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Thomas Sowell: Economic vs Political Decision Making [Enhanced] [Complete] — Transcript

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0:08[Music]
0:23[Music]
0:27a scholar who has taught and lectured at
0:29University around the world and whose
0:31writings have been translated into
0:33several languages Dr so has been a
0:36consultant to administrations of both
0:38political parties and has served as a
0:40scholar and Residence at three think
0:42tanks Dr Soul has written numerous books
0:45on economic social issues and public
0:48policy one of his books a conflict of
0:50Visions was provided to our seminar
0:53attendees to help them understand the
0:55underlying assumptions that produce
0:57political clashes and that guide the
0:59course of history history by the way Dr
1:01Soul considers that to be his best book
1:04so seminar attendees you have his his
1:07greatest work most of you here tonight
1:10probably know of Dr Soul through his
1:12syndicated newspaper column as well as
1:15his column published in Forbes Magazine
1:18where he is a contributing editor Dr
1:20Soul has been described as one of only a
1:22handful of thinkers who have the ability
1:25to look at the same facts as others yet
1:28conceive webs of explanation
1:30that are much more subtle sophisticated
1:33and accurate than those of his lessers
1:36in describing Dr Soul's 1980 book
1:38knowledge and decisions Milton fredman
1:41said it this way quote this is a
1:43brilliant book The ideas are original
1:46and penetrating the examples ingenious
1:48and apt the exposition lucid and
1:51absorbing Professor Soul illuminates how
1:55every society operates in the process he
1:58also shows how the performance of our
2:00own Society can be improved ladies and
2:03gentlemen it is my distinct pleasure to
2:06introduce one of America's Premier
2:08social philosophers and commentators Dr
2:10Thomas
2:15soell thank
2:21you thank you very
2:26much it's almost like getting a sneak
2:29preview of my OB
2:32sitary
2:34uh when when I was younger I used to be
2:37embarrassed by generous introductions uh
2:40but then I I I realized what the critics
2:41were saying and I I realized it all
2:43evens out in the long
2:47run I'd like to talk about uh economic
2:50decision- making as distinguished from
2:52political decision- making and and I'd
2:54like to start off with the definition of
2:56an
2:57economy uh an economy is not just a
3:00system for producing goods and services
3:01and distributing them because the Garden
3:04of Eden was not an economy since there
3:06was no
3:08scarcity so economics is a study of the
3:10use of scarce resources which have
3:13alternative
3:14uses so that racing is inherent in the
3:17circumstances competition is inherent in
3:20the circumstances there are people
3:22particularly among intellectuals who
3:23think that competition is one of those
3:25things we can choose to have or not have
3:28when in fact all the only choice we have
3:30is how shall the competition be carried
3:33out the rationing is inherent whether
3:35it's under capitalism socialism
3:37feudalism or any other kind of
3:41method so scarcity is the first lesson
3:44of
3:45Economics now the first lesson of
3:47politics is to forget the first lesson
3:49of economics
3:59it's it's POS popular to call to call
4:02Politics the art of the
4:04possible I call it the art of the
4:07plausible because what you're advocating
4:09doesn't have to be possible the Clinton
4:12healthc CARE program for example is
4:22uh uh Democratic senator Patrick Mahan
4:26uh referred to the statistics and the
4:28estimates uh of the Clinton of the cost
4:31of this program as
4:33fantasy but there's no reason why you
4:35cannot enact fantasy into law there are
4:38many laws which show fantasy has been
4:44enacted let me give you a concrete
4:46example of a what an economy involves
4:49because an economy involves tradeoffs
4:52politics involves Solutions real or
4:56imaginary some years ago there was a
4:58tragic uh airplane CR which a baby was
5:01killed by being torn from its mother's
5:05arms in Washington the answer was quite
5:08clear we must have laws that say that
5:10babies cannot be held in mother's arms
5:12in airplanes they must have their own
5:14separate seat where they strapped
5:17in uh fortunately or unfortunately a
5:19couple of economists got hold of
5:22this and they figured out what would be
5:24the probable result of such a law uh
5:28first of all it means that every couple
5:30that's traveling with a baby would have
5:32to buy three seats instead of
5:34two and therefore they would have 50%
5:37higher cost of
5:38Transportation now since to ordinary
5:40people in the in the real world as it's
5:42distinguished from Washington Money
5:45Matters and therefore some of those
5:47people would not fly some would take
5:50alternative transportation on the ground
5:53almost all of which has a higher
5:55fatality rate than
5:58airplanes and so they estimated that in
6:00the course of a decade you would save
6:03one baby's life and you would lose the
6:06lives of 60 other people as well as $72
6:11million so the whole perspective of
6:13tradeoffs is typically lacking in
6:15political decision making people ask
6:18such questions
6:19as in politics uh is nuclear power safe
6:24and the answer is no because if nuclear
6:27power were safe it would be the only
6:29safe thing on the face of the
6:34Earth the only question is compared to
6:39what compared to hydroelectric dams
6:42compared to doing without
6:44electricity there's a story which I hope
6:46is apocryphal of an economist who was on
6:48the street Meta Meta friend who said how
6:51are you how's your wife to which the
6:54economist replied compared to what
7:03so looking at nuclear power in this way
7:07it is far safer than any alternative
7:09method of producing
7:11electricity someone calculated how much
7:14how how many lives are loss for every so
