America, What Went Wrong? with author James B. Steele

Jason Hartman looks at a variety of factors in relief funds from debt, deficits, GDP, and the IMF. After he talks about the upcoming virtual Meet the Masters event. Later on the show, he brings on James B. Steele to talk about the decimation of the middle class. They go into how the US got there and how we can get out. Steele talks about the American Dream and the US health care system.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:54
Welcome in greetings. This is episode number 1400 and nine d3 boy, we’re getting close to that magical 1500 episode number, aren’t we? Yes, we are. Yes, we are. Well, our guest today will be James B. Steele. He is one of the most famous economic investigative journalists of all time. He won two Pulitzer Prizes, to national magazine awards. And five George Polk awards, talk about credentials. When he was at the Philadelphia Inquirer, time and Vanity Fair. He’s got multiple number one New York Times best selling books. And today we’re mostly going to talk to him about America. What went wrong? The crisis deepens. But, but

Jason Hartman 1:45
But what does that really mean to us? Well, just remember the Rule of Life. The people who live in the financialized economy and the people who are close to the money printer Always benefit the most. And the good news is, if you’re following my plan, you may not be an insider, you may not work on Wall Street, you may not work at the Federal Reserve or the US Treasury. And you may not be Jamie diamonds or some other bankster. But you get to take advantage of that same benefit that they do, albeit maybe to a lesser degree, I’ll be the first to admit that the insiders are always going to get the biggest share of the money printing, but you definitely get to take advantage of it. Because you are following my plan. You are taking advantage of inflation induced debt destruction. And what does that mean? That means you are brilliant. So congratulations for being brilliant.

Jason Hartman 2:54
Hey, I’m gonna tell you something about that in a moment, but I also don’t want to forget to mention, you know, I had the pleasure of Being on RT America somewhat recently, and I’m going to be on again today with Rick Sanchez. He is a really phenomenal journalist and reporter because, you know, he bucked the trend. He hasn’t gone along with the mainstream media narrative. He’s in the game. But he’s also one of those people who’s a voice of reason and a voice of reality. In this crazy corporate controlled media that we we live in, it’s just we have this bath of corporate run media, and it’s good. There are a few journalists like him. So I’m looking forward to that this afternoon. We’re going to talk about forbearance and unemployment and mortgage credit availability and things like that. But relating to what I was just saying, before we get to our guest. The crisis deepens. Well, the IMF, the International Monetary Fund, is out with a new report. And guess what they’re talking about. They’re talking about debt, debt, debt and debt, yet It’s bad. It’s good. It’s mostly bad. But for us, it’s good because we know how to game the system, essentially. And that makes debt. My favorite four letter word. Yes. That is my favorite four letter word. You’ve heard me say that before. So what does this mean? Well, this IMF report is talking about how global debt will surpass 100% of global GDP. Now, you know, GDP means gross domestic product. And that usually applies to a country but it’s been applied to the entire planet, the entire human rights, and that global GDP is between 80 and 100 trillion dollars. I believe no one looks at the global GDP. You know, too terribly much nowadays. But that’s about where it is. So if global debt surpasses global GDP, what comparison do we have for that? Well, we have the US and the US is getting to that 100% have its own GDP, we have certain states and we look at their GDP, which is, of course, all of the left wing states, the Socialist Republic of California, my former home and other left wing states. Well, they have the biggest debt problems. And unlike the US government, they can’t print their own money. They can’t create a currency out of thin air, and they don’t have the world’s reserve currency. Certainly. Now, on the other end of the spectrum, let’s look at the nations. And let’s look at the biggest debtor nation that is a big nation a an economy that really matters. And that would be the third largest economy in the world, formerly the second largest, but they they slipped, and that is Japan. Japan’s debt to GDP ratio is absolutely crazy. Most people would say it’s 230% debt to GDP 230% it’s absolutely crazy. But, you know, the question is, what does this really mean? Well, the US in a very enviable position, obviously, because it has the reserve currency. And no matter what anybody says it’s going to keep that reserve currency for a long, long time. So what does it mean? Well, let’s look at what some people are saying and what the IMF is saying about this. In the US, we’re running and especially lengthy tab, having income to show for it, the IMF said, of the US budget deficit, that it will reach nearly 24% of GDP this year. Now, remember, there’s a difference between the debt and the deficit. The deficit is the annual thing. The debt is the overall thing. Okay. I think most of you know that, but I just want to know how I like to put it in very simple term. So it’s really obvious because reality and truth gets obscured in complexity. Let’s not let that happen. Okay. And then it goes on to say while we’re on the subject, The report also revise previous doom and gloom economic forecast for the doom and gloom here. it expects global GDP to decline 4.9% this year and US GDP to slide by 8%. They don’t think there’s going to be a V shaped recovery. Well, neither do I months if I predicted and I’m still predicting, I’m standing by that prediction that the recovery will be my modified square root recovery. Of course, we’re going to talk a lot about this at our upcoming sofa summit.

