for more inspiring stories of america together log onto our website foxnews.com. from my home to yours, good night and god bless. america, i'm mark levin. this is life, liberty and levin. we have a great show. we will take people into the constitution, what the president is doing to preserve the constitution and we will dig deeply into capitalism and the spending on capitol hill and two of the best guess to do exactly that. christopher is a distinguished fellow at the hudson institute and was part of the reagan

ministration. he served at the american enterprise institute. how are you my friend. >> i'm just fine. good to be here. thanks for having me. >> it's my pleasure. the president notice the piece you wrote as did i in the wall street journal. the title is for the first time in u.s. history and administration is responding to a crisis with the regulation and decentralization. this is crucially important, explained to the american people what you mean by the. >> throughout our history and especially in recent decades when we encounter a national emergency of some sort which we tend to do every ten, 15 years, it has been the occasion for increased centralization of power that is the migration of power from the states to washington d.c., the federal government, and within the federal government from congress to the executive

branch, this crisis and emergencies have not been the only thing propelling the growth of executive government in washington. it has been a continuous process for about the past 50 years. there are many deep causes for it. emergencies have certainly been an important part of the story. one could go back to crises of the 19th and 20th century, but the most important recent ones where the 911 terrorist attack and the financial crisis of 2008. in both cases, in memories of many people the response was the federal government exercise, the president and his top aides took the lead of the response to the crisis

required urgent action, acting with dispatch, they did that but the tendency was also to create huge new bureaucracies of highly centralized power and increasing autonomy, freedom from oversight by congress, able over the long-term to act without congressional appropriations as in the case of the consumer financial protection agency created after 2008, to write the rules where the executive had enormous discretion to state what the law is, to interpret it, to enforce it and even to adjudicate it. this centralization of lawmaking power in the executive branch in washington is a dangerous thing for our constitutional values. it interrupts the competition

within government and between the feds and the state which is an important part of the constitutional scheme, and emergencies have been an important cause of this enormous and high-powered central government we have today. the article you mentioned was calling attention to the fact that the steps that have been taken in response to the coronavirus epidemic have been a dramatic departure from previous emergencies of this magnitude. the federal government has been taking very important leadership steps but the frontline responders have been governors, mayors, hospitals, medical professionals and private enterprise. pharmaceutical and equipment manufacturers that have

responded with extraordinary speed in national mobilization to meet the threat. >> let me ask you some follow-ups. i think you're correct. why do you think the knee-jerk reaction is to centralized government. in a federal b accuracy that has, in many respect failed the nation, what you think the notion to abandon the notion of local and state governments closest to the people, knowing how to deal with the hospitals, and why do you think this president who didn't come into office as a conservative has really been steadfast and protecting the constitution and resisting calls by nancy pelosi and others and in the media to use the national defense act to start nationalizing companies

and centralized imported general in charge of everything and so forth and so on. he's basically saying look, i'm not franklin roosevelt and i will do these things. >> i think part of it is a logical mistake that many people make, there's a big crisis that demands action. in america we always respond to crises a little bit too late. we were late to the game in world war i, world war ii, but then we get together you get our act together and we mount a ferocious and effective respons response. people like to think if we just had a strong central authority that was an impotent an. [inaudible] we wouldn't have to go through these things, but i think it's

a response to do away with the patchwork response in conflict and competition among different jurisdictions, they tend pretty heavily to be in washington d.c. the national media of course would just like one authority to go to. it lowers the cost of their news operation, they don't have to care that much about what's going on in san antonio or fresno or peoria. when you have a nation with dispersed centers of authority and initiative, it's harder to put together a 15 minute news summary with a small crew in washington d.c., the big national newspapers are centered in washington and in new york they have an interest in a centralized repository for news and many people in the federal government, the

establishment in congress would like to have more power. that makes their jobs more important but i think if you go around the country you do not find quite the same enthusiasm for a uniform national response, especially to a crisis such as the one we are facing, and there is a lot of deep appreciation for the value of letting different jurisdictions and different people adapt to the circumstances as best they can. mark: and why do you think donald trump has demonstrated himself to be quite the constitutionalist despite all the pressures that are on him to just go full franklin roosevelt? >> that's a great question. i think part of it is his background is in business. a lot of his background is in business and he really does appreciate business enterprise.

