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Protectionism — Transcript

by Andrew Johnson · 8,858 words · 1,298 segments · language en · Watch on YouTube

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0:04hey welcome back so we were talking
0:06about NAFTA North American Free Trade
0:13Agreement NAFTA is a contract between
0:16three countries to stop protectionism
0:19United States Mexico and Canada right
0:22this contract is written in three
0:27languages it's written in
0:31English it's written in
0:34French and Spanish now why is it written
0:37in
0:38Spanish because Spanish is the official
0:42language for Mexico okay why is it
0:45written in
0:46French because French is one of the two
0:50official languages in
0:53Canada it's also written in English why
0:56is it written in English because English
0:59is another of official language for
1:04Canada fact fact note what is the
1:07official language of the United
1:11States it's not
1:13English everybody says oh it's English
1:15speak English you're an American it's
1:17not English United States does not have
1:20an official language they don't Google
1:22it so people say you better speak
1:25English sorry it's not the official
1:28language okay so a lot when they pass
1:31NAFTA bunch of people says oh no oh no
1:34NAFTA is bad we don't want NAFTA because
1:36all of our jobs are going to go down to
1:38Mexico now why would our jobs go to
1:40Mexico well a couple reasons cheap labor
1:43because labor rates are much less
1:44expensive than they are in BW
1:47Washington also in Mexico they don't
1:51enforce those pesky little environmental
1:53laws you know things like you shouldn't
1:55pollute and labor things if people blow
1:59up it's bad and they got all these
2:01things they don't enforce those
2:06things
2:08so it's written in three
2:10languages and then everybody says oh all
2:12of our jobs are going to go to Mexico
2:15they did and they
2:18didn't that's kind of interesting
2:21so when they first passed NAFTA a bunch
2:24of the steel factories in Northeast
2:27United States all moved their steel fact
2:29factories to Mexico why because cheap
2:34labor and they don't enforce those pesky
2:36little environmental laws or labor losss
2:39hey sounds cool right now when they
2:41built it down there they built these
2:43factories down there they built the
2:45crummiest factories you ever can imagine
2:47these were bad factories first off a
2:49steel factory is not a good place anyway
2:52you do not want a job in a steel factory
2:54first off they're
2:55dirty they're
2:57loud they're dangerous people blow up
3:01they're
3:02hot and it's low pay does this sound
3:05like the job you
3:06want I don't want that job you don't
3:10either right so they move so as soon as
3:12they passed NAFTA a bunch of Steel
3:14factories moved down to Mexico because
3:16reasons we already talked about okay now
3:19they built a really terrible bunch of
3:22really terrible factories and people say
3:23well those evil Americans they're
3:25building terrible factories down here in
3:27Mexico they should build nice steel and
3:29they could they could build beautiful
3:32safe clean nice steel factories down in
3:36Mexico they did not because Mexico has a
3:39history of
3:41nationalization nationalization is when
3:43a country steals foreign assets that are
3:47located in their country Mexico has done
3:50this forever right so they discovered
3:52oil back in 1800s and there's a real
3:56famous guy's name is
3:58Rockefeller yeah that rock Feller right
4:01so he created a company called Standard
4:03Oil now you Standard Oil doesn't really
4:06exist any longer because it was broken
4:07up under the Sherman Antitrust Act see
4:10how that's all coming back now we got
4:12Sherman Antitrust Act okay so anyway but
4:14before they broke up Standard Oil under
4:17the Sherman Antitrust Act he went down
4:19and discovered that Mexico has really
4:22big oil reserves and it's close to the
4:23United States so he goes down there and
4:26he rents the land and he starts to pump
4:28oil so he's pumping oil pumping oil pump
4:29pump oil The Mexican government says Hey
4:33give us some of this money and and the
4:37Rockefeller just it's your oil sure so
4:40another pumping oil pumping oil pumping
4:42oil then the Mexican government says we
4:44want more money Rockefeller says well
4:47we're pretty close to the margins right
4:49now we're not making very much profit
4:51now they said it's our oil we charge
4:54what we want Standard Oil says okay
4:57pumping oil pumping oil pumping oil then
5:00the words came out that you never want
5:02to hear in international business they
5:04said thank you for your business what do
5:07you mean we are taking over now what do
5:10you mean your factories are on Mexican
5:13soil therefore the Mexican government
5:16owns them you can't do that yes we can
5:19it's our country get out don't go away
5:22mad just go
5:24away wow so Standard Oil left Mexico now
5:29Now The Mexican government starts to
5:32operate these factories they're pumping
5:34oil pumping oil pumping oil there's a
5:36problem though oil production is very
5:40intensive techn it's got a lot of
5:42Technology it's not it's not something
5:44that you can just figure out you need to
5:46have really educated people Mexico has
5:50some educated people but they didn't
5:51have enough people with the skills to
5:54keep the factories going so they start
5:56to break down pumping oil pumping oil
6:01oil and they stopped so now they're not
6:04producing any oil so The Mexican
6:07government says Hey Standard Oil come on
6:10back why don't you fix your factories
6:13and we won't steal it again and standard
6:15oil
6:16said no you will steal it yet because
6:20they have a long history of doing that
6:22nationalization so if you go down to
6:25Mexico and you build a shiny beautiful
6:28Factory
6:29what is going to happen to that
6:32factory it's going to get nationalized
6:34everybody knows that it's kind of like
6:37if you break into Bill Gates house to
6:39steal his stuff are you going to steal
6:42his
6:43socks or his underwear you don't care
6:46socks are socks or socks you're not
6:47gonna you're GNA go for the good stuff
6:49aren't you right same thing if they
6:51build beautiful shiny factories it will
6:54get nationalized and so they say hey
6:56let's just build really low quality
6:58factories down there and then we don't
7:00have to worry about it and that's what
7:02happened so McDonald Douglas decided hey
7:08we've got this thing called NAFTA which