Jason Hartman 7:39
That’s our annual meet the Masters our 22nd anniversary. Meet the masters of income property event. We push the date back a couple of weeks, so it’s going to start July 31. With a reception on Friday evening. And then we go that weekend, August 1 and second. So save the date for that because You won’t want to miss it. It’s our first virtual conference. So that’s gonna be really exciting. We’ve got Harry dent speaking, George gammon speaking. And our client and professional actor, Sean Carroll is the emcee. You’ve heard him on the show before talking about his his own case study. And we got a bunch of other speakers we’re working on, but we cannot drop any names yet, because, hey, it’s not confirmed. So we don’t want to do that. But save the date for that July 31, August 1 and second coming up coming up. It’s gonna be really exciting. So this article goes on to say, so what do we do the IMF advise governments to keep relief funds flowing? So in other words, so what about the debt? So what about the deficits? So what about their relationship to global GDP? Who cares keep the relief funds flowing? The Keynesian idea? Remember john Maynard Keynes, arguably the second most famous economist In History after Charles

Jason Hartman 9:05
almost said Charles Schwab, I don’t know why I said that. No, after Marx, okay, Marxist Marxist ideology, and Marx is sadly the most famous economist who ever lived Karl Marx. And why is that? Well, because sadly, his ideas caught on the most. And it’s a bummer. A big bummer that they did because hundreds of millions of people suffered under Marxist ideology. But listen, give the guy credit, his economic ideas govern the former Soviet Union, the remaining few communist countries we still have left today and really change the world more than any other economists. So unfortunately, hopefully better ideas will win out as humanity goes forward. So keep the money flowing, the really funds flowing regardless of the the debt and the deficits. Okay. So that’s what they say. And then the IMF also said that governments could try to curb tax avoidance, broaden their tax bases, and potentially make their tax systems more. Don’t you love this word? Because it’s such a complete misnomer. Progressive. Yeah, right. Definitely. Progressive is usually regressive in terms of the real effects of their taxation. Definitely, definitely true. But that’s the you know, things get a moniker, they get a they get a name and like everybody believes it. You know, it’s crazy how that happens. But they say that the bottom line is countries that control their own currency, like the US are at an advantage when it comes to managing debt. The money printers that the Fed can always make sure the federal government is able to borrow. Yes, they can. You are definitely right about that. And that’s why The US can defy gravity, For I say, decades to come, who knows, maybe even centuries to come. Before this debt really becomes the problem it should become. We live in an illogical world. It doesn’t make sense. It’s like that old movie about the kinks, say an old great band. They have a movie. It’s called stop making sense and old movie. And it’s pretty good. By the way, check it out. So, yeah, we live in a world of unreality. We really do. So there’s the update on debt and deficits and be sure you align your interest with these great powers that be the most powerful forces. The human race has ever known governments and central banks with standing armies, and it’s not going to change so align your interests with them. How do you do that? You do that by following my investing plan. The plan we’ve been outlining on this show for The past 15 years. And the plan I’ve been teaching for the last 17 years, and is explained. And by the way, if you’re new to the show, be sure or you just want to review the fundamentals. Be sure to check out our sister podcast. It’s the Quickstart podcast. So just type in Jason Hartman quickstart on any podcast platform, and you’ll find it on iTunes, etc. And that is a podcast where we, we go over more of the fundamental ideas, because here we talk a lot about current events and interview various guests like we’re going to interview today. But if you just want a review of the fundamentals, or to be introduced to the fundamentals, the Quickstart podcast is your place to get that so you can listen to both, they’re obviously both free and check those out Also, many of you have asked for this. I mentioned it yesterday, but hugely popular webinar on asset protection asset defense, tax savings and estate planning. You can get that at Jason hartman.com slash s. asset. That’s Jason Hartman calm slash asset for that webinar. Anyway, without further ado, here’s our guest today, James B steel.

