Episode Transcript
[00:00:00] Speaker A: In this episode, we take a look at the AI chat box that seems to be able to pull people back from conspiracy theories. And also take a look at what's happening with Argentina's economy with the, quote, shock therapy that their new libertarian president has implemented within the past year.
Hello. Welcome to the call like I see it podcast. I'm James Keys, and joining me today is a man who's always ready to stir it up. Tunde Ogun. Lana Tunde. You ready to catch a fire today?
[00:00:45] Speaker B: Yeah, man, I was thinking of Bob Marley when he said that stir it up thing, so.
[00:00:50] Speaker A: And catch a fire.
[00:00:52] Speaker B: But we're in a good mood now. I'm a buffalo soldier. Let's go.
[00:00:56] Speaker A: All right. All right. Now, before we get started, if you enjoy the show, I ask that you subscribe and, like, on your podcast app or on YouTube. Doing so really helps the show out. Now recording on October 1, 2024. And we recently saw a story in the New York Times that talked about an AI chat box had been developed that has shown some promise with walking people back from various conspiracy theories. And, you know, we all have recognized that, well, many of us have recognized that, you know, and been concerned about AI chat boxes and just the proliferation of misinformation and how that's being distributed and how that can be persuaded people away from reality or facts or truth. But, so it was interesting to see that this type of force potentially could be used for good, so to speak. So, Tunde, seeing this, what were your thoughts on this kind of AI chat box and its ability to pull people back from conspiracy theories in ways that researchers have been surprised how it's been.
[00:01:57] Speaker B: Able to do so also, well, you'll be pleasantly surprised that I'm glass half full Tunde today. I'm not totally depressed coming into this topic, so I'll answer you directly and say I was enlightened by it, actually on a serious way, because we know that you and I, anyone who's listened to our show for the last few years, know that you and I are well versed on the negative effects of social media and kind of the current way that we as humans relate to activity online in general. And we've done many shows on it. There's been documentaries on it. So not to rehash all that, but this is the first time. This is why I say I'm kind of cautiously optimistic learning about something like this, because it's an example. It's the first time I can think of, I'm not gonna say the first time. It's happened that instead of trying to put guardrails around the technology in terms of limiting use and trying to figure out how to stop people from going on this and how to deal with this information kind of from a limiting, limiting people's usage way, this is the first time I've seen, hey, let's use these tools that we've created in the tech world, in AI, to actually try and help combat in a positive way the way that the negative forces have used these tools that were available.
And I think it's that old adage of, you know, the truth can get halfway around the world.
[00:03:27] Speaker A: You mean a lie?
[00:03:28] Speaker B: Yeah, a lie can make it halfway around the world before the truth can get its shoes on. And I think this is a longer arc of that analogy where it's like the negative forces that took advantage of social media, the algorithms and all that, first, naturally, it takes time for maybe the positive alternatives to catch up. And I think, as I'm saying, this is the first time I've seen, like, wow, okay, someone's gonna use this technology to combat it, not just complain about it and figure out how do we get people talk about, how do we get people not to use this stuff as much or to use it different, but not really having a solution that seems viable?
[00:04:05] Speaker A: It's interesting. I would take a slightly different approach. I don't think it's the first time it's been tried. Like, misinformation is everywhere. And so people have tried to use various websites or whatever for fact checking. It just doesn't work. And so, to me, what stands out about this is that this is one of the fewer times, or one of the times we're seeing where they're using the technological tools in a way that has had some success.
And this is notable for various reasons, because one of the, some of the dogma around, like conspiracy thinking. And once people get down that rabbit hole, you can't use argument and facts to try to back them out. Whereas, you know, and then the AI chat box, that's kind of the way it's approaching it in many respects. And so it's not only able to have success, it's able to have success in a way that's confounding researchers and saying, well, why is this working? Where is, if we had a person doing it now? And in the studies they were doing, like, people knew they were talking to AI, they knew they were talking to a chat box, but they didn't know why they were talking to the chat box. And so, you know, this is something that conceivably you can put out there in conspiracy forums and stuff like that and just to try to get people, I mean, I've talked about it before, the biggest hole or fallacy in the conspiracy thinking I always see, because I'm not one to say you should always take, take accepted answers or whatever, but it's the level of scrutiny, when someone goes down this conspiratorial mindset, they apply a level of scrutiny to the official story, and then they don't apply that same level of scrutiny to whatever alternative conspiracy theory story. And it's like if you're going to be skeptical about official stuff, be skeptical about the conspiracies as well. And that's, I think that, you know, like the fact that we don't have parity there is always the biggest problem. It's just, oh, they're just so happy to find something else other than the official story that they just jump right in and say, yeah, yeah, that's great. I don't even have to apply any, anything to this. But to your point, though, I mean, these things are all tools and it's important that we keep that in mind. And so that the tools have been, at least initially, you know, like the uses that may have been for negative purposes or purposes that, you know, like I'm not crazy about have, have happened doesn't necessarily mean that the tool itself is just completely worthless or bad. It means that it's been used in a way. Right now, the economic incentives kind of go towards uses that may be antisocial and so forth, but nonetheless, it still is a tool and it can be used for good. And so this is kind of a reminder of that.
[00:06:26] Speaker B: Yeah, no, that's a great point. And that's what I mean by this. This. Cause you're right about the websites that and those, like, I mean, look, I mean, I think the famous sites that I know of are things like snopes.com comma, factcheck.org comma. You know, all these kind of things where you're supposed to, I think there's a few others, but, but, you know.
[00:06:46] Speaker A: Where you can go, like that's helpful for you. Cause you've said, like, you people have come to you with stuff and you look it up and like, I found out in 5 seconds that this thing.
