good afternoon and welcome to capital account i'm lauren lister here in washington d.c. these are headlines for monday july thirtieth two thousand and twelve the c.e.o. of r.b.s. is warning in a guardian interview about a huge fine facing the bank due to the library scandal while h.s.b.c. set aside two billion bucks to cover regulatory problems things like libel rigging and money laundering now we spend a lot of time covering regulation of violations by the big banks let's flip that around today we'll talk about a litany of absurd small business regulations that could be crushing entrepreneurs meanwhile mitt romney was in poland after making headlines for his trip to israel and tough iran talk after the u.k.

blunders of course this is all while on his foreign jet setting the latest in election two thousand and twelve but if this is campaigning noise to you and you're looking beyond the constructs of the modern us democratic system for alternative ideas maybe you're disillusioned with what capitalism has become well you're in luck because we'll hear from author jeffrey tucker about anarky and the role it can play in building a new civilization in the digital age plus sarbanes oxley turns ten today happy birthday but the threat of jail time for executives knowingly signing off on inaccurate financial reports hasn't been used to go after financial crisis related incidents so what gives and what's the lesson we'll talk about it let's get to today's capital account.

now as you probably know as we have a dedicated loyal audience we spend a lot of time a great deal of time rather on this show talking about the big picture of the financial system and financial regulation the need for it the lack of enforcement in many cases the burden of compliance costs for small firms versus the large too big to fail firms that can not only shoulder the cost of violating these regulations but can also spend such a large amount of money lobbying to influence them today just to give you an example we see headlines from r.b.s. over a libel or settlement from h.s.b.c. putting aside two billion dollars in the face of regulatory scrutiny over a bunch of stuff money laundering other alleged indiscretions but what about the overabundance of little regulations smaller regulations that could be crippling or burdening small business owners and entrepreneurs trying to make it during

a difficult time no less a small business just for everybody who wants to know what we're talking is defined as having fewer than five hundred employees and according to the u.s. small business administration they represent ninety nine point seven percent of all employer firms employ half of private sector employees and generating sixty five percent of net new jobs over the past seventeen years now are there mixed reviews as to whether they truly are the economic engine of growth for the economy to use an incredibly hackneyed phrase sure there are but do these small government regulations matter you bet just ask our guest jeffrey tucker he's executive editor of laws a fair books and author of a beautiful anarky how to create your own civilization in the digital age which is coming out pretty soon and we're so happy that he is on the show making his stop in d.c. to be on catholic hour with thanks jeffrey thank you learned it's really great to be here it's amazing to have you here fresh from the gore financial symposium i. go

through. we get to your book which i can't wait to talk to you about oh i do want to touch on this issue of these smaller government regulations that are a real burden to small businesses to entrepreneurs and one that you've recently been writing about it has to do with the large soda ban that bloomberg has proposed in new york and you bring up the example of honesty which is a tea company they're trying to make less sugary more healthy drinks for folks however they're complaining about this soda ban and that struck a chord with you want to elaborate on why that's right i mean they got snagged in this notable soda ban like many entrepreneurs who are there were specifically targeted but they got snagged because their. container was a little bit over what the what the regulation allowed and you know this is just one example we only knew about it because the c.e.o. of the company happened wrote an article about you know so prophetic the business pages these days are filled up with pleas from businessmen just love me so my

products to consumers kind of please create jobs is it ok if i bring consumer stuff that they they want i mean what happens when land of the free idea and the reduced to have to having to go the op ed pages pages and banking for the right to do business and we only know about a fraction of the most of them of course don't have access to the op ed pages for and silence and so many more would be entrepreneurs never be able to create businesses all because of the gigantic number of regulations which are. even in the middle of this terrible you know sort of stagnation style economy and i would suggest the major reason for the stagnation is precisely the regulatory state which is just. i don't want to talk about a few of the things that you just got in that so one is this idea that a small business owner is now to go to the pages of the wall street journal to write an op ed do you think as mark said change that well i think it is a change it is a change you know because they don't really want to do this before i think it's