Jason Hartman 13:15
It’s my pleasure to welcome James B. Steele. He is one of the most famous economic investigative journalists of all time. He’s a two time Pulitzer Prize winner, two national magazine awards and five George Polk awards. Well at the Philadelphia Inquirer time and Vanity Fair, multiple number one New York Times bestsellers, including the betrayal of the American dream, Howard Hughes, his life and madness and his newest book, America, what went wrong? The crisis deepens James, welcome. How are you? Great to be with you. I’m fine. It’s good to have you on you know, OFF AIR a little bit. Before we started, we were talking about how the middle class has just been decimated over the past couple of decades. Until 2007. tene Americans, typical middle class Americans hadn’t had a real dollar pay increase for four decades. What is going on? Is this by design? If so, whose design? How can it be?

James B. Steel 14:15
It was a range of things that have brought this about. But the principal things are Washington and frankly Wall Street. It has been in the interest of both to but various programs in place which had been very detrimental in the middle class. Part of it has been direct, automotives, deregulation, various industries, airline trucking, certain financial industries, created all kinds of problems with homeownership, as well as debt and so forth. That’s one, the tax system in our mind is the single greatest driver of income inequality in this country. Most of the tax benefits that have flown in the last few years have gone to really upper income people or corporations, the corporations would love not to pay any taxes. at all, but the numbers are staggering. If you go back just a few decades, companies paid roughly 40% of the total income tax bill. Today, this year, it’s going to be less than 10%. Now, that’s all pre COVID. We’re talking about, I mean, over this course changed everything in this whole equation. But that shrinkage is it shifted everything onto the backs of individuals, both middle class and certainly upper income individuals who pay a sizable part of the overall income taxes

Jason Hartman 15:33
is a lot of that way the corporations are getting away with paying a lot less is that because they’re doing all these offshore schemes, like the double Irish twist, and they’ve got all this money offshore. It’s like, it used to be that a corporation of a certain country, or a baseball team of certain city was like the hometown team. Now these multinationals just go from one jurisdiction to another, figuring out how to screw everybody. Government and not pay anything. It’s unbelievable. And at the same time, the people who run those corporations are, you know, are spouting these leftist ideas that, you know, we need more taxes, but I it’s just incoherent I don’t get it.

James B. Steel 16:15
Well, I think you’re right about the hometown image is a perfect point because I think a lot of corporations were attached to wherever whatever town they were in, even though they might have been national in scope. And all that’s been out the window and half the corporations, some of them are not even domestically owned anymore, and which most people don’t even realize in that case. So that’s a lot a big part of it. A lot of it has been, certainly the global economy has been a huge factor in this and a lot of the earnings abroad. When you say the global economy, do you mean trade deals that have offshored American jobs? That’s part of it. And other parts of it are just companies who are just basically selling abroad as well. So it’s really both sides of the equation. I’m in the latter 2017 tax bill and the repatriation of The funds that were sitting in big offshore accounts that all kinds of multinational corporations like Apple, Google, others had offshore, and also manufacturing companies as well, for a very low tax rate, they were allowed to bring these, this money a certain percentage of back to the US. But the Federal Reserve Bank of New York studied this, among others. I don’t think of the Federal Reserve Bank of New York is exactly a left Think Tank, right. They studied this. And they concluded that most of the money came back went into stock buybacks, dividends for those corporations. In other words, the money isn’t plowed back in to the real operation of the company. It’s for a very small number of people who benefited from that money coming back. So they got a lower tax rate to bring it back. And they didn’t do anything to really help with it. Another one of the problems that we see because money isn’t being invested back into the country as a whole, only the various elite, only the very wealthy Not always by design, but by the way it works out in practice, we’re getting the benefit of this. And that’s not going to, I don’t see how that can continue over a period of time because the middle classes increasingly will get poor and poor. I mean, look at median family income. When we did a first edition of this book many years ago, median family income was around 34,000. It kept pace. This is a 1992. And if it kept pace with just across that time, median family income today would be around 68 69,000. Yeah,