[00:06:53] Speaker B: Wasn'T true, but that still takes an.
[00:06:58] Speaker A: Effort of and a desire to find out if it's true or not.
[00:07:02] Speaker B: Yeah, yeah. Well, and this is what I'm saying. Like this idea of trigger and response. So what happens is online, we get triggered very easily, and then we respond quickly out of emotion. And I think what I mean, some of us are wired a little bit different in this way. Like, maybe I'm one that just, on some things, I'm a little bit slower. Like, I try and slow it down and start asking myself questions like, okay, well, what do I really think? Like, an easy one right now that's going on in our political discourse is that one of the presidential candidates that's running here in 2024 has a desire to bring in illegal aliens or immigrants and give them sex change operations in exchange for votes.
You know, my trigger and response mechanism allows me to say, well, hold on. Before I get triggered into believing something like that, let me really slow down and think about it. So, an example here to me is, and why this is interesting is like you're saying to go to those Snopes.com and factcheck.org, you got to actively then take time. Your mind has to say, okay, well, let me go look at something else. I think where this is interesting to me is the use of AI. That's what I mean. Like, the use of the actual tool and the algorithm that has caused some negative stuff in humanity to combat it. And what to me, the hope could be would be that the AI can quickly get people to think between the trigger and response so that they actually, there's some critical time for critical thinking and for them to kind of deescalate with some of their more emotionally triggered responses. And that, to me, is just a very interesting use of the technology. And last thing I'll say. Cause I want to get your thoughts on this. One thing I thought of in reading the article was the idea of the trusted messenger. And it's interesting, like you said, about the way that the scientists have talked about conspiracy theories, that you're right, the going thought has been that facts don't matter when someone really has a belief in their head. If you try and talk rational and argument and all that, it's going to fail. But the fact that not only has this shown, I think the results are about 25% of those who believed in the conspiracy did not believe after dealing with the chatbot for about eight minutes. So it's interesting.
[00:09:24] Speaker A: That was resilient. Still didn't believe.
[00:09:25] Speaker B: That's what I was going to say after, like, they come back and test the people months later and the resistance to the conspiracy still held. So that's why these experiments showed a much different outcome than before. So to me, that's what I want to get your thoughts on, like I thought, well, is that because the messenger is different? Is it because at this point in our evolutionary timeframe, humans trust AI? Because I thought the minute someone poisons the well and says, oh, the AI is done by some, you know, ESG, George Soros, liberal, or the AI is controlled by Elon Musk. Right. Like either side of this kind of political spectrum will then a portion of the population not trust him. So that's why I wanted to get.
[00:10:06] Speaker A: Your thoughts on it, because I don't think it was because it was AI that they believed it, because one of the things they talked about, and we'll have this cited in the show notes, this piece of. But one of the things they talked about was that the conclusion was, or the theory was that maybe it's not that facts don't matter at all. It's just that the presentation of facts wasn't. When you're trying to do this just individually with people, like a person doing it, it's not personal enough. And so what I was thinking from that, basically, is that the AI, based on the responses, the interaction with the, the chat box, that the AI may be able to identify the basis why you want to hold on to that conspiracy theory. Why are you holding on to that conspiracy theory? And then instead of just generically reciting facts like, oh, well, that's not true because of this and that. Like, I would, I thought you were going to think, you know, like the example I thought that was most relevant right now was the, you know, we've seen it claims floating around that the, the president and the governor of North Carolina, like they're purposefully withholding aid from hurricane victims. And I, that that's something that if you, if you, then, if you hear that and then take the step to look it up, then it's like, oh, okay, yeah, that's, that's just, that's, somebody's lying about that, and that's not true. But if you, if that satisfies an emotional need for you, or if you are very easily manipulated along facts along that line, then you would, you wouldn't take the extra effort to apply skepticism to that. Well, what the AI chat box conceivably could do is, in prompting you and then, and conversing with you back and forth, identify the emotional attachment you have to that. Or is it an attachment to the person who's saying it? Or is it, you know, what is the reason why you were trying so hard to hold on to this and then give facts that undermine that or that go at that basis. And so it actually becomes more targeted in terms of, because, again, we know that people hold on to conspiracy theories for various reasons. And what has been established is it's not just the fact of the matter. It's more than that. It's an emotional component, like you said, trigger and response. It's like, okay, this satisfies something in me, or this is something, this is the kind of thing I want to believe. I want this to be true. And so what I think is that the AI is able to identify quickly the nature of that attachment and then direct its provision of facts towards straighten you out in that context. And so, and again, it's not something like, it's 100%, but it's, it's much more successful than other intervention methods have been, particularly those that are like, uh, realistic. You know, really could be realistically applied. So it's, you know, it's something that, like, I think it's a notable kind of discovery. Now, what I'm going to kick it to you, though, is, and just kind of moving the conversation on is that, so surely nothing could go wrong with this.
[00:12:53] Speaker B: Right?
[00:12:53] Speaker A: Right. I mean, are we, are you, how confident are you?
[00:12:59] Speaker B: No, I thought of, actually, I thought of, like, the concept from the movies, the Matrix films. And remember, like, there was like, I guess the God of that movie, you know, the kind of story was the kind of, I don't know if you call it like, the singularity, right? But, like, whoever created the actual entire, like, landscape of that whole, you know, artificial world and that, and that alternate universe that humans had been living, you know, the thing and where they were really in real world, they were batteries. But, you know, so that was when I started going to that dystopian stuff. Like, wow, I wonder if the wrong person got their hand on chat GPT and they were able to just control all the information output. So in the end, yeah. I mean, even something like computers that we might be able to trust that they can do numbers and binary code and all that stuff without failure and without mistake when it comes to disseminating information, I think we'll always have some sort of suspicion as humans that who's really behind this? What's, you know, the kind of wizard of Oz.