7:10means fair trade so we can move our
7:12factories down to Mexico so they had a
7:14huge Factory in uh witch talk Kansas
7:18huge Factory so everybody's seen
7:20airplane factories if you live in
7:21Seattle you see them do we have airplane
7:23factories everywhere and there's one
7:25word to describe an airplane Factory and
7:27that's big there really big so they
7:30moved their factories down to Mexico
7:32because they wanted to get the cheap
7:34labor so think about moving an airplane
7:37Factory really expensive and it takes a
7:41long time took over a year to move the
7:43factory but they said so even though
7:46it's expensive and they're not making
7:47any money for a whole year on that
7:48factory they said the labor rates are so
7:51much cheaper we'll just go down to
7:52Mexico so they go down to Mexico they
7:54build their factories and they start to
7:56hire the locals to run it there's a
7:59problem
8:00they don't have enough skills to build
8:03airplanes now some people do they've got
8:05some people but not enough the the the
8:08worker Pool isn't large enough plus
8:11they're not as efficient as workers as
8:12we are here in the United States and so
8:15they tried to build airplanes and they
8:16couldn't find any workers so what do you
8:18do you moved your factory down to Mexico
8:21what do you
8:22do well you try to build your airplanes
8:25with unskilled labor now here's the
8:28question do you want to fly on an
8:31airplane built with unskilled
8:35labor I don't right why right because
8:39it's a very very high skilled job
8:42there's a reason we do airplanes in the
8:43United States and they don't in China
8:45and they don't in all sorts of other
8:47countries because they're very high
8:49skilled we have the workers they didn't
8:53so these airplanes just started falling
8:54out of the sky boom boom boom now when
8:58an airplane falls out of the sky it's
9:01really expensive you say well it's
9:04really expensive because the airplane of
9:05the people no it's so much expensive so
9:07Boeing two two uh what
9:11737s and fell out the sky and how many
9:15billions of dollars do you think that's
9:17cost them yeah now McDonald nuglas boom
9:20boom boom boom
9:22boom they said well this is just silly
9:24so what do you do
9:26now you move back to wit talk can
9:29so now they move the airplane Factory
9:32back to Witchita Kansas now all the good
9:35employees all the the people who are
9:37really skilled and can find a job doing
9:39anything they got hired up they're gone
9:44so who's left over the people who can't
9:47find jobs outside or disgruntled
9:49employees so now you work for this
9:51company let's say you're one of these
9:53these aircraft U producers you work for
9:58McDonald Douglas for 15 years right they
10:02leave you you have to file bankruptcy
10:05you lose your
10:07house then they come back and say oops
10:12sorry would you be a happy
10:15worker I wouldn't so even so the best of
10:19the best got hired Away by loed Martin
10:22and and Boeing and all these other so
10:25who's left over the not the best of the
10:27best and they're unhappy happy but they
10:30say sure I need to eat so I'll go ahead
10:32and work for you what do you think about
10:33the quality of those
10:36airplanes they were just they were
10:38terrible I mean the employees were
10:40sabotaging the airplanes I don't want to
10:43fly on the sabotage airplane so now
10:46planes falling out of the sky boom boom
10:48boom McDonald Douglas was bankrupt they
10:51were dead they're done right and they're
10:53lying there in Kansas GL we're we're
10:56done and Boeing swooped out of the sky
11:00and purchased McDonald Douglas assets
11:02for pennies for pennies right say well
11:06that's you said that McDonald Douglas
11:08was stolen by Boeing that's not stolen
11:11yes it was because the Boeing Executives
11:14had a really good idea that moving a
11:17factory to Mexico was a bad idea but
11:20they pushed when they were developing
11:22NAFTA they pushed it so McDonald Douglas
11:25would be have wouldn't have a hard time
11:27moving to Mexico in other words
11:30kind of set them up didn't
11:32they yeah yeah yeah so people say oh
11:35nafta's bad naft is bad actually since
11:371993 two-way trade with our NAFTA
11:40Partners In other words between the
11:41United States and Canada United States
11:43and Mexico has increased
11:4844% that's a lot because Canada can do
11:51some better things than we can Mexico
11:53can do some better things than we can it
11:55makes a lot of sense and if you look at
11:57how nap people say well nap has been for
11:59the United States it hasn't been bad
12:01it's actually been semi good not great
12:05but good who is NAFTA help the most well
12:08NAFTA has helped Mexico the most by far
12:13but what country needs help more than
12:15United States and Canada in NAFTA Mexico
12:18so it helped them the most Canada it has
12:21helped them too it's help the United
12:23States but not as much so NAFTA is a
12:27contract there is no NAFTA people say
12:31I'm GNA take us to NAFTA NAFTA doesn't
12:33exist it's a handshake it's a piece of
12:36paper it's a contract between three
12:38countries saying we won't do
12:40protectionism against you you don't do
12:42protectionism against us that's all it
12:46says now but then they recently we they
12:49come up with something called the
12:53usmca
12:55usmca stands for United States Mexico
12:59Canada trade
13:01agreement right it uh it's the same
13:05thing as nap it's really the same thing
13:07it's it's there's no difference between
13:09NAFTA it's like an orange and a
13:11clementine they're both oranges right
13:14one's a little bit different but it's
13:17not people say well we're going to do
13:19away with NAFTA and we're going to go
13:20the US MCA first off we haven't usmca
13:25has not been ratified it does not exist
13:27yet right
13:29uh it's basically NAFTA with some
13:33enforcement mechanisms in it so one of
13:37the problems with NAFTA is it doesn't
13:40have any
13:41enforcement there's no way to enforce
13:44NAFTA right it's a contract it's a piece
13:46of paper so if one person says oh we
13:49read our piece of paper
13:51differently you can't do anything it's
13:53an agreement between three countries
13:55that promise that they won't cheat but
13:58the problem is
13:59everybody cheats because
14:02everybody loves to export they hate to
14:06import so we cheated everybody cheats
14:09United States we wouldn't cheat oh yes
14:11we did so there was a provision in NAFTA
