AMA 28 – Les Leopold: The Looting of America

Les Leopold

How could the best and brightest in finance crash the global economy and then get us to bail them out as well? Hmm…This is a great question answered by Les Leopold in this interview.

Les Leopold co-founded and currently directs two nonprofit organizations, the Labor Institute and the Public Health Institute, and is the author of the award-winning The Man Who Hated Work and Loved Labor: The Life and Times of Tony Mazzocchi. Leopold designs research and educational programs on occupational safety and health, the environment, and economics and helped form an alliance between the United Steel Workers Union and the Sierra Club.

Listen in to this entertaining episode as Jason and Les discuss the market that supported the housing bubble during the last decade and the useful recommendations for avoiding the next possible economic bubble and bust. Upcoming shows will feature: Dan Sullivan, founder of Strategic Coach® and the lucrative Phoenix investment market.

Narrator: Welcome to the American Monetary Association’s podcast. Where we explore how monetary policy impacts the real lives of real people, and the action steps necessary to preserve wealth and enhance one’s lifestyle.

Jason Hartman: Welcome to the podcast for The American Monetary Association. This is your host, Jason Hartman and this is a service of my private foundation, The Jason Hartman Foundation. Today we have a great interview for you, so I think you’ll enjoy it. And comment on our website or our blog post. We have a lot of resources there for you, and you can find that at or the website for the foundation which is Thanks so much for listening and please visit our website and enjoy our extensive blog and other resources there.

Start of Interview with Les Leopold

Jason Hartman: It’s my pleasure to welcome Les Leopold to the show today. He is out with a new book entitled The Looting of America and comes to us today from New Jersey. Les, welcome.

Les Leopold: Thank you. Thank you for having me.

Jason Hartman: Thanks for joining us. Tell us a little bit about your book. This is a subject that is so disheartening to see this basically criminal behavior, even if it’s legalized criminal behavior, going on in the financial markets.

Les Leopold: Well, I spelt that in order for us to kind of maintain our citizenship, then we needed to know a lot more about how Wall St actually functions. And we need to understand better how these financial casinos operate, both in order to protect ourselves from it individually, but also to be able to do something collectively through our political process because we just experienced a gigantic raid on the treasury. As far as I can tell right now we’ve dumped at least a trillion dollars into Wall St and we’ve guaranteed maybe another 13-19 trillion dollars’ worth of assets alone. And as far as I can tell we haven’t gotten much in return. So this book was designed to respond, to understand why the economy collapsed and to give us some tools to protect ourselves against what’s going on.

Jason Hartman: Well that’s certainly a needed thing nowadays, so I’m glad you wrote the book. We are just propping up institutions that are labeled too big to fail and that kind of thing. And then you hear Goldman Sachs does another huge bonus, and this just seems so inequitable what’s going on out there. Give us some of the details as to what’s happening, and why the money we’ve dumped into Wall St appears to have not worked, at least not yet.

Les Leopold: It’s maddening. We really were stuck in a very bad place. About a year ago the financial market truly rose up. The fantasy finance instrument, all these complicated plays on junk debt ended up going toxic. They were supposed to be chopped up in certain ways to make them risk free. Turns out the risk was really there as soon as housing started to decline, or level off even, the value of the assets crashed and they were stashed all over the place. Especially the large banks and investment houses were flooded with these things and flooded with various insurance policies and all of them were going south in a hurry.

When Lehman Brothers went under, it caused a global panic and literally nobody was lending money to anybody else. Why? Because everybody knew how bad their own situation was, and they just assumed every other bank was just as toxic as they were. So nobody was going to loan anybody any money. And in our system, when money stops flowing the entire real economy gets pushed off a cliff. So you saw auto sales drop by 40% almost overnight. That was just indicative of the kind of crash that was starting, and that’s the recipe for a great depression.

I don’t know that we had a lot of choices other than working out some kind of bail-out. But the kind of bail-out we did have choices. The reason I say that I don’t think we had a lot of choice is because some very bad things were about to happen. AIG for example, had ensured 450 billion dollars’ worth of toxic assets. And it didn’t have the money to make a paid claim. Had it gone under, it would have sent… hundreds of financial institutions would have then collapsed because things that they had counted on wouldn’t have been there. Assets they thought were rock solid would have collapsed. So you would have had like a set of dominos that would have gone right through the banking system around the world, and that would have caused a major, major panic.