i cannot imagine any previous president or any alternative president out there who, in response to this crisis would have been mentioning ceos and business firms by name and parading business executives in the rose garden and briefing room. that's the world he came from. we have not had many people with business experience to put it mildly, in the white house and i think that's part of it. if you read the newspapers you will see some people saying he's just deflecting attention to the states because he doesn't want to take response ability. i think that's not a good answer. i think he realizes in a crisis such as this the buck stops with the president, he's going to take responsibility regardless.

it's a little bit like the katrina fiasco with a lot of deep problems at the state and local level, but the blame ended up falling on the president of united states i think it is going to fall upon him but i think he also realizes the effectiveness of a uniform national response is unlikely to be satisfactory and that will be especially the case in opening up. the shutdown had to happen under the very imperfect information that we had at a time. it happened very quickly but opening up will be a different matter, it has to proceed at different paces, and we seen the president is not shy about disagreeing with the decisions of one governor or another,

but his emphasizing that the decisions are there's is based on quite a realistic assessment of the situation and how to get the country back to work as promptly as possible. >> when we come back up and ask you this, that is federalism, what is federalism? is federalism where governors get to make all the decisions and go to washington d.c. to pay for them or is federalism something other than that?

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mark: welcome back america. federalism seems like a dry topic. it's not dry at all. it determines whether you will be a free person or not or if will have a constitutional republic or not and christian from the hudso hudson institute is exactly the person to ask this. what is federalism, and is federalism what, i would argue, what governor cuomo thanks it is that i get to make all the decisions and the federal government gets to pay for all my decisions. what is federalism and is that

federalism? >> that's not just the governor cuomo version, that is the national governors association's version of a deal federalism which is the federal government collects the taxes, turns the money over to the states and the states get to spend the money as they wish. if your governor that's the best of all worlds. you don't have to take the political heat for raising all the money your spending. symbiosis doing that, but you have wide discretion in expenditures. once the natural position of a governor, they will argue for that, but the fact is that as more and more money comes from washington, they are in more and more subtle ways, whatever they may say at press conferences, obliged to align themselves with the views of the federal government, and often the views of a particular bureaucracies. don't just think of congress,

but think of the hhs and the department of education that put so much money into state and local government. if i have one worry about the effects of the coronavirus epidemic in response to the long-term fate of the federalism, it is that federal proportions of state expenditures which led up to 35% or higher in the years up to the 2008 crisis will rocket up again and might even stay there. we have state saying the crisis means the federal government has to bail out the state pension plan which have accumulated hundreds of billions for the whole country over one and half trillion of

debt over years and years of mismanagement. the relationship of the current crisis to this history is obscure to me, but when you have legislation that is spending one, two trillions of dollars and a lot of horsetrading is going on in the congress, one can imagine we could migrate to a system where much more financing of the state and local government is from the federal government and the result would be a lessening of the amount of real policy and political competition within our political system, and it would also result in less responsible decisions at the state and local level. >> and it can also result in undoing all the wonderful work

of the boundaries of the federal government versus the state government through our economic and financial decisions as you just said because there are a lot of policies that are tied to a lot about money and moreover these governors and state legislature have a disincentive to be responsible and prioritize properly if they know they're going to get bailed out. let me ask you a question. if in fact the president of the united states wasn't really holding the line on the constitution, on the limits of federal power, this country could have changed in a very dramatic way in the last six or eight weeks. >> i agree with that. there is an argument that the nature of the epidemic has been such that state, local, medical professionals were bound to be on the front line, it was bound to be a very diversified response. i don't agree with that. in the early days the