[00:14:00] Speaker A: Yeah, exactly.
[00:14:00] Speaker B: Yeah. And so, and so, but I was gonna make a joke real quick because you were talking about the hurricane thing, because, you know, it's fun, the irony of this trigger response stuff, because you're right. And as you're talking, it makes me realize we just continue to underestimate I think, as humans and in our culture just how much we are driven by emotions, confirmation bias, and how really we are all irrational. But we like to think that we're so logical and rational. And so I started thinking, like, as you're talking about the lies about withholding aid to states like North Carolina, I'm thinking, but the same people pushing these lies, literally one week ago were trying to shut down the federal government.
And had they been successful, nobody would have been getting help because FEMA wouldn't have been operating. So it's just the irony again when you slow it down and start thinking about, oh, yeah, like, you know, these people really care about me or not, or are they just marketing and trying to get people angry. So. But no, I think in continuing our conversation here, one thing is interesting, as you're talking, this trigger response thing as well, I started thinking about one of the parts of the article that really hit me personal because it was about the 911 attacks. And they, and they, and I say hit me personal. I didn't suffer any losses, thankfully there. But in terms of family or friends. But more of, I used to watch those loose change videos 20 years ago and I started believing some of that stuff, you know, I remember the one that had the silhouette of a Boeing 737 on top of the, the hole in the Pentagon and thinking, yeah, that makes sense, that the hole is smaller than the plane, all that. So one of the things that was the chat box dealt with was the 911 was an inside job conspiracy. And it was about the idea that steel, the buildings couldn't collapse because steel only catches fire and melts at a certain temperature. And the temperature of the burning fuel wasn't that hot and all that. And what the chat box did was it inserted between the trigger and response. This information, I'll read it. Steel starts to lose strength and becomes more pliable at temperatures much lower than its melting point, which is around 2500 degrees fahrenheit. And I thought that's a great example of getting in between someone trigger, meaning the government's lying to you. It was an inside job. And the response being, okay, so therefore Bush personally ordered 911 or whatever kind of the conspiracy is. Because I thought the word pliable language is so important. The minute I read that I just thought of a steel beam bending and I was like, oh, of course. You know what I mean?
[00:16:41] Speaker A: It doesn't have to turn to liquidity, correct? It doesn't have to liquefy.
[00:16:45] Speaker B: Yeah. Especially again, because then I can remember where the plane hit the building and it was looked like maybe about 20 stories below the actual top of the building. So I'm thinking, okay, so if you got literally probably thousands of tons of concrete and steel above this hole that was put by the plane, made by the plane, and that steel becomes pliable, of course at some point it's going to fail and collapse. And the fact that that worked, right. That to me is a great example of, an example of just using language to slow people down to say, oh, yeah, think about it doesn't have to melt and liquefy. It just has to become weak enough that it can't sustain all this heavier stuff above it and it'll collapse. Like, okay, that makes sense.
[00:17:28] Speaker A: And then once you have this certain amount of momentum, then you know, it beneath that can't with, you would be able to not withstand it also. I mean, that, that example, though, is one of the things that really illustrates what I was talking about. You know, like the idea that you go from the, okay, the, I have suspicion about the official story to not just, okay, I'm just a skeptic. I think there's more than what we know. To actually, no, no. Actually, I'm sure that it was an inside job and there were all these, there's all these people who know all this stuff about it and didn't do anything about it. It kind of illustrates what I mean as far as the, the application of skepticism, you know, a high level of skepticism on the official story versus a low level or no skepticism on this alternate story because you can still walk away from 911 or Kennedy assassination or Covid origins or whatever with the idea that, hey, I'm not sure that I have the whole story. You know, I think there's more going on and maybe whether somebody's lying to me or whether or not it's not fully understood even in the context of, of the, the COVID issue. Covid origin, you know, like, but I don't have the whole story. But to then take, okay, I'm skeptical of the story I have. And then to go, you know, completely off into, off the reservation into some other alternate explanation that you're not applying scrutiny to and that you're 100% sure about is always the place where the conspiracy piece kind of loses me. But yeah, I think in terms of whether or not this could go wrong, I mean, I, as I may be, the more glass half empty person here, like, I'm happy that this is something that's been developed, but ultimately, what this is talking about is the ability for AI and chat boxes and so forth. To persuade people of things. And persuasion is a very dangerous thing because it can be. And you can imagine that, you know, people with nefarious purposes are reading this stuff, too, and like, oh, this is the best idea ever. Like, to be able to persuade people.
[00:19:25] Speaker B: That's what I'm saying. Yeah, yeah.
[00:19:27] Speaker A: To be control of it. Yeah. Well, and then, you know, like in a decentralized Internet environment, it's going to be out there anyway. We talk about that with the media, you know, with the media system, you know, yes, there is no state television that everybody has to watch. But what that means is that you end up with the situation where people live in different realities and they're siloed into these realities and they just don't hear about, you know, fact checks or they just don't hear about stuff where, oh, this person's slurring his words, you know, and all that. Like it's completely kept from them. And then other people hear about that all the time and it's like, why doesn't everybody talk about this? So the, the idea that this could be used in targeted fashion, people that may be susceptible to this or susceptible to that, it can be something, this could be something that I could see being very dangerous in a society as well. Now, my answer isn't say we shouldn't do it, but I don't think that this is like, okay, everybody, we're done here. You know, like, we'll be able to. Everything, everybody will have happily ever after. Now, I think this will create some solutions to some problems, and then it will create more problems that we'll have to figure out other ways to deal with as well. So, I mean, that's a theme that I bring up a lot of time, is that there's no finish line with any of this stuff. Like, there are people who want to deceive, who want to turn people against each other, make you hate this person, make you hate that person. And those people aren't going to give up if, oh, well, now they're going to be able to unwind a quarter of the people that believe in these conspiracies that help us out. Well, oh, well, we're done here. No, no, they're gonna figure out ways to either turn more people or anything like that. So forces of deception, manipulation, they don't, you know, they don't give up. So this would be a great tool for them as well. So I, I think it, we still have to remain, you know, like, understand that the work continues if, you know, truth and reality are things that you think are important.