7:17many billion kilowatt hours of
7:19electricity because human lives are
7:21among the price paid for generating
7:25electricity and having calculated this
7:27they asked how many lives would be lost
7:30generating the amount of
7:31electricity that would have been
7:33generated by Three Mile Island during
7:35the time that it was shut down and the
7:38answer was 52
7:39lives no lives were lost at Three Mile
7:43Island even during the quote disaster
7:46unquote uh two people were killed on the
7:49highway trying to get away from Three
7:50Mile
7:54Island
7:56uh some someone has calculated the risk
7:58to your life for various kinds of
8:02activities uh living within 5 miles of a
8:05nuclear power plant for half a
8:09century represents the same risk to your
8:11life as driving 10 miles on the
8:14interstate
8:15highway or spending half an hour in a
8:19coal
8:20mine or 6 minutes in a
8:25canoe and I
8:29and I think of all the environmentalists
8:31in their canoes worrying about nuclear
8:34power
8:35[Applause]
8:45plants there there's a whole uh
8:47literature about safety I I think the
8:50The crucial book was uh unsafe at any
8:52speed by Ralph nater about the
8:55Corvair and the argument was that the
8:58because the Corvair was a rear engine
8:59car it had certain safety problems
9:02peculiar to that kind of car and that
9:04these problems were disregarded when the
9:06car was produced and of course he has
9:08all the particular individuals who died
9:10as a result of these things I took a lot
9:13of interest in this since I was driving
9:14a COR at the
9:18time and it's certainly true that there
9:20are different handling characteristics
9:21to a rear engine car which makes it more
9:24prone to certain kinds of accidents but
9:27what nater apparently didn't have time
9:29to get around to was that it's less
9:31prone to other kinds of
9:33accidents uh and therefore no matter
9:35where you put the engine if you put the
9:37engine in the front if you put it on the
9:39top or the bottom or either side it
9:41would have some kinds of accidents that
9:43it was more likely to have and other
9:45kinds that it's less likely to have and
9:47the studies that have been done indicate
9:49the Corva was no more dangerous on net
9:51balance than any other car of that
9:55era there are many other areas where the
9:58the desire for safety for categorical
10:00safety for Solutions not for tradeoffs
10:03um affect political decision
10:05making for example pharmaceutical
10:09drugs and vaccines very often save many
10:12thousands of lives but sometimes the
10:16side effects of the drugs or the
10:18diseases you catch from the vaccine
10:20itself cause crippling illnesses and
10:23sometimes fatal
10:25illnesses and of course if you allow
10:27everyone who suffered
10:30these effects to sue the pharmaceutical
10:32companies then of course the
10:34pharmaceutical companies have every
10:36incentive to cut back on the production
10:39of existing drugs and vaccines and to
10:42reduce their investment in producing new
10:45drugs and new vaccines to
10:48solve to find cures for diseases that
10:50are killing people
10:54today I'd like to talk a little bit
10:56about the whole political mode of
10:58decision- making in terms of the
11:00patterns that you see in it uh there's
11:02one pattern in which you you you you
11:05generate um political support by
11:07creating a quote crisis
11:09unquote now since all human situations
11:12have some negative features to them
11:14nothing is easier than to find something
11:16to complain of and to call it a
11:19crisis uh a crisis does not mean that
11:22what you're talking about is any worse
11:23than anything else the human beings do
11:26it does not even mean that it's getting
11:28worse than it was in the past
11:30in a remarkable number of cases that I
11:32looked at the thing that is called a
11:34crisis has in fact been getting better
11:36for
11:37years prior to the
11:41policies now after you after you've
11:43convinced people there's a crisis you
11:45have your
11:46solution this's sort of a four stage
11:48things first comes the crisis then comes
11:50the solution typically the people who
11:52Advocate this solution will say this
11:54will lead to beneficial result a the
11:57critics say this will lead to
11:58detrimental Al result
12:00Z third stage they put the policy in and
12:04the result is that it leads to
12:06detrimental result Z the interesting
12:08part is the fourth step where the people
12:11who attribute this detrimental result to
12:13the policy are accused of being
12:15simplistic for ignoring the complexities
12:17of the many factors involved moreover
12:20the only cure for this new bad situation
12:23is more of the same policy let me give a
12:25couple of
12:26examples first the war on poverty
12:30now the purpose of the war in poverty
12:32was not to prove that if you took money
12:33from here and get and put it there there
12:35would be more money there than there was
12:37before the purpose of war and poverty
12:40was to end dependency on government
12:41handouts that is you would have an
12:43increase in spending and investment as
12:45they
12:46say in these
12:48programs which will then pay off down
12:51the road as all the problems that have
12:53been forestalled by this wonderful
12:54program now begin to
12:57subside uh you can quote either from
12:59Lyndon Johnson or Bill Clinton depending
13:01upon who you prefer to
13:02quote large literature from both
13:06sources and so and retraining is one of
13:09the great magic words in both
13:10administrations you will retrain people
13:12including people who were never trained
13:14in the first
13:17place in order to reduce long-term
13:21dependency so the predictions were made
13:23that if you had these programs after
13:25some period of years dependency on the
13:27government would decline and of course
13:29the opposite uh prediction that
13:32dependence on the government would