So it was very difficult to let institutions go under. That’s what Lehman Brothers unfortunately taught us. The question then became what do we as the tax payers get back in return? And that’s where the big failure came in. so it would have made sense, for example with Goldman Sachs, to say we’re going to have a 90% profit. When you get profitable again, we’re going to have a 90% profit tax because we are about to guarantee the 13 trillion dollars of credit default lost that AIG owes you.

We’re going to give you 100 cents on the dollar. Which I think was foolish, but if we’re going to give them 100 cents on the dollar we should say if in the next few years, you returned profitability (which they did in the next quarter; they had a record product in the next quarter), we the tax payer got nothing. We gave them 13 trillion dollars and we got nothing in return.

They turned around and paid back the TARP money, but of course they didn’t pay back the AIG money. They didn’t pay back the loan guarantee, the asset guarantee, they just did the thing that everybody saw: TARP money. They said see? We’re even. We get to keep our record profits. That was outlandish. And we really need to think long and hard why we let them get away with it. It was an incredible travesty of justice.

Jason Hartman: So the reason they gave the bonus, the TARP money back is so that they could pay themselves these extravagant bonuses. Is that correct?

Les Leopold: Yes, well they paid it back because it made it look as if they were no longer on the Federal Dole. And that was just not true. They were on the dole for the 13 billion coming from AIG plus they still have tens of billions of dollars of various loan guarantee and asset guarantee programs that allows them to function. If we took away all those programs, they would be struggling. They wouldn’t be making record profits.

And so the thing everybody saw was the TARP money, so they wisely just gave it back and said see? We’re free of the Federal government, we can pay ourselves whatever we want. A total fabrication.

Jason Hartman: Yeah. So, let’s go back to kind of causal issues here because everybody’s arguing on both sides of the aisles. Some say it’s really the republicans, some say it’s the democrats. I think most of this started and it didn’t finish obviously, all administrations I think have been guilty of creating the problem, but it seems like it really started back under this community reinvestment program where banks were incentivized or pressured, some say, to give loans to people that weren’t necessarily qualified but were of the right demographic. Do you agree with that?

Les Leopold: No, I don’t actually.

Jason Hartman: Okay.

Les Leopold: And I explore this in some detail in Looting of America. It turns out that we’ve now been able to investigate those loans, and those loans are doing fine. Those are not the prime loans. The people who got those community reinvestment subprime loans are actually doing quite well making their payments. Very few. Default rate is very low.

Jason Hartman: Gosh, I’ve just got to tell you though, I’ve heard the complete opposite on that.

Les Leopold: Yeah, well you know what? Show me the beef. I just don’t see it. There’s no evidence that I’ve seen that shows that that led to subprime loans. I would like to take us back a little further. I think the problem began in the mid-70s and early 80s when we fell in love with the idea of deregulation in two very important ways. We embarked on a grand experiment at that time. The academic and policy communities said these new deal controls and tax constraints are getting in the way of a prosperous America. So what they did was they did two critically important things.

One was, and this was after the end of Bretton Woods, one was that they really removed the constraint on as many as possible on the financial community. And this is not on the finances of the kind of investors listening to your show. They removed constraint on the big boys. On the big financial institution so that they could so-call innovate. Financial innovation was supposed to take off.

The second thing they did was they had a dramatic change in the tax structure. As you know, in the 50s and 60s, the marginal rate on the super-rich was very high, from 79%, and they dramatically reduced that step by step and by the early part of the Reagan administration, they really cut it.

Look, the middle income and the upper middle income benefitted as well but nothing like the folks at the top.

Jason Hartman: But we also have to say, I just want to make one point there if I may, we also have to say on balance a lot of the crazy deductions for building economically stupid things, like these wind mills back then, now these wind mills are a little more efficient nowadays but back in the days when those were syndications and before Reagan came in he did reduce the marginal rates, but also eliminated a lot of these economically non-sensible production. And the rich were participating in those.