very risky to go public and say look the feds are. and after me you know they broke down the door of my factory and confiscated all my stuff they shouldn't be doing this i mean you risk making yourself more of a target more of the vengeance of the bureaucratic class so you know right so you would far rather just be silent about it and resolve it through some sort of litigation or something like that but when they're desperate that's when they go they go public and make these kind of pleas and so you know we only know of fraction of them because there aren't too many people have access to the pages of the wall street wall street journal i mean there are blogs and things but you know mostly business suffers and that's i mean it's very tragic what we're seeing in this in this country i mean practically every good and service in this physical world is have really regulated with a kind of central plan that's the accumulated craft really of decades and decades of legislatures and regulators passing regulations all of which are applicable at any one moment in time and the only people who really care are the people who are

really if profoundly affected by them i mean there's a lot of suffering going on right now and of all times to do this evolved this is the time when we ought to be radically deregulate as you say finance is a different matter but yeah we've been there and the rest of the free market i had agreed upon before that i have a different thing but we're talking about just barriers to entry our first small business is for entrepreneurs that want to get into the game of really touched on a theme that really been emphasizing i think what we've seen is a dramatic change in the ethos of government and the old days i'm talking like a century ago the idea of government was that we were going to bring human progress human flourishing. inspire more creation of material wealth we're going to electrify your rule community and give you those like what the new deal is all about right everything is strange now the site bureaucrats don't have anything to do except reverse progress make you more miserable take things away from you than i use services deny you goods and just it's just a big don't do this don't do this kind of state it's become to the point where

something is not mandatory is forbidden in the united states this is really true it's an exaggeration well i. to keep on your point you talked about not just the new arbitrary creation of new laws that businesses have to keep up with to make sure they're not violating but also the arbitrary way that they're carried out and enforced that's right and you brought up the example of the gibson guitar raids now that happened a while back it was raided because of the wood they were using their guitars were confiscated millions of dollars were lost and part of that issue had to do with regulatory bodies disagree on even the way that's right that the regulations should be out for so how do you even how do you even know it's it in that or that in your this in a rational system because really we see on any given day the accumulation enforcement of like one hundred years of regulations all of which are applicable today and they're all contradictory and they're all spread across many many different agencies and so you have to you know have a huge teams of lawyers just to be able to make a different guitar i mean it's it's crazy in that case is particularly strange because it wasn't really about the wood they were using it was about where the wood

was in final production you know was it here or was it in a foreign country i mean totally arbitrary stuff and that's just one time liver of the kind of problems we're dealing with. what do you think is the solution to this because we're talking about a regulatory system that has become just so complex and so laden with problems that this is kind of regulation gone a raw is so is it what is the solution i think you know what these regulations do is that they put a ban on creativity i mean this is the thing these regulations are strange they presume there's no future that there won't be progress that there won't be improvement so that not everything in place you know i can say everything's got a central plan and i went online one time pull up a p.d.f. which has the government's model and ideal for the push lawnmower that must be made this way it must be made this way and it's true for everything from from toes to fossil something to light bulbs i mean we're seeing a light bulb and coming i mean it's getting grim i think we need a wholesale routing of the entire regulatory state what accomplishes that i don't

know i don't believe that a single president could do it. a single legislature could do it i mean we just need a dramatic transformation and he's not going over all of this is know as the way you're going to uproot everything and and get of rid of the entire regulatory structure i'd like to see the federal register thrown into a gigantic pile in the middle of the street and burn you know like like like and middle ages because you know i mean that would be a good kind of book burning. so you know people from being poisoned from eating bad food i mean during the days where there were no regulations people were getting locked in factories and burned to death because their employers could lock them in or dying for meat because the meat factories were gusting. you discover in the in the private sector as it turns out people make food don't want to play. so i'm thinking ok that happened where it does happen despite the regulatory state right i mean i mean it's happening now i mean i hear this all the time people bring up the nightmare scenarios if we have freedom oh this would be terrible but every time

