| Capitalism in the hot seat |
By Arthur B. Laffer, Stephen Moore, Peter Tanous
GLENN: By the way, Stephen Moore is here and he's got some more on the budget and I just -- you know, Stephen, I would like to run this by you. What do you say we just kill the rich people? Because if we kill the rich people, we will reduce the people who are the tired and the people who are looking for a job because we'll open up 2% of high-paying jobs in America.
MOORE: (Laughing). I don't say kill the rich. I say eat the rich, as P. J. O'Rourke would say. But you are right.
GLENN: Well, we could kill them and eat them.
MOORE: This class warfare really has gotten out of hand and, you know, there's so much wrong with this. And I was just listening to your monologue about this. But one of the things is let's just talk about where jobs come from. I mean, I know this is a mystery to people in Washington who think jobs come from government, but most people in real America know that jobs come from small businesses. And guess who falls in that $250,000 and up category, Glenn? It turns out according to the latest calculations about 68% of all those people are going to be paying those higher taxes. Those evil rich people, they're small business owners and operators who get up and entrepreneurs who started these businesses. So how are the --
GLENN: 68 -- wait, wait, wait.
MOORE: The other question they can never answer is how do you create the jobs if you are taxing the people who create the jobs?
GLENN: Wait a second. 68%.
GLENN: Of those people who are small businesses are going to be affected by this.
MOORE: No, no, no, no, no. Let me be very precise about this. 68% of the people who make, who are in this income category that Obama wants to tax, 68% of those or two out of every three of these people are going to face these higher taxes. They are small business either owners, operators or investors. They are the people who provide the capital and the elbow grease that make small businesses possible.
GLENN: And if I'm not mistaken, out of all of the businesses -- I mean, we could talk about General Motors and everything else but out of all of the businesses in the country, 70% of all jobs are provided in this country by small business?
MOORE: Yeah, and small business is defined as a business that employs anywhere from 1 to 250 workers.
GLENN: Okay. I'm a small business because I have --
MOORE: Right, right.
GLENN: 20 full-time employees here in New York, I'm a small business owner.
MOORE: And you're also one of those evil rich people, too.
GLENN: Oh, I know, I know. And I've been so evil to my employees and I've done so -- seriously, Stu, do you have a gun? Oh, thank goodness we're in New York. You don't have a gun. Otherwise I would have said to you shoot me and kill me now.
MOORE: Well, we're going after you and we're going after Tiger Woods and we're going after Hannah Montana and all these people.
GLENN: So listen, Stephen, what else is in this budget yesterday that -- by the way, yesterday I found out while I was on the TV show that I -- because I said look at all of the earmarks in this budget from Joe Biden and Barack Obama. During that part of the TV show I hear in my ear, just got a note from the White House; Barack Obama's name, not the earmark but Barack Obama's name on that earmark is being expunged. It's amazing.
MOORE: Yeah, 9,000 earmarks in the spending bill that passed the house. I believe it was Tuesday or Wednesday, 9,000 of these things. And you mentioned I think one of them on your show that, yeah, now the government's going to pay you to take that tattoo you got off on your butt when you were in high school. That too removal, folks, is now a federal government program. There is my --
GLENN: Well, they will say that's such a distortion, Mr. Moore. What that is is that is -- we're trying to break up gangs when they get those gang tattoos.
GLENN: And so what we do is we take that gang tattoo, then they won't be part of gangs anymore: That will work.
MOORE: Why don't we turn to something more serious that you mentioned earlier and that is this cap and trade something. You know, think about this in the context of what's happening in Detroit with the Big Three auto companies. Think about this in terms of the steel industry, the chemistry. Any manufacturing in America. I mean, here we face a meltdown in manufacturing and it means a lot of these hardhat workers are losing their jobs. Terrible thing, right? The absolute worst thing you could possibly do for American manufacturing right now and any -- by the way, anybody listening to this show who works for a manufacturing firm, you ought to be out in the streets revolting against this cap and trade because what's going to happen, Glenn, is we're going to put essentially a 10 or 15% tax on our own manufacturers, the ones where they say made in the USA and so what's going to happen is all of these jobs and manufacturing plants are going to move out of the United States and they're going to go to China and they're going to go to India and they're going to go to Pakistan and we're not going to have any manufacturing left in this country.
GLENN: How do we do this.
GLENN: How do we do this in a budget? How are we not even -- we're just putting this in a budget and all of a sudden we have cap and trade?
MOORE: It is economic Harry Carey. It really is. In fact, they have done this in Europe. In fact, they should look at what's happening in Europe because Europe's a little bit ahead of us in this stuff. They did cap and trade about five or six years ago. You've got steel workers that are protesting in the streets against cap and trade because they're, all the European steel workers are losing their jobs and where are those jobs going? Just as I said, they are going to other third world countries that don't have cap and trade which means you don't do anything to reduce global warming. All you do is shift the jobs from the USA to all these other countries.
GLENN: Okay, so Stephen Moore from the Wall Street Journal, author of End of Prosperity.
Tell me, let's switch gears for a second. The banks have not been nationalized. They didn't nationalize CitiBank today. They just bought 40% of it!
GLENN: What is the difference, what is the difference besides the word game? All we're doing is what's the definition of "Is."