[00:21:11] Speaker B: Yeah. And that's. I mean, to kind of. I know we're gonna wrap it up here. That's in the last part of the article. They talk about a little bit of kind of solutions. Like, what could, you know, imagining a little bit, what could these be used for? How could society do it? So I'll read real quick. It says they have considered linking the chat bot in forums where these beliefs are shared, or buying ads that pop up when someone searches a keyword related to a common conspiracy theory.
And so one of the thoughts I had is, okay, so who's going to pay for these ads? Right? Like, so I started thinking, like, so is this going to be another cash grab from the tech industry by, you know, where the government's gonna subsidize more stuff by paying for these ads to keep us all thinking, you know, not. Not getting susceptible to this. But I thought of. So I hope that's not the case that should.
[00:21:57] Speaker A: Well, you could always use the tobacco model. You know, that's back.
[00:22:00] Speaker B: That's where I was going. You already read my mind because I wrote down my notes, big tobacco, because I remember we have commercials because you and I are in Florida just for the audience. So, tobacco free Florida runs ads about anti smoking and educating the public. And my understanding is that that was funded from the big lawsuits, settlements from the 1990s. The billions of dollars that the tobacco industry paid, some of it, they were forced to put into a pool to educate the public about the bad use of smoking or the bad side effects. So I was thinking the same thing. Like, either it's got to be done through something like that, forcing the tech industry itself to somewhat self regulate and pay certain. Pay maybe annual fees into a pool where then a nonprofit like OpenAI can apply this chatbot to certain things in these strategies or their governments. Like, big tobacco is going to have to regulate big tech better, just like it ended up regulating other things that affect society, like alcohol, tobacco, and firearms. That's why we have an ATF division agency. Right.
But, yeah, something's got to be like, there's got to be. Now, how do we do this? How do we implement it? And I think that's the next conversation. The research shows this works. So let's get this thing out there. You know what I mean?
[00:23:15] Speaker A: And the tobacco model is, I think, a good place to. Good thing to bring up, because, I mean, the thing about it is that. And I. This is always, you know, like, it's. It's amazing. Quite amazing, if you think about it. Like tobacco has to, big tobacco has to spend a lot of money that goes towards convincing people not to smoke, and yet they still make money and they still are like, profit. When you sell a, an addictive product, then, yeah, maybe society should have you kick in the money to just to make sure that people are reminded that the product is addictive and not good for you. And so that kind of thought process with social media and the big tech could be applied there as well. Hey, not only has this been shown addictive, it's been shown that you're trying to make it more addictive. And so as you pointed out, historically, what we've seen a lot is that they're like, oh, okay, we'll take out some of these addictive, more addictive features, you know, like the restriction, but it could also be or alternatively, or addition, you know, in addition, or alternatively be, okay, well, now you're going to have to put some money aside in a pot, and we're going to teach people how bad this is for them. You can still do it, but, you know, and that's the nature of a free society. You can still do it, but you at least have to fund the effort to explain to people how bad this is or to explain, to help talk people off the ledge who get addicted and get down these rabbit holes and so forth. You know, the solutions. You know, there are solutions that would help as far as implementation, you know, and we don't have to reinvent the wheel necessarily. But, I mean, I think that ultimately, where we're going in a, from a societal standpoint is just, at least we have a recognition of how harmful this can be, how susceptible people are to manipulation and or just persuasion through these types of tools. And so, therefore, let's. Let's not get caught, you know, with our pants down, so to speak, continuously. Let's at least have efforts going to try to make sure that information isn't just available to people, but we actively make efforts to get people solid information. Or, again, from my standpoint, at least have people apply the same level of skepticism to official stories as they would to unofficial stories that may be very emotionally satisfying to them, which, again, uphill climb. But what the chat box box has proven is that that's not impossible. So. So, yeah, I think we can wrap this topic from there. We'll have another topic here later today. So check that out as well, and we'll see you then.
All right, our second topic today, we're going to take a look at the huge jump in the poverty rate in Argentina. That many have attributed to and, you know, looks to be attributable to the shock therapy in the economy that their new president, president as of within the last year, Javier Millay, and his shock therapy to the economy. And just briefly, background for a while now, Argentina has had runaway, Argentina has had runaway inflation.
The economy has been in a recession. It's been really bad. It's been one of the worst economies in the world. Inflation in the hundreds of percent year on year. It's mind boggling. And obviously, with, with not much without economic growth. So it's not a good setup. And so when Millay came in and it was last December, his shock therapy wanted to cut the government, cut government jobs in subsidies for, like energy and stuff like that, really cut back on government spending and so forth across the board and try to almost squeeze everything down until when things could normalize was at least the theory, you know, very libertarian type of an approach, a lot of austerity, you know, for the population in particular. So some would say predictably. But what now reports that the poverty rate now has jumped over 50% or. Yeah, and, you know, up to 53% now. You know, that was up from, it was high before, 47% before, 42% before. But nonetheless, you know, like that's, I don't know if that's part of the plan or, you know, or what, but it's a huge jump and it's a lot of suffering involved. And so, you know, when you say shock therapy, then you see a lot of suffering. It's like, well, hold on. Is this something that should be, you know, or what's happening here? And so we wanted to take a look at it from the economic standpoint because one, you know, we look in the United States and all people complain our economy is the worst ever and so forth. And there, there are other problems in the world that are going on where things could get a lot worse. One, but then also, two, this also gives an opportunity to discuss some of these economic approaches that we see in various places and whether or not, you know, like when you're faced with crisis, should the government spending be trying to get you out or should you be pulling back on our government spending and try to hope things go to a rock bottom and then can bounce back or so forth. So Tundai, just, I guess, big picture thoughts on the jump in poverty rate and then also just what's happening there from an economic standpoint?
