An hour with Steve Forbes

for mckay natatorium a kansas state university k pr presents an hour with steve forbes i'm kate mcintyre steve forbes is chairman and editor in chief of forbes media which publishes the nation's leading business magazine he's the author of several books his latest is money how the destruction of the dollar threatens the global economy and what we can do about it he ran for president in nineteen ninety six and two thousand and served as chairman of the bipartisan board for international broadcasting during the ronald reagan and george h w bush administration's foreign spoken kansas state university on march ninth two thousand fifteen out of the one hundred fifty fifth landon lecture on public affairs he was introduced by case the president her shelves look like you really really much for those very very kind words like all of you for the warm welcome thank you for the great weather more than one person with a straight face is told me this is year

round but as kirk indicated i did come here in nineteen seventy eight with my father when he gave a landon lecture was in january it was cold and there was a lot of snow and was coming down so they believe that global warming since then say don't have snow anymore but i kind of doubt that it is that is a honor to be here no small part of the lecture named after governor land and he was an extraordinary entrepreneur very very successful services social business that is also a humane public servant as governor he cut taxes in the depression kept expenditures in line but a lot of things to relieve the great distress that they're terrible to iraq that economic catastrophe among other things he's put a moratorium on foreclosures of mortgages realizing that for a period of time these things are beyond people's

control so he knew how to do the right thing both in making sure that taxpayers' money was not wasted but also making sure but during a time of real economic contraction people or not left to run their all helping people who couldn't help themselves because of adverse circumstances you also recognize the us role in the world back in the nineteen thirties if you read your history is a great isolationist decade market that did not want to have anything to do with the world you went against the grain even before the us was brought into the second world war december nineteen forty one governor landon was an advocate of at britain which was for a pair of time fighting nazi germany alone went to have ago us urged us government to give billions of dollars to bridge now fight that war before we came in he also post in the decade and the so called neutrality acts would put severe restrictions on the us is a beleaguered help countries which were under attack he thought that if the evil was running amok in the world we have to do

something about it so this evening what i'd like to do in the spirit of governor landon as to make some remarks about the economy will hurt our economy in the global economy and the reason is very simple we live in one of these periods of time where america is unsure of its role and is critical because the economy not only involves our well being in the world well being are also involves the safety of the world the security of the world if democracy and free enterprise are not seem to be working if the us is seen as weak and an engaged and political extremists around the world to rise and get strength fanatics around the world to rise and its strength and people figure they can grab things they're not there's gained strength we sit with isis in the middle east not to mention what's happening in nigeria you sit with iran's push to get nuclear weapons to tout pour the world and develop ballistic missiles the convention deliver those nuclear weapons to our

shores we sit with poems seizing of crimea and now trying to cock in ukraine and before this is over you'll probably try to make moves against other neighboring countries we see it with occasional aggressive probes of the chinese government into disputed territories in the pacific we saw in a deadly way and governor landrieu recognize this in the nineteen thirties where we almost lost civilizations in the nineteen seventies was another terrible decade when america was seemingly i'm always a decline or not doing which part of the nation in the world that amazingly given what happened subsequently the soviet union was seen as a sentence central america and africa seem to be following more mourn the communist influence parts of europe wanted to please the soviet union instead of standing up to it you were still living with the consequences day of them all was taking over iran in the late nineteen seventies and the then russian soviet invasion of afghanistan in nineteen

seventy nine were still living with the consequences of that fact today so today the us seems to be in the ways things seem to be out of control and this then leads to why is this happening is this something inevitable we hear these words today the new normal actually what we're going through is the new abnormal and it's not going to last just we shook out of the nineteen thirties came back in the nineteen seventies where we come out of this terrible period in the next few years this gets into the basics of how to get an economy to move it make progress unless it comes to asking a very simple question how do you achieve progress that stands with another question what is the difference in georgia bureau the technologists and others of ss what is the difference between us today human beings today and people in the stone age