president was under constant pressure to mount a unified national response to make those initial guidelines, essentially a national dick tack with everybody in every state had to obey. he has powers, theoretical powers that he has not chosen to exercise under the national emergencies act and the public health emergencies act to declare quarantines, or to restrict interstate travel, there is an immense amount of theoretical power that congress has given him in statutes that were passed long ago that he has not exercised, and it is not impossible to believe that a president with

different instincts would have seized the throttle, the throttles that were available to him and mounted a unified national response. a lot of people are still complaining that the opening, and especially the assembly of testing procedures from state to state should not be a matter of variation in state policies from one place to another, but the federal government should take control of that, and so i do think it's possible that a president with different instincts would have responded very differently and it could've brought a long-range change, but an additional acceleration to a government for this vast

country that is run by one branch of the government in washington d.c., we might have moved further down that path and there will be risks that we continue to do so, both in the phasing in of opening up the economy and social life, and also in legislation that will be passed in the coming months. mark: christopher it's been a great pleasure to have you. i will say this, all these year years, at least three years the president has been accused of being a dictator. he's been compared with the worst dictators in human history and yet when push comes to shov shove, when there is an emergency in front of him, when he's held accountable for every death, for every bad decision, for every ventilator he has stuck to his guns and he has governed absolutely responsible when it comes to

the constitution. do you agree with that. >> i agree. all right. it's been up leisure to have you. we'll be right back.

changes in the way the white house handles the pandemic over the coming week. after two months of frantic

responses, they want to put president trump a more controlled setting. plans are being drawn up for a limited schedule of travel. there have been some confusing responses with reporters. gas prices are dropping due to the coronavirus pandemic. the average cost of a gallon of regular gas is down to about 97. that's down nine cents. the lowest was a dollar 30 in tulsa oklahoma. prices can still be expected to drop even more until the stay-at-home orders are eased. now back to life, liberty and levin. mark: welcome back. we want to get into the economy and spending and inflation and all the rest of it but i want you to know a little bit about art laughter. he was a member of the economic policy advisory board

of president reagan during both of his terms. he's in economic theory that describes the relationship between tax rates and tax revenue, collected by government. we had a 20 or 25 year massive economic growth, largely his model was responsible for that. you are an economic advisor to president trump during his campaign, he awarded you the presidential medal of freedom in june of last year, you have a bachelors degree in economics from yale, you went on to attend stanford, you earned an mba and a phd from economics, you are a professor, associate professor at the university of chicago, usc school of business, a distinguished professor at pepperdine and now you're with little old me. art, i wanted to have you on this program because i am

deeply concerned about the massive federal spending that's taking place. we have a huge federal spending problem and i want your macro, your general take on what's going on with congress because i think the treasury door has been thrown wide open. what is your take on this. >> government spending is taxation on and milton freedman would say that all the time. to understand how it's taxation, it's often not clear, not even to professional economists. it's not clear because some of them think government spending stimulated the economy. it doesn't. when you look at government spending, imagine a two-person world just to see how government spending is taxation. if you have a two-person world, farmer a and farmer b, a farmer begets unemployment, who do you think is paying for them. it's farmer a. government redistributes income. it does not create resources and so whenever they bail

someone out of trouble, they also have to put someone else into trouble. it's not a positive sum game, it's a negative sum game and what they are doing right now is making the economy worse, not better by doing all that government spending. mark: in some of their ideas they don't even think them through properly. you now have restaurant saying we want to open but we can't hire people because now people are getting more money unemployed than they would employed so that is not going to be a drag on the hospitality industry. some were left off by the treasury department and leadership, it signed into law and then we have a problem. they're not gonna go back and fix it either. here's the thing, the problem is, and correct me if i'm wrong, when you keep printing money, technically, your printing trillions and trillions and pushing it into

an economy where people are told are not permitted to work, where they must stay home and businesses are told you're not going to open, you can open very slowly and so forth, what happens to all that paper money? what happens to the economy. >> will remember it's a debit and credit at the same time. i'm not sure that's where the real problem lies, at least not the way i think of it. the way i think about it is redistribution. if you tax people who work and you pay people who don't work, do not be surprised if you get a lot of people not working. whenever you redistribute income, you take from someone who has a little bit more and you give to someone who has a little bit less. you reduce that person's incentive to produce and he will produce less. by giving to someone who has a little bit less you provide them with an alternative source of income other than working, and they too will produce a little bit less. this is math. it's not republican or democrat or liberal, is not

