuss bipartisanship and public service, watch live at noon eastern on c-span. c-span now, our free mobile video apps. or online, c-span.org. >> attention middle and high school students across america. it is time to make your voice heard. student cam document a contest 2025 is here. this is your chance to create a documentary that can inspire change, raise awareness and make an impact. or documentary should answer your question to the president, what she was most important to you or your community? whether you are passionate about politics, the environment, or community stories, student cam is your

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being here today to discuss your new book what went >> thank you, thank you for being here today to discuss your new book, "what went wrong with capitalism." why don't we just start off by answering the basic question. what did go wrong with capitalism?in >> yeah, i think that what's happened is that capitalism has been distorted, much beyond what the founders had in my, that what they had in mind for capitalism was a system which promotes competition, promotes creative destruction, promotes churn. instead we have a very distorted form of capitalism today where the average person in america and, in fact, across the western world feels that the system is almost rigged against them. one of theth basic pieces of capitalism is it should at least give the sense that this going to be an equality of opportunity. i think the average american today feels that there's not

even equalitye of opportunity r them, let alone the fact of course capitalism naturally gravitates itself to an equality of outcomes but that's supposed to be based on meritocracy. what's wrong with capitalism date is it being really distorted as an as a argut that the series of government actions have led to a capitalist form today that is very much different from what its w founds have in mind. and it includes a suite of government habits, not just government spending and deficits and debt that even rising over time. it's the tendency to regulate the tendency to bailout companies at this slightest hint of trouble, the tendency to manage or micromanage the business cycle and, of course, and all this also the role of the u.s. federal reserve where it seems so acutely sensitive to even small fluctuations in the stock market that it becomes a

sort of asymmetry that on the upside people are allowed to gain. on the downside know what is really allowed to fail. so we've had a socialization of risk the tap and across the system. >> so you borrow this phrase from bernie sanders init your bk and you use quite well when you say we have what is right now socialism for the rich and competition or capitalism for the poor. you going to budget details about why that's true to an extent but then you of course finish it off with a massive amount of or with a large amount of the welfare state that exists which is mostly for middle-class people, middle-class people, the poor, and elsewhere, and other types of people who aren't the rich. the take away, the question i have from this is who isn't covered by bailouts in s the united states? and how true is bernie's statement, really? >> yes, i think the statement of

bernie sanders is the half-truth, which is it's true we had socialism for the rich boy argued a book is we have socialize risk for everyone. so even the welfare state of course has grown exponentially over time, the middle class like in terms of have got you feel entitled that theo need to get the benefits or giveaways as well. it's really become socialized risk for everyone. now of course the most galling part of that is that the rich are also getting, their risk be socialized by the government which is that any company or large corporate even is on the verge of failure, the government stand ready to bail that company out. and that something which is very new to american culture because back in the grand old days of american capitalism you did not have this format where companies

would get bailed out by the american government. the first big ballot of an american financial institution really happen in 1984 with that of continental illinois. before that in in the '50s, s and even the '70s when the idea was suggested american government should bailout any company or even financial institution in trouble, it would be met with huge resistance in washington at that's not the way america is. but now we'ved had this very changed situation where every sort of company feels that they are entitled to bailout. obviously when that happens, the person, the middle class or even the poor families feel that if those companies are getting such bailouts, what aboutut me? and even they are getting a lot of a government support but the most galling aspect is obviously when it's applied to the rich which is become a sort of modern-day form of trickle-down economics which is that when you bailout these big largege

corporations, the justification given is that if you don't do that, it will be to complete economic collapse and it will lead to a lot of people being laid off. but the problem there is that it's a very self-fulfilling argument when you bailout these very rich companies or even like last year you had the svb bailout which took place overll which silicon valley bank. then it's really problematic because it sort of makes anyone then feel entitled to the fact that they deserve a government support and they deserve to be bailed out. >> i mean it will is quite a change is bailout culture. when franklin roosevelt was governor of new york, the legislature proposed a system of deposit insurance for depositors. fdr when he was governor opposed that, and in a sort of folksy way he talked about moral hazard, about how having this guarantee for depositors would make them a little crazy in