Jason Hartman 18:37
and it’s only about 54 56,000. Right? It’s, well, it’s 61. But it’s basically 2017. Put another way, another way that’s really much worse than it sounds is that those inflation numbers are understated. I mean, we all know that the government is manipulating the index to make it look better than it is, right. If those were the real inflation numbers. I would Just in my head math say that that median income would need to be about 90 $95,000. Today to equal what it was in the early 90s. But also notice that in the early 90s, when he wrote the original book, the pay increases in real dollars stopped in 1977. That’s right. It’s dramatically worse. And then to add insult to injury, and you can comment on this, the pay of the C level executives, the boards of directors became just dramatically out of sync with regular workers. And I’m not talking minimum wage workers even I’m just talking middle management people. It’s like there’s this giant separation.

James B. Steel 19:42
You’re absolutely right. In fact, it’s one of the most shocking numbers I think, in this new book apart. Peter Drucker studied this whole issue of SEO many years ago, and he thought the optimum ratio would have been 20 to one for an ounce like

Jason Hartman 19:56
300 to 400

James B. Steel 19:59
person By the factory for the the middle of $1 20 to one, we did the first edition this put back in the early 1990s. It was then up to 89 to one. So almost for some estimates now have it over 300

Jason Hartman 20:15
Oh yeah, I know.

James B. Steel 20:16
I know. It’s like 308 it’s just cycle way beyond what even we thought was going to happen. When we wrote this book people attacked us at the time so you’re, you’re against success.

Jason Hartman 20:27
You’re against capitalism. Surprise arguments. I’ve even made those arguments myself, but I realized that I was wrong. Because we need a good middle class. That’s what’s one of the things that has made this country great is a strong middle class otherwise we have guess what civil unrest we have a lot of unhappy people and they’re gonna they’re gonna burn cars and take over downtown Seattle. Sadly, but But how did it happen? Okay, so trade agreements, understating inflation, Wall Street money. believes the financialization of the economy, I mean, take us into that in more depth.

James B. Steel 21:04
And it was a theme that began to develop really in the 70s by a lot of very conservative think tanks that began to seep into the body politic. that had to do with deregulation, the idea that government is filled with red tape, and it’s cumbersome, it’s not efficient for GM for business operate this way. So there are a whole range of things like that, that’s certainly feeding its way into the tax system, the fewer taxes, that means there’s more money to invest. But when they started crafting these bills, most of the breaks went to people at the top, tell them to therefore make those investments and so forth. So it’s a whole series of things slowly over a period of time, the same time things like social security are not really significantly increased the way they should be. I mean, half the retirees basically depend on social security that is their only retirement benefit and so security’s essentially been pretty much flat for a long time, though. Every time there’s an increase, it’s offset by increases in Medicare, which comes out of everybody’s Social Security check as well. So it’s a range of things like that. But it was a mindset government’s evil. Government’s a problem. Let’s let the free market determine everything. I think the free market has been wonderful for America has given us a variety of wonderful things. But it cannot solve this problem. And I think what we’re in right now is perfect proof. It can’t solve this problem. The virus I think, as much as anything else, exposed just how vulnerable we are in this country. I mean, the vast bulk of people in the middle class working classes. Remember, right after COVID struck, and businesses began to layoff workers. Do you remember those photos and she saw on TV all the lines of cars waiting to get boxes of these weren’t people who arrived up under viaducts as homeless people, middle class people, I mean, their people are just hanging on. And the other great study the New York Fed was the one that’s a couple years ago that said 47, or 48% of the people are faced with an emergency $400 they don’t have the cash. They don’t have money. I mean, what that told me about where we are,

Jason Hartman 23:22
I don’t think too many people would deny that there’s a problem. So maybe we don’t need to spend that much more time on it. But I totally agree there was a problem. Absolutely. So let’s just go back to a couple things you mentioned, you talked about how the benefits accrued to a very small number of people and companies. And then you know, the argument being that well, they all invest that money. And that argument does have at least conceptual validity, because investment is wealth formation. And the old saying, you know, money doesn’t sleep or maybe it does. I No, I don’t think it does. Because if rich people have money, they can’t just do nothing with the money, they’re going to invest it. And then investment is going to and I hate to say this, but trickle down to somebody, it’s going to, it’s going to build more houses, it’s going to build more factories create more jobs. I mean, isn’t that true?