they present a nightmare scenario to me it sounds like it's going on right now despite the biggest most intrusive most well funded love in the history of the world right here on this country what is that the united states government has never been a bigger government in the whole of human history think about ok it's like well it is growing not shrinking contrary to what the new york times was claiming yesterday oh my god ok. great let's talk about a radically different approach to that issue which is something that you write about your book is focused on it which is an arche right so let's all open our minds and why don't you tell us in one minute before we go to break real quickly why and are going to case case for and i'll read back to you after the break but just for going to. the goal of the book is to make it. scary it's called a beautiful which it is beautiful and the analogy i'm using here is about communication and we live in an age of astonishing global communication unlike with anything we've ever seen before instantaneous networks anybody in the world can

talk to anybody else and what are they trading that changed. creating the most valuable commodity in the world which is knowledge and it's a beautiful thing is uncontrolled as uncensored every conversation takes place with a matter of mutual learning and mutual benefit and i would suggest in the book that this model of conversation that's now global and instantaneous and geographically noncontiguous in the most beautiful way can be a metaphor for the reconstruction of the whole world as a voluntary order that's the thesis of the book all right ok so hey we're to talk about more about that beautiful anarky and a minute on the other side of a break when we'll have more with geoffrey tucker author and executive editor of laws a fair books. and still ahead with the volatility and stocks and bonds investors are looking into alternative investment trends some include boozing we'll tell you what they are in a special segment of loose change where jeffrey tucker will join us but first your

closing market numbers. what drives the world the fear mongering used by politicians who makes decisions to break through it's already been made can you trust no one who is you know maybe you who with the global machinery see where are we heading state controlled capitalism is called sessions when nobody dares to ask why we do our t.v. question more. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else and you sure see some other part of it and realize everything you. charge

is a big issue. here is not what you want. but in the alone itself you'll get a real headline with none of the most is the problem with the mainstream media today is that they're completely disconnected from the viewers and for what actually matters to those viewers and so that's why young people don't watch t.v. anymore if they want news they go online and read it but we're trying to take those stories that people actually care about and transfer them back to t.v. . welcome back ten years ago july thirtieth two thousand and twelve president george

w. bush signed into law the sarbanes oxley act the new regulations were passed to try to tighten up corporate governance and hanson anshul disclosure and combat corporate and accounting fraud that was one of the big deals the threat of jail time for corporate executives who knowingly certified inaccurate financial reports in fact when bush signed the law he reportedly made this the right no more easy money for corporate criminals just hard time and he called the legislation the most far reaching reforms of american business practices since the time of f.d.r. well after the financial crisis where is the hard time for sarbanes oxley violators related to it it's something we've talked about with a number of guests who've laid out concrete evidence they believe the violations that have gone on punished leading up to the financial crisis here a few examples we know that there is very very clear evidence that there

were. by senior management of citi group you know senior management of lehman brothers among others it seems like with this example you gave us our brains oxley it seems like you have a disaster like enron and then you have an effort to regulate so that it doesn't happen again like with sarbanes oxley and then you have the same practices that continue and post enron go unpunished so my question for you what is the point of regulation f they're not enforced is it just for show yes it is for show it looks as if the regulators are there to protect the bad guys we didn't hold c.e.o.'s of our major banks accountable for accounting statements that they signed off on in two thousand and seven that were false. so happy tenth birthday sarbanes oxley is there some bigger lesson here given that your birthday is that's kind of a nonevent because you aren't really a big deal anymore seemingly they're bigger lesson about regulation i want to bring back jeffrey tucker executive editor of laws

a for books and author of the upcoming a beautiful anarky how to create our own civilization in the digital age because i want to ask jeffrey what he thinks kind of the bigger picture last lesson is here because here is this massive regulation that's supposed to give us a big bazooka to combat fraud and it's just sitting there and news just by oh it's a national crisis news that's the thing that's being used against americans i mean regular people are actually suffering from this did you know that america many american entrepreneurs are establishing banks internationally and they come out except wonderful banks that are providing good services to come out accept americans as part of their depositors because that opens up tremendously good legal liability to the bank itself so there's a kind of financial arm current being drawn up around this country and american citizens so that our rights are being limited to shop international for finance so nobody wants to have anything to do with us i was like the americans how short is that they will live merican so many accounts even after i live there you know you're you know it's very difficult because of like the foreign account you know