14:16that said if you're doing uh products
14:20from made out of
14:22wood
14:24wood then you can put a tariff on Wood
14:28Products we when we signed NAFTA all
14:31three countries signed it and said yes
14:34we agree that you can put a tariff a
14:36little bit it's an exclusion every
14:38contract has these little things read
14:39your car insurance policy don't read
14:41your car insurance policy it's boring
14:43but if you read it it will say except
14:45except except and NAFTA was the same
14:47thing so they said except for wood so
14:50then United States government said hey
14:53we're going to put a tariff on Canadian
14:57Lumber which we are allowed to do do
15:00they did for all sorts of reasons but
15:02they because Canada was doing some
15:04protectionism against their wood so then
15:06we put this tarff against the wood and
15:08then everybody says well okay you can do
15:10that then we say well wait a
15:14second magazines are made out of paper
15:18and paper is made out of wood so we're
15:22going to put a tariff on Canadian
15:25magazines and the Canon Canadians say no
15:28no no contract says wood they go yeah
15:31wood your magazines are made out of wood
15:33so we put a tariff on their magazines
15:36right there's nothing they can do
15:39there's nothing nothing they can do yeah
15:42so it NAFTA has some problems so when
15:45they when they're right now they're
15:46working on the US
15:48MCA
15:50which I give a 50/50% chance that it'll
15:54go it's it's it's either way but it does
15:57have some good parts to it what they
15:58should do is just make naft up
16:002.0 but they didn't want to for
16:02political reasons the Republicans and
16:04the Democrats both say that the other
16:06person created NAFTA which they both did
16:09George Bush Senor created it Bill
16:12Clinton got it ratified it's joint but
16:15they want to say oh it's Bill Clinton
16:17got it elected so let's he got it passed
16:20ratified so let's create this new thing
16:22called the usmca and the US MCA is
16:25exactly NAA but it does have some
16:27enforcement mechanisms
16:29but it's also harder to say isn't it
16:31USMC I like NAFTA because it's real
16:33quick but what they'll probably do is
16:35they'll call it usmca for a little bit
16:37and then they'll probably go back and
16:38call you in na because that's really
16:41what it's no different just has some
16:43enforcement which is a good
16:45thing then they came up with something
16:47called
16:49Gat Gat stands for General agreement on
16:52tariffs and
16:54trades it's similar to NAFTA if you
16:56think of NAFTA on steroid
17:00that's what Gat is gat General agreement
17:03on tffs and trade so NAFTA was written
17:05in three languages naft is a contract
17:08it's not an organization it's a contract
17:10written in three languages English
17:13French and
17:14Spanish when they made Gat General
17:17agreement on TS And Trades they said hey
17:20if you sign this
17:21contract you get to sign it in your own
17:26language which makes sense right do the
17:29French want to sign something in in
17:32Spanish no they don't which so so they
17:36made up all these different versions of
17:38Gap so now you have a complex legal
17:42document that's written in over a 100
17:46languages now let's look at NAFTA are
17:48there lawyers out there that can read
17:50and write in Spanish French and England
17:53English
17:55sure are there any lawyers in the world
17:58that can understand a complex legal
18:00document written in over 100
18:03languages well no they don't exist there
18:06is no person in the world so now you
18:09have a complex legal
18:11document that's written in languages so
18:14many languages that no person on the
18:16world can read so what
18:18happens you cheat that's what everybody
18:22does you cheat because you love to
18:24export you hate to import so you want to
18:26slow down your Imports speed up your
18:30exports everybody's cheating it didn't
18:31work it was a big
18:33failure so then they said
18:35okay when two or more countries have a
18:38disagreement on the terms of Gat what
18:41does Gat say General agreement on ter
18:43and trade when they disagree on
18:45something we need an organization that
18:48can rule on
18:50disagreements and that organization is
18:53called the
18:55WTO so you have NAFTA NAFTA is a
18:58contract in not an organization you have
19:00Gat Gat is a contract it's not an
19:03Organization WTO is an organization it's
19:07also what's called quasi
19:08governmental which means it's kind of a
19:11little bit of a government so they can
19:13actually make laws in other countries a
19:15little
19:17bit so
19:19WTO now a lot of people say I hate the
19:21WTO oh WTO is bad do you know what the
19:25WTO is yes it's a world you know is it
19:28isn't
19:29order or anything like that WTO WTO all
19:33they do is if a country sign
19:35Gat and people have a they have a
19:38disagreement on what it means the WTO
19:39rules on what that disagreement is if
19:42you don't like that answer you say
19:45bye-bye WTO I'm
19:47leaving but if you don't join the WTO
19:50then people can put tariffs on your
19:51stuff
19:53so so some people say I hate the WTO and
19:56you say why and they there's some some
19:58challenges to it one is environmental
20:01laws that's true so if we pass
20:05environmental laws in the United States
20:07and a factory doesn't want to go under
20:09those laws we just move our Factory to a
20:12country that doesn't enforce those pesky
20:13environmental
20:16laws that's what we
20:18do now is the WTO an environmental
20:23Organization no their job is to stop
20:27protectionism if like going to a
20:29policeman and you have a toothache they
20:31say hey Mr I got a toothache well the
20:34policeman might be able to say I'm sorry
20:36to hear about your toothache there's a
20:38dentist office right over there I bet
20:40you they can help you there and they'll
20:42be concerned and they might say would
20:44you like me to walk you to the to the
20:46dentist office and help you get there
20:48I'll do that for you and they'll help
20:50you but they really don't care about
20:53dental things they're not they don't
20:54have training in Dental things and
20:55that's not now should the WTO consider
20:58environmental issues yes but that's not
21:02their purpose it's to stop protectionism
21:04because protectionism starts Wars if you
21:06look at World War I it was pretty much
21:09was caused by two things a wrong turn
21:12and protectionism countries stopped