same appetites same bodies same planet what's the difference between us and them lawyers or boils down to this we have more knowledge we know more simple as that even if you have a physical destruction acknowledges not destroying you could quickly recover from physical devastation we saw that after world war two western europe europe was devastated japan was physically devastated two nuclear bombs dropped on it to end the war millions of people died and yet because the us security umbrella western europe and japan quickly came back from that huge devastation in a matter of a few years which experts thought was absolutely impossible that the key thing was knowledge was not destroyed the city today no recent samples of knowledge of work take for example a country much in the news these days the state of israel the modern state of israel was founded in nineteen

forty eight since the founding in nineteen forty eight israel's populations grown more than tenfold its arable land is grown free fall its agricultural output sixteen fold its industrial output more than fifty full yet the net use of war today in israel ranks knowledge technology than that you support israel today is ten percent less than it was in nineteen forty eight that's the power that's the real source of wealth in the world it's not physical things are the manifestation of the true source of capital which is indeed the human mind earlier today i spoke to some business students made the observation that economics of economists don't do their profession any good when they talk about heart dropping things like the allocation of scarce resources not like fifty shades of gray allocation of scarce resources pretty dull stuff but the key thing about

economics is not allocating resources that's a part of it but it's secondary to what true economics is about and that is the creation of resources or very few natural resources in the world like for example oil or was always refer to as a natural resource is anything but in another self assembly go we stuff a lot you can't eat you can't drink it can feed it the camel's just go what terms is glop and something we can't live without was human ingenuity turning it into energy more more efficiently we see it too in terms of free markets free markets have allowed to operate we'll always without exception term scarcity into abundance figure out how to make things cheaper to make things better one example of course is the automobile hundred ten years ago carr course the equivalent today of over a hundred and twenty thousand dollars toys for the rich

along comes henry ford has engineers develop the moving assembly line turner toy for the riches something every working person could afford more modern example or we used to call cell phones now and help your mobile devices so the first cell phone thirty years ago because the shoe box way as much as a brick forty minute ish battery life the first one which was made by motorola three thousand nine hundred and ninety five dollars today millions around the world loved most and given away as part of plan provider and nowlan assume have hand helds smart him helms twenty five thirty dollars by thirty five dollars a pop amazing technology and for those you love sports movies but screen tvs i'm old enough to remember when those things that's fifteen to twenty thousand dollars and get in for a few

hundred dollars this has implications of joe discuss in the moment in the field of health care were told it was a lot of scarcity we have to make hard choices in the future no we don't have to make hard choices we have to make the right choices and turned scarcity and to abundance and more more affordability which you look around the world is a troubled world knew was coming doing better but still like a carbon going thirty miles an hour now are gearing up to maybe forty we should be beyond sixty five or seventy miles an hour nobody's looking at eighty miles an hour so i'm not saying it to get in the way so where we only look good when we look fast as russell moore was doing worse europe is in trouble much of the much of europe is in a recession or semi recession latin america is in trouble they're stagnating brazil and others japan still mired in some huge recession you look at china there having difficult problems making reforms sort of

the war was going on why are we moving ahead sonic touches on a few big things one is and i hesitate to do this cause they're such nice people but i asked be done and that is start with a subject that is critically important was not the kind of thing that excites you like a good super bowl or watching certain movies that is the subject of monetary policy money no use a monetary policy federal reserve ben bernanke the janet yellen greenspan exchange rates blah blah blah the eyes get heavy and so let me as reward give you little reward for what i'm about to do to you discussing the subject that is a travel tip if you ever find yourself in an airplane in coach middle seat on the runway watching your wife passed away

who won a little bit of elbow room to seek mates start talking to them about monetary policy affects you a wide berth in a similar vein a lot of young people here and if you're single on a bad day and one out start drawing about monetary policy and you'll never see that person again guaranteed but the thing the thing the subject is critically important money and raises very very simple even ever we get right on taxation and spending on regulation you don't get monetary policy right you get the money right here to have a troubled economy this gets that question had a week she progress will the mechanism for achieving progresses we seek knowledge come from constant experimentation you think of experimentation a lap what happens in the markets every day people coming up with new things