James B. Steel 24:23
It is true that obviously, if you invested in that particular way, as opposed to just perhaps just more dividends or higher pay for your CEO or buying back your stock at the company, you’re absolutely right. I mean, I think that’s why the 2017 tax bill which gave these big corporations that had all this money offshore a break. I mean, I wish that had that money coming back and been policed, but it did exactly what you’re talking about, really invested in the US. Instead, it was invested in stock buybacks, bigger dividends, things of that sort, rather than maybe building another plant. Launching another division, something like that not just buying an existing company. So I agree with you. And I think that’s one of the things about American capitalism. It’s obviously been very aggressive and very successful, a whole range of reasons. I think all we’re saying in the book is that it’s not enough, that alone is not enough. We need more at a more active government can do the things that can do and that’s what the virus exposed. I mean, the free market was totally unable to handle this and understandably so. It’s a national problem that crosses state lines, corporate lines, and globally as well. Absolutely. But at least in case of our own since the US, we didn’t have something in place or anything close to being in place to think about a way to handle it. So there’s a there is a role for the government, not just for that, but think about the government dealing with the middle class on that same basis. That’s what I would like to see like are those issues that are really harming the middle class, health care is a big one. I mean, that could be salt. That could take a lot of those expenses off, and

Jason Hartman 26:05
how would it be solved?

James B. Steel 26:07
That? Well, I’ve done and I’ve advocated for years a single payer system. That’s probably not on the radar, even if the democrats win Congress coming up, more aware of all the criticisms in our systems in Canada in the UK, I mean, you know, you die waiting in line, you know, no innovation, the Canadian criticisms are way, way off base. And I The reason I know that some part of my sisters lived in Canada for 40 years, so I actually know what goes on up there. You have in Canada, you wait if you need a hip replacement, but if you’re seriously ill, you do not wait, Canada, and actually most of the public opinion polls in Canada, so Canadians are more, that system has a higher approval rate than our own. So that alone tells you something that the UK has a problem. But look at the single payer systems in France and Germany, very high level of budget. Very high level of care so it can be done. To be fair, though, France and Germany and Europe in general is a disaster.

Jason Hartman 27:07
and Canada doesn’t have the type of immigration they have a much smaller population. You know, there’s so

James B. Steel 27:14
many differences. Now there are differences in all of these places, but I don’t and Germany is in certainly a downturn now. But don’t ever underestimate the Germans what they’re gonna do there and, and France, I think is consistently, people underestimate in some ways, the internal strength of much of that country and certainly the healthcare system. You have any doctor friends who know French doctors, they will tell you the French medical system is a very high level very, very high quality. But anyway, back to the main point, the single payer could be in many different ways. The UK they actually pay the doctors, you don’t have to do it that way. It could be a whole range of other things. The Canadians were criticized, you can go to any doctor you want to in Canada. You can’t do that in the US today, depending on what your planets so There’s no there’s mixes and matches sure all over the place

Jason Hartman 28:03
on the health care thing. You know, there are just two things we could do. That would just be simple four steps. Number one, and that’s when Trump has been working on is make the pricing transparent. Like how in the world did we get to this stupid system where the patient is detached from the cost of everything in no other area of life doesn’t work that way. When I take my dog to the vet, I evaluate treatment based on knowing the cost. And I can call another vet in shock. You know, you get the insurance in there, this other party, and it’s like, you know, I go to the doctor, and it’s like, run every test you want. I don’t care. I’m not paying for it. It’s just a silly system, and then let the insurance companies sell across state lines to increase competition.