[00:27:55] Speaker B: Yeah, I think, you know, like you said, I think in fairness to this president Millay, he did come in inheriting a disaster. So he's been in the office since December of last year. So under one year, like we do with everyone, right, that's leading something big. You gotta be fair. The guy needs some time and all that. But I do think we are fair to discuss kind of the economic philosophies and kind of concepts that are being espoused by people like him and his government and to look at how they played out so far. So I say all that to say that, yeah, it's interesting, man. I think this is one of those times. I can see, you know, the concept of this horseshoe theory idea where there's, there's a lot of, you know, there's, there's realities in the world, realities in economies, realities of how human beings deal with things like capital and the flow of capital, things like that, right? Regulation. And then I think there's, there's ideas that sound great, but they're a little bit more fantastical. And what I mean by the horseshoe theory is I've always felt once I got old enough and mature enough and really read and understood both communism and libertarianism.
I think they're ideas that for some people kind of sound great and they might look great on paper, but when both have tried to be applied to real world life and humans, neither seems to work well. And I think this is an example of the Javier Malay government and the economic philosophy they have of a libertarian approach that appears at first, maybe there was a little shot in the arm. I saw that there were a lot of glowing reviews by certain libertarian and right leaning economic publications in the first six months of his administration. But it seems like the data has bore out that, like you said, very well, I think there's a lot of pain right now through the austerity measures. And I think that, you know, whether you look at the collectivism of communism or the maybe more individualism of libertarian, both kind of seem to be extremes that do cause pain for a majority of the population. And I think just interesting watching that play out now in Argentina, and it's pretty bad for the people that are there. It was pretty sad.
[00:30:14] Speaker A: Yeah. I mean, and that's, it's the whole thing. It's like, well, what are we doing here? Are we doing economics as an academic exercise? Are we doing economics to try to have some prosperity, you know, amongst the population and so forth? And so if prosperity is this, which you're sacrificing, you know, at least broadly shared prosperity, where, you know, people, many people get to take advantage of the spoils in the society and you're not living in this just extreme wealth inequality place which ends up driving a lot of these problems a lot of the time. But I think you really said it well in terms of just kind of how at the edges, a lot of these, like this purity of thought that people want to have where it's like, hey, you gotta go full socialist past socialist to communism, or you have to be, you know, like government should just completely stay out of it. And we're just gonna do, you know, this other extreme libertarianism, like, none of those have ever been demonstrated to work in terms of providing prosperity amongst a population. You can have a few rich people, you know, in either system, or you can have a situation where nobody has anything, you know, like everybody's poor, you know, and in either situation, but neither have been able to generate, you know, a sustainable, like, broadly shared prosperity. And the contrast, I would say, really that we can look in the United States in the 1930s and forties in terms of an alternate approach, like when the Great Depression hit the United States and FDR tried to bring us out of it.
They didn't go libertarian and austerity and say, hey, look, government's just not doing anything. You know, like government pulls all the way back. You know, they didn't go to that extreme. They also didn't go communist or full socialist, like, oh, governments going to do everything now, you know, the government's going to be in here. Government's going to start making, we're going to take over to car companies, start making cars. Government's going to make tvs. You know, they didn't do that either. They, what they did was, is they took, and it's not necessarily a moderate approach, but they took pieces from different sides of the debate and they took say, okay, hey, we're going to do some government spending, you know, in a keynesian, you know, which you can, we'll put something in there about keynesian economics to, to, we'll have government spending to try to stimulate the economy to get money flowing through the economy again. But we're still going to do this through private companies. We're going to have companies that are profit motive driven. But one of the things also that happened during that time was they took, combined with those to stimulate the economy. They took efforts to redistribute the wealth and not have all the wealth stuck at the top of the economy. Because when all the wealth gets stuck in economy, that creates the stagnation more than anything, because there is no incentive in these capitalist type systems. You need an incentive for the money to be put back down at the bottom in order to flow back up through the top. That's the whole point of capitalism, is that money at the bottom always flows up to the top. That's why you invest capital. So they also, I mean, you had confiscatory taxes of 93% at the top level, you know, when coming up out of that, because they knew they had to get the money unstuck from the top with this great wealth inequality that existed at that time. So you put all that together and you build the biggest middle class in the history of the world, broadly shared prosperity, and, you know, so it can be done. The question is, though, whether people are so invested in certain mindsets, whether or not they could ever get there, because like you pointed out, a lot of times when you get into these crises, people want to look at one extreme or the other and just try to will that into existence with suffering of people being the result.
[00:33:32] Speaker B: No, you're right. I mean, that's, that's the thing is that as far as laughing when you said both systems, libertarian and communism, you'll probably end up with just a few people at the top. And it's true. Even the communist regimes, the people running the regime, usually end up being very rich. Everyone else suffers. And a pure libertarian would be equivalent to some sort of super oligarchy, where you probably have just a few people at the top holding a bag of money and everyone else. One of the things, though, you said some interesting things that got me thinking. I want to continue on this vein, because what I realized in preparing for today, I started thinking about things like the new Deal kind of government spending, and then a term that we've used before, but is not widely used by the public called the velocity of money. And I think that's what you're really alluding to when you're talking about the ability of capital through confiscatory systems like income taxes to get reinvested from the top down into the bottom of the system. And that's really what I mean by the velocity of money. How fast is money moving through a system? And so if you think about it, things like stimulus plans, like ones we've had all our lives, right from George Bush after 911 and the recession there to all the way to now with Biden this year and the CARES act under Trump, what happens is most of the time when people, middle class and lower on the economic system get money, they spend it immediately because they're spending it on food and transportation and housing.