13:34increase and so the war on poverty was
13:37initiated uh dependency uh increased to
13:42un first of all the situation at the
13:43beginning of the of the crisis poverty
13:46had been declining in the United States
13:48for at least a
13:50decade dependency on the government to
13:52stay out of poverty had been declining
13:55for at least a decade prior to the war
13:58on poverty
14:00dependency on government began to
14:02increase almost
14:04immediately as of today there are more
14:07people in poverty than there were in
14:091964 despite literally trillions of
14:11dollars spent and the only cure is more
14:15of the
14:17same example two sex
14:19education now the goal of sex education
14:22was to prevent teenage pregnancy and
14:24veneral disease and this was of course a
14:27crisis now for those of us who
14:31are tend toward skepticism if we look
14:34back at the actual data we find the
14:36teenage pregnancy was declining for more
14:39than a decade prior to the introduction
14:42of sex education into the public school
14:46system
14:50uh by 1968 half of all the public
14:53schools in the United States had sex
14:55education during the 1970s the other
14:58half
15:0010 teenage pregnancy during the decade
15:02of the 1970s Rose by approximately
15:0650% teenage garia tripled between 1956
15:10and
15:111978 and both those Trends are still
15:14continuing and the fourth stage the cure
15:17for all of this sex
15:21education and now we come to a current
15:24example the health care situation or the
15:26health care crisis I'm sorry
15:30now how do we know that there's a health
15:31care crisis in the United States because
15:34the president has told us again and
15:36again the president's wife has told us
15:40the media have told us what more could
15:43you
15:45want now one of the one of the
15:47statistics they throw around is that the
15:49United States spends 14% of the G&P on
15:53Healthcare uh no reason is given why a
15:56higher or lower number would be better
16:05particularly in a country which is
16:06growing older and wealthier at the same
16:10time uh Germany and Japan have held up
16:12as models because there they only spend
16:15%. I'll get back to Germany and Japan a
16:18little
16:19later uh one of the confusions is the
16:22confusion between health insurance and
16:25medical
16:26care and the second confusion is between
16:28Medical Care and
16:31health uh we already have virtually
16:35Universal Medical Care in the United
16:37States the poorest soul in these United
16:41States who passes out on the streets
16:43will get medical
16:52care he may or may not pay the hospital
16:54but he will get medical
16:57care the other thing is confusing
17:00Medical Care with
17:02health there are tremendous differences
17:04in longevity within the United States
17:07Mormons in the United States have a life
17:10expectancy a decade longer than the
17:12average white
17:14American is this because the Mormons
17:17have extraordinary medical
17:19care or could it have something to do
17:21with the fact that they don't drink they
17:23don't take
17:25drugs uh and they don't go around
17:28shooting each
17:42other now the favorite um explanation
17:47for any problem in Washington is that
17:48our society has
17:50failed and so prenatal care is held up
17:54uh
17:55uh as one of the ways of reducing our
17:57infant mortality
17:59one of the faster ways of introducing of
18:02reducing our infant mortality would be
18:04to collect the statistics the way they
18:05do in the countries we're compared
18:11to was it which is to say that when a
18:13very underweight baby is born in the
18:15United
18:17States all kinds of medical treatment
18:19are given to that baby and when the baby
18:21dies in spite of that treatment that
18:23baby becomes part of our infant
18:25mortality statistics in many other
18:27countries no such effort is made to save
18:30that baby and when that baby dies that
18:33is counted as a still birth not as
18:36infant
18:37mortality so it's much faster to reduce
18:39INF mortality that way to make
18:43ourselves comparable to the people we're
18:45being compared
18:48with couple of years ago there was a
18:51study which showed that um prenatal care
18:55was uh not as common among blacks as
18:57among whites and that there was a higher
18:59infant mortality rate among blacks the
19:02immediate conclusion was clearly it was
19:04one thing was the cause of the
19:06other again being sort of battle
19:08hardened about these things I sent away
19:10for the
19:12study and on the very same page where
19:15the statistics showed that blacks had
19:18higher infant mortality rates and lower
19:21prenatal care it showed that
19:24mexican-americans have even lower pre
19:26even less prenatal care than blacks and
19:29lower infant mortality rates than whites
19:32and if one would to thumb a few pages on
19:34one would discover that Americans of
19:36chines Japanese and Filipino ancestry
19:40likewise had lower infant mortality
19:43rates than whites and less prenatal care
19:47the conclusion I would draw is that
19:48there is no connection between prenatal
19:50care and infant mortality but of course
19:53that's not a politically popular
19:55conclusion there'll be a lot of
19:57bureaucrats out of work if we start
19:59thinking that
20:00way getting back to Germany and
20:06Japan in Germany and Japan people have
20:11more doctor's visits for the same
20:14disease and shorter visits each time so
20:18one of the ways in which you can bring
20:20health care costs under control is to
20:22have someone go to the doctor 10 times
20:25for half as long instead of five times
20:27for twice as long
20:29that way your statistics will show that
20:31you have brought health care costs under
20:34control now if you're an elderly person
20:36who has to stand out on the street in
20:37the winter waiting for a bus 10 times
20:40instead of five times you may not fully
20:42appreciate the good that's being done
20:44for