James B. Steel 28:46
I, I don’t have any problem with that at all. And in fact, look, the gun I wrote about health care 15 years ago talked about the oddity if you were standing in a line to buy groceries. If you had a box of cereal It was $2. Why did the guy Behind you that same box was a $5 airline ticket. And so, you know, there’s no doubt, there’s tons of things that can be done. But I think the most important things would be to figure out a way to get these costs down from middle class people who actually even have insurance, let alone provided for the ones who don’t have, because we do spend lawyers, you know, so well, more than anybody else in the world. So healthcare is one, obviously jobs or another. I think student loans are an area that is just crying out. We’re never going to forgive all the student loans.

Jason Hartman 29:33
It’s a total scam. I mean, the way we have indebted, these young people and older people too, but especially young to $1.5 trillion in non dischargeable student debt, that’s a crime, that it’s a criminal activity. All those companies that have done those student loans should be indicted. So it’s ridiculous. But you know, you have a fascinating table of contents. And, you know, there’s so much to talk about here and time is limited, but it’s Talk about the casualties of the new economic order downward mobility. You talk about the paper jobs and you know, the $500 an hour bankruptcy lawyers that the global money men who are beyond the law who are the global money men, by the way,

James B. Steel 30:16
this was one of the earlier in the earlier edition. This was the late Mark rich, who made a lot of money on oil trading and also in the steel plant in West Virginia where he basically there was a year and a half strike they just about bankrupted the town and half the workers there who they have mentioned, one of the few labor victories at the time, were eventually rich threw in the sponge and said, Okay, you guys win. And I’ll certainly get out here. But But he was one but there there of course many. And all you have to do is go to the Cayman Islands or

Jason Hartman 30:48
any of those places down there and you’ll see plenty of them on the mailboxes as well. Absolutely. So it’s the offshore games, all the tax games and and those types of things. Has the American Dream ended? Or is there some hope here?

James B. Steel 31:03
I think there’s always hope if we do the right thing. And I think it would, it would not be easy and it cannot be done in a year or two. But it could be done. I mean, if we set a plan to figure out a way, what are the kinds of social safety that we can provide for the middle class doesn’t have to be a huge thing. But something that makes sure when something like this happens, we don’t have people lined up at three miles getting boxes of food, there’s got another way to do that particular kind of thing. I think the other thing which is maybe at the top of the list, right alongside healthcare, his retirement, retirement is a huge, unbelievable freight training, catastrophe coming down the tracks right now. I mean, the Motley Fool just in the last day or two and a piece on the Gen X is what shaped her and everybody’s sort of new groups before after them are in trouble. The death of pensions, and the shifting over to the self directed 401k is important. Trees. All of this has been more convenient for companies. But it’s going to be a disaster for workers down the line, because those funds, and there’s nothing wrong with those funds, but they’re just not going to produce the earnings. They’re not going to produce the return that people need in the middle class, like pensions, that of all. The other thing that we need to do is to increase social security for those people that need it. Now 50% of Americans Social Security is their principal retirement, and they’re only retired. There’s many things that can be done can all be done in one year, but something other than just lip service to the fact that little plastic

Jason Hartman 32:40
gym all those things, it would be great but they all cost money. And we’re running huge deficits, huge debt with with Coronavirus, it got much worse. Doesn’t money printing cause problems? I mean, can you just do that and these things have consequences, right? You can’t do

James B. Steel 32:57
it all at once. But I think we’re going to I have to figure out one or two things to do. I think we need to invest in a way that creates jobs. I mean, a simple thing that Don had been talking about for years is infrastructure. And a lot of people, Democrats and Republicans both talk about that. That’s certainly one, not just roads and bridges, but other kinds of things, you know, high speed, telecommunications and a whole range of things, maybe parts of the green energy concept, but there’s, there’s ways to do things, but you know, you have to make some targets and stick with them. You can’t do it all in one year. But we need to at least start thinking about this other than just wringing our hands about

Jason Hartman 33:38
so if the government is going to give people money, I mean, I couldn’t agree with you, you know, that the New Deal concept was okay, you know, put people to work. You know, that just doesn’t seem to happen anymore. The government just gives out money and says stay home and become a lazy loser. You know, that’s basically what the plan has been the last five decades.