[00:35:01] Speaker A: Goes right back into the economy.
[00:35:02] Speaker B: Yeah, correct.
[00:35:03] Speaker A: And.
[00:35:03] Speaker B: But who benefits from that, right? The grocery stores, the train companies, the airlines that, you know, whatever, right? The home builders, things like that. Who also then benefits long term is then it cycles back to all of us, because most Americans, about 65, 70% of Americans, do have exposures to the stock market, at least via things like 401 ks at work or retirement plans, if they're government employees, through their, through the government system. And all those are invested in these companies stocks. So it's this velocity of money that keeps our economy going. And what happens, what Millay did, which is very interesting, he went on the libertarian model, which we tried in the United States in the 1920s under Woodrow Wilson. And so what happens is, I'll quote from the article that we're pulling from here about Millay. Quote, unlike previous populist governments that kept consumer spending high at the cost of massive budget deficits, Millay dismantled price controls, cost subsidy on energy and transport, and devalued the peso by 54% in December after taking office. My point is that what he did is he slowed the velocity of money by cutting all that stuff, just like what happened with Woodrow Wilson. He decided to slow with the Federal Reserve the velocity of money after the 1929 crashed, you know, here in the United States. So what happened is John Maynard Keynes.
[00:36:29] Speaker A: You're talking about Hoover. That, though, by the way.
[00:36:31] Speaker B: Sorry. Hoover. Sorry. Yeah. Woodrow Wilson was in the ten years before. You're right. Correct. So sorry. That's me getting middle aged here, having my Biden and Trump moment combined.
I pick on all of them. But, but, no, but that's why it's an interesting progression, because you're just picking.
[00:36:50] Speaker A: On the old guys. That's.
[00:36:52] Speaker B: Yeah.
Baby boomers.
Because it was the new deal and the velocity of money that got us out of the Great Depression. And so that's what I mean is we have historical examples of where these things have worked and where they haven't. And to your point, where, where the people that beat up keynesian economics, they're the ones who don't appreciate that we took keynesian economics in America since Ronald Reagan and put it on steroids, which is we just spend government deficit spending in good times and bad times now.
[00:37:25] Speaker A: Well, you don't have discipline. That's taking one of the things from it and just applying it perpetually, which is not necessarily what it's supposed to do.
[00:37:33] Speaker B: We don't have the discipline to rein in the spending. The only time that it happened was in the late nineties when Bill Clinton and the Republican Congress negotiated a budget and we ended up with a surplus by the year 2000. Just to explain what that means, we were in a deficit.
[00:37:48] Speaker A: Yeah, just explain what that means. Under the, with keynesian economics, basically, when the economy's going poorly, it's believed that what you do is use government spending to create velocity of money. The government spends money, and therefore that, that puts money in. People start spending it all the way up the chain. You know, you, you buy a hamburger, people at the restaurant have jobs, they go buy stuff and so forth. You get this engine turning. When things are going poorly, the private sector can't do that. So the public sector will do that. When things are going well, though, the public sector is supposed to pull back and let the private sector just continue to spin along. And so, and that's the discipline is, okay, now we're going to, who's going to be in charge and cut off the spigot when the economy's going well. And I think that when you look at what's happening in Argentina, and I think the Great Depression is a great example for us to kind of draw on. Because if, when you use the austerity, that is what, you know, really drove the, the deepest part of the Great Depression, because that, as you pointed out, that was the first thing they tried here, and there was just, there's no reason for anyone to invest anything when the economy is contracting like that. That's why you need a state to step in and start putting money into it. But the thing about the new Deal and the approach to the government spending that happened in the thirties is that, and even with the military spending, which was a part of that as well, is that that only worked because you had the tax system in place that did not allow all of the money that was being spent to ultimately just pool and stay at the top. It required that money to keep cycling back through. So you had the government spending money, and then on the wealth class, you did not allow them to keep all of it. They could keep some, they could keep some of the spoils, but they couldn't keep all of the spoils. They had to step, they had to send that money back down to the bottom also. So not only did you have the government investing money at the bottom for it to flow up naturally through it as a capitalist system, but you had the, the wealth class. That money was going back down into the bottom, too. So you had all this money flowing up through the economy at all times. And so it was, it was, you know, it that it has been shown to work, you know, always begs the question, well, why don't people do that kind of stuff more? But the reason is, is because for that engine to work, there has to be a level of taxation and other means, basically to prevent the wealth class from accumulating all that money. And the wealth class doesn't like that.
In Argentina, that's not a part of the formula right now, either. Part of the formula that this guy's doing is austerity for all the middle and lower classes, but that's not necessarily applying to the upper classes as well. So there is wealth there, but all the wealth is stagnant. And what I mean by that is that if they see there's no economic activity at the bottom, why would they invest anything? You know, like, it's so.
[00:40:29] Speaker B: You know, that's a great point, James, that it becomes. That's what becomes a spiral downwards and the bottom falls out, literally. And you're right, that's where you end up like Haiti or one of these countries, because that's where the wealth class leaves. And then no one wants to make a new one, or at least their money leaves.
[00:40:46] Speaker A: They invest their money elsewhere. You know, they can. Internationally, they gotta leave.
But.