Les Leopold: Yeah, this is not a broad-side against Reagan and some of the more positive things that have happened. But the net result, what was supposed to happen was an enormous investment bill, and in fact it did happen. But the consequences were not what we thought they would be. A huge amount of money went up to the top fraction of 1%. Now, maybe you have a listener in that group. I doubt you have many. I’m talking about the top one tenth of 1%. Let me give you a couple of statistics that blow my mind. In 1970, the ratio of the top hundred CEOs of the average worker was 45 to 1.

Jason Hartman: That’s the pay ratio.

Les Leopold: The pay-ratio.

Jason Hartman: Yeah, that’s completely out of balance.

Les Leopold: 45 to 1. The last time we were able to measure it in 2006, it was 1723 to 1.

Jason Hartman: Unbelievable.

Les Leopold: Here’s another one. I just went over the 2007 tax beta. The top 100,000 return had as much adjustable growth income as, this is just what they reported, as the bottom 65 million. That’s the worst income distribution since 1928.

Jason Hartman: There’s no question about that. I interviewed the author of the Winner-Take-All Society, and it’s definitely an insider’s game in the financial markets, and there’s a massive consolidation of wealth going on. And what’s interesting about it, is that these big financial institutions like Goldman and like the others, they’re wanting the government to come in and regulate them more because all of the compliance, the little guy can’t get in the game. They can’t afford to comply, right? So it’s like on one hand it seems like the right wing side would say you’re regulating us too much, we’ve got to get government out of the way, which is a speech I generally agree with, but they really ask to be regulated because it keeps competition away.

Les Leopold: Yeah, of course. Now let’s push this just one step further. When we had all this money at the top, the reason we didn’t see a rise in average wages… in fact, from 1970 to the present the average wage of the non-supervised reproduction worker went down 18%. The reason we didn’t have this boom that went through all society was they couldn’t find enough placed to actually invest all this money that had gone to the top. They kept looking for some place to go because there weren’t enough stable investments in sort of the real economy. And this is where Wall St. came in. A deregulated Wall St was able to cook up incredibly new complex instruments to suck up the surplus capital.

And you don’t have to quote me; I quote the Wall St Journal. They talk about this wall of money that was chasing after these exotic instruments. And Wall St was clever enough to come up with ways to give you a slightly higher interest rate on your bong compared to what you could get in a government bond or a typical corporate bond. So what you had was the illusion of getting a safe better rate of return. The money flocked into it, and there was so much money to be channeled that they invented more and more new assets virtually all based on the same underlying risky junk.

Let me pose the following problem to you: How is it that we have roughly 300 billion dollars’ worth of subprime bad loans? How did that turn into a multi-trillion dollar set of toxic assets? 300 billion TARP with 700 billion could have easily taken care of 300 billion.

Jason Hartman: Because they created so many derivative instruments that it multiplied. And many of those loans were sold multiple times. Nobody even knew what was in the pool they were buying. And I’ve got to tell you, this is the reason I say to our investors to stop investing in other people’s deals. Because you leave yourself susceptible to three major problems.

Les Leopold: You’re one of the few interviewers, and I’ve been in front of several, that gets it. That actually understands that’s fantasy finance. That’s what Looting of America is all about. It shows you how this process was created. And you’re absolutely right. If you’re going to invest your money put in something that’s real and socially useful. You know when it starts to smell like a casino game. When it does, you’re missing out on most of the money. Most of the money is in the fees. This casino finance game that you just beautifully described, was the most profitable game ever devised by Wall St. They made more money selling these junk derivatives than they made from any other activity, any other kind of trading, any other kind of mergers and acquisition in the history of Wall St. This was their big money maker.

That’s why today I just wrote a piece about the death bond. They’re trying to do it again with life insurance policies. They’re going to try to build up another secure innovation pool, not because it does anything socially useful; it’s because when they do it, the fees embedded in the structure are enormous. The investor gets a little piece of it, Wall St gets most of it. And I would caution people from getting involved in it unless you’ve got money to blow.

Jason Hartman: Tell us what that is. I haven’t heard about this.

Les Leopold: Oh, the death bonds? Of this is wonderful. You see when god forbid we should get sick and be on our death bed, your insurance policy is going to have value, right? Because let’s say you have a million dollars of life insurance and you’re dying. Well if I come to you and I say look, I’m going to give you 400 thousand dollars right now.

Jason Hartman: So it’s a life settlement then.