conservative or left-wing, right wing, it's math. whenever you redistribute income you always reduce total income and of course the point is the more you redistribute the greater the drop in total income and then if you go along with this stuff where you get exact equality of income, if everyone comes out exactly the same and everyone's income is redistributed there will be no income whatsoever. think of it for a moment. to get equal results for everyone, what you have to do is you have to tax everyone who makes above the average income one 100% of the excess. we have to also do is subsidize everyone below the average income up to the average income and if you actually did that, if you actually taxed people one 100% above the average income in subsidize the others up to 100% i would stipulate everyone would be equal and they'd be equal at zero. one 100% redistribution leads

to no output whatsoever. this is math. it's not anything else in ideology. it's just plain math and it's worked everything the time. mark: let me follow up with you. i don't think these are mutually exclusive. redistribution of wealth is what you're talking about. >> exactly. that's what they do. for political reasons and other reasons that's what they do. but i'm talking about inflation. the government creates inflation. the monetary system creates inflation and the fiscal system, you have a federal reserve that's trying to keep up with these fiscal policies and what are they doing? we had years and years of quantitative easing and now we have a federal reserve that's pushing out $6 trillion in loans. they've all but nationalize the private equity and capital markets. we have a board deciding now prioritizing who gets what. that's number one. number two, my question to you

was really leading up to inflation. what is inflation? >> inflation is a client in the purchasing power of a unit of money. that's exactly what it is or in increase in the cost of goods. that's what inflation is. if you look at what we've been doing we been doing quantitative easing since ben bernanke and janet yellen, we've done all of this this last round they increase the monetary base by $4 trillion. it's huge huge amount but we have not seen any inflation. we have not seen it and i don't see any signs in the economy right now for inflation reemerging. the only thing that would lead me to it be a little bit stingy on that is the price of gold has risen but long bonds, there is no expected inflation that i can see in any other market indicators so that's not where i'm focused, and that's not where i'm worried right now, although god knows

we have created an environment such that if inflation were to reignite in this economy there would be absolutely nothing to stop it from continuing. mark: let me ask you this. what caused inflation in the 1980s. >> let me go back to the 70s which is where it really started. i was there in the white house in the 1970s --dash. mark: although i have to tell you i bought a home and i was paying 12% interest. >> that was early 80s. the u.s. went off gold, we change the price of gold that we would neither buy nor sell and that's when we started the u.s. value the value and i think the price of gold went from $35 down to eight or $900 at the end of jimmy carter. until we got paul, there was no control of inflation.

that's when you change the monetary standard as we did then. that led to a huge amount of inflation. it was changing the price of gold and the prices of other currency. it really ratchet inflation up. when paul came in in 1979 he did a great job as head of the fed and contracted the monetary base, did a beautiful job of reestablishing the value of the u.s. dollar and inflation started on a decline. obviously the inflation rates and interest rates lasted into reagan but on the first day we took off on january 20, 1981 the prime interest rate in this wonderful country was 21.5%. since then it had been declining for two reasons. one is solid control of the fed and number two is very rapid expansion of goods and services which has always lowered the rate of expansion and that were in a world where i don't think inflation is a major problem.