[00:40:51] Speaker B: But it's just that no one trusts. No one trusts the system anymore, right. And it just kind of slowly collapses. And that ends up being for. It's amazing. Like, I've read about countries like Afghanistan being beautiful, you know, and well run in the 1950s, and then obviously that's no longer the case. So it's sad when this happens because, and just like with Haiti, if a country can't recover from these moments, you're talking generations and people's whole entire lives, they end up, you know, being in this poverty stricken third world existence. And that's what I mean. I think this is the dirty little secret that if you understand this stuff, most people don't, which is those at the top. This is the whole point of divide and conquer, because it's easy, because we're talking about, like you say, in a good way, confiscatory.
You're taking someone's what they value emotionally, which is money and things that they feel they earn, and you're spreading it back out in the system. And when you have a very homogenous society like Switzerland or Japan, it's much harder to make people hate each other and be against each other. When you got these pluralistic societies like the United States or these Europe, some european countries where, you know, people have their tax and then there's benefits giving out to the rest of society, it's much easier to divide people and say, hey, you know what? These people are taking your hard earned money and they're giving it to them over there. And I know you don't like them, so you should listen to me and da da da. And so I started thinking, keep all the money, correct? No, because I started thinking about how many Americans don't realize that our system of this velocity of money and the recycling of it through taxation and all that, and the confiscatory nature actually drives our economy. And this is why our economy is freaking huge and the largest in the world. And how many wealthy Americans have benefited from government spending specifically on them. So I'm thinking of specific examples like Elon Musk, who has had $15 billion of government contracts with SpaceX. That's our tax dollars going to fund his experiments and rockets and all that. And I'm happy for that. Like, it's great that he, as a private sector guy, is allowed to blow up rockets on a launch pad until they work, and now they work. So that's great. I don't hate him for that. But I'm disappointed that he just. He continues to bash the system, which allowed him to be the richest guy in the world. That's what disappoints me about him. But I also thought of things like section eight.
How many Americans do I know right now? It's a lot that are wealthy as real estate owners because they started at some point in the seventies or eighties or even nineties, just buying one little duplex over here and putting section eight people in there and getting. Those people had their rent subsidized by the government. And this private sector person was able to go out and buy another duplex. The next thing you know, the guys got ten after five years. And then he leverages that. And now these guys are really wealthy guys, but they started it through a government subsidy program that came out of the taxpayer. So that's the one thing that disappoints me with a lot of wealthy people that I know personally, because I'm in the financial world, that they just is like the goose that killed the golden egg or, sorry, the goose that laid that golden egg story. They don't appreciate that the America is the goose. This whole system, the government, the government spending all the stuff everyone says they hate, is laying our golden eggs. And it's interesting. The stock market's booming all that, and so many Americans just want to be negative on the economy, yet they got so much money, more money. I'm talking about people upper middle class and higher. I know there's a lot of people hurting, but there's a lot of people on the upper scale of our society today that all they do is complain. And they literally have four or five times more wealth than they did just ten years ago. And that's the part that's sad to me, that we can't see that it's like a big ecosystem, just like nature, that all these things are connected. So, you know, the reason my, my rent?
[00:44:43] Speaker A: No, no. It's the, in this go this for the same reason. Like you pointed out, with the difficulty in Haiti. Like, once in a place like that, trust has been lost in the system, and it's really difficult to get it back once it's lost, because there does, it requires a level of faith to put your money up to then say, okay, hey, there, there's an environment here that if I put my money up, the money will come back. This is how, you know, the american economy is very healthy, by the way, is because people don't have a problem putting their money up knowing it's going to come back. Like, and I say a lot of.
[00:45:12] Speaker B: Times that you're trying to come here.
[00:45:14] Speaker A: Exactly. I say a lot of times, you know, how money flows up in a capitalist system. I mean, and that is inherent in the system. And what I mean by that, basically is that the whole concept of investing capital is to get return on investment. That return on investment is the money flowing up through the system. You put your capital here, you count on it to attract more funds to it. So you put a hundred thousand in, you expect to pull out 110,000 or whatever. You know, your return is, that's a 10% return on investment, whatever, like that is inherent in the system is that if you take capital and invest it in the right places, that you can get a return. And essentially, when you say, when you have faith that that's going to happen, what you end up doing, a lot of times this is where you see, you know, like what you said, like with Musk or whatever, the people, once they pull that return back, they don't want to take that. They want, that's theirs. They won. They don't want to play the game anymore with that. Like, they have that. They'll put up some more money and take another risk with other money. But, and where, that's where the tax system comes in. It says, well, no, no, you pull in. If you're, if you're making x amount of money, you pull in x amount of money, then we're going to say, okay, some of this money then get kicked back to the system and we're gonna, you know, keep the process rolling for everyone. And, I mean, I, people naturally, as you can imagine, just don't like that. And I'm looking at it saying, not that I think that the confiscatory system is overly amazing or fair or anything like that, but it just seems to be necessary for the system to turn over naturally. It seems like when you pull back that then you either need perpetual government spending and borrowing, as we have now, in order to keep the system rolling, or you need some other input, because if you allow the funds to accumulate at the top, they can't cycle through the system anymore. And so you have, you have to figure out more ways, other ways to get money to cycle through the system. Going back to Argentina right now, that's the struggle they're having, is that there's just not a lot of money circulating through the system. They pulled out one spigot. One spigot of the money circulating through the system. It wasn't ideal the way they did it, but was government spending that was, they turned that spigot off, but they didn't turn on any other spigot. You know, they didn't say, okay, yeah, and all these people that they all are 1% of our economy, that's holding 30% of our wealth, you guys are going to, we're going to kick some of that money back in, and that's going to be a spigot. We'll have to input money in, and you guys can invest your remaining capital and try to earn that money back. But ultimately, we're not going to let it just sit up here and, and they didn't do that part. So, you know, like, it seems like they're walking into the abyss at that point. I don't know, at least in terms of looking at history, how they're going to pull that out absent some other, you know, some other intervention. But that being said, all the while you have 50% of the people in poverty. Like, you have so much suffering in the country, and it's like, I end where I started. What are we doing this for? You know, like, what are we doing this for? So that most of the people in a country are just, you know, in dire straits. That seems to be a failure.