choosing banks that were sound. as a result they would choose banks that charge higher or gave them higher interest rates because if they lost money the government would bail them out. so it was all upside. i've heard moral hazard throughout my education, throughout my career, up through the 2008 bailouts after the financial crisis. but it haven't l really heard it said in the last decade or so. what happened to this term? what happened to this idea that bailouts and shielding people from all mistakes would lead them to make more risky choices that would result in more mistakes? what happened to this idea? >> exactly. i think that's a great point. i think what's happened is there is this feeling that if the american economy is doing fine, then why should we worry about moral hazard? crisis, why shoule be worry about it? and that's one of the big issues that i address in the book, which is that there is a real price to these bailout outs and

what you call, you know, like the moral problem, which is that if you look at the productivity in the american economy and as you know, the key to economic growth is productivity. productivity. american economy has been declining for the last few decades. and i linked that decline in to this bailout culture that we have in america, which keeps alive a lot of deadwood and also keeps alive or sort of promotes a lot of the big companies from getting bigger. so i think that the reason why there's still moral hazard may have faded is that it became a bit like diet and steel because a lot of people felt it is the policymakers that, like all these people, keep telling us about moral hazard, but it's not led to any problem or any apparent problem in the american economy. and that's the link i make that no, it has led to a problem. it's just that it's much more insidious. most policymakers tend to view problems as an apparent crisis in your face crisis.

so if the was facing some sort of a fiscal crisis or it running out of money to bail out companies or that was not working, then it would be, yeah, okay. this is a problem but i see that the problem is much more insidious because it's led to a decline in the number of new start ups in america that's been declining for the last few decades, right up until the pandemic it's matched by a decline in productivity in the american economy. so the moral hazard is a real problem just that it's been playing itself out in a modern, insidious way. and because it's not happening in your face in terms of a big crisis, people, wages, policy makers have stopped talking about that. but the average american has, i've argued in the book, is very unhappy at the state of the american economy today. so for the average person, even though they don't think in these terms of moral hazard and stuff, something is not working for them in the way that the american economy is delivering.

you spend some time, joseph schumpeter, to the late austrian economy as to among his many achievements, he coined the term creative destruction, the idea that market competition and an evolution in the market would weed out a lot of unproductive firms, firms that don't innovate, firms that aren't very dynamic and free up, those resources that are sort of constraining and and trapped to go to firms and to entrepreneurs who are more productive and can utilize those resources more effectively, efficiently. they are basically younger and have new ideas. right. and that this process is destroys all companies and causes economic problems and dislocate asian unemployment. but the ultimate result is more creativity, more expansion and more growth. what you write about, which i think quite eloquently, is describe how you replace, how policymakers have replaced this

system of creative destruction and replace it with this system of zombie firms, at firms that are supported by the government, that don't innovate. and we see this, i think most you know, most importantly in places like japan and europe, and now it's spread to the us. what do you think about zombie is like? what's the role of zombies and how does crushing creative destruction cause them? yeah, so i think that first let's define what is a zombie company, right? which is that a zombie company? these are definitions used by institutions institutions such as the bank of international settlements and others. these are defined as companies that have not earned enough profits to even make their interest payments for three years in a row. so are forced to keep going back to the market, to borrow and to keep a, you know, themselves alive. so that's defined as a zombie company. now, this term became popular in japan in the 1990s that when the japanese economy was slowing

down appreciably in the 1990s and the bubble was bursting, there was a big rise in the number of zombie companies or they were classified as zombie companies in japan. the american media that we, including publications such as the new york times, would almost walk this phenomenon in japan, saying that these zombie companies are being kept alive because of artificially low interest rates, easy money and america is very different. america does not do this at that point in time, the number of zombie companies in america was roughly about 2% of the total number of listed companies in america. today, the number of listed companies which can be classified zombie companies in america is by some measures, close to 20% of the total. so just a massive explosion in zombie companies in america and across the western world. i would say so terms of that's what's happened that these very easy money policies, very low