James B. Steel 34:00
Well, I think that’s been true. We’ve seen this year after the virus in particular. But that’s the kind of thing where I think if we had national plans for something like this, and thought about it, we might be able to respond to that better rather than just printing these checks down sending. I mean, people aren’t getting the money now, it’s good, because they’re in bad shape. But that’s not the solution. The solution is trying to figure out what is the foundation that makes the middle class viable again, what are those jobs? And what are benefits?

Jason Hartman 34:29
You know, I mean, it’s sort of easy to answer that. It’s jobs on shore. It’s higher paying higher skilled jobs, and having a newfound respect for vocational type jobs. So what’s wrong with being a plumber? You know, no, I don’t want to do the job. But there are people out there that want to do it and you’ve just destroyed so many of these jobs. Right. And, you know, frankly, that’s the Trump agenda. I love him or hate him, but that has been part His plan to give those jobs a new level of respect? Why do people need to go to university? Get a degree in feminist studies that has no job market and be $70,000 in debt to a silly student loan?

James B. Steel 35:14
Absolutely. Couldn’t agree. I couldn’t agree with you more on that.

Jason Hartman 35:17
Not everybody needs to go to college.

James B. Steel 35:20
No, no. And and a lot of people have been making that point for a long, long time. And I think that’s a very valid point. And I think his his focus on trade has been a positive thing in the sense. I mean, Don, I’ve been writing

Jason Hartman 35:32
about trade for years. And by the way, you keep referring to Don, that’s your co author.

James B. Steel 35:37
And we were writing about free trade and some of the disasters that created years ago and like goodness, that we had hammered The Wall Street Journal editorial page attacked us, currency free traders. I mean, there’s any restriction on free trade and their book is like heresy. You just can’t do that. Anyway, and our only point was, you can’t have this on restricted. There’s one sided. And we’ve we’ve been writing that for years and years. So that part of his agenda I think has been positive. I think the way he’s gone about it, though, has been not positive.

Jason Hartman 36:13
And what do you mean by that, like picking fights with China is war? Well,

James B. Steel 36:17
I think if you’re going to pick up that with China, the Europeans are upset with China’s we are. I mean, you all get together. But instead he’s been total God alone and everything. And I think that’s when we’re if you were working together with others, you might really think it’s a result. But Chinese are picking we’ll just we’ll just Outlast

Jason Hartman 36:36
this guy. And it sounds like you would be critical of Clinton’s free trade policies. I’m guessing right

James B. Steel 36:43
now. Well, no. The one thing people forget about Clinton, and you saw this in the Trump Hillary Clinton debates. I mean, what people forget is that NAFTA was a fait accompli when Bill Clinton took off. NAFTA was negotiated by George HW Bush. People forget that. It wasn’t Bill Clinton, it was done deal. And I’m not unsympathetic to the problems of a president at that point saying, Well, I’m not gonna sign this. And not just the Wall Street Journal, but every other damn editorial page in the on your neck. Well, Trump did it, you know, he got out of the TPP. Yeah. Any endorsed some criticism for that perfect because. But anyway, all I’m saying is, I think Clinton in that sense, was a different era and didn’t really have much choice at that point. But look at the new NAFTA, that Trump I mean, that’s USMC, it’s NAFTA light,

Jason Hartman 37:36
so it’s better than the old one, but not that much better. I don’t think it’s much better in the olden

James B. Steel 37:41
one of the breakthroughs and we can now sell wine and British Columbia State scores. That’s my favorite

Jason Hartman 37:48
there’s always some special interest

James B. Steel 37:50
in there some special right so I’m not so sure that’s gonna be a big job generator in the US anyway. Yeah, never know. You never know and most Mexico is related the auto industry in the US and the auto workers. They don’t see any benefits really in this thing about anything. So anyway, it’s at most a draw a lot of sound and fury signifying I think very little, ultimately. But that’s

Jason Hartman 38:15
neither here nor there. At this point. These things are definitely complicated. Hey, as you wrap up, just give us any prediction on the future. Inflation, deflation stagflation. I’ve kind of think we’re moving into a stagflation airy period reminds me of the misery index and Jimmy Carter era coming up. But what do you what do you think?