to work with doesn't work things that fail failure learn from as well some of you may be over not for member in the days of apple before steve jobs came back a product called the news failure came up with the technology that enable things like the ipod so you learn from failure getting that knowledge of the way we've achieved progress not seeking his we trade with each other we exchange with each other say you want to bake a cake you gotta get the ingredients gonna get the eggs then to get them out the flour and the like gotta get the electricity you gotta get the stalled the other and get the refrigerator that at the measuring spoons and the like all these things say go through buying and selling to exchange we build billions of times a day i don't think anything of it anymore but all this is done through trading with one of those individuals we can't do in much of anything that you have to do everything ourselves and still be living in caves but this interacting

with one another exchanging with one knows how we moved ahead so what makes this exchange possible money now in the old days in the old days we had barter so by soul men and forbes three thousand years ago howler get paid perhaps of the herder goats what's that one by eye patch for writers being a little facetious here but i don't really apple store the herder goats moreover says knowing as want go to one shape slab and then figure out how swapping builds for sheep rap star sheepherder my troubles don't eat the sheep sheepherder wants to be paid with wind up at red wind he wants white wine becomes very very cumbersome so money was invented in the marketplace by people markets are people trying to figure out how to make it easy to change with one another trade with one another so the first coins a starring cell that tell us was invented by state call libya

and the greek state is two thousand six hundred years ago atkinson came up with their own quote was called the tv announcer were calling him a great commercial and cultural center whether it's coins pieces of paper or lips as are blips on a computer money as a means of doing transactions this gets to something very very important money facilitate buying and selling but money in love itself unless you have one of these ancient where corey's money in and of itself has no intrinsic value not it's simply measures value away scales measure weight or roll was measure lights are clocks measure time some money in and of itself is not well it measures well it's a claim think of it as a claim on products and services like a coat check at a restaurant you used to claim your call but it's applying love itself it's nothing and it only works based

on trust you don't trust and it doesn't work if you trust that total strangers and trade with one another because they trust that piece of paper without notation on a computer is worth something big would be a claim on other products and services so money works best when i was a fixed value just get fix waits measures in the marketplace by gallon of gasoline you so much to certain sites doesn't fluctuate each day you buy a pound of potato chips minnow should say what something pure vanilla and chips or hamburger she's whatever it is you want to buy some sixteen ounces doesn't fluctuate each day so this moment play one little mind games imagine for a moment our central bank the federal reserve did two clocks where does to the dollar match and floating the clock sixty minutes an hour one day

forty eight minutes the day after ninety three mins the day after that life would be chaotic the clock change in terms of time each day magic trying to bake that cake we talked about that says make the batter for forty minutes if to figure out is that nominal minutes inflation adjusted minutes isn't a kansas man and a mexican man and japanese men at the chaotic so it didn't hit it would have this stable money that just makes life easier soon enough to think about it and prices when we go out and buy things we we drive prices give us information about what something is where prices gives information something this hot not hot prices give is that essential information and so what happens if you have an unstable money it's like a virus in the computer it crops the

information for example well in the nineteen seventies none of your overnight remember the seventies humans call pandering tried in politics it works why i'm here today but what nineteen seventies women we push shove the power off the rails at the value in it why one from three dollars to forty dollars a barrel is going up and up the price of people very conscious growing up in price therefore it must be running out of it and so a lot of investment was made she keeps going up must mean there's not enough out there in the early eighties we saw the same thing i recall to the state live through it soon the money's going going up and up then in the early eighties when the terrible inflation the seventies was killed by ronald reagan paul volcker the fed reserve well crash from almost forty dollars about them to turn finally stabilized at twenty to twenty

five dollars agriculture especially farmers and levered up what though ranching period prices weren't given the right information we saw in europe are last decade and we sort of play these games again with the dollar housing prices start removal people thought she'd listening we need more house price keeps going up even invented and towards a new mortgage was why haven't income who needs it you know i think lawyers gone up in a while prices were lying to us dollars on stable in value we so what happens is yemen and stable currency get less investment in the future as investing that leads to a higher standard a living means investing in the things that today are on scene it was a new product it's not here today you invest to create it like steve jobs and the eyecare in the iphone and the ipod building a new factory same thing to the same thing things that are