Les Leopold: That’s right. And what they’re going to do, and there’s already a little bit of a hustle going on in that already, but they want to do it big time. They want to buy up hundreds of thousands of these policies, put them in a big pool, chop it up as usual and then sell it to investors. And the underlying premise is the sooner people die, the more money investors make. That’s the bet. Now the question I ask is where does the value in doing this come from? Where does the money that turns into fees and the higher rate of return, where does this come from? What produces the value? Well the answer is embedded in the insurance industry’s structure, there’s a small but significant number of people who go last on their insurance policies before they die. They just don’t have the money or they’re distracted or whatever.

And so that means that the insurance company doesn’t have to pay out the entire million dollars. Sometimes they don’t have to pay out at all, sometimes there’s a settlement built into the policy, etc. Now, that’s build into the insurance company profit and into the whole range of prices that we pay for life insurance. Well, what this is going to do is it’s going to capture that little piece and it’s going to keep it within the secure innovation industry and take it away from the insurance industry. And the prices of insurance is going to go up, so this is going to be a transfer from insurance purchasers like us, when we buy life insurance it’s going to be higher. And we’re going to be funding the next round of Wall St secure innovation.

Now, god forbid, right? It’s never supposed to happen. But what if they come up with a cure for cancer? a big one? Or heart disease?

Jason Hartman: Well that’s what happened really with the viaticals and the AIDs patients in the 80s.

Les Leopold: That’s what’s mentioned when you research. They talk about that.

Jason Hartman: Right. And so just for our listeners benefit, what happened there was people started going around offering money to people who had HIV and they had big life insurance policies so if they had a million dollar policy they would give them 500 thousand, and the thought process or the pitch was: enjoy life now; you’ve only got a limited time left. You might as well have your money now to enjoy it. Maybe you don’t have any heirs; why did you buy that policy in the first place? Who knows the answer. And so patients would take this money as a settlement and then they’d develop better treatments and they didn’t die. And so the investors really lost their shirts in investing in this.

Les Leopold: Now imagine this: Imagine [0:17:34.8] and the derivatives are built on top of it. And imagine this happened. We’re going to go in and have to bail out this industry because it bet on rapid chemo death that didn’t happen. This is sick. You can’t make this up. It’s unregulated. This is the other awful thing. The insurance industries are well regulated because we’ve known for well over a couple hundred years that insurance scams are easy to put together. You’ve got to back up your insurance policies. You’ve got to otherwise it could be a fraud easily.

Well, the derivatives, still these death bonds are not regulated at all. We haven’t even gotten around to it. So they’re off and running. They’re off and running doing their other kinds of… they’re repackaging some of the real estate loans back into more complex derivatives. They’re doing that because they know people will buy it, because we’re already guaranteeing most of the financial industry.

Jason Hartman: One more thing I would just like to say about the next round of securitization. It seems like they’re on the verge of making all the same mistakes with these mortgages again. For a while I felt like the banks over corrected and they got too stingy and too tight with money. And now, in some cases, they’re getting really loosy-goosy again. Not on non-owner occupied loans which is what we’re usually dealing with in my business. Which oddly enough I think are the better loans because they produce income, whereas your own home, that’s just a complete 100% liability. But for home owners, they’re making some pretty aggressive and nutty loans again.

Les Leopold: Well think about it: you’re getting money from the Federal Reserve. You can get as much money as if you’re a big bank as you want for almost 0%. Your institution is on the list of too big to fail, right?

Jason Hartman: Right.

Les Leopold: So, you ain’t going anywhere. You’ve got all this government guaranteed income either through TARP or TARP plus AIG or TARP plus AIG plus these asset guarantees. You are sitting pretty. Why not open up the casino again? This because the fees, again we’ve got to always follow the money. The profits for Wall St comes in the fees. For packaging and selling and then trading. That’s the ballgame for them. So they want “products” unlike any products the rest of us know about. Not really a house, it’s not anything other than a financial instrument. So the more products and the more layers of products they can sell, the more money they’re going to make.

Jason Hartman: And the more confusing the whole thing is to people, so they just kind of say yes because they’re usually being sold this scam of an investment in some nice office with marble floors and a guy in a suit. So you just sort of figure this must be credible, right?