20:52you one of the confusions that runs
20:54through the Whole Health Care issue is
20:56the difference between controlling costs
20:58and controlling
21:00prices let me look at some of the cost
21:02differences that
21:04exist uh an American doctor pays 14
21:08times as much for malpractice insurance
21:11as a doctor in Germany nothing that the
21:14Administration has said is likely to
21:16reduce that that
21:18cost in fact given the political support
21:20of The Trial Lawyers Association for
21:22Bill Clinton I doubt seriously if that
21:25cost will be reduced at all
21:30controlling prices is something very
21:31different nothing is easier than to
21:33control prices you issue a law saying it
21:35is illegal to charge more than x for
21:38product a they've been doing this not
21:41only for centuries but literally for
21:44thousands of years uh the emperor Dian
21:48back in the days of the Roman Empire had
21:50price controls had exactly the same
21:52consequences as price controls under
21:54Jimmy Carter dian's reaction was very
21:57similar to Jimmy Carter
22:00he wondered why people were so
22:06greedy now now one of the reasons the
22:08United States has higher costs is that
22:10we have better health care it was
22:11fascinating to to watch the president
22:13say that we have the best health care in
22:15the world yes the best does cost
22:19more uh you can always pay less and get
22:23less but only by going through the
22:26government are you likely to pay more
22:27and get less
22:30[Applause]
22:36[Music]
22:41the United States has the lowest death
22:43rate from
22:44cancer of the stomach cervix and uterus
22:48of any country in the world it has the
22:51second lowest death rate for breast
22:53cancer and from heart
22:55attacks there are more than twice as
22:57many cat scanners per capita in the
23:00United States as in Germany more than
23:03three times as much many as in
23:07Canada what's fascinating in all the
23:09discussion of healthcare is that the
23:11entire supply side is ignored I don't
23:14know where these doctors are going to
23:16come from that they're going to give us
23:18this greatly increased medical care that
23:20we're demanding at the government's
23:23expense for example there are something
23:25like 8,000 doctors from Canada alone
23:29practicing in the United States partly
23:31as a result of the wonderful Canadian
23:33health
23:35system that we're being asked to
23:37imitate correspondingly there are large
23:41numbers of Canadian patients who come to
23:43the United States as a result of the
23:45wonderful healthc care in Canada that
23:46we're being asked to
23:48imitate I was up in Spokane this spring
23:50and they mentioned how all the people
23:52who come down from Canada to be treated
23:54that is they they pay their cost down to
23:56the United States in addition to paying
23:58for medical care here that they could
24:00get free in
24:01Canada one of the people who did this
24:03was the premier of
24:09Quebec I told him in Spokan just just
24:12wait wait a while after a while we'll
24:14have our Health Care system and
24:15Americans will be going up to
24:18Canada over a period of about a dozen
24:21years something like 15,000 doctors came
24:24here from India alone so we have a very
24:27large medical contingent in this country
24:30from around the world coming here to
24:33enjoy the free conditions of the
24:35American Medical system of course if we
24:38make our system just like theirs many of
24:40them will probably decide to go
24:45home what's really lacking in so many
24:47areas is is a lack of knowledge of the
24:49role of prices there's a notion that
24:51prices are just things that people set
24:54up arbitrarily on their own I call it
24:57volitional pricing
24:59you decide that you want to charge this
25:01some prices are high because people are
25:02greedy and other prices are low
25:04presumably because they're not so
25:06greedy um when I was teaching at UCLA I
25:09used to tell the people if that if
25:11that's true then it must be that
25:14proximity to the to the ocean increases
25:16greed because all the housing prices
25:19near the ocean are far higher than they
25:20are in
25:22land as you go east into the smog why
25:26the prices go down and it's seemed to me
25:28that proves that smog is an antidote to
25:36Greed unfortunately this theory has not
25:38yet been
25:44recognized there is no sense that prices
25:47are conveying some underlying
25:50reality fact I have a book coming out
25:52this fall which is called is reality
25:54optional
25:58and unfortunately among many
26:00intellectuals the answer will be
26:03yes now some years ago when I taught at
26:07brandise I I traveled from California to
26:09Massachusetts and discovered that my
26:11auto insurance rates had
26:14doubled uh since Los Angeles is not a
26:16small village or something you wonder
26:18why does that happen now at about the
26:20same time many other people were upset
26:22because Massachusetts had the highest
26:24auto insurance premiums in the
26:26country the political answer was not to
26:29say why are these premiums so high what
26:32what what fact are they conveying but it
26:35was to control the premiums in fact they
26:37launched an investigation of the
26:40insurance industry the net result of
26:43which was they discovered that insurance
26:44companies were losing money in
26:46Massachusetts charging the highest auto
26:48insurance premiums in the
26:50country now anyone who's ever seen
26:52Massachusetts drivers will know that
26:54there's no mystery as to why those
26:56premiums are so high
27:01the only place where you can regularly
27:02see drivers changing lanes in the tunnel
27:05during the rush hour is in the Callahan
27:08tunnel in
27:10Boston when I taught at Brandy I can
27:12recall driving to work on the right hand
27:14side of the street and being surprised
27:17to see a tractor trailer pass me on the
27:18right on the shoulder of the
