Announcer: Please note disclaimers at end of show. Welcome to Creating Wealth with Jason Hartman. During this program, Jason is going to tell you some really exciting things that you probably haven’t thought of before and a new slant on investing, fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible.

Jason is a genuine self-made multimillionaire, who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it. And now, here’s your host, Jason Hartman, with the Complete Solution for Real Estate Investors™.

Jason Hartman: Good day and welcome to Creating Wealth Show No. 127. This is your host, Jason Hartman and I thank you very much for joining us today from 26 countries worldwide. We’re glad to have you.

Today, we have an interesting show for you. We’re going to start off with some affirmations. How’s that for new age? We’ve never done anything like that before. Just thought I’d do something a little different today.

Two things that have been very instrumental in my success in life and the successes of many other people, written about by Napoleon Hill, who’s the author of Think and Grow Rich, and written about by Scripture and things from antiquity a long time ago, are the power of the mind and most especially the subconscious mind, the power of two things: affirmations and guided visualizations. Both of those things that can create a mental framework for us to become more successful in life by basically programming our mind to bring us what it is we want to achieve. So we’ve designed a small set of affirmations for investors and just wanted to give you a little sample. We have a lot more to it than this, but here’s just a little sample of them that we’ll play for you in a moment. We had it all professionally voiced.

And then we’ll have the second half of John Stapleford, who is with Moody’s Economy.com. You heard him two shows ago, I believe it was, and he talked about some interesting things in terms of statistics and how to read them and understand them, and various real estate markets across the nation, and so forth. So a lot of good stuff coming up there.

Now, before we go to the content of today’s show, I want to tell you that the next couple of shows we have a lot coming up for you. On the next show, we have an expert on student housing. She is the author of a book called University Wealth. I think you’ll find that particularly interesting. And we’re going to have some information on our Columbia market, our student housing market on that show, No. 128. Show No. 129, I interviewed internet and social media marketing guru, Shane Gibson, who is quite renowned in that field, and I think you’ll like what he has to say on Show No. 129. We have a surprise for Show No. 130, our “zero” show, every tenth show where we do something a little different.

And 131, I sat down with John Burns of John Burns Real Estate Consulting the other day, and we talked about some really interesting stuff, about trends around the country. And boy, 132 and 133 are looking really interesting, too, but I don’t spoil the surprise. I’ll tell you about those shows later.

Remember to join us on November 14 for our Creating Wealth in Today’s Economy Bootcamp. Register for that at www.JasonHartman.com and click on Events. And by the way, on our website at JasonHartman.com, we have some new products up there that you might really want to take advantage of. Just look in our store and we are adding a whole bunch of stuff there. If you are an Amazon.com customer, we have published a few new books on Amazon.com. Just search Jason Hartman in there. And also, for the Amazon.com Kindle. I love my Kindle. If you’re using one of those, it’s a really cool device. And also on Lulu.com, our books are on there as well. So you can get them on our website or on those sites, and we just wanted you to know about those as well for background and details and supporting material, visual aids, and so forth, in terms of your investment and business success.

I want to say thank you very much to Travis, our client, who owns a company called Nutrishop, who sent me some fantastic protein supplements. And I don’t know if you have this going on in your life, too, but I get busy and when I get really busy, I skip meals, I postpone meals, and that’s not very healthy. My diet kind of goes down the tubes as I’m running around and doing things, and I just love to work so much that sometimes I kind of forget to do that. I have really benefitted from supplementing my diet with protein supplements. I keep one of these protein powders that Travis sent over in the office. I keep one at home. And it just makes sure I get some extra nutrition in my diet, and I have to tell you, these things are darn good. Check out his website at NutrishopUSA.com. Again, thank you so much for sending those, Travis; I really appreciate it. And get some more investment properties.

Also, last thing; if you are not in our coaching program, be sure to take advantage of it. We have two coaching programs and one of them has two different tracks. What do I mean by that? Well, first of all, of course, we have our investment, finance, and real estate coaching program that I’ve talked to you about before, and we have that in two formats now. We have a private coaching program and a group-coaching program, depending on what your budget entails.

And then we have another side of our private coaching program and that is the program that helps you build what we call a “PME.” That is a Personal Media Empire. If you’re interested in building a Personal Media Empire, which means getting your logo together for your business – a lot of you I know have side businesses. If you’re interested in really hitting social media hard – Twitter, Facebook, LinkedIn – if you’re interested in podcasting like we do, we’ve been very fortunate to be very successful with the podcasting, and if you’re interested in doing that for your own business, or any part of your own life – it could even be your family, it could be political, it could be charity oriented, whatever. Mostly, it’s business oriented.