Les Leopold: And also they’re going to sell them a credit default flop on top of it to guarantee a portion of it. So it’s going to seem like Triple A, no hassle no problem. And if you’re in that income bracket that has that kind of money to burn, I’d say what the heck? Ask yourself, how could so many people fall victim to Bernie Madoff? Think about it for a second. It’s because people were accustomed to getting double digit returns for doing nothing. Totally passive investment.

The people you’re talking to through your show are trying to actually do something with their money. They’re actually going to buy a home, rent it out. That’s actually an economic socially useful function. That’s what we’re supposed to do with the economy. If we want to have a gambling casino, go to Vegas or Atlantic City. But we’ve confused the two now and it’s going to be very difficult to untangle it.

Looting of America tends to be a guide so that we can see how this evolved and maybe have some better insight into what we can do about it.

Jason Hartman: It’s just amazing out there. The fact that you and other people that have written excellent books on this subject, have anything to write about Is discouraging. Although it’s very interesting.

Les Leopold: This is the amazing thing. I thought Looting of America would kind of pass quickly as the economy got better. Never in my wildest dreams did I think that they would let the securitization process and wild things like these death bonds start up again so quickly. I never believed they would let this guy, Andrew J Hall, who’s an oil speculator. He’s going to get a 100 million dollar pay day from city group. City group is the bank that all of us own. I think it’s like $1250 per every man, woman and child in the country is going up this city group. We own city group and it’s going to pay 100 billion dollars. When I saw that happening I thought my god, not only has nothing changed but just as you said it’s starting all up again and we seem to be more than willing to let it happen. It’s outrageous.

Jason Hartman: Yeah, it really is. It seems like Wall St just feeds off of bubble mania. They go from, I’m sure there were earlier ones that I can’t think of right now but they go from dot com to the housing market…

Les Leopold: Savings and loans.

Jason Hartman: Right, and now life insurance. And it was all just supported by Greenspan, and now Bernanke and the Keynesianism is very disconcerting to me because I think they’re just putting too much money into circulation. It’s going to come back and bite us with pretty severe inflation I think.

Les Leopold: There are two things that have to happen in my opinion. And I spell this out in some detail in Looting of America. Two things. One is we need to design policies that move money from Wall St to the real economy. The people listening to your show should have access to capital so they can do positive things to the economy. Remember Adam Smith? That’s how you’re supposed to make money. Adam Smith by the way was incredibly suspicious of the financial [0:23:20.8]. He thought real people making real things providing real services is what makes an economy and a country prosper. That’s what we have to get to. Wall St is way too big. Over a quarter of all our profits coming out of Wall St? That’s ridiculous. It’s way too big.

The second thing is we need a fairer income distribution. Not because of any moral values; I’ll let your listeners argue about whether it’s right or wrong to have a big gap between rich or poor or good or bad. Economically it signals a very bad period for your economy. We’re much better off. Our real booms come when the gap between the top and the bottom is moderated by fair tax policy. I’m not saying we want to confiscate the wealth of your listeners. That’s ridiculous.

But once you start making 5-10 million dollars, you’ve got to give back. Right now… we talk about all our deficits. Well, if you don’t tax where the money is, the money is in the hands of the super, super rich. The top 400 billionaires have a collective net worth of 1.56 trillion dollars. if you leave that alone, it’s hard to get at it now, but if you don’t tax the income as it comes along and you let this wealth accumulate, it can’t do anything positive for your economy. Some of it will, a lot of it won’t. A lot of it will fuel the next set of bubbles.

And so two things. From the top to the middle and the bottom, and from Wall St to the real economy. The only policies I care about are ones that do one or the other. The rest I’m not interested in. It’s like arguing how many angels on the head of a pin. The money is still on Wall St, I don’t care how you regulate it. You’ve got to get it out of Wall St.

Jason Hartman: Yeah, and that’s why each investor needs to just vote with their wallet. And many of them, when I say criminal behavior I mean legalized criminality through lobbyists because these big financial firms, and we’ll call it the financial complex, like the military industrial complex, they lobby congress to get what they want. And they succeed in it and they contribute to campaigns, and they’re just writing the laws. So they may not even be illegal behavior like Bernie Madoff, it’s just criminal behavior that’s legalized in their own fantasy finance game. I love that term, by the way.