21:14trading with each other guess when else
21:16they stopped trading with each other
21:17World War II yeah plus war is way worse
21:22on the environment than a couple of
21:24factories it just war is really bad on
21:27the environment okay next problem people
21:30say is they don't like the WTO it's
21:31because of labor
21:33rates that's true so if you have a
21:36sweatshirt Factory in Seattle and you're
21:39sewing
21:41sweatshirts first off can a sweatshirt
21:44Factory in Seattle compete with a
21:46sweatshirt Factory in Indonesia where
21:49Seattle minimum wage is what 12 $15 an
21:51hour Indonesia it's like $2 a
21:54day you can't compete and so people say
21:58my job's going to go to
22:01Indonesia yeah it is it is it is okay
22:07third one third reason people say that
22:10they don't like the uh WTO they say it's
22:12a world
22:14government I I'm American I don't want
22:18people from other countries making laws
22:20in the United States only Americans make
22:22laws in the United States that's not
22:24true that's not true we make laws in
22:27other countries and they make laws in
22:28the United States all the time and
22:31there's a real real famous example in
22:34Chile remember the country that was
22:36going to join NAFTA but didn't in Chile
22:39they had this terrible terrible dictator
22:41his name was General Augusta pese or pet
22:45they're both pronounced I've heard it
22:47pronounced both ways and I've been in in
22:50uh been down there and I say hey uh how
22:53do you pronounce it and everybody said
22:54it differently too so I don't know what
22:56what what but he was a bad dude in
23:00Argentina he killed a lot of people he
23:03made people disappear he loved to give
23:07free helicopter rides to his enemies but
23:10he didn't include The Landing in other
23:12words he would take him up the
23:13helicopter and they shove him out and
23:15splat right he was a bad
23:18dude so General pet was doing all this
23:22terrible stuff killing all these people
23:23and the people were ready to revolt
23:26against him they were going to have a
23:27civil war
23:29you don't want a civil war Civil Wars
23:30are bad always so they said we're going
23:33to have a civil war and he they said if
23:36you step
23:37down we don't have to have the Civil War
23:40and he says if I step down you're GNA
23:43all that money that I've stolen you're
23:44going to take it back and all those
23:46people that I killed you're going to put
23:48me in prison or kill me for killing all
23:50those people which that's kind of what
23:52happens to dictators right so he says
23:55I'm not going to step down they said
23:57okay if we promise prise you you get to
24:00keep the money that you stole if we
24:02promise you that we will not prosecute
24:05you for killing and wounding and maming
24:07and doing terrible
24:09stuff you got clemency will you step
24:12down because that's a way better than
24:14having a civil war he
24:16says
24:18done yeah that's pretty cool so he steps
24:21down and they get a new government and
24:23you'll find out that the new government
24:25in in Argentina
24:28Chile I'm sorry if this was in Chile
24:30right it was not not an Argentina I'm
24:31sorry it was in Chile right you'll find
24:33out that Chile actually has a pretty
24:35decent government system right now yeah
24:38so pet and Shay was in Chile not
24:39Argentina did that up so everything's
24:43happy he's living his life in his Villa
24:46and everybody's happy no war solved all
24:50the problems but then Mr pet started to
24:54get old and as people get older they get
24:57sick
24:59and Chile had a decent medical system
25:02but not the best so he flies into London
25:06England for medical help so dictator
25:11Chile does terrible stuff in Chile flies
25:14into London for medical help right then
25:18after they fix him up he gets on an
25:20airplane to fly back to Chile but the
25:23British government arrests him for
25:25crimes against humanity in Chile
25:30so the courts in Belgian France and
25:35Switzerland said that under Spanish law
25:39the British cannot arrest him for crimes
25:41against humanity
25:43and you know this isn't a test question
25:45but it just think of this think of how
25:48complex our legal systems are so you had
25:51the Belgian French and swiss
25:55courts ruled
25:59that England could not arrest general
26:03pese for crimes against humanity that
26:06occurred in Chile five government legal
26:09system by the way the British did not
26:12want to let him go they had to because
26:14that's the way laws work so you can't
26:16say oh we're all independent we're not
26:19right right so those are the three
26:21reasons people say that they don't like
26:23it right those are not valid arguments
26:27Environmental labor and government are
26:29not valid arguments but there is a valid
26:31argument so the idea of the WTO is
26:33comparative advantage means I focus on
26:35what I'm good at you focus on what
26:37you're good at everybody gets Rich which
26:41makes a lot of
26:43sense but what if you're not good at
26:47anything what if you don't have any
26:49natural resources you don't have skills
26:51you don't have money you don't have
26:53anything you're
26:55a a almost a failed State country you're
27:00you can't do you can't compete with
27:02anybody for
27:03anything under comparative advantage
27:06we'll get good at something well we
27:08don't have land we don't have water we
27:10don't have food we don't have education
27:12how can we get it how can we ever
27:14compete with countries like France and
27:16Germany and Sweden and the United States
27:19and Denmark how we can never compete
27:21with them so comparative advantage says
27:23well suck it up right well
27:28that's kind of silly isn't it so
27:30somebody who's they don't have any
27:32resources what are they supposed to die
27:35I mean but under the
27:38WTO we don't give them advantages
27:41because that's not we want to use
27:42comparative advantage everybody focus on
27:44what you're good at so that's a big
27:46thing so the idea here is everybody's on
27:49the boat on the bottom of of of of the
27:52the lake and we put water in the lake
27:54and everybody starts to float up but
27:56what if your boat has a hole in it
27:58the water fills up and you
28:00die that's wrong and so that is a very
28:04valid concern against the
28:09W okay so we said NAFTA NAFTA is not an
28:12organization is that a test question yes
28:15that's a very good test question NAFTA
28:17is an agreement North American Free