27:24road the only place where I've seen uh
27:27emergency vehicles with their sirens on
27:30having to jam on the brakes because
27:31someone did a left turn in front of them
27:34is in
27:35Massachusetts but of course people
27:37didn't want to hear what the prices were
27:39telling them and so the answer was to
27:42control uh the prices
27:44themselves there have been many other
27:47areas in which there' have been price
27:48controls they have a standard really
27:50stereotypical pattern one is that you
27:53reduce the supply of whatever is being
27:56controlled not surprising since people
27:58do less when they're paid less the other
28:01is that you reduce the quality of what's
28:03being controlled because higher quality
28:05is costlier than lower quality and when
28:07you control when you force the prices
28:09down people then reduce the quality of
28:12of what they're producing one of the
28:13classic examples is
28:16housing uh wherever rent control has
28:18been put in there is a a shortage of
28:21apartments in many places there's a
28:24provision in the law that says this is
28:26only a temporary measure of until the
28:28housing shortage is over and sometimes
28:31they Define that in terms of some
28:32percentage of vacancy and so on and what
28:35they don't understand is that as long as
28:36that law is on the books there will
28:38always be a shortage and there will
28:40never be a time to take the law off the
28:41books in Paris they put a law like this
28:44on the books as an emergency measure
28:46during World War I it was still in forc
28:49when World War II broke
28:52out in Sweden they put one in in the
28:55early days of World War II decades later
28:57it was still
28:58there finally for some reason it
29:02occurred to someone to take off the
29:03price
29:04controls instantly there was a housing
29:08Surplus the housing projects put up by
29:11the Swedish government suddenly began to
29:13have high vacancy rates and in fact had
29:16to be bailed out because they couldn't
29:17fill
29:19them I thought about rent control a few
29:21years ago when I visited West Berlin it
29:24was it was still a difference in those
29:26days and I this marvelous new uh modern
29:30city and I came back and visited some of
29:33my relatives in the in in the Bronx and
29:35as I drove uh into the Bronx and I saw
29:38all these hulks of abandoned and boarded
29:41up buildings I thought suppose someone
29:44from Mars had come down here and you
29:47said to him which of these two cities
29:49was bombed during World War II he would
29:52pick the
29:54Bronx because Berlin had recovered from
29:57the bombing but the Bronx had not
29:59recovered from rent
30:03control one of the other problems of uh
30:07politics is that there must always be
30:09problems and solutions it was once said
30:12of a liberal politician he has more
30:14solutions than there are
30:17problems let me give you an example of
30:20how problems can be created
30:23statistically and
30:24otherwise one of the the Congressional
30:27budget office office came out with some
30:29statistics a few years ago showing that
30:30the rich are getting richer and the poor
30:32are getting poorer or were during the
30:34Reagan Administration presumably not in
30:36this new enlightened
30:40era now again being skeptical I sent
30:43away for the original uh statistics it
30:46it really produces absolute cynicism
30:48when you read enough of these government
30:50reports uh one of the ways that the poor
30:53were getting poorer was that they left
30:54out of these statistics more than 150
30:58billion dollars in government
31:00transfers those weren't counted and as
31:04for the rich they counted as capital
31:06gains things that most people would not
31:08think of as capital gains for example if
31:10you invest $10,000 and you hold the
31:13investment while the price level
31:15doubles uh and then you cash it in now
31:19if you get less than
31:20$20,000 you have lost money in real
31:24terms not as far as the government's
31:26concerned let's suppose you get 15,000
31:29back with the price level doubled as far
31:31as the Congressional budget office is
31:33concerned you've made $5,000 in capital
31:36gains and if and if you want to correct
31:39for inflation you divide the $5,000 by
31:41two and so you've made
31:43$2,500 in capital gains so you can be
31:46one of the rich who's getting richer all
31:48the while you're heading toward
31:50bankruptcy
31:52court and this this this produced what I
31:54think is one of the fundamental
31:56principles of Statistics which say that
31:58a always exceeds B if you leave out
32:00enough of a and exaggerate
32:06B one of one of one of the reasons that
32:09the uh people in the upper income
32:11bracket receive such a high percentage
32:13of the total national income is that
32:15there are more people that is if you
32:17took look at the top 20% of families and
32:21income and look at the bottom 20% you'll
32:24discover that there are 28% more people
32:26at the top in the top 20 % than in the
32:28bottom 20% and since it is people who
32:31earn money this is one of the reasons
32:33the others are in the top brackets
32:36there' have been a number of studies
32:37done well there there's a more
32:40fundamental problem with the data than
32:43this years ago someone uh uh told about
32:46a u a man in New York who heard that
32:50someone was hit by a car in Manhattan
32:53once every 20 minutes and his response
32:56was he must get awfully tired of that
33:04exactly the same reasoning can be found
33:06in these statistics that are given out
33:09because they assume that these are the
33:11same people all the
33:13time uh there have been several studies
33:16done and fortunately they've been done
33:17by people who are left-wing
33:18intellectuals at the University of
33:20Michigan and conservative Republicans in
33:22Washington and they all give the same
33:25answer which is that in the course of
