i used to be a regular on c-span when i was a staff member on capitol hill, but i've relocated back to point blank and i continue to regularly talking about and talking to my community about and you say you were a regular house so you guys often would me up and say, we want you to do our morning that you that you have really great calling shows in the morning and sometimes you do a democrat and a republican staffer sometimes you would stagger it do the republican staffer first and the democrats efforts. so this was during the nineties, right after a newt gingrich came into office. my was -- armey. he was the republican leader of the majority leader at the time. and you are associated with two think tanks project 21 and the national leadership for the national leadership for public policy research. if i get that right national center for foreign policy

research. yes, that is correct. and what are so project 21 is an organization of black americans who are trying to promote the idea that black americans are not uniformly liberal. black americans have a diversity of opinion on a lot of issues tax policy, abortion policy, crime policy. and we make sure that that word gets out. we were created during the rodney king riots when a bunch of black americans were funded to maxine waters, who said this of nearly a billion plus dollars worth of damage, is normal for black people when they're upset and we were formed to say that's not what black people think, that's what criminal ized people think. some of who might be black. and the national center for public policy research focuses on environmental issues free market issues and the like. horace cooper another issue that you take on is and the chapter

is by is lynching black americans economy. so a lot of people don't realize that there are some factors about black as a group that you could argue for instance a lower percentage of black americans choose the medical care or physician fields of study than the population at large. a higher percentage choose education and a significant of black america works in the public sector, a higher percentage of black americans work in the public sector than anyone else. so what i wanted to do was figure out what is happening with black america from an economic perspective given where we are it is very difficult unless you're the biden or

you're a nancy pelosi to become a multi multi millionaire from a government job. it's very difficult, not impossible, but is very, very difficult. so schoolteacher, fireman, police officer in my family, my mother my father, my brother and myself for four, four were a government employee, worked in congress. my father worked for the city of houston. my mother was a schoolteacher and my brother worked for county. we represent some of the regular ways of blacks. so black americans start off at a financial deficit since those kinds of jobs don't allow you to leave 100,000, $200,000 to your children so they get a leg up. so when you get ready to buy a house, that means that you're more likely get an adjustable rate mortgage.

when the federal reserve starts hiking the the adjustable, the mortgage rates, the interest rates, black americans more than any other group feel the pain more black americans are finding that being foreclosed upon because their thought was we're going to get this 6% rate and then rates keep dropping. we can refi, nancy, at four. that's not rates are doing. if you started six in 2021, you're at nine now. that's a high, high level during the years black americans, according to ford, set records for the number of f-150 pickup trucks they bought during the biden years. the man set record numbers of take backs of vehicles that could no longer be afforded it

is harmful the way the president's policies have made it. it's a slight annoyance, as if you make more than 150, $175,000 a year in america. his policies been a slight annoyance. but if you under 50, it's almost hell on earth for you and black americans are disproportionately more likely to be under 50 and they ought to be 175. his policies target those people regardless of race. but since more blacks are there more blacks are hurt. well horace going from trucks into what you call energy poverty for blacks. so another issue that seen is that all of us have to pay for our electricity under. the trump administration energy as a cost to the average family reach some of the lowest levels

but under the biden administration energy as a percentage of the income dramatic increased and what meant was that if you are a black household you find yourself having to make some tough choices, pay the electric bill, get the medicine, go to the grocery store, black americans suffer more from spikes in energy prices, not just at the gas tank. you will get the electric bill. and that's what i meant. what i said earlier. if you make 175,000, it's annoyance when you see electric bill is up 25 or $35 for the month, maybe even 50 for the month. but if you're on a tight, tight budget, 25, 35 or $50 every month can push you the top in your book, put you all back in chains. you look at the issue of equity versus equality.

so we have been given sort of a fool's choice to undo all the perception of unfair ness and injustice. and let's just equalizing outcomes. that's equity whereas we ought to be trying to do is saying that all as our premise that all americans are created equal all citizens are created equal from the beginning we didn't fully live up to that but we've now over that to some citizens need to be more equal than others. now they don't say it that way, call it equity. but if say that the son of a black engineer who just didn't score well on tests will still

get into a top tier school maybe harvard maybe yell and then a kid whose father has a minimum job, who hit those books super super hard and scored some 25% better or higher on exams. sorry we've got enough whites that kind of equity over equality creates enmity among races and actually when when the supreme ruled that harvard these other elite institutions that no use affirmative action they did surveys black americans agreed because implicit the equity argument is that somehow those blacks deserve it or wouldn't able to get it otherwise. and when i was a kid, my grandmother assured, assured me, you hit books, you study, you

sacrificed, you make the effort, anything want in america is possible now one of the things that i said in the book about our former president, mr. obama, a great model potentially of what's possible when he became president. no european nation had a minority. we had seen women as prime ministers in the uk and, in germany, but we had not seen nonwhite european leading countries. when america did that? that was a first. we're starting to see little bit more of it now. one of the things that barack obama could have done, notwithstanding his policies on energy on health care, on force in power, he could have said to students all over america go hit the books, study apply in

america. you can do whatever you want you can be president. he could have done that instead. he often said america is such a bad place that if you don't let me help, you'll never make it. mr. cooper, in your view, do we have a relation issue in this country? we have an artificially created relation issue. do you want to talk about where america really is? every year since 1980, racial intermarry, which has increased and in some decades dramatically. so there never been a decade since 1980 when fewer for whites or blacks or browns intermarry than the year before. and as i said, in some decades that has been like a 20% drop. people can't be loving one another while saying all of their neighbors hate people who