28:18Trade Agreement Gat General agreement on
28:22tariffs and trades it's a
28:27contract WTO WTO rules on Pro on
28:31disagreements under
28:33Gap right it's quasi governmental which
28:35means it's a little bit not really but
28:38it's a little bit and now we get to the
28:40next one is EU United uh European Union
28:46so eu's been in the newspaper a lot
28:47we'll talk more about that but to
28:49understand a lot of people don't
28:50understand how the EU works is it a
28:52country is it not a country ah so you go
28:55to France and you say are you French or
28:57are you EU and they're gonna say I'm
29:00French right um but it's a country but
29:05it is it's kind of like if you go to
29:06Texas you ever been to Texas you say are
29:09you an American or are you a Texan and a
29:12lot of times they'll say I'm a Texan
29:14first I'm an American second right so
29:16they that's how they think right right
29:19so to understand the European Union you
29:22have to understand what it was
29:23originally going to be called it wasn't
29:25originally the European Union they
29:27played around with calling it The United
29:30States of
29:32Europe yeah United States of Europe do
29:37the French want to be
29:40Americans do the Germans want to be
29:42Americans nine right they don't they
29:46want to be Germans and French and
29:48Spanish and they should so they said oh
29:50we're not the United States of Europe
29:53we're European European Union I like
29:57European American that's even better so
29:59we're the European Union the EU plus
30:02United States of Europe is used they
30:04don't want to be used so instead they
30:06want to
30:08be but if you look at the United States
30:10of America and how we've evolved and how
30:12we're designed it's exactly what the
30:14United States of Europe the European
30:16Union is so the United States of America
30:19we originally started out with something
30:20called The Articles of Confederation
30:22which was a treaty right and then we
30:24said that didn't work we turned into a
30:26constitution you're European Union
30:28originally formed What's called the MRI
30:30treaty and didn't work too well so they
30:33turned it into Constitution United
30:35States our leader is called a president
30:37of the United States European Union
30:39their leader is called
30:41the president of the EU but it's a
30:44little different so the United States
30:47mostly it's by popular vote I know it
30:50doesn't always happen but it comes
30:52really close right in Europe if they had
30:56the popular vote
30:59the president would always be German
31:01because Germany has the most people
31:03you're going to vote for your own guy
31:04because you get all the power do the
31:06French want a German president no so
31:11they decided hey we're going to rotate
31:13the presidency every six months among
31:17the the members of the
31:20EU United States we have What's called
31:23the Federal Reserve the Federal Reserve
31:24is in charge of printing money and
31:26interest rates that's called monetary
31:29policy in Europe it's called the
31:31European Central
31:32Bank they do the same
31:35thing okay uh some of the problems that
31:38the EU has is is the the governments in
31:42northern Europe are very good at
31:44collecting taxes they do nobody really
31:46cheats on your taxes and it takes like
31:48half an hour to figure out your taxes in
31:50places like Sweden it's real easy nobody
31:53cares right everybody pays their their
31:55money and it's a it's it's not that bad
31:57of a deal the Prov is in South Europe
32:00they have a history of evading their
32:02taxes so what happens the north pay
32:06their taxes the South
32:09doesn't then they borrow money from the
32:13north yeah you can see a problem with
32:15this right okay um they have a supreme
32:18court we have a supreme court uh they're
32:21it's just the United States so the
32:23United States has a single currency
32:25called the US dollar we have bit Co no
32:28the official Lang currency of the United
32:30States is the US dollar it's a hard
32:32currency okay the official currency of
32:35the European Union is the
32:38Euro not the euro dollar a
32:42Euro a euro dollar is a US dollar
32:48outside the United States so if you're
32:5120 years old and you go up to Canada
32:53this weekend and you have 20 US dollars
32:55in your pocket as soon as you go to to
32:58Canada those are called Euro dollars you
33:01decide you want to go to Japan this
33:03weekend you bring 20 Us dolls with you
33:05you go to Japan those are Euro dollars a
33:09euro dollar is a dollar outside the
33:13United States and then the reason they
33:16even talk about this way is because
33:17currency has different value inside your
33:19country than outside your country but a
33:22lot of countries use the US dollar as
33:25their currency too so you go to Zimbabwe
33:28they using US dollar right so when you
33:30take the money out so a euro dollar is a
33:33US dollar outside the United States
33:36let's say you go to Japan and you get a
33:40get some Japanese Yen and you bring the
33:43Japanese yen into the United States
33:46those are now called Euro
33:50yens you go to Vietnam go get some dong
33:55you bring those dong out of Vietnam
33:59bring them into the United States now
34:00they're Euro
34:02do yeah so a euro currency is a currency
34:06outside its
34:09country now what do you think they call
34:12a Euro outside the
34:15EU you would think it'd be a Euro Euro
34:18or Euro squared or something yoyo or
34:20something no it's still a Euro so the
34:24euro is the only Nono
34:31currency how crazy is that so a Euro
34:34outside of the EU is still called a Euro
34:36there's no Euro Euro but any other
34:38currency outside the country it's called
34:41a Euro of their currency because back
34:45when when they were doing all this stuff
34:48everybody traded with Europe that's just
34:50what you did I mean sure United States
34:52might trade a little bit with Brazil but
34:55really back then everybody traded with
34:56Europe so they called him Europe
34:58currencies okay so it's not as the idea
35:02here is the French are good at some
35:05things the Germans are good at some
35:07things let the French do what they're
35:09good at let the German do what they're
35:11good at and we should all work out real
35:14well comparative
35:15advantage right think about this how
35:17many wars have France and Germany
35:21fought I don't know but it's a lot right
35:25how many wars has Washington fought with
35:31California how many wars has Nebraska