33:27less in the decade most Americans move
33:30out of whatever income bracket they're
33:32in for example if you looked at the um
33:35bottom 20% as of
33:381979 of income
33:40taxpayers by 1988 85% of those people
33:44were no longer in the bottom in fact a
33:47slightly higher percentage were in the
33:49top 20% by 1988 then remained in the
33:52bottom 20% and so we're talking about a
33:55changing mixture of people over time
33:58rather than the same folks in fact many
34:00of the people in the bottom 20% are the
34:03children of the people in the top
34:0820% and finally let me look at another
34:10uh crisis that we hear of uh hunger
34:15statistics
34:16now a political advocacy group computed
34:19a few years ago how many Americans were
34:22hungry now when you think about it how
34:24would you find out how many people are
34:26hungry it takes a long time to go
34:28through a country of 240 million people
34:31and ask everybody are you
34:37hungry naturally they had to speed this
34:41up so they got a census computer
34:45tape and they figured out the
34:46eligibility for food stamps and they ran
34:49the tape through to find out how many
34:51people are eligible for food stamps then
34:54they found out how many people actually
34:56get food stamps they subtracted one from
34:58the other and the difference were
35:10hungry using this method someone decided
35:13to find out what was the hungriest
35:14county in the United
35:19States it turned out to be a forming and
35:21ranching
35:25Community where the employees and the
35:27employer Earth ate what they
35:31grew now because the employees were
35:33being paid partly and room and board
35:37their cash payments were lower than they
35:38would have been otherwise and so in the
35:40county there were certain number of
35:42people who were below the level where
35:45they were eligible for food even though
35:47they were eating their own steaks and
35:49and
35:50vegetables and only I think I think
35:52there was only one person in the entire
35:53County who actually was on food stamps
35:55all the others were hungry
36:05there there are more of these things but
36:07I I I'm going to cut it short to have
36:09some time for questions and
36:10answers uh one of with Hunger as with
36:15income when you look at actual
36:17individual Flesh and Blood people you
36:19get a radically different answer than if
36:21you look at the the grow statistics so
36:24the Center for Disease Control uh and
36:26the US Department of agriculture have
36:28actually looked at Flesh and Blood
36:30people they have taken blood samples
36:31they've done other studies of them they
36:34cannot find any greater
36:36likelihood of poor children being
36:39clinically underweight than other
36:41children blood samples show no evidence
36:44of any protein or vitamin deficiencies
36:46varying from one income bracket to
36:49another the only difference they can
36:51find is that low-income women have a
36:54slightly greater tendency to be obese
36:57presumably from
37:09Hunger the the media play a tremendous
37:12role in all this because you can always
37:15find someone who is highly atypical put
37:18him on the tube interview him and
37:21represent his case as if it's typical of
37:23the whole country and there's a great
37:26deal of that going on there are not only
37:28ideological reasons for doing this there
37:30are financial reasons because obviously
37:33the more crises there are the more
37:35reason there is to buy newspapers and
37:37watch
37:38television and so you find many many
37:40crises in these places I've suggested a
37:43couple of times and like most
37:45Suggestions by economists it was
37:47ignored that uh the networks could
37:50easily afford to have a department of St
37:52professional statisticians would examine
37:54all these hysterical statistics that are
37:56thrown around by various groups that
37:58would have uh an aor grind of course
38:01that would mean there'd be more accuracy
38:03on on on the on the television tube but
38:05it also means there'll be lower ratings
38:07and so this is apparently not the kind
38:09of tradeoff that they're looking for
38:11thank you very much
38:16[Music]
38:47[Music]
38:50thank you very much appreci
38:57we have a couple of uh cordless
38:59microphones that we will be circulating
39:02around uh if any of you would like to
39:04ask Dr Soul a question please raise your
39:06hand and we'll try to get a mic mic for
39:09to
39:10you please speak into the mic so we can
39:12all hear I'd be interested in your
39:14opinion of Rush
39:18limbo I'm a rush limbo
39:25fan I was uh uh delighted to hear that
39:28my friend Walter Williams was
39:29substituted for Rush recently I didn't
39:32hear the broadcast but I'm going to send
39:33away for the tape uh I assume that they
39:36put on Walter for those who thought that
39:38Rush was too
39:43moderate no it's it's incredible the the
39:46demonization of this man in the
39:48media uh it's uh how many of you knew
39:52know that the largest the biggest
39:55bestseller in history of any non-fiction
39:57book was written by Rush
40:03LMO this book was on the New York Times
40:06bestseller list for dozens of weeks
40:10before the New York Times ever reviewed
40:14it and the review was buried in the back
40:17of the of of the of of the section one
40:21of the really scary things is the extent
40:22of which people are being demonized for
40:25for political differences uh
40:28I think the prime example is Clarence
40:31Thomas uh
40:37it's it's simply not enough for people
40:40to say they disagree with his political
40:41opinions or with his Judicial philosophy
40:44they must picture this man as a demon
40:47now I've known Clarence Thomas since
40:481979 one of the hardest people in the
40:50world to
40:52demonized
40:54uh I I I I I I get worked up when I go
40:57into when I even talk think about it
41:00um I hope everyone has read David
41:02Brock's book called the re real Anita
41:06Hill the