interest rates for a long period of time has kept alive. these zombie companies in america. now, when that happens essentially means that keeping alive the deadwood and there is a price for that, because if you keep alive so much deadwood, then you are keeping out new for coming in your keeping out new startups from, prospering and. we have seen the mirror image of that is that the number of startups in america has been declining over that period of time. so there's a real price to be paid when these policies are pursued that you're keeping alive the existing companies. and yeah, that feels optically good that okay, you by keeping alive these existing companies even though they are not profitable and they are inefficient by every metric but keeping alive those companies, you are helping maybe in the short term avoid some job losses or so. but what happening then is that you are choking new competition, you're choking new companies from being formed, and that shows up in the declining number of startup companies in america.

so i think that that's what i'm trying to do in this book to illustrate that there's a real price for these things and the price that are offered can be insidious not something apparently in your face, but if you look at beneath the hood, there's a serious price to all these policies. yeah, i mean, you write about this in a lot of detail, right? the price is lower growth and the long term lesson evasion, less income growth, less economic mobility. as a result of a lot of these these policies. the fed the federal reserve plays a large role in this and your book and other central banks do as well. how does the fed through its policy or other policies is create this system of of low growth and malinvestment and investment in zombie firms and keep them going? right. i think that if you just trace back the fed and this is where i say that a lot of people think that we entered this know, incredible free market era in the 1980s. and yet if we look at the role

of the fed, there was a seminal shift in it back in 1987. yeah, the stock market had a big crash in october 1987 at that point in time. alan greenspan, the fed chair for the first time, became the head of a major central bank. to say that we are going to intervene in a way to help prop up stock prices, which are that he cut the interest rates to rescue the stock market at that point in time that had not been done so explicitly in america's financial history. now, once he did that, the signal he sent and that came to be known financial markets circles as a greenspan put, which is the fact that on the upside people were allowed to benefit and to make money on the downside. this view came about that federal reserve had your back you that the market failed to match. the fed would intervene to prop up the stock market and after that we saw that play itself out

repeatedly where the fed became very conscious of the stock market and led to this asymmetrical risk. as far as the stock was concerned, that on the upside people were free to speculate or do what they wanted. on the downside the fed would be there to protect that capital. so i think that that is what has led to this feeling now that you can make as much money you want on the upside. and another downside, the fed will be there now when you have the idea, it obviously leads to people making their decisions accordingly when they are going to sort of feel that their losses are going to be socialized. but the profits are all for them to capitalize. so you are a fund manager, you work in finance. that's been that's been career. you've seen this play out from the inside is and you sort of have embraced this sort of

austrian business cycle theory of like booms and busts caused by monetary policy dislocations in the long term caused by this. what in your career? when did you have this aha moment. where you realized what was going on. because i just assume that giving you a front row seat to all of this, you had some moment or some time when this when you became convinced this thesis. yes, exactly i think that, you know, like it's happened over time. i mean, it started out in my childhood. i trace it back to the 1980s. i grew up in india, which was then a very socialist country. and i saw that for me, capital in america was all about giving people more economic freedom, right? so it started off with a love for capitalism, but it came from a sense of economic freedom. but the government playing a role. so i'm not a true austrian in a way that i think there is a role for the government to be played. the government needs to provide a basic welfare. the government needs to intervene in crises.