If you’re interested in blogging and maximizing and optimizing your blogging, whether it be video blogging, audio blogging, or text blogging, if you’re interested in creation and launch of email campaigns and management of them, and doing drip campaigns, and all of this great new marketing that really I’ve done in my business for many, many years, and it’s been very successful for me – if you’re interested in any of this stuff, we are coaching on that, too.

Several of our listeners asked us, saying, “Jason, I want to do what you’re doing for my business.” Well, if you want to, we can help you with that. We thought why not offer that as an additional thing to help people with, so that is available to you. Just inquire. Give us a call at (714) 820-4200, or JasonHartman.com, and we’ll be glad to tell you more about that.

Let’s go to these affirmations. Now, I know this is a little odd for us. We have about ten minutes here that I’m going to play for you of just some affirmations that are applicable to investors. Now, these are each repeated twice because you need to hear them two times. They have some music background to them, and I know some of you may think, “What’s Jason doing with these affirmations? This is hokey. Or this is too New Age.” Folks, it’s not. This is important. You will start, after you listen to these repeatedly, you will start to ingrain these into your subconscious mind and they will make you a better, more successful investor. So take advantage of that.

Years and years ago, I used to listen to affirmations constantly to help me get ahead in business, and then when a situation came up for me, I was already armed with the way to handle it because I had programmed my subconscious mind through the use of affirmations and guided visualizations. We will probably share with you one of our new guided visualizations on a future show. Here are the affirmations, and then we will have Part 2 of the interview with Moody’s Economy.com, John Stapleford. Here we go.

Jason’s Affirmations for Investment Success

  • I grow more wealthy every day.
  • I make the time and effort to become an educated investor.
  • I actively seek the advice of a professional investment counselor, who practices what they preach.
  • I am making investments where I am directly in control.
  • I like being a direct investor, where the profits go to me rather than an investment manager.
  • I make the decisions for my investments because they are controlled by me, rather than an investment manager with conflicting interests.
  • I am using proven, prudent financial planning techniques for my investments to optimize my returns and limit my risk.
  • I invest in diverse geographic markets to limit my risk and increase my opportunity for gain. I agree with the old saying, “All real estate is local.”
  • I am area agnostic and I seek the best opportunity without regard to its location.
  • I make use of borrowing and leverage to accelerate my wealth creation and reduce my risk.
  • I prudently use borrowed capital to increase my returns, while limiting my risk.
  • I understand the difference between real and paper investments, and choose to focus on real investments that produce real value.
  • I invest in housing because it is universally needed by all people.
  • I understand that the largest single expense for most people is tax, and I am reducing my tax burden to the legal minimum by investing in tax-favored, income property assets.
  • I understand that I am responsible for my own financial future.
  • I am free from dependence on politicians or fund managers for my financial well-being.
  • I am a direct investor because I value control over my financial future.
  • I am continually improving my level of financial education through study and coaching with a professional investment counselor.
  • I am acting decisively to build my financial future.
  • I actively invest in income property because it is historically proven, with a long-term track record of success for millions of people.
  • I am free from the compulsion to gamble with my investments for quick profits.
  • I am willing to delay gratification for my greater long-term financial freedom.
  • I seek the advice of an experienced professional investment counselor, but still make all of my own decisions.
  • I invest in real, tangible assets that satisfy universal needs.
  • I am investing in my education by attending informative events, subscribing to the right publications, and coaching with trained professionals, who have been there and done that.
  • I am happy to spend money on quality education and coaching because I know it is far less expensive than making real life mistakes.
  • I am free from the desire to follow the crowd and invest the same way as everybody else. I realize that exceptional people follow the prudent path, which is not necessarily the popular path.
  • I accelerate my wealth building by refinancing my properties to generate tax-free income and tax-free investment capital.
  • I understand that prudent borrowing to finance my investments not only increases my return on investment, but also reduces my risk because the bank becomes my silent partner.
  • I am shielding myself from inflation through the use of prudent, long-term, fixed-rate debt.
  • I am focused on the decisions that I make and the things that I can influence.
  • I am free from worry about things that are beyond my control.
  • I understand that diversification means more than owning different kinds of paper assets.