GLENN: This is a nationalization of CitiBank, is it not?
MOORE: Yes, it is. You are exactly right, Glenn.
MOORE: Right now we've bought, I believe the federal government is about a 70 to 75% owner of CitiBank. So how is it not nationalized?
GLENN: What does this mean now to the average person? What is going to change? Where are we headed now, Stephen?
MOORE: Well, I mean, we are moving -- you know, I used to say we're creeping toward socialism. I think we're taking now big leaps towards it and it's not just --
GLENN: We're running.
GLENN: We're in a flat out Sprint, man. We are running.
MOORE: And I mean, you know, it's not just in banking. I mean, we've done this now -- I mean, we're basically the owners of major insurance companies, we're the owners of the Big Three auto companies, we're the owners of many of the manufacturing firms that have come down. I mean, the investment banks. We have got to stop. I mean, how many times do I have to keep saying this? We have to stop bailing people out because there aren't going to be any businesses left that are making money.
GLENN: Stephen, when we sat at that dinner two years ago.
MOORE: You were against me, Glenn, but you are using it against me, Glenn, but go ahead.
GLENN: No, I'm not using it against you. We looked at scenarios that were crazy, just crazy, and they've almost all been done now.
GLENN: What is the --
MOORE: I don't even recognize our government anymore. I don't recognize what we've done. I was saying jokingly yesterday that, you know, I'm going to have to move to France to find free markets, you know.
GLENN: Yes, yes. Okay. So let me ask you this: We sat -- it was probably two years ago and we looked at crazy scenarios.
GLENN: And couldn't happen, couldn't happen. What is the crazy scenario where we're going to say a year from now, can't, can't be, can't be? I say within two years that this economy is in such horrible shape, the world is on fire that we are actually tying within two years to a global government.
MOORE: Well, that's certainly the dream of the left is to have global government and then all this stuff like cap and trade is like that. I think my kind of doomsday scenario, I mean a year from now -- and by the way, when we talked a year and a half or two years ago, you know, I didn't believe any of this stuff was possible that we would -- I am just aghast at how much our country and our government has faltered in the last six months. So the doomsday scenario that I see and that we're getting even closer to every day is a rampant inflation. Not 1970s style inflation of, you know, 15% but we could see 25, 30, 50% inflation rates with all the money that's been created.
GLENN: Do you think that could be --
MOORE: And all that money is necessary to pay for all these government programs that we created.
GLENN: Do you think that could happen within a year?
MOORE: Well, no, I'm exaggerating a little bit but I can see 1970s still inflation by next 2010 and if we keep printing money -- I mean, look, inflation, there's too many dollars chasing too few goods. We could see, you know, 20% inflation. We could be like Argentina.
GLENN: So Stephen, there was a story today. I think it was on Bloomberg, and I didn't pull it off and I need to, but it was about the record treasuries that we are auctions off this week. We have never auctioned off seven-year treasuries like this, the record amount of debt we're telling off now. They're seven-year treasuries which means they have got to be sold again, right?
MOORE: Seven years from now they have got to be sold again.
GLENN: Seven years, yeah. Otherwise we're out of money. Did you read this article by any chance?
MOORE: I'm not familiar with it.
GLENN: You've got to read it. It was talking about these seven-year treasuries and they were quoting people in Asia, finance ministers and bankers and everything else and they said there is a real shot if America doesn't stop spending money, there is a real shot that they will default. We're not going to default because, nations don't default because you just print money.
MOORE: But that's the way governments default, Glenn, is they just print paper dollars, right.
GLENN: Yes. And that just -- then you're into hyperinflation.
GLENN: But they're saying -- I mean, there were credible people saying in this there's a chance that America defaults on this and at some point -- these are Asians saying this. At some point we are not going to buy this debt. How are we going to pay for this in seven years, Stephen? There's no plan that would pay for all of this in seven years.
MOORE: Well, that's right. And by the way, I think the federal government should be, when they are doing all this borrowing, if they were smart, they would be laughing at these 30-year low interest rates because I guarantee you a couple of years from now we're not going to see those low interest rates.
GLENN: Nobody will -- nobody would buy them at 30. Nobody would buy 30 years of our debt.
MOORE: Well, you are probably right. You are probably right about that. But, you know, it gets to the point that the origin of this sin, which is there is this mentality in Washington the government can borrow all this money, we get trillion dollars, we can spend it, we create jobs, we stimulate the economy without any thought about where the money is going to come from.
GLENN: Okay, last --
MOORE: Of course, the money comes from borrowing it and hyperinflation, we pay a very high price on this.
GLENN: Last --
MOORE: We used to worry about what we're doing to our kids. Now we worry what we're doing to our grandkids and our great grandkids.
GLENN: Stephen, let me ask you this, last question: Now I just lost it. Shoot, I have less than a minute. So I'm going to go. I'm sorry. I just lost the -- I just lost the question. Darn it. Okay, Stephen, thank you very much.
MOORE: See you, Glenn, bye.
STU: It's been a rough day.
GLENN: It has been a rough day. I got sidetracked on three different things.
STU: You are kidding. Your mind was thinking of three different things in the middle of an interview with someone who's speaking? You're kidding me. That just happened on the air?
GLENN: I'm so riddled with ADD, so riddled.