but then i saw in america over time that how the government's kept on increasing and the government now started to do things with socialist india once used to do. that's really what sort of got to me that that is what the american brand of capitalism was all about. now you speak about the aha moment. see that a couple of things which really disturb me. one was that in the 2000 and tens, even once economic recovery got going, the federal reserve then was still seemed determined to engage in policies such as quantitative easing because it felt that as long as inflation was dead, it could put as much money in the system was required to try and prop up the economy. so that was a very new policy. why should the fed be doing that, which is to throw all sorts of money at the economy, all because it feels that consumer price inflation defined in a very narrow way is

contained. but what about asset price inflation? what about the fact that property prices are surging, which puts homes outside the reach of the average american? so that was the first moment in the 20 tens when i felt something was wrong. and then the idea of this book really took hold in the pandemic that at the time of the pandemic the american government decided to shut businesses down fine. i mean, it was a serious crisis but and then to compensate for that to just throughout amount of stimulus the kind of stimulus governments in the west particularly like in america which they inject monetary fiscal credit got into this was huge and i was saying who's benefiting from this stimulus? a lot of the stimulus checks ended up in people in people's pockets who were earning more than $100,000 a year. the fed, to try and intervene in the market to say that they're propping up and unfreezing was buying commercial paper off

tripoli credit quality such as berkshire hathaway and all these really well-to-do corporations so and then you had this incredible explosion wealth which took place with people shattered at home that the stock market just surged and the surge in billionaire wealth, which took place in the year 2020, was that people are sitting at home. you've shut the economy down, the economy is contracting, but the stock market is surging and. all these billionaires who are there are making tons of wealth sitting at home because amount of money which has been injected into system is unprecedented. so it's then really which you know, like i got me thinking that what's happened to capitalism, this is an economy and this is a country, america, that i was so optimistic on. i came to this. i wrote such optimistic about this country. but then when i saw that the week was being distorted and

connected it with the fact in 2020 that the average american is not feeling satisfied. and today here we are in 2024 and the top ten, 20% of americans feel that they're doing well. but anyone in the bottom 50, 60% are stressed out in terms did you know their incomes are getting squeezed? they've got squeezed by, you know, the high inflation we have had. they've got squeezed by this feeling that, you know, that the rich are benefiting and they don't have the equality of opportunity. and they're also feeling squeezed by the fact that all this liquidity has led to an incredible increase in property prices, but it's put a home for the average american of reach. so i think that that's when i really made the connection in the last few years in the post-pandemic. and this book in many ways is a pandemic baby. so there are three different main draw causes of a lot of these problems.

you identify in your book. and we've talked about the first two, you know, these huge bailouts and governments concentrated on preserving, bailing out a lot of individuals and firms as you have federal monetary policy through the federal reserve and. then the other one you discuss at length in your book is regulation. and it seems like the thread that ties all these together is where the government is trying to protect people from the consequences of their own behavior, from the consequences of their own decision. how does regulation fit into this model of yours? yeah, so i think that when the government sees any problem, impulse is to regulate. as i say in the book, that the road to hell is paved with good intentions, whichs that every time that you see problem, then you think that all we need to, we regulate this or that. and as a say in the book that those regulation in fact end up hurting the average person and benefiting the entrenched,

particularly the big businesses. how does that happen? so first, let's look at the numbers that we hear. an explosion in new regulation over the last couple of decades. the american government in. 3000 new regulations a year and that's been going on for the last couple of decades. this massive piece of increase in new regulations. how many regulations has the american withdrawn over this time period? over the last 20 years, they've 20 regulations in total, right so just look at this asymmetry. that's happened. so now these regulations are happening everywhere. if you want to open a new registrar, you want to start your own fund, you have to deal with a phalanx of new regulation is now the you support my experience in the fund management industry. i know for a fact that the cost of setting up a new fund management operation today for a fact is ten times larger than it

was 20 years ago because you have to comply with new regulations and other things. now, who benefits from all of this? obviously, if you're a big business, it's the costs of meeting these new regulations is still relatively small. but if you're new, start up with a small or medium sized business, the costs are incredible too. to meet those new regulation is. secondly, those same big companies are able to lobby in washington given their power and given the money to write regulations in such a way that benefits. so the biggest lobbyists in washington today tend to be the big corporations, particularly the big tech companies. and for the average person, this all feels onerous in many. one, as i said, is just the cost has up a lot. so therefore you have the decline in new companies being formed in america. but secondly even for the average employee, this means a lot. who's already working at firm? one statistic that i put out in