compliance regulations that have come down yeah that's right the ira you know so you've got all these regulations that have really and they've combined at a time when the federal reserve has absolutely demolished and broken the banking system with this stupid zero interest rate policy which is violates all kinds of you know normalcy of the natural order and that's all it's not saying so you and so you've got you know a desperate scramble to try to somehow make money with with your with your savings and our options for american students are getting increasingly limited and we're being sort of walled in into this this country and its broken system and it's really very tragic and has a profound effect on economic growth too so you get the unintended consequences that these regularly know it's not. do exactly like what they do you know after a while you watch these regulations that can really be unintended i mean are these people really stupid or are they partly well i mean maybe i don't know about the great question i wish we didn't know the answer to that but i do want to keep going on this an arche thanks for the break you laid out what your book is now and our

keeper some people may have a negative connotation they may think of you know black bloc protesters bashing and when you know it's lighting cars on fire that kind of thing you know what is your view or vision for an artist seems to me your vision of people you know bashing in cars and destroying things that to me is the government bureaucrat i mean that's a perfect example where they do what they do in suits and they do it quietly but they're practically destroying the physical world the beautiful thing is that in one thousand nine hundred five emerge this this beautiful thing the internet was privatized and we've seen the creation of a beautiful in order to be productive and prosperous and progressing in international network of communication and the afrikaner me as one example nobody regulates and it exists and every day we wake up and there's progress there's one point zero two point zero three point zero there's new apps new opportunities new beautiful things happening when i first got in the editorial business it was like truly the precentor the days was like the dark ages you didn't know who was writing who could do anything everything all correspondence was through mail nowadays we

can contact anybody in real time with wireless devices and talk to them face to face it's a beautiful thing in other words this is an order created through the private sector and through the free market but then how do you apply that to government because you can't really get into a war that destroys civilization in the end app i mean maybe you could but i haven't heard of it yet so one of the arguments against something like anarchy is what happens in the situation of war combat people are always going to try and take others' territory so i mean don't you need some kind of well what happens in africa in the case of wars that you know two big governments are battling it out with each other and i would like to see us and gave them a kind of unilateral disarmament i mean you know canada doesn't have a gigantic. national defense and nobody's bugging them and i was think of coast rica so yeah i think we could see some dramatic cuts and defense and make the world a more peaceful place i think governments tend to be warning you know and not preventing war but starting wars i mean certainly american history shows that so

the beautiful thing i think we learn from looking at the digital world is how productive an orderly and creative private individuals cooperating with each other countries all languages we can do wonderful things together and to me this is this is the three three we can rise up against contraband that's how we go because i want you to understand so this is the six important that we were talking about that the c.e.o. brought wrote an op ed about where it got us to be invested or a point nine ounces too big for what would be allowed under the soda ban so cheers small businesses i hear there's a private sector. you know the forbidden fruit that doesn't you know is very good so the forbidden fruit we've tasted it and we are going to be wrapped up with jeffrey tucker author of laws a fair book but don't worry because we're setting up behind us for a loose change and he is going to stick around for that so geoffrey tucker will have more in a second. because

all right let's wrap up with loose change and as promised we have dimitri and jeffrey here and stranded at sea here and so we've got a whole crew here to talk about some fun stories because with the volatility in stocks and bonds and best years are looking into alternative investment trends to head here's one option. the concept of investing in wine isn't really new people men doing it privately for years in their own cellars and in fact there are a handful of funds in the u.k. delivering relatively consistent handsome returns but it's. so there is a wine and according to the new york post art wine musical instruments even classic

cars are either nice funs promising high returns from fifteen percent for cars to thirty percent for wines that one rather that investors are increasingly turning into so this is an investment that not only can you buy that you can drink it if things really go wrong and if your investment you know plummets hey at least you got the boot right it's all but one of the one of the of the scramble for returns i mean you've got a world where the federal reserve has destroyed the ability to make money by saving money so of course people are turning to crazy things and this is really what's behind the library scandal for example i mean it's a desperate seeking out of return in a world of zero zero interest rate so yeah it's going to be wants but i think a lot of people are actually scrambling for internet stocks and we're trying to see some health return there are a bubble and may turn to bust again it's the kind of distortion that comes about when the federal reserve manipulates the credit markets so you have to look for things outside of the financial system in order to invest in whether it's farmland for old classic cars wind are alternatives and the lot of all that is resisting one