[00:48:01] Speaker B: Well, and one of the things I know we want to wrap up here is as you're, as you're saying what you're saying, and now I'm having this arc that's bending towards looking at what's happening right now here in our country, meaning this hurricane Helene that just hit a lot of the kind of east and Sunbelt part of the country just in the recent days. This morning, just as I'm drinking my coffee, I'm looking on my iPad, on my newsfeed at the damage in North Carolina, in Asheville. And it's exactly as you're saying. I'm thinking to myself, who's going to pay for this? Right? I mean, literally, the roads are cut in half because of the flooding was so strong, it basically broke apart the asphalt. And you're right. Think about the joke I just made, which is not a joke, just in jest, but it's true that we had members of our own government, elected officials in Congress and the Senate that tried to advocate shutting down the government last week. And this goes back to your point, in a natural disaster, because we're in Florida, we're a little bit more used to dealing with these disasters. But unfortunately, a lot of Americans, millions who never experienced this type of real severe natural disaster, just got a rude wake up call. And I think, you know, it goes back like I'm thinking of something like the Marshall plane. After World War two, Europe would still be in total ruins if it wasn't for the Americans spending money and creating entities like the World bank and the IMF to also spend money to get these countries rebuilt. And again, that, what is why I go back to the idea of people at the top dividing all of us with this other stuff. Because think about it, we revered ideas like the Marshall plan and say how good they were. Imagine, by the way, that helped, the.
[00:49:48] Speaker A: United States was helped by that as well because that became, of course, that.
[00:49:51] Speaker B: Gave us the large customer. Yes.
[00:49:53] Speaker A: Sold it. We sold tons of stuff there for that.
[00:49:55] Speaker B: You know, bunch of Ford cars, we sold airplanes, all that. You're right. It gave us a good customer. Imagine if part of Kamala Harris's campaign was saying she wants to do a Marshall plan in Africa.
I wonder how this country and a lot of people would react because then someone at her opponent would be able to drive away and say, oh, she really wanted all your tax money going over there. All that. Not saying, hey, let's.
Yeah, exactly. Not saying, let's go create another customer base with another billion humans and, you know, get them to buy stuff from us. And we ceded that to China already. So the, well, that meaning because that's.
[00:50:29] Speaker A: What China is trying.
[00:50:30] Speaker B: That's what I'm saying. That that's what I mean, I'm just saying, we see that the relationship with a lot of african nations, to China, that's common knowledge.
[00:50:37] Speaker A: But China is literally trying to kind.
[00:50:39] Speaker B: Of do what we did.
[00:50:41] Speaker A: Yeah. Try to build up a customer. And honestly, what it is, is to try to build up an alternate customer base so that they're not so dependent on selling stuff to the United States. But, yeah, that's a whole nother podcast.
[00:50:51] Speaker B: Another home. That's another.
[00:50:54] Speaker A: So.
[00:50:54] Speaker B: But that's. That's all I'm saying is that this, the more you just think about it in a rational way, it's like, yeah, the only reason why. I think if people were properly educated, how this type of economics is structured, they may be less apt to believe that the extremes of maybe communism and libertarianism are something even to take seriously.
But the ability for those at the top to divide and conquer is as strong as it's ever been.
Yeah. Yeah. These algorithms are helping them.
[00:51:26] Speaker A: No, I mean, of course we need a chat box. You know, maybe a chat box.
[00:51:30] Speaker B: Yeah, exactly.
[00:51:33] Speaker A: I mean, I think the quote unquote simplicity of those things make are going to always. They're going to have appeal to some people. And because you and I, we may talk about high taxes or whatever, but nowhere are we talking about something where everybody's supposed to have the same amount of money or anything like that. Like the winners should. Should do better than the people who didn't win, so to speak. The question is, if you didn't win.
[00:51:54] Speaker B: I'll just be honest, James. I want to win with no work and no competition. So, I mean, I appreciate that you're such a magnanimous, stand up guy that you want to compete and all that.
[00:52:03] Speaker A: Well, I just, you know, if we have a system that works, then I think that gets everybody's best effort, that.
[00:52:09] Speaker B: You don't want to become president and just raid the treasury and say, it's all mine. Now that the Supreme Court. Think about this, though. I just realized, Supreme Court gave immunity to presidents, right? So now if I run and I become president, and I just show up the treasury secretary and say, write me a check for a trillion dollars right now, and I put a gun to his head, that's not a crime, is it?
[00:52:28] Speaker A: No, no, it's the crime if you do it, but it's not a crime if you have a marine.
[00:52:32] Speaker B: The Navy Seal.
[00:52:34] Speaker A: Okay, so then you're just executing your duty.
[00:52:37] Speaker B: I'll get this. Secret Service. We got it. Are you sure? Okay, so it's over.
[00:52:41] Speaker A: You got to close the stop it go. We've gone completely off the reservation at this point.
[00:52:44] Speaker B: That's the next job.
[00:52:47] Speaker A: But now we appreciate everybody for joining us on this episode of call. Like I said, subscribe to the podcast, rate it, review it, tell us what you think. Send it to a friend. Till next time. I'm James Keys.
[00:52:55] Speaker B: I'm tunde one. Lana.
[00:52:57] Speaker A: And we'll see you next time.