>> you and i are going to disagree on that. we probably won't know until five or six years. >> that's okay, there's a huge increase in the monetary base and that's been here for a long time. mark: that's exactly my point. at some point pay the piper. at some point pay the piper. we'll be right back. at&t knows you have a lot of things on your mind. staying connected shouldn't be one of them. that's why we're offering contactless delivery and set-up on all devices. and for those experiencing financial hardship due to this crisis, we'll work with you to keep your service up and running. hi! because at at&t, we're always committed to keeping you connected. it means being there for each other. that's why state farm is announcing the good neighbor relief program we know our customers are driving less, which means fewer accidents. so state farm is returning $2 billion dollars

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we're in this together. mark: welcome back. i'm here with art laffer. we are discussing inflation and other issues related to redistribution of wealth. what we do to get the country back. >> let me talk about how to get the country back for a very, very long time. that's what i'd like. the problem in washington, the problem in your state capitals come the problem in your city's khmer counties is that these politicians do not bear the consequences of their own actions.

now they are spending other people's money and it's really easy to spend other people's money. there is no limit to how much generosity you can express by spending other people's money. let me just say very simply, it's not compassionate to give away other people's money. that's not compassion. what we need to do mark is we need to make it so the politicians bear the consequences of their own actions, and my view the way the solve that is to put politicians on commission. the congressman salary is paid fully at 3% growth. at 4% growth the congressman gets double his pay. at 5% growth they get triple. at 2% they get no pay at all in at 1% they have to pay us their full salary. you would see these people behaving totally differently. the way we get the ceo and the board, they bear the consequence. their incentives are aligned

but they're not in line. politician incentives are not in line with ours and if they do a rotten job they still get the same pay up they do a good job. if you look at this coronavirus complex, have you noticed their salary were any workers getting less pay? no. professors at universities don't get left by either. they need to bear the same consequences as the people and then they would have no problem with them making lots and lots of money as long as the rest of us do as well. mark: that's fascinating. i'll have to think about that. what we do with ironfisted governors who are shutting down our states and have very little incentive to open.

>> if we subsidize bad decisions that would be terrible. normalized. >> exactly that reduction was reduced radically in the tax act of 2017 it was right thing to do. there's no reason why we in tennessee should pay for cuomo because their taxpayers get a deduction we have to pay it. it just doesn't make sense. they all want to bail him out. mark: before we run out of time, economically, not politically or governmentally, what would you do as president or whomever to get this economy started again. >> open the economy of course. >> yes. >> some sort of tax policy. >> yes a waiver of the payroll tax through december 31 that would increase worker pay by 7.65% and reduce the cost of

labor to employers by 7.65% which would incentivize them to retain and hire new workers and to work the workers they have more, it would do that by having a deadline on december 31 what it means is everyone would rush to get that production because it's only a short-lived discount think and it would cover everyone in the economy because it covers all payroll, all company, they would no longer pick winners and losers, which they do all the time now, and lastly by doing a tax cut instead of the spending increase cost them a lot, i did a piece with john child that showed 30 cents about every dollar paid is paid for the cost of getting money into that government. every dollar of tax cut is more efficient than government spending. a payroll tax cut for a limited time we get this economy jumpstarted and that's what i'm looking for. then we go to the long-run

solutions which we really have to do in this country to keep us from drifting further. >> and the president agrees with you and this advice on eliminating invest for a short period of time until the end of this year end i think that's a brilliant idea. we'll be right back. (baby sounds and cooing throughout) (notification chime) (keyboard clicking)

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>> welcome back art laffer. you have a long-term solution, you hinted that you might. >> i did flat tax when he ran for president in 1992, good guy, good governor of the state of california. we got rid of all federal taxes. by the way, i will let you go on, but i don't happen to agree with that. i understand you don't. >> most people don't on the side, but what we did is we got rid of all federal taxes with the exact trip. [inaudible] and then we had to flat taxes, the income tax, the medicare and medicaid, excise tax, death tax, capital gain and had to go rate flat taxes, one on business sales and one on

adjusted gross income. we were able to match statically to all federal revenues within the tax rate of about 12% on each. that's where you should go on taxes. what you want to make sure you do is collect your taxes in the least damaging fashion and spend the money in the most productive fashion and then, mark, when the damage done by the last dollar of taxes collected is less than the benefit done by the last money spent, you stop already. that's for the government limit is there. anything above that is too much government, anything below is too little but you do it with the low rate broad-based flat tax to collect the revenue for the federal government, and no other tax, no picking winners or losers, no deductions exemptions, exclusions, favoritism, one flat tax. mark: that's way too rational so i'm thinking how would you get that through a house of representatives where you have a nancy pelosi and really,