today there and scenes where you have an unstable current see what happens to get less investment and those things less investment in things unseen or more things like hard assets so that's the reason why we're not doing so well that's the reason why businesses are going bust at a faster rate and new businesses are being created very rarely that happens in american history is happening now trees one medium incomes are not going up we're not giving up a bad investment cigarette have stable money how do you do what at the toe would bore you what were the way we did it for the first time in eighty years of our existence we tied it the goal they say that of the congressman actually rich because they've been taught the superstitions of the depression you knew how to get back to stable value money effects of the wider goal because more than anything else on the sport that keeps its intrinsic that we see the price fluctuate that's not so

much the value gold as it is people's perceptions about the value of the dollar today and what it might be tomorrow or evidence we don't fix it dollar goes all the places are now strong today that's like oh that clock when you have a watch you don't want to be too fast you don't want to be too slow you want to be at the right time so called not perfect it's a best thing we have it doesn't mean we go and gold coins and would pretty inefficient to talk about the kids today i can go and mcdonald's one dollar eighty nine hamburg giving a gold coin trying to get one thousand one hundred dollars and change no not very efficient or are names like the rover just a rower measures like this go fix it so it doesn't restrict the economy booming economy create more money flows say we fix the dollar gold st paul hundred dollars an ounce but the number one music goes above twelve hundred freight fewer dollars those local funding great more

dollars very simple we did it for a hundred maybe years and it worked you know we had a civil war two world wars great depression growth rates not higher in eighty years from the time of george washington the nineteen seventies the growth rate in the west was the greatest long term rental growth in human history if we maintain that level of growth that we get from an eighty years last forty years of our economy today would be fifty percent larger eighty trillion dollars figure imagine if you have an economy fifty percent figure incomes fifty percent higher life would be a lot better i may not do miracles this year in basketball but you know there are some things that money can't do along but certainly would be a much better life and so that's what happens when to disclose on the subject money before it quickly hit on taxes and health care

is a quote from john maynard keynes your grip on about economics because number of gdp and all that stuff when you have an unstable money since it's based on trust if he can trust them anymore we discuss a book that i wrote called money when people ceased to trust money they seized across each other so here's what john maynard keynes you got something to write here's what he said ninety years ago we said that lennon was certainly right there is no london was won a graded communism in the soviet union so one was certainly right there's no subtle are no sure means of or turning existing bases of society and the board is the currency the process and gauges all the hidden force of economic war on the site of destruction and does it in a manner which not one man in a million was able to diagnose that he was talking about the hyper inflation but in the house there's volatility over time

you can have this rapid it's still under roads which michael social trust we see playing out today researchers show by the way around the world the countries are routinely debase the money have high rates of crime and countries that don't so for cross the sea to that or social divisions the one percent versus the ninety nine to forty percent versus everybody else the youngers is all public sector versus private sector it marks a valiant try to save money today can look like a forbidden rates of interest it seems a bad a disconnect between honest effort reward reward speculation so this is critical boring the absolute critical and they are starting to move in the right direction former head of the federal reserve paul walker sense into one off gold the fed more crises no he didn't endorse a gold standard but he started the process first thing i do is recognize have a problem what we're doing is not working not working here it's not working around

the world that's the first step that we can stress the question what do we do now another area where they received much more rapid progress christie is taxes and know this may be a sensitive subject in the state are not running for anything so let it out america's overtaxed the thing to recognize about taxation is not just a way of raising revenues also a price and a burden the tax you pay in income surprise you pay for working attacks on profits the price you pay for being successful tax on capital gains the price you pay for taking risk that work out yeah it is a very simple only lower the price of good things i productive workers taking success you get more of them raise the price to get less of them they look at our tax code today the federal income tax code it is a cold dead weight on the us economy put in perspective abraham lincoln's gettysburg address to find the character the american nation

all two hundred and seventy two words declaration of independence over thirteen honduras constitution all the madness all over seventy two hundred words the bible which took centuries to put together seven or seventy three thousand words of the federal income tax code not just the coat itself which is four million words but all the ten rules regulations about another climate but eight to nine million words nobody knows what senate the irs doesn't know at the time the third time to call the hotline the stance of them and that and they they they can be they can be the wrong answer and hold responsible for some years ago money magazine did a servant of the hypothetical family's finances get the numbers of forty six different tax preparers people consider top in the field you know they got back forty six different returns forty six different estimates what the family quote thousands of dollars difference is for people make a living at the bank there's only one thing to do when i think about what happened two years of several candidates and advocated next year