41:08uh the gist of it is that before this
41:10book was written uh it was her word
41:12against his but after this book was
41:15written it's her word against a whole
41:17Army of people who contradict what she
41:18said subject after subject after subject
41:22um one one of the fascinating things
41:24which seem to me so uh characteristic of
41:27Clarence was that during this early
41:29period when he was at the Department of
41:31Education uh he would drop Anita Hill
41:33off when he was passing her place and
41:35one evening she invites him in this is
41:37from people who were there who knew both
41:38of them at the same time to whom she
41:41complained that he paid no attention to
41:42her very different from her later
41:45complaints and one of the stories that
41:47she told to the her fellow employees was
41:49that she invited him in uh offered him a
41:52glass of wine which he
41:53declined and that he sat there talking
41:56about Ronald Ray and his grandfather
41:59which again sounds very typical but
42:01somewhat different from the story that's
42:02being told in the in the media any EV I
42:06got off on onto a
42:09tangent
42:11question U first of all congratulations
42:13on your book exposing the American
42:15education system uh my question is
42:18education related how do you respond to
42:21the anti-choice and anti voucher
42:25Educators who say that the American
42:28education system has been the great
42:30equalizer in our democracy and to allow
42:34vouchers to be used in private schools
42:38would destroy the great equalizer that's
42:41it's fascinating because uh what what
42:44they're saying is that if everyone has
42:45an opportunity to go to private schools
42:47that's unequal but if only those with
42:48their own money have have that right
42:50then it's equal it's it's fascinating
42:53reasoning
42:56uh no they're having a a tremendous uh
42:59campaign in California to say how
43:01horrible the voucher schools will be how
43:03wonderful the public schools are and
43:05what what strikes me is that even if you
43:06were to grant that for the sake of
43:08argument uh why then would you expect
43:10parents to be leaving these wonderful
43:12public schools to go to these horrible
43:13voucher
43:15schools uh unfortunately I think they
43:18have a chance of winning out there that
43:20is the uh the public school people
43:22partly because it's an off-year
43:24election uh and so many many of the
43:26voters will will simply not turn out
43:28while every member of the National
43:29Education Association will certainly
43:31turn out and vote at least
43:38once Dr
43:40s Dr
43:42s I am chairman of Florida's Republican
43:45party and I have
43:49used didn't realize we were in such a
43:51dis disregard here this
43:54evening I have used your conflict to
43:58as a as an analysis between the
44:01difference in the Florida Democrat and
44:03Republican party and I'm never sure I
44:06have quite captured that your your book
44:08was so intellectually challenging that
44:10it left me kind of in the doen from time
44:12to time would you address that for me in
44:15a way that I might re uh represent that
44:19in a way that might be more passionable
44:21than I have done so already well since I
44:23know absolutely nothing about the
44:24Florida party parties of the Democrats
44:27Republicans I'm not sure how I could do
44:30that
44:40but well yeah uh one one of the things
44:44that happens is people uh some some
44:46Gatherings they introduced me and say
44:47how how I came out of Harlem and went on
44:49to professional career as if that was
44:51something extraordinary and a few years
44:53ago uh a black lawyer in Harlem wrote To
44:56Me
44:57from Harlem I don't think he was in
44:58Harlem
44:59anymore saying that uh he grew up in
45:02Harlem and gave the address it was about
45:05two blocks from where I grew up saying
45:06you know really that was not that
45:08unusual in that era and he proceeded to
45:10list uh I think it was something like a
45:13a priest a two lawyers a college
45:16President Etc who all came out of this
45:18one building this one tenement that he
45:20lived in and as I thought back over it I
45:23I realized that was really not that
45:25unusual in that era that I lived uh
45:28within a oh within about a five block
45:31radius of 145th Street in St nichas
45:33Avenue in
45:34Harlem and within that radius I can
45:38remember a kid whom I played with who
45:40went on to become Dean in one of the
45:42colleges has recently retired another
45:45half a block away who recently retired
45:47as a psychiatrist I'm the only one who's
45:49still working from this
45:51cohort
45:53uh uh half a block away also lived Harry
45:56Bella
45:57fonte five blocks the other direction
45:59was James
46:01bwin and again within the same radius at
46:04the same time uh colen Powell went to
46:06college there so it was not at all that
46:10unusual in that time part of the reason
46:13was that people were able to get a
46:16decent education in the school system
46:18which they cannot get today in that same
46:21place
46:23uh I I went um I had my niece who Liv
46:26lives in Harlem tell me the name of the
46:28math textbook that her kids were using
46:30in the 11th grade I got myself a copy to
46:33see what they were doing and the next
46:36time I talked with her I said you know
46:38what they're teaching your kids in the
46:4011th grade is what they taught me in the
46:42ninth
46:43grade so that's where the educational
46:45system is so that a kid who lives in
46:47that same block that I or that lawyer
46:49lived in no longer has the same
46:51opportunity that we had because the
46:53education system has been
46:55destroyed there's a great deal of um
46:58self- congratulation in some liberal
47:00circles because of all the things that
47:02have been done for blacks but if you
47:04destroy the Family Law and Order and
47:07education there is nothing else you can
47:09do that will make up for it
47:12[Applause]