35:34fought with Georgia well one we had the
35:36Civil War right okay so we've had one
35:38war and there's people are still mad
35:41about that aren't they now imagine the
35:43Germans and the French oh man so they
35:46said hey this is just silly let's all
35:48trade together and they made the EU so I
35:51was in Germany I stayed with this with
35:54his family for a little while and the
35:57the one of the people we stayed with she
35:59was a college professor in France she's
36:03German but she was working in France she
36:05drives to France every day or five times
36:09a week right there's no gate it's kind
36:13of like going from Washington to
36:14Oregon sometimes you see a little sign
36:16says welcome to Oregon sometimes you
36:19don't sometimes you say well the lights
36:21are a little different colored because I
36:22get different different vendors yeah
36:25sometimes it doesn't it's the same thing
36:26the whole EU
36:28is all one country so the problem is
36:31though the southern countries have been
36:33kind of tough for the EU right not as
36:36successful as they want to be so the EU
36:39right now has about 11% unemployment
36:41depending on what happens with Co and
36:44stuff Spain it's close to 25%
36:48unemployment so Spain borrowed money
36:51from the EU and if you go to Madrid
36:53Madrid's a beautiful city but there's no
36:56highways in Madrid and yet it's fairly
36:58easy to get across they put them all
37:00underground so they get money from
37:03Germany and the northern European
37:05countries to build their highways
37:07underground now they're beautiful it's
37:09nice think of the
37:11cost huge cost right so I was in I was
37:14in uh Spain we're driving down the
37:17highway and and it's very hot kind of
37:20desert area with with um all the trees
37:24everywhere it's it's beautiful but we're
37:26driving down the road
37:28and I look over and I see that they have
37:30another highway right next to our so
37:32it's just right normal four-lane highway
37:35to go in each direction right they look
37:37next to us there's another one there but
37:39there's nobody on the road and I asked
37:42the my tour guide I said what's up with
37:45that he says that's our
37:48spare what so if anything goes wrong
37:51with this highway we have a spare that
37:54we can use would you ever use a spare no
37:58but we got it right just in case
37:59anything happen well if you know
38:00anything about highways sitting out in a
38:03hot desert sun is not good they don't
38:05last forever so what did they I said why
38:08did you guys build a spare they said
38:09well created
38:10jobs you know they borrowed money to
38:13create jobs now they owe huge amounts of
38:16money and they say we shouldn't have to
38:19pay it back and the Germans are going
38:21nine you pay back yeah that's a big mess
38:25happens in Greece happens in lots of
38:26other countries
38:28okay so the EU what's more interesting
38:31about the EU is the countries that
38:33aren't in the
38:39EU so the countries that aren't in the
38:43EU first one it's Norway Norway is not a
38:46member of the EU because they're rich
38:49because of oil production they can
38:50produce oil at like a hundredth of the
38:54cost of what most countries can produce
38:56it cuz to produce oil most countries use
39:00petroleum to produce oil because you
39:01need
39:02energy Norway uses electricity so they
39:05have all these beautiful FS up and down
39:08here and they put dams on them and they
39:11use the dam power they pipe it they they
39:14they take lines out to the Norwegian sea
39:18and use the dam power to produce oil so
39:20their oil cost or nothing right then
39:24they also have these damn things make so
39:26much power that what do they instead of
39:28instead of using their oil which they're
39:31flooding in oil they said we sell the
39:34oil and make money and then we'll have
39:36people drive Teslas
39:39instead so they're making money on a
39:41Tesla so if you go to
39:44Norway you want to buy a Tesla there's
39:48no sales tax so Tesla start what 60
39:52$80,000 is right you pay $60 $80,000 and
39:56you get your Tesla
39:58and you get free parking you get free
40:00electricity to charge your
40:03Tesla you get to go on the uh HOV
40:07links and your your Tabs are pretty much
40:11free right now let's say you want to
40:13drive a Toyota Rav 4 it's not a Tesla
40:16just a regular one so you go buy a
40:18Toyota RAV four that cost what
40:20$40,000 right then they make you have to
40:23import it into the country and they put
40:26a monster tax on it now they don't put a
40:29tax on it because it's Toyota because
40:31they're importing they put a tax on it
40:33because they don't want gas
40:35cars and so they might put a 100% tax on
40:38it so now you can pay
40:42$80,000 to drive a Toyota Rav 4 plus
40:47electricity plus a gasoline plus parking
40:51plus tabs or you can drive a
40:55Tesla so no so everybody drives a Tesla
40:59right pretty crazy stuff so Norway will
41:02never be a member of the EU they um
41:05because I said hey if we join the EU
41:07you're just GNA tax the heck out of us
41:09and give it all to the Greeks and the
41:11Italians and the Spanish which would
41:13have happened and so they're not a okay
41:17Sweden Sweden is a member of the EU but
41:21they don't use the euro as their
41:23currency they use the crown or colen or
41:25however you want to pronounce it because
41:27and the swedes said hey look we'd love
41:29to be full members of the EU but we want
41:32our King on our currency so if you want
41:36to put the Swedish King on the Euro
41:39we'll join in do the French want a
41:43Swedish King on their
41:46currency no so they said we're not going
41:50to join okay Iceland there aren't very
41:54many people in Iceland Iceland used to
41:56be part of Denmark they broke away when
41:58they broke away they didn't join the EU
42:00but it doesn't matter Tacoma has more
42:02people than Iceland so that really
42:04doesn't make any
42:05difference okay Switzerland
42:08Switzerland's interesting there always
42:09been Switzerland's a strange country
42:12it's kind of a country and it kind of
42:14not a country it's like four states that
42:16kind of get together and their loose
42:18Confederation and they don't but they
42:20always like to be neutral so they said
42:21we're not going to join the EU because
42:23we don't join things like this right but
42:25what we'll do is we'll have a trade
42:26agreement with each country
42:29individually we have a treaty with each