was take this piece to look up a steak which are very open never rise again to start all over again with crime place with a simple plot turns about to unveil the few days a new version of it generous exemption frozen for kids' single rate family of four would pay no federal income tax on the first fifty two thousand dollars in wages no tax on savings them death taxes you believe the world unless by the irs or as a dessert founders would say as i found is it's a no taxation without respiration and do the same thing on the business side cut the rate from thirty five to seventeen percent no more mentally make a capital expenditure right and

often the election lay out the cash we have a law scared ford against future profits you do that a stable dollar the tax code are no longer spending six billion hours you're filling out tax forms it little we do an initiative paper thirty countries have done a variation on that this is not in the law thierry action to issue paper a few keystrokes and it's dark matching the brainpower released to do productive things beyond getting older we all are i like the idea of more medical research conquering diseases that's a good thing when filling out tax forms are trying to interpret and undecipherable tax code so that's going to come i think that nothing looks like a crisis today i think is setting the stage for something profoundly positive is a scary healthcare ask ourselves why do we have a health care crisis the usual answer is well people like me are getting older we want more health care services more medicines and so the thing becomes more expensive that spins out of

control people can get only got a problem rescue cell step back for a moment to ask yourself why is it that demand for medical care health care is considered a disaster rested manford everything else is considered a passive great opportunity for the norse one more apps right is glad to help you out you want more for people in the state glad to help you out you want more aircraft manufacturer glad to help you out so what's with healthcare light immense huge disaster everywhere else the economy sees a great opportunity because we don't have real free markets in health care is grew up over the past seventy years nobody design images of all crazy monster movie we're pieces of it which is why we still have the best health care in the world still turning up more new devices new drugs in the rest of the world but a crazy system know you go to a clinic or hospital new

task in advance what it cost to get a very strange look it's one of two things either uninsured or you're a lunatic why would you wanna know the price what's it to you salter parties disconnect between friday and consumed i can imagine going out to dinner tonight or in a fine meal say okay what it cost less at blue shield of medicare were about what medicaid sort of thing now becomes chaotic but you know new systems beginning right now we had before the affordable care act a whole new system work for the first time in our lifetimes patients will truly be in charge that's messing with them the convoluted so my advice is don't get sick for the next three years to listening sorts itself out which can say it's a little signs of that for example flu shots in terms of health care billing once upon time when a flu shot in the point in the back when a gospel of the doctor went there the shot they go anywhere ignore the

drugstore for the airport or the gas station so far up in the flu shot through the windshield wire out of tickets available everywhere available everywhere see if you walk in clinics more and more cvs walgreens and others nurse practitioner research shows eighty percent of her melodies can be treated our nurses technicians all this review before french physician which you go in there yasser's problem and recently of the hospital you see it in other areas for example lasik surgery for the ice might have to wear these things cost less today than it did ten years ago y because that is connecting fighters and providers and consumers are published rich caro guard cut the thing done eleven years ago cost him five thousand he told me a few months ago that he could get it done today and half the price and probably better result wide because not because there's not that disconnect so providers at every incentive make it more affordable and better for you and so in terms of health care system

a new system of altering we're finally going to get that miracle of turning scarcely into abundance now again human nature being what it is will soon just take it for granted and look at these hand held today a more for member only place a coal overseas is back in the fifties it was a big deal to menace to do it today place a call outer mongolia takes more than five seconds he said this device is a piece the crop seconds six seconds to reach out among what they're what was so soul take it for granted the bottom line is the bottom line is that we just don't oppose it and the rest of the world and we will find ways around it we've been through rougher periods before we're setting the stage in a very messy way one extraordinary new bureau ahead it very much if you're just joining us you're listening to steve forbes chairman and editor in chief of forbes media forbes gave the one hundred sixty six landon lecture on public affairs at kansas state