47:24[Music]
47:27and uh in addition have some personal
47:29knowledge because my son is on the
47:31campus at Unity of Oklahoma so I had
47:33some personal knowledge with h I'd like
47:35to know that you have talked with with
47:37Judge Thomas since I'm a lawyer and
47:40never in my knowledge have I seen
47:42anything happen to a supreme court
47:44Nomine like what happened to Thomas what
47:47happened to Judge even compare yeah uh
47:50and I feel despite their denials that
47:54Senator messing bom and Senator Kennedy
47:56their staffs were largely responsible
48:00for what happened to FR
48:05[Applause]
48:07th I'd be very interested in talking
48:09with you sometimes you dropped me a line
48:10at the Hooper institution I'd be very
48:13interested in talking with you sometime
48:14and Dro me a line at the Hooper
48:18Institute I I must say he's sounded like
48:21his old self after he gave that speech
48:23to the Senate uh denouncing them at at
48:26the end
48:27I talk I talk with next I talked with
48:29parent Thomas the morning after the
48:31morning after he gave that speech on
48:33television denouncing the Senators and
48:35he uh he sounded
48:38wonderful he was himself for the first
48:40time in a very long while Haven gotten
48:42all that off his chest did you go
48:45through the stage of experience that
48:47many bright young men go through of
48:49beginning as a young college student is
48:51a liberal in your economics an
48:53interventionist a socialist and move
48:56toward the pre Market or did you were
48:57you born understanding the free market
49:00no no I I I don't do things by half I
49:03was a
49:04Marxist
49:06uh there's no point messing
49:11around and many people say have told me
49:15that they they think I must have changed
49:16when I went to the University of Chicago
49:17and studied on the Milton Freedman it
49:19was not true after I spent a year at
49:21Chicago had taken Milton Friedman's
49:22course and even more miraculously passed
49:24it uh
49:27uh my My Views were unchanged what
49:30changed me was getting a summer job in
49:32the government and seeing how the
49:33government actually
49:42[Applause]
49:47operates I'd like to ask you what your
49:49opinion is on the current issue with
49:51regard to the Federal Reserve System and
49:54coming under some fire with regard to
49:57privatization that they have and what
49:59the government should do with regard to
50:01Federal Reserve System I I haven't
50:03follow I haven't followed that
50:05controversy uh in general I tend to
50:07wonder what purpose it serves um the
50:11Federal Reserve System like so many
50:12things was an outgrowth of a quote
50:13crisis
50:15unquote there had been some uh banking
50:18problems and some contraction of the
50:20money supply and so the Federal Reserve
50:23System was imposed to stop that now it's
50:26happens that the largest contraction of
50:28money supply ever in the entire history
50:30of the United States occurred after the
50:31Federal Reserve System was put into
50:34place uh from 1929 to 1932 there had
50:38never been anything that bad before so
50:40I'm not at all sure why we have a
50:42Federal Reserve System except that we've
50:43had one and that there are four people
50:45who don't want us to get rid of it
50:46because it would mean their
50:52jobs take one more question one more
50:55okay was it someone over here no
50:59yes um I I just had a question about
51:02sexual harassment and it relates to a uh
51:07seminar I had at my work where I was
51:10told because of the development these
51:13sexual harassment laws that if I were to
51:16see a single man who worked for my
51:19company out of work who was dating a
51:24single woman a and I knew that it was
51:28completely
51:29consensual I would have to report that
51:33to the re Human Resources
51:36representative the reason being is
51:38because there's been court cases where
51:41if the company doesn't know and 3 years
51:45later they can be sued the companies end
51:47up
51:48liable and for my my point when I look
51:52at
51:53that I think of what Russians was
51:58like in Russia they used to tell the
52:00kids to report on the parents and I
52:05don't know something about that seems
52:07orwellian to me and I'd like to know
52:09what your Insight as to where we're
52:11going with that is where's it Comm I I
52:14had heard of that particular one it
52:15sounds like do ask and do
52:24tell uh I think I'll stop with that
52:29[Applause]
52:37note I feel I should feel perfectly safe
52:40doctor in saying you made 580 new
52:42friends here tonight really we do thank
52:45you for bringing your insights to us
52:47[Applause]
52:53tonight it's been a great pleasure to
52:55have you here thank you for coming thank
52:57you ladies and gentlemen for coming and
52:58this this uh concludes our program
53:01tonight have a safe trip home good
53:08[Music]
53:17night the institution for World
53:19capitalism is an independent nonprofit
53:21organization on the campus of
53:23Jacksonville University in Florida the
53:26institution was founded to advance the
53:28principles of democratic capitalism in
53:30America and around the world we do this
53:33through a program of education and
53:35public affairs including presentations
53:37such as the one you have just seen the
53:40institution promotes a greater
53:41understanding of the three interrelated
53:43systems of democratic capitalism an
53:46economic system based on private
53:48Enterprise a political system based on
53:50constitutional democracy and a moral
53:53cultural system based on individual
53:55liberty we encourage you to help us
53:58spread the message of democratic
53:59capitalism a message that freedom and
54:02capitalism Remain the best way for the
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54:2849986 I'm David busy thank you for
54:31watching
54:32[Music]
54:38[Music]
54:42[Applause]
54:48[Music]

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