42:31country which is clunky but that's what
42:33they want to do and there really aren't
42:34that many people in Switzerland anyway
42:37so it makes much of a
42:39difference okay uh originally Poland and
42:43Romanian Bulgarian Lan all these
42:45countries were not going to be members
42:47of the EU and they said hey why don't
42:52you actually they said the same thing to
42:54Italy Italy was not originally going to
42:56be a member of the EU and they said
42:59first fix your finances after you fix
43:02your finances you can join well Italy
43:05made a pretty good argument they go we
43:07are part of Europe we're as much part of
43:11Europe as any of these other countries
43:13are so let us join and then we'll fix
43:15our our economic system the EU
43:19said really to be italianist to be
43:22European can't argue that one so okay
43:25right so they let them in and then
43:27Poland says hey wait a second we want to
43:31join in too but you're not the same
43:33thing you're you're you're you were
43:35controlled by Russia for long no we want
43:37to join
43:39and okay and then all these other
43:41countries started joining in and uh it
43:45hasn't been good because uh there's a
43:48big difference between Germany and
43:49Poland I
43:50mean Poland's a beautiful place I've
43:52been all over Poland and the people are
43:54nice and but it's it was ruled by
43:58England for a long time I'm sorry ruled
44:01by Russia for a long time and that still
44:03is evident of it well Germany was too I
44:07know and if you go to Eastern Germany
44:10you cannot miss the difference between
44:13Eastern Germany and Western Germany you
44:16still see
44:17it so but it's closer than it is with
44:22these other countries so they all got to
44:23join uh it's been kind of a mess
44:28um
44:30turkey turkey has applied to become a
44:33member of the EU and of all the Middle
44:37East Muslim countries turkeyy is
44:40probably the most European of them all
44:42and has one of the more stable
44:44governments in the economy and they said
44:47okay we will give you 10 years to fix
44:50your government so it's more like
44:52European governments and then we'll let
44:54you in and turkey sis great
44:57it's never going to
44:59happen they're never going to let turkey
45:01in first off the Greeks and the Turks
45:05hate each other they fought so many wars
45:07against each other the Greeks say no no
45:08no no no and they still get they're
45:10they're right now getting ready to go
45:11over war on one of these little tiny
45:13islands that nobody cares about they
45:15don't care about the island they care
45:16about the fish in between it and you can
45:18swim between the island it's so silly
45:21but so the Greeks say no the Germans
45:23surprisingly also say nine they don't
45:26want it because in Germany if you work
45:28in the trades it's a decent job you can
45:31make a lot of money so if you're a
45:32plumber in Germany you're making good
45:35money you're a plumber in Turkey you're
45:37not making anything so if they opened up
45:40the EU the the Germans say that the
45:44Turkish plumbers would come into Germany
45:47and take over their
45:48jobs which has some validity it's hard
45:51to argue with that one so also the new
45:54leader of turkey his name is erdogan
45:58he's kind of been going in the opposite
45:59directions I think he's kind of SE that
46:02he's they're never going to join the EU
46:04and so he's kind of going the other
46:06direction he they just bought some
46:08missiles from
46:09Russia and the United States say wait a
46:11second you're part of NATO it's a big
46:13mess right so turkey turke Turkey's
46:16economy is pluming I'll prove that to
46:19you in a little bit now the big one is
46:22brexit right brexit so Ireland
46:27is part of the
46:28EU but the UK so Northern Ireland
46:31Scotland
46:33Wales uh England all those countries are
46:37not they're part of they're part of the
46:39EU but they didn't get the full meal so
46:42if you go to Europe and you have a
46:45passport you get what's called a shenen
46:48Visa and the shenen Visas as soon as you
46:50get the visa you can go to Germany
46:52France Italy Spain Portugal and you
46:55don't have to show your passport it's
46:56just is good you're one you're in one
46:58you are the it's all one country
47:00passport wise if you wanted to go to
47:03England you have to get a separate Vis
47:06so they didn't use the the European
47:08currency they don't use the EUR they use
47:10the pound sterling because the pound
47:11sterling is a fairly hard
47:14currency uh people recognized the pound
47:17around the world uh and they didn't want
47:18to join it um so they were a member of
47:22it but then the EU
47:28started to do something called
47:30harmonization which is where they try to
47:31make the rules similar in other in
47:34between the different countries right so
47:37if you look at Washington and
47:39Oregon most of our rules are pretty same
47:42in in both States pretty same there's
47:46some differences sure they don't pay
47:48sales tax uh in Portland but they did
47:51pay uh income tax and vice versa here
47:54there are some differences but the you
47:56is fairly harmonized right so they said
47:59we want to harmonize too and the British
48:02said the UK they said we don't want to
48:05go into this rules we've been doing it
48:06this way forever and ever and ever and
48:09so they voted
48:11to separate so everybody said that they
48:15would that the vote would go against
48:17separation because it's really a bad
48:20idea but they were wrong and so they
48:23voted to separate so now they're in the
48:25process of separating once they get out
48:28of the
48:29EU completely then the European Union is
48:33going they're going to start slapping
48:35tariffs on
48:37UK that's what they're going to do right
48:40so it's going to kill a lot of jobs also
48:42if you know anything about the UK
48:46Northern Ireland there's a thing called
48:47the troubles so they had this the
48:50troubles going on for quite a while the
48:51troubles was basically a civil war it
48:55was ugly right
48:57they recently fixed it they just said
48:59hey you can travel between the Northern
49:03Ireland and Ireland right so if you go
49:06to Ireland go to Northern Ireland
49:08there's two groups of people hate each
49:09other it's the Protestants and the
49:11Catholics right and you can't miss it
49:14right there's big fences up all over the
49:16place to keep them from killing each
49:17other so what happens is you go to