university on march ninth two thousand fifteen coming up ford's takes questions from the audience at mccain auditorium i'm kate mcintyre if you missed last week's k pr prisons on ted x lawrence with the pine and the founder of family promised karen olsen it's no archive on our website k pr that kay due dot edu there you can find many previous keep your prisons programs a complete program schedule and information about upcoming shows you can also pledge your financial support for kansas public radio and locally produced programs like a pr presents again our website is k pr that kate you die edu you're listening to k pr press them on kansas public radio i just want to say look john saturday night live like you and wondered who has a better sense of humor that conservatives or liberals

though that depends on whether it's a real humor or unintended humor and that the city was big stuff well one of the things especially if your candidate and sometimes she was i was in a more humor out of the public square the answer is humor is a very tough thing and you try to do a stand up comedy it depends on the audience and what works if one group of people may just fall flat or offend another group so your voice stepping on a minefield when you go out and try some human alfie get elected and you can let more out there what a great what you have but by golly before going there yeah to be very careful very careful on how you were employed there and get some of the scars to show for it so we're or as mr forbes thank you very much for coming to

kansas state university first of all my question is a fairly simple how far farther in that you think the us can go before bankruptcy court the us debt is growing and what makes it a real concern because it's not the result of fighting a world war and world war two we amass very quickly proportionally more debt far more debt than we have today who were literally fighting around the world for civilization all the economy you couldn't buy shoes during moreover you could buy cars rationing little dedicated to were winning the conflict so you ran up a huge debt but we're now doing it without a major world war and that's that's not a good thing and so the answer to it is first to get the economy growing when you have the assets are growing and makes a liability side a lot more easier to work live with

and the other key thing is though is starting to recognize the very basic principle that is there are certain things government does necessity does well in certain things where it just lacks competence and others a lot of things that governments wasteful long not to just just cut that back a little bit or just stopping increase the growing economy will rescue suspending as a portion of gdp does not go up on things like social security you'll have to touch benefits for those are on the system about to go on the system we're actually going to get that we have enough wealth in the nation meet those obligations or really gets better with younger people want you here says i'm gonna go kimberly that's why the word can use the us were here so that's why we should be bringing in for younger people a new system

where you turn a liability into an asset by having those monies you pay payroll taxes that are gonna washington were spent right away they pretend it goes into a trust fund doesn't goes your own personal account with proper rules and diversification proper rules on safety say can't go below on horse racer online gambling like that overtime for younger people the amazing thing is you know if you dont invest a dime and starts over time you'll have when you decide to retire and you take your own retirement age sixty five seventy seventy five whatever you want you have more benefits than the current system as delivering people of my generation so that's the way you do it you know there are the two ways to deal with these problems one is which michael root canal without anesthesia and the other is lower better restraint and growth growth will solve a lot of problems and the thing to keep in mind about

government is it does not create resources you create resources in the marketplace government can take resources it can create a sonnet talk about stimulus as jacob are aware of those resources come they come from you so again i'm not talking about acting or destroying about it was a single garment do well in what is a not do so well and you do that then i think little bitter strike goes a long way so you don't have to do drastic think you have to have a hyperinflation don't have to have an awareness of hill barrels for thirty years our common stuff we get more aware of this one little thing on that little factoid really with you in the nineteen eighties the national debt under reagan more than doubled because increased primarily a lot of things but the big thing was defense spending big increase in defense spending it

worked we won the cold war against the soviet union which nobody at the time thought possible separating few others shut up expenditure were to more than double the national debt wobble over a trillion and a half dollars one point seven trillion dollars the nineteen eighties yet because of his reforms slashing taxes the regulation though bitter spying on the rest of the budget rather positive things the net wealth of the nation when up seventeen trillion dollars so the key is growth restraint and their weaken ourselves out of it in many ways is one parent medical banking system in the eighties and early nineties was a far more bad shape than it was in two thousand and eight back then when it's right decisions we make some money in the crisis we're still paying the price for today

to forsake you very much for coming to see said the free market when one allowed to operate on a habit it will always created london's out of scarcity and he referenced also endeared him to talk being the crisis that we went through in two thousand at the narrative we got from the current administration was that the free market had its chance and it failed i'm imagining that your take is one of the different than that can you talk about your perspective of what happened what happened in two thousand made was what happens when you undermine your currency we saw the same thing in the seventies when the private sector is blamed for the federal reserve in undermining the dollar win win all four gold standard and so it started really are something that started under public and administration continue and democrat ministration