Les Leopold: Thank you. Think about this: they are actually using the TARP money, our money, to lobby their interest on capital hill right this minute.

Jason Hartman: I have heard that.

Les Leopold: Isn’t that unbelievable?

Jason Hartman: Unbelievable.

Les Leopold: They don’t want any constraints on the mortgage industry obviously. So they’re lobbying against the consumer financial protection agency, which I don’t know whether it’s going to be a good or a bad thing, but I don’t think that they should be shaping it. let that be shaped by your listeners and others that know more about how that actually could be good for the public interest. They’re using our TARP money, Wall St is, to… they said they’re going to go to the mat on this one. They said, “we’re going to give it all we got”. And I said all you’ve got? All you’ve got is what we just gave you!

Jason Hartman: Ah, it’s so discouraging Les. My blood pressure is really increasing as we’re talking about this.

Les Leopold: Yeah, that’s my warning to people who buy the book and read it. When you go on Amazon, take your blood pressure pills because it will get you going. But if we don’t face up to it, it’s going to be worse. Our only hope is that enough Americans will start to understand how these games are played and won’t just roll over and let it happen.

Jason Hartman: And I sure hope that happens and getting the message out with a book like yours, The Looting of America, is very important. So your prescription for people is invest in real things that have true social utility, be a direct investor you’d probably say. That’s my term for it. But your prescription just in a nutshell, and then I want to get your thoughts on where we’re going. Any thoughts on the future of the economy.

Les Leopold: Okay, look I’m pretty simple minded. I’d say most of your investors are far more sophisticated financially than I am. I’m an educator, I’m not a financial advisor. But it seems to me that we should make a distinction in our mind between gambling and investing. Investing to me, is investing in the possibility providing real goods and services for your economy, for your community, for your society. That’s what investing is about. And if you do it right and you do it well, in our economy you’re supposed to be able to succeed. And there’s risk involved because you can fail.

If you want to gamble you’re much better off going to Atlantic City where the odds are set, or Las Vegas where you know what they are, where the game is not rigged. Gambling on Wall St is just literally, you may as well write your pay check over to Wall St directly. Why even bother going through the ruse? Because you’re going to be paying for the fantasy finance either directly as investors or indirectly as tax payers. It’s a rigged game and we have to do something about the rigged game. I think most of your listeners have already a very gut sense of how to do this, what to stay away from. I think we’ve been burned enough. People don’t want more toxic assets.

Jason Hartman: People amazingly though have some pretty short memories. When you get in like this past few months as we’ve seen the stock market climb and I believe that’s totally artificial. Because nobody’s asking the question, what do companies need to have their stock value go up? They need something called customers. Customers create revenue, and guess what? The consumer is broke. The consumer is saving money for the first time in many years, which is what they should have been doing all along. Where’s your view on where the economy is going the next couple of years? What do you think we’ll see?

Les Leopold: Here’s the thing that we have to watch: I’m very worried about the unemployment because when you look at the real numbers, we’re up to something like 29 million people who either don’t have jobs or are forced into part time work. Then you add in some jobs that we’re making now. We’re down to about 7 million. It’s about 18 1/2 % real unemployment rate. You can’t have anything good in the economy happen if that many of your own people are unemployed.

And we have to find work for our own people, no economy, no country can sustain itself for long without finding work for its own people. That’s what I think we should keep our eye on. If that number keeps going up or plateaus and doesn’t go down, I agree with what you said before. I don’t know how it’s possible to envision a real recovery. I don’t know where these profits are going to come from, I certainly don’t think they’re real. Because if people aren’t working, how could they be spending?

Jason Hartman: And when you reference that, I just want to make the clarification that you’re referencing the stock market when you say that.

Les Leopold: Oh, yeah. I would urge your listeners to keep their eye on the real thing which is in our world, people need to work. Some are clever enough to create their own industries and their own enterprises, but most of us, the vast majority of us have to work for somebody else. And if there’s no place to work, we have a serious problem. Not just the social problem, we have a fundamental economic problem that I don’t think will go away.

Jason Hartman: I definitely agree with you there. Do you think that all of this money printing that’s been going on in terms of TARP and TALF and various other bail-outs and government programs, do you think we’re going to see inflation in the future? Or do you have sort of a tame view of that?