the book is that today, according to some studies, the average person spends 16% of their time at work dealing with legal compliance scores. is other, you know, like red tape is ism to meet the requirements can you imagine 16% of the time is being spent on those factors and that's costing the american economy millions, if not billions in dollars of lost output. when the average employee is spending 16% of time doing these things. so that's what i try and show that the regulatory state is really hurting the average person and benefiting the big entrenched businesses with their money, power and their influence in washington. yeah, i mean, it's is about 16%, but it certainly feels like lot more because it's some of the most boring work you're ever going to do on your job. you sort of hit on something right there, which is the

influence of large, firm arms and sort of guiding the creation, these new regulations to punish implicitly or explicitly to punish their competitors. economists call this regulatory capture. it seems like and this is my you know, my libertarian angle coming here, it seems like if you have a government that is going to be involved regulating portions of the economy and through creating regulations or running a welfare state. i sort of large enterprises they're going to be moving around trillions or hundreds of billions of dollars and have regulated patterns that impact firms and individual lives. and on every level, it seems almost politically impossible all to avoid a situation where this happens, where you're not going to get a large amount of regulatory cap. sure. so what kind of hope do we have for trying to put this back in the bottle or at least build

build a wall around it? well, first thing is, you know, just to put this out in the public, to raise awareness and consciousness of that, as i say in the book the first step to a cure ito diagnose the problem. so in terms of that, let's make people aware that this is what's going on. because today the solution that many people offer whenever there's a problem is even bigger government. you that of this is a problem. the government needs to intervene and do this. the government needs to, you know, put in more regulate. and as i show that at the most charitable thing that you can see about the government, that it's playing whac-a-mole, which is to put something down in here and something else pops somewhere else. so the first thing we have to do is to make people aware. and i think that that's what i've tried to do in this book, which is that you have had, you know, some of these arguments out there in the public sphere about the fed's role, about regulation and stuff, but how do you tie it all together to show in a systematic way that the last century how the role of

government has crept and gotten bigger and bigger over time, and what are the negative consequence of that already the i think the broader problem is that many people have been focused on the expanding role of government in a bit of a superficial way. they speak about just government spending and then there is this constant threat which is raised, oh, we need to increase, you know, the government's you know that the government's increasing debt and deficit will lead to a crisis. some day. well, that's not happening. and so, unfortunately, that argument really appears still a bit discredited. the average person thinks that, okay, all these people keep fearmongering about these rising debt and deficit. some people are still worried about it, but it doesn't feel material in any way. and you have a lot of people, economists on the left, dismissive these arguments, saying that all these people have been telling us about how increased government spending and debt and deficits will lead to a crisis. nothing has happened. and, you know, like america is

beyond this, it's the world's biggest financial superpower. the people will keep piling in here. dollars will keep coming in. we have taken other strength in our economy. but what i'm trying to do in the book is show that these government habits over time extend to just beyond government spending. it's about regulation. it's about bail out. it's about micromanaging the business cycle. it's about socialized it's about socializing risk across the curve from the most galling only for the rich, and that what are the negative consequences that of already happen in terms of declining started scum declining social mobility in america, declining economic mobility in america where the average person feels they cannot move up the ladder. only 35% of% of americans today feel that they're going to be better off than their parents. whether that number a generation or two ago used to be close to 70-80% of the average american felt they could be better off than appearance. that's a depressing feeling but

it's to make the connection that why are people feeling so depressed even though at the superficial level things appear fine? that's the connection of try to make in this book. so to again put it here in a summary, which is that first i have to make people aware of what is the problem. otherwise you want to keep doubling down and keep doing the same thing that is got us into this feeling of economic -- >> we are going to break away here to keep her over 45 year commitment to congressional coverage. the u.s. senate is about to gavel in for what we expect to be a brief pro forma session. no votes are expected. live coverage on c-span2.