today show there's not a party thing by the way john kennedy democrats of the dollar should be as good as gold while reagan republican should mention killed the terrible inflation in the nineteen seventies open the darn well under bill clinton we have the only ninety so again this is not a partisan thing but the roof so when we won we started off the rails in europe are last decade they foiled cheapening the dollar would help our exports and didn't realize the damage was going to do the rest of the economy that's once again when you start undermining currency people are hard assets while in the mid nineteen eighties during our last decade average well over twenty one dollars a barrel when up to as high as a hundred and forty seven two thousand eight and it's crashing again and i think it's over crash i think it's going to come back

but you get this kind of a nasty volatility soulless capital when in the housing and we're still living with the consequences today and yet the fed instead of being punished worse transgressions so the treasury department being punished for their transgressions voters rewarded with massive new powers therefore that is not to excuse though he did in this speech in the marketplace again he never could've had what happened in mortgages and had a weak dollar would not have happened and again the seventies we saw variations of this movie so why you get your money right in a salsa a lot of problems now at for humans so lawyers can make errors and we're trying new things the joys can be waste in the marketplace runway over two thousand people try to create or manufacturing companies in this country starting from

eating nineties onward and no look at pc makers in the early eighties long and one by the board so people trying new things along the market a workbook that property fermentation or we saw some serve in the last decade was purely policy made no bs fannie mae was guilty freddie mac was guilty on the can defend their green just bad behavior but their misbehaving in the nineteen nineties we have strong dollar we didn't get the crisis we had in the last decade big difference between last decade in the nineties stabled are strong or i should say last decade we can vault a dollar we're still seeing that play out today so private sector perfect know as humans are not perfect discussing earlier by james

madison all of the us constitution said if we're angels would not need government would not be lost no we're not angels i said earlier supper maybe grandkids that they only to a certain age and and so you need a lot of the key thing is to have sensible commonsense rules not there are thousands and thousands of pages of regulations today letter of smashing the banking sector one reason why we haven't had more loans to small new bills he says regulators the banks ally when they do that and they're getting a little easier but not much a little easier which is why are showing signs of life they're allowing more or perhaps sensible pricing of credit but if that hadn't been so heavy handed we'd been a lot further along today so again up and perfect but there are things you'd be done

better than what we did in the last decade good evening mr forbes from solder of a dual majoring to excess economics thanks deanne ports middle east my family has been featured twice in this business in the middle east on the other hand when it comes to oil saudi and the seventies king faisal has caused a major rise in oil prices and you've touched on that therefore the united states has responded very heavily in the way they treat oil domestically therefore they put a ban on selling oil two other countries under the name of homeland security now that's not the case and you've talked about having so much knowledge and up using that knowledge to change our domestic lives

and our economy why only seen such laws changing because once countries know everyone is holding back so their oil you talk about saudi arabia talking about europe to talk about an internationally was holding their oil and they're reaching their capacity once that happen or synagogue again and the united states is going to get her why are we seeing opening trade for the united states and having been as they've been able to export oil and that would be very grateful for the madison i think that would be a great deal for the united states yeah one that you know again new knowledge sometimes powers appear slow to work i just that knowledge and the embargo on exporting oil is totally counterproductive one reason why oil production may now go down in the united states one reason why they a natural gas boom may be damaged even more than it's

being damage now is that there's no place to store the oil will literally running out of storage capacity in many parts of the country an actual thing would be if we have a ready market is to sell we're now because we should becoming a major energy producer that crazy law stands in the way and now it's like this saying kansas canceled oklahoma we have the interstate commerce clause which mixes big free trade area but this barrier on oil is actually counterproductive and itzhak harming an industry but thanks to technology or fracking and horizontal drilling oil and other breakthroughs specially finding out what's actually down there huge breakthroughs in a very very tough industry know and when the dollar is not weak whale in energy