look like them. that's just not true. the eeoc is saying that workplace investor nations are declining with regard black americans, in fact, anti-semitism is a far higher area of investigation. the last decade and anti asian hostility hate and acts of of crime are spiking with to the eeoc. the met asia's of whether or black americans being mis unfairly treated or mistreated in america. the doesn't show this. now turn immediately to law enforcement. the truth of the matter considering the number of victims who identify blacks as their victimizer versus the actual number of arrests, blacks are not arrested. at the same if blacks were arrested at the same level as

victims who identify them. we would an even higher number. the fact is that most law enforcement, most police departments are intimidated by this idea, that they will be perceived as being anti black. you can't let someone get away with rape and robbery because you hate. it's got to be something else. the last point i'll make is it took the supreme court stopping affirmative action to end it because universities and law schools are so committed to this idea how. can we say that america is this place? it's so hostile to blacks or minorities in general who designed the cover puts you all back in chains. so i asked for something the publisher, did the design, but i asked for something that reminds it us of lbj's policy of giving

people public housing facilities. i today wouldn't wish on my worst enemy the sort of public housing facilities that were the norm in the sixties and the seventies and in fact today what we see are a large number of people where there's multi generational poverty that mom went in her kids got their own apartment later in their her kids got their own apartments. all of these hopes dashed. and so i wanted to make sure that we talked that and they had these chain link fence as around them. so as to quote prevent malefactors from coming in but in many instances it just people inside now you know the president said when he was a vice president that if mitt romney were elected president, black americans would be put

back in chains horace cooper put your back in chains. is the of the book the subtitle how joe biden policies hurt black americans. thank you for spending a few minutesruchir sharma thank you r

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? yeah, i think that what's happened is that capitalism has been distorted much beyond what its founders had in mind, 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 the basic thesis of capitalism is that it should at least give the sense that there's going to be an equality of opportunity. i think the average american today feels that that is not even equality of opportunity for them, let alone the fact that, of course, capitalist ism naturally gravitates itself to inequality of outcomes. but that's supposed to be based on meritocracy. so in short, i think what's gone wrong with capitalism today is that it's been really distorted, as i argue in the book, that the seeds of government actions have led to a capitalist form. today that is very much different from what its founders have in mind, and it includes the suite of government habit. it's not just government spending and deficits and debt that have been rising over time. it's the tendency to regulate the tendency, bail out companies at the slightest hint of

trouble. the tendency to manage or micromanage the business cycle. and of course, in all this is also the role of the us federal reserve when it seems so acutely sensitive to even small fluctuations in the stock market, you know that it's become this sort of asymmetry that on the upside people are allowed to gain. on the downside, no one is really allowed to fail. so we have had a socialization of risk that's happened across the system. so you borrow this phrase from bernie sanders in your book and you use it quite well where you say, we have what is right now socialism for the rich and competition or capital ism for the poor. you into a bunch of details about why that's true to an extent. but then you of course, finish it off with a massive amount of all, 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 the united states and how true is bernie's statement really? yes, i think that the statement of bernie signed sanders is the half truth, which is that it's true that we have had socialism for the rich. but what i argue in the book is that we seem to have social risk for everyone. so even the welfare state, of course, has grown exponentially over time. the middle class, you know, like in terms of i've got, you know, feel entitled that they need to get like all the benefits are giveaways as well so it's really become social risk for everyone. now, of course, the most galling part of that is that the rich are are also getting their risk, be socialized by the government, which is that if any company or large corporate even is on the verge of failure, the

government's stands ready to bail company out and that's 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 bail out of an american financial institution really happened in 1984, but that of continental illinois before that in the fifties, sixties, and even the seventies, when the idea was suggested that american government should bail out any company or even financial institution in trouble, it would be made with huge resistance in washington that that's not the way america is. but now we have had this very changed situation where every sort of company feels that they're entitled to a bail out. and obviously, when that happens, the person, the middle or even the poor families feel that if those companies are getting such bailouts about me

and even their getting a lot of government aid and support, but the most galling aspect is obviously when it's applied to the rich, which has become a sort of modern day form of trickle down economics, which is that when you bail out these big large corporations, the justification given is that if you don't do that, it will lead 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 bail out these very rich companies or even, you know, like last year you had the s we be bail out, which took place of a rich silicon valley bank. then it's really problematic because it sort of makes everyone then feel entitled to the fact that they deserve government support and they deserve to be bailed out. i mean, it really is quite a change as bail out culture. when franklin roosevelt was governor of new york, the legislature proposed a system of deposit insurance for depositors

and fdr when he was governor opposed that. and in his sort of folksy way. he talked about moral hazard, about how having this guarantee for depositors would make them a little lazy in choosing banks that were sound. and as a result, there were choose banks that charged higher or gave them higher interest rates because if they lost money, the government would bail them out. so it's just all all upside. and i've heard moral hazard throughout my education, throughout my career, up through the 2008 bailouts after the financial crisis. but i haven't really heard it said in the last decade or so what what happened to this term? what happened to this idea that bailouts and shielding people from their own mistakes would lead them to make more risky choices that would result in more mistakes? well, what happened to this idea? exactly. i think that's a great point i think they too. what's happened is that there is this feeling that if the american economy is doing fine,

then why should we worry about moral hazard if all these bailouts have not led to any apparent crisis, why should we 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 outside, people are allowed to benefit and make money. he came up in the federal reserve have youyo back the fed would prop up the stock market and we saw it repeatedly where they became very conscious of the stock market. the stock market was confirmed on the outside but will do what they wanted. on the downside was that they would protect that capital so i think that's what is not 20 is what it on the downside the fed would be there. ... feel that their losses are going to be