is that you're inherently your heavenly hedge because if things get really bad you wasted and you know you can put yourself out of your misery i mean like you know worst case scenario if you know if it's not a good investor just drink it get ways that you know there's something to do that's really tragic that it's a really good thing or nine hundred twenty nine car you have to be some of like some sort of amazing expert like me i buy my ones based entirely on the name and whether the label is cool or not i mean that's that's my basis for and i don't think it's a good it's for investing the wine probably so there is bourbon a good investment will probably i know those are probably correct that's right what was the thing that we had. i was in vancouver when we had assuming the orders are falling on our you know it's not just during the i think this is the drink of two thousand and twelve it's called the negroni and it's a nineteenth century drink and it's come party this week from with me and i'm told that will give you. so there is a there is a degree of value in investment i'm going to give you

a long. letter which let's move on let's enjoy one more story let's try because we've talked a lot about the lack of jail time for bankers and exacts who committed crimes leading to the financial crisis in two thousand and eight hours this for a change of pace according to al jazeera death terms in iran bank scandal this story out of the thirty nine people tried for fraud in relation to this banking scandal the biggest in the country's history court orders death for four of those convicted. is this more of the direction that maybe would be helpful in college not in the financial crying their eyes they. seem to be a little bit of a turnabout does that have anything remotely like that on there are true but you know i mean imagine if john course i had you know face sticking his head through a noose yeah before you just walk around drinking proper cheetos couple of those in the hamptons enjoy himself and you never so they used to they used to be a capital of capital punishment for counterfeiting us of course they can't do that

now because of the federal reserve the entire board would go to jail no that's right and you know i think it's interesting this lot more scandal which truly was a scam how many people even cared about this show is covering it for a very few of those he was in the headlines like you know forty eight hours and then just vanished well the fact is that there were a lot of victims on main street as a result of this this this is a very important story that ought to be more focus owned it was a deliberate manipulation by the large and also yes it will be because there are a library as one part of nearly every derivative deal that was done so there are going to be hundreds of trillions of dollars worth of lawsuits that could happen so we're starting to see them a lot to start going to victimless crimes and there are victims everywhere but it's hard to identify the hard to figure it out there's no they're not going to face the law why were fraud and the only thing is it takes more than ten seconds to understand it which is a big problem for the american public actually why they should be watching capital count if you're going to let them because according to a poll i just saw sixty six percent of people didn't know who jamie diamond was

sixty six percent according to vanity fair poll that's really freaky where i've seen some crazy polls that say things like i mean people don't actually action of the president those or the vice president well that's to their credit in a way you know you know i mean to do the more you are going to politic some are saying you are going to vote for you guys i don't have time to play the sound bite but the olympic medals it turns out are not really made of gold the gold medals they're only like one cent holder or something i mean what do you think of that is that the biggest fraud that you get your gold medal it's. not even entirely made of gold rush it's like mostly over well it seems this is to be perfectly the rest of maybe they're made by the us treasury or something maybe that explains very out of her right guys thank you so much for joining us who covered soccer in the me too there are lyrics change thank you so much for watching that's all we have time for though but be sure to come back tomorrow and in the meantime you can follow me on twitter at war in the story you can give us feedback and catch any shows you missed at youtube dot com slash capital account you can catch us in h.d. on hulu at hulu dot com slash capital dash accounts for everyone here at capital

account our special guest too loose change included thank you so much for watching and have a great night. wealthy british style and sun. but i was going to. market why not. find out what's really happening to the global economy with mike stronger for a no holds barred look at the global financial headlines tune into cars a report on our. soul those stories are here. for going global that's not. only viral. load you.

choose your place take your stuff and. the stuff that. makes your statement. spread the word. as you point out student loans.