is often a low margin tough business oregon's coordinated employee more tougher to say they are for a lot of other businesses so that's a self inflicted wound taken all of let's get the production to meet an actual demand of the marketplace of people know that there is a steady supply the reason why shouldn't be in this country will get more more countries i mean companies moving their facilities here is we can do provide energy very cheaply germany which went whole hog for alternative energies their electricity prices are two to three times what they are here in the united states that chemical produced mysteries always been very big in chemicals are putting new investment here in the us because though we have that supply of energy manufacturers the same thing so there's where the government gets out of the way now there's a lot of harvesting that can be done in this country in an area where we thought a few years

ago energy washed up the whole it's really just beginning if we let it you weren't you mentioned the federal aaron chairman yellen and the big question now and the fed is the zappos qe rate hikes equities markets are going bananas speculating on when these rate hikes are going to be do you think the economy's strong enough to see these rate hikes late summer early fall well there the question is one of the reasons why we have such a punt recovery to to have a percent growth for six years why the labor force participation rate that people actually who could work seeking work in the marketplaces now warren spent thirty five years it because we haven't had that investment when ways we haven't had that investment is we don't know what the real price of money is your price controls go back to the roman spike lee joon others tried putting price controls and a mucking up the market rent

controls great to get an apartment in new york for twenty dollars a month or that's great but norton bonaparte with it we get to twenty bucks a month so what the fed is done with the suppression of interest rates much a short term rates across the border in the name of helping us and harass it hurt us and that that's why you have this bench like binge but this huge appetite for corporate bonds jump bonds as the fed have gobbled up so much of the long term treasuries that totally distort the market once upon a time these to be those be in the banking business thing called the interbank market yet excess reserves you go into a bank that could put to work thriving market data dead that is the proverbial doornail and they're so quick or they get out of high price everything the better things will be another key

thing to a good couple out well probably we have before we get with major tax reform i you'd see this economy starts to recover very very quickly and that set of regulators now as i said today regulators like an article for banks to lend people say rightly bomb on demand may not be what it should be but i'll just give you one anecdote our vision of philadelphia the other day over the recent graduate of the wharton business school she an apartment started a unique restaurants some kind of sandwich is doing very well positive cash flow from day one salon open up another restaurant in philadelphia though the bank asked for three hundred thousand the bank says sixty thousand but conditions she said look you show that we can run a business cash flow positive so your risk is not out of the

norm i wouldn't do it so the price founder of money from elsewhere and that's the kind of thing that just you multiply that slows the economy down i don't blame the bank of a london three hundred thousand regular income and say what are you doing this is risky well guess what guys lending is risky good bankers know how to do it and the dodd frank does not so folks please join me once again he fortunately you've just heard steve forbes gave the landon lecture on public affairs a kansas state university on march nine two thousand fifteen forbes is chairman and editor in chief of forbes media which publishes the nation's leading business magazine he's also the author of several

books his latest is money how the destruction of the dollar threatens the global economy and what we can do about it he ran for president in nineteen ninety six and two thousand and served as chairman of that bipartisan board for international broadcasting during the reagan and bush administrations this lecture marked the one hundred sixty six landon lecture on public affairs at kansas state university previously and unlike shows have featured a number of presidents bill clinton both george w bush and his father george h w bush jimmy carter ronald reagan gerald ford and richard nixon the series has also features several us supreme court justices sonia sotomayor sandra day o'connor and earl warren kansas public radio has been broadcasting the landon lecture series on k pr present since two thousand six with the permission of kansas state university audio was provided by dj state office of mediated education

many of those land and lectures are archived on our website k pr that case you that edu as are most previous k pr presents programs you can listen to them anytime at k pr that k u die edu while you're at our website you can listen online to both k pr and k pr to find a complete program schedule and pledge online conveniently and securely again our website is k pr that k u dot edu you can also find out about a pr programs on facebook and follow us on twitter i'm j mcintyre to join me next sunday at this time as kbr presents climate change kansas perspective so washburn university panel discussion featuring policy experts from across the state at the next week's kbr present eight o'clock sunday evening

on kansas public radio and one o'clock sunday afternoon and cheap er to keep your present is a production of kansas public radio at the university of kansas set morning edition is everywhere shapiro reporting from bunkers streets alleys jungles and deserts but most importantly start your day with a trip around the world and wake up with morning edition from npr news and listen everyday weekdays from five nine am on kansas public radio stations