49:21Belfast and in the middle of the city
49:23there's this big fence that's really
49:26high like 30 ft high or something like
49:27that and they have doors so during the
49:30day you can go back and forth and nobody
49:31cares and everybody's happy but after
49:33work traditionally you go to the pubs so
49:36if you're Protestant you go to
49:37Protestant pubs if you're you're
49:38Catholic you go to the Catholic pubs and
49:41then they start to get a little drunk
49:43and they start to say hey let's go beat
49:44up on those other guys both sides do
49:46this so then they close the
49:49gates and said so then they they go to
49:52the fences and they yell dirty words at
49:54each other and they throw bricks but the
49:56bricks are about as high as you can
49:58possibly throw it as a human can
50:00possibly throw it so they can't so then
50:02they say well I'm going to get you and
50:04they decide that they're G they get in
50:05their cars to drive around the fence but
50:08by the time they get to the end of the
50:10the fence they're usually pretty sobered
50:12up and it isn't worth their time they
50:15still get in fights and they still have
50:16all this problems but they kind of like
50:18on let's go back and get another P or
50:20something like that that's just that's
50:21just kind of what happens in in and you
50:24go I was in London Dairy and you can see
50:27places where bullet holes right and and
50:30bombs you can see dirt or smoke signs on
50:33the side of the buildings they bomb they
50:35still have the troubles but it's a lot
50:38better now if they do a hard
50:42brexit that Civil War will start again
50:45everybody knows it so now they're trying
50:47to say well how do we keep that Civil
50:49War from
50:50starting that's a
50:52toughy that's a toughy nobody really
50:54knows about that
50:57so the
51:02EU now here's an interesting little law
51:07that a lot of you guys don't know so a
51:08lot of people who are 20 years old they
51:10love to go up to Canada for a holiday or
51:12for the weekend why because the drinking
51:14age is 19 up there go up there um you
51:20need to know about a pesky little law
51:23and this law is called the Foreign
51:25Corrupt Practices
51:27act the Foreign Corrupt Practices Act
51:32says
51:33basically US citizens are always under
51:37us laws
51:39what yep now the French don't have this
51:43pesc law the French when they're outside
51:45of France can do whatever they want to
51:46do but the United States we do call the
51:50foreign cor Practices Act so if you were
51:52a US citizen you were always under us
51:55laws
51:57now this law was originally designed for
51:59bribery so we don't want us Business
52:01Leaders to go over and bribe foreign
52:04officials there's a problem if you do
52:07business in
52:08Vietnam you have to bribe foreign
52:11officials you can't do business in
52:13Vietnam at any scale unless you bribe
52:15foreign businesses and that's illegal in
52:18the United States and you say well we
52:20don't really care what you do outside
52:22the United States actually they do they
52:25care a lot because they want everybody
52:27to know that American Business people
52:31are under at least a certain standard of
52:33rules so you know that the French can do
52:36whatever they want to do and you know
52:38that people from the United States of
52:40America have to go under us laws who
52:43would you rather do business
52:45with yeah so they actually do enforce
52:49this law quite a
52:51bit
52:52so uh oh if you're 20 years old you're
52:56saying
52:58but but yeah yeah
53:02so if you go up to Canada and you drank
53:08did you violate the Foreign Corrupt
53:09Practices Act and you're 20 years old
53:13the answer is no you didn't you
53:18go because what is the United States
53:23drinking
53:24age it's not 21
53:27yeah it's 21 it's not 21 you heard well
53:31no it's 21 it is not
53:3321 the United States drinking age is
53:3718 I heard it's 21 you heard wrong it's
53:4218 now the states every state in the
53:45United States has moved it up to 21 but
53:49they don't have to they want to they can
53:50say we're going to kick it back down to
53:5118 and that's perfectly legal and they
53:53can do that although the federal
53:55government will stopped giving them
53:56money for their highways but they can do
53:59that the federal drinking age is
54:0218 you go well why would we have 18 and
54:0621 both why would we do this it's for
54:09our soldiers so imagine you're 18 years
54:12old you join the Army to serve your
54:15country they station you in Germany the
54:18land of
54:20beer what's the possibility you're going
54:22to drink a beer
54:26100% right everybody drinks beer beer is
54:28just you'll see people sitting at the
54:31bar at the train station at 7 o'clock in
54:33the morning drinking a beer they drink
54:36beer all the time that's it's a national
54:39past time they drink some weird beers
54:40too so they they uh they're really sure
54:42that we drank something called a mixer
54:44in the United States and that's the
54:45American thing to drink a mixer a mixer
54:48is half Coca-Cola and half beer and they
54:52said all Americans drink this like I
54:55said we don't drink beer and Coca-Cola
54:57together oh yes you do like no we don't
54:59they go you're just too old like no no
55:04no no maybe you might mix it yourself
55:07but I mean actually see in a can where
55:09it says half beer half Coca-Cola and a
55:12you don't you don't um but they're sure
55:16that we do that it's kind of crazy now
55:18they they do drink something it's kind
55:19of fun it's half on hot days they drink
55:21half beer and half um apple cider that's
55:25actually pretty yummy right
55:26so you join the Army serve your nation
55:30you get stationed in Germany the land of
55:32beer are you going to drink a beer
55:36absolutely so do we want to put you in
55:39jail because you broke the law so they
55:40said no so it's uh so the the drinking
55:43age is
55:4421 you go okay well thank goodness
55:49though that this only applies to US
55:50citizens that's right Foreign Corrupt
55:52Practices Act only applies to US
55:55citizens and it only applies to federal
55:59laws you say well I'm not a US citizen
56:03so I don't have to worry about
56:06that don't worry if you are not a US
56:11citizen United States government has
56:13something for you
56:15to be very very afraid and I'll tell you
56:19that one later hey thanks a lot having a
56:20good day bye bye

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