Les Leopold: It’s a very good question, and I’m having trouble wrapping my mind around it because I see a certain type of trap coming up, which is I don’t believe that the fed will allow serious inflation to take off or all the central banks. I think they will come down quickly on it. Now, if they come down too soon on it they’ll get a double-dip recession. They’ll push the economy back into recession. So I think the danger is less inflation and more a second recession. Because I don’t think they’re going to let the entire world’s currencies get out of whack. I just don’t think they can afford to do that.

Jason Hartman: And when you say come down on it, if inflation does start to rear its head, which I think it’s going to, the way they come down on it is by tightening the money supply which means higher interest rates.

Les Leopold: Higher interest rates. I think the short term worry was deflation, which is in a way far more destabilizing in the short run because then nobody buys anything…

Jason Hartman: They wait for a better deal.

Les Leopold: And then of course that starts the downward spiral of production that feeds on itself. It actually did happen for a while over the last year. I think they care a lot. The American and the fed care a lot more about the inflation number than they care about the unemployment number. But the trap could come, if what happens if you can’t get unemployment now and you’re stuck with a chronically high level while you’re controlling inflation. What does that do to the real economy? And I have not read anybody yet who has been able to give me an answer to that question. Maybe that’s the sequel to Looting of America.

But I think you’re right to be worried. The worry is, if we had instituted windfall profit taxes on Wall St, high marginal tax rate on the financial sector for those people who are living off of our large debt, we would be recouping this money faster and putting ourselves into a better fiscal stance. But we’re not doing any of that. We’re letting the money stay in that sector, and I can’t understand for the life of me why we’re doing that. Why aren’t we trying to build up some fiscal resources by taking the money that’s doing no good and putting it back where it might do some good? I don’t get it.

Jason Hartman: Because the politicians are in the pockets of all the big Wall St firms on both sides of the aisle.

Les Leopold: Unbelievable. Even after this crash, a crash that was caused entirely by the financial sector. How can people be that bought off by it? I have trouble accepting it. I believe you, but emotionally I just don’t want to believe it.

Jason Hartman: I know. I couldn’t agree with you more. Well les, tell people where they can get the book and your website please.

Les Leopold: Well we have a website called, .com, .whatever. Whatever you want I think it will show up. You can buy it wherever you like to buy books. It’s on Amazon, if you buy it there please review it even if you hate it, we love for you to review it.

Jason Hartman: And by the way, I should mention Les, you’ve got some very good reviews. I read the reviews on Amazon. Most of them were just shining reviews and said it was a nice breezy read, that you made things very understandable, as you have on the interview, and so I’d really encourage readers to check it out there. But what else were you going to say?

Les Leopold: Well there’s all these online places like Barnes &Nobles, etc. But it should be in all your local bookstores. If not, just ask for it because the distributer will find it. Looting of America, it’s got a subtitle but it doesn’t matter. Looting of America, The Looting of America Les Leopold. You’ll find it easily and you’ll get it within a day or from your local bookstore if that’s the way you like to buy books.

Jason Hartman: Excellent.

Les Leopold: Whatever you do, try to review it some place even if you don’t like it. We need to make some noise about it.

Jason Hartman: That’s for sure. I hope people buy the book and they get really angry and then they also start voting with their pocket books. And the way to cut these guys off, the way to win is to stop investing your money with them. That’s really the answer.

Les Leopold: And I promise your listeners that they will understand the book. It’s not over anybody’s head and it doesn’t talk down to people. I think it’s right where your listeners are and I’d appreciate the time.

Jason Hartman: Excellent. Well, Les Leopold from New Jersey, thanks for joining us today. We really appreciate having you on the show.

Les Leopold: Thanks so much for having me.

Narrator: The American Monetary Association is a non-profit venture funded by the Jason Hartman Foundation which is dedicated to educating people about the practical effects of monetary policy and government actions on inflation, deflation and personal freedom. Our goal is to help people prosper in the midst of uncertain economic times. This show is produced by The Jason Hartman Foundation, all rights reserved. For publication rights and media interviews, please visit or email [email protected] Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate professional if you require individualized advice. Opinions of guests are their own and the host is acting on behalf of The Jason Hartman Foundation exclusively.

Transcribed by Ralph

The American Monetary Association Team

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