James B. Steel 38:32
I’m not an economist on issues of deflation and inflation. And in fact, I’m not so sure many economists are very attuned to this one anymore because everybody has been worried about inflation for years and it’s just never happened. Yeah, I mean, I mean, it has happened a little bit to be loved but it’s a tiny and but when you’re thinking well,

Jason Hartman 38:51
I like some say, you know, hyperinflation,

James B. Steel 38:54
I think we’re gonna be obviously in a very, very weakened condition for a long time. There’s just no way You’ve come out of this virus, robustly, despite the silliness that’s going on on the stock market. I mean, this has no relationship to what is really happening in the economy. It just shows you how people grab on the slightest bit of good news and say, Wow, let’s go for that. But I think the underlying problems are still there. And that’s going to take us a long time to work our way through this. The other shifts are like you mentioned, I think commercial real estate or I made on the mention this, but I mean, what’s gonna happen there?

Jason Hartman 39:28
It’s a disaster. I mean, they’re they’re going to be so many commercial mortgage backed securities defaults. It’s going to be staggering. Exactly. And that’s, there’s no way I can see doing much about that because it’s, this is what’s going to happen. It’s just a fundamental change. Look at we do have a housing shortage. There’s no question about that. No one would disagree with that. And, you know, you complained about deregulation, but maybe a little less regulation there would actually help people have some housing, and if we could rezone Some of these office and retail properties that aren’t going to be used as office and retail properties anymore in turning into housing at a reasonable price without a bunch of complex codes and city planning and you know, hiring a zillion lawyers and environmental impact people just let people live somewhere. I mean, my God, the homeless problem is insane. The cost of housing is absolutely crazy. That’s an area where maybe we need some deregulation.

James B. Steel 40:27
Well, and a lot of that is local regulation as much as national. So and I’m not for one minute saying that there are some things that can be deregulated here and there. I mean, I think we’ve all seen examples of I’m just saying, I think in the case of some of those industries, we might a little bit too far. And I just look at trucking. trucking continues to be a catastrophe. Now 40 years after its deregulated, I mean hundreds of thousands, basically the number of companies that went in and out of that industry. was regulated. The ICC was the principal regulator. And once those were relaxed, everybody was a trucking company. So literally in the last four years, thousands of these companies go in, and it’s really in many cases, the case of excessive competition. It’s like, if I read a the biographies of the first john Rockefeller, his whole goal was to reduce competition. competition was constantly producing lower returns, or no returns for everybody in the business. So what tracking has been, I mean, look at all the big companies, most of them have gone out of business the last few years, and the ones that survive, maybe survive for a little longer, and then they go out of business, just chronic chaos, chronically trying to retrain drivers. What the drivers make now is a pittance compared to what they made, like 3040 years ago, adjusted for inflation. Well, people could argue the same thing about airlines, but the other side of that is that it’s a lot cheaper to fly and then I’m doing a we’ll go pre COVID on this. I mean, what’s happened now a little bit, but it’s come out of the hides of the people who work for those industries.

Jason Hartman 42:06
Sure, but the consumer can go places, just like deregulation in trade, you can buy cheap stuff on Amazon and at Walmart, but you’re not gonna have a job,

James B. Steel 42:16
that and that’s always the trade off the way you’re figuring out how much of this you can live with how much you can write. So we get back to that.

Jason Hartman 42:25
Okay, fair enough, Jim, wrap it up for us and give out your website if you want.

James B. Steel 42:28
The website is Barletta and steel ba r le TT and steel. Most people want to put a T and Don’s name is calling Bartlett but it’s barlett that has this book, and of course in the others, but this book is just out. And it’s really a clarion call in my book to saying we’ve got a tremendous crisis here that is worsening, intensifying, and we’re going to have to figure out a way to get on it. The book was essentially written before the virus, but the virus in some ways is exposed. The need to think about these things more than ever in my book.

Jason Hartman 43:03
It has definitely accelerated that. Jim Steele, thank you so much for joining us. Great to be with you, Jason.

Jason Hartman 43:14
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