quite frankly, a couple hundred other, how would you get that done. >> will let me tell you how we got it done or at least we almost got it done. when jerry brown called me for a hail mary, jerry was running a thin the race of eight candidates in the democratic party. he said if there was nine he be running ninth and he ran on this flat tax. we went from ninth in the race to second in the race. we were coming in and this bill clinton guy, we had him in the crosshair, we won the primary in connecticut and oregon, we are coming into new york and california, and we were gonna knock that silly guy from arkansas off his seat but three weeks out of the new york primary he announced, jerry announced he wanted jesse jackson as his running mate and we lost but we still got the second most delegates in a democratic primary mark this flat tax of the people would love to have this flat tax. all we need to have is some presidential candidate go for

it and we will get through the house, the senate very easily once we win the election on it and we will win it whenever it comes up. mark: if we can do feet nancy pelosi who represents one city, i think that would go a long way to bringing liberty and economic sanity back to this country. >> it would. mark: art laffer one thank you very much. you've had decades and decades of tremendous positive influence on our society and i cannot thank you enough. cannot thank you enough. the president was right tooooo i don't add up the years. and i don't count the wrinkles. but what i do count on is boost high protein. and now, introducing new boost women... with key nutrients to help support thyroid, bone, hair and skin health. all with great taste. new, boost women. designed just for you. dealdash.com, the fair and honest bidding site. an ipad was ..

at&t knows you have a lot of things on your mind. staying connected shouldn't be one of them. that's why we're offering contactless delivery and set-up on all devices. and for those experiencing financial hardship due to this crisis, we'll work with you to keep your service up and running. hi! because at at&t, we're always committed to keeping you connected.

avoid sick people... and touching your face. there are everyday actions to help prevent the spread of respiratory diseases. visit cdc.gov/covid19. brought to you by the national association of broadcasters and this station. welcome back america. one and the program tonight in defense of the president of the united states. look, we have two presidents behind me. we have a statue of ronald reagan and a book my father wrote about abraham lincoln. when i think of donald trump, not the media or trail character, not the democratic

party. trail and character but the man i listen to faced with crisis after crisis, the attacks, the phony scandals, they've impeached an innocent man and turned the constitution inside and out. it's the democrats in congress and the democrats and the media, when i think of donald trump i do think of lincoln. they had different challenges but they were strongmen and despite attack after attack after attack they not only withstood the attacks they did great things for this country. you heard chris, he didn't come into office as a conservative ideologue and yet he knows instinctively that he wants to defend the constitution, defend the american traditions. he didn't come into office thinking he would be attacked

day in and day out that they would try to remove him and yet he gets up every day, he has energy, when you look at the man he 74 years old. he doesn't look 74 years old. joe biden is 77 years old and looks like he's 107 years old. he's motivated, strong, and here's the difference between donald trump and all of his enemies in the media now. he loves this country and he loves the people and he wants the country to work. i think of lincoln and ragan and i'll throw in one other president coolidge. coolidge believed in a strong economy. he went against the progressives and my final thought this evening is this, there's a big decision coming up in something called face forward. another multitrillion dollar bill -- phase four. we as a nation must fight for this. i disagree slightly with art laffer, there is such a thing as inflation and when it hits it is a virus that hits every

corner of this nation. enough spending, open up the country, support the governors who are trying to open it up, and opposed the governors who aren't. that's it for tonight. i will see you next time on life, liberty and levin exclusive tonight, my conversation with jared kushner. he's been at the heart of the coronavirus response team and will talk about that and about where we go next is a country. he joins me live in just a few minutes. good evening. welcome to "the next revolution". this is the home of positive populism. also with us for the hour, lisa booth, tammy bruce and charlie kirk. as the devastating human toll of the shutdown rises, as it becomes clear, not just the cure is worse than the disease, but the cure is not even a cure and governors