Interview with John Stapleford Part 2

Jason Hartman: Kind of wrap up on the real estate market, if you would, and I want to talk about your latest book. What are your thoughts on any particularly more attractive markets? I know there are a lot of unattractive markets for sure. You were talking about migration flows and so forth.

John Stapleford: First of all, it’s going to be a long crawl back for regional housing prices, and the prices will still decline through most of 2010 and then we’ll turn around and start to rebound. But the rebound will take a good long while. Probably by 2010, the decline in prices across the United States will have been around 40 percent. As of right now, it’s around 25 percent.

Jason Hartman: Yeah, and I kind of personally see California declining about another 10 percent or so. Where do you think those declines will be worst? Will they be in the expensive markets? Will they be in the over-speculated markets?

John Stapleford: You had mentioned them before, that California, Florida, New York, Nevada, Arizona, those are the worst. The most modest declines have been kind of in the energy belt, as you go up the Rocky Mountains. And so you’re talking about Texas and Oklahoma and the Dakotas and Montana. And actually, Louisiana. They have energy that can give them an economy that’s kind of counter to what’s going on. Actually, the Northeast, like New York, there was a lot of aggressive speculation, and Massachusetts. But Pennsylvania wasn’t that bad and Ohio wasn’t that bad; West Virginia wasn’t that bad.

So the downturn in those states is more modest, and so the recovery should be a little quicker. Overall, we think the last to climb out will be Florida, Arizona, and Nevada, where they had the most aggressive speculative lending. New York has been hit by the whole financial industry bust, although even that – you had mentioned this earlier and it was a really good point – that’s more been in terms of wages than it has employment, that the number of jobs in the financial industry, the loss there, is nowhere close to the loss of wages and compensation.

California, the fact that you started in so early into this decline, we think it means that, in fact, the downturn is going to play out relatively swiftly. You’re already well into the foreclosure process. And when you look at income trends and you look at how much the prices have fallen, in fact, a lot of the housing is undervalued.

The areas of the country, besides the Northeast being stable, Pennsylvania, Washington, Oregon, Utah. They have relatively good economies. The areas that have faired the best have been Texas, maybe Oklahoma, and New Hampshire actually, which is interesting.

Jason Hartman: That’s kind of an oddball in there.

John Stapleford: Well, yeah, and they’re an oddball in the whole Northeast, but they have the lowest state and local tax burden in the United States and Texas is not far behind. And Texas, of course, has the severance tax on oil to prop them up and keep taxes low, and they have probably the most free market set of government regulations in those two states. So their economies have not taken as big a hit and their housing market is going to come out, we think, a little faster.

So it’s definitely, as you had started out saying, it’s very location specific and it depends on the factors in that conceptual framework that we talked about. But things are starting to turn and housing prices are starting to go up because there are so many bargains out there that there are people who are willing to consider buying. Not at the high end, of course.

Jason Hartman: At the bread and butter end. One thing that you didn’t mention, two states, is the Mid-Atlantic area, the Carolinas, North and South. Any thoughts on those?

John Stapleford: Again, that could be sort of location specific because South Carolina, not bad; North Carolina worse than South Carolina. Overall, it’s not as bad as the nation. Now, Charlotte, of course, right now, a disaster because of –

Jason Hartman: Due to banking.

John Stapleford: — banking, Wachovia and the financial services. And again, it’s that conceptual framework. When you stand back and you look at this state, the growth in the United States, the metropolitan areas that have been growing over the last 25 years have been metropolitan areas with higher temperatures. You look at North Carolina and South Carolina. Do they have high quality of life in terms of temperature, air quality, relatively low cost of land because most of the state is undeveloped? Yeah, they do. And so, over the long haul, do they have some real competitive advantages? Yes. And with air conditioning and telecommunications and so forth, you can locate your corporate headquarters there and you’ll be hardly disadvantaged.
So in looking at those two states, South Carolina is doing better than North Carolina. Neither one of them has had the peak, the trough decline that we’ve had throughout most of the nation.

Jason Hartman: I’m sort of surprised. We’re getting kind of interested in Phoenix again and we haven’t looked at that market for about four years. I think our timing was pretty good. But when prices have been cut in half, it’s cheaper to own a house in Phoenix than it is to rent it, for the same house. It seems like Phoenix is getting pretty interesting. Am I wrong on that?

John Stapleford: I guess the question in my mind with regard to Phoenix is their growth rate going to be positive, but at a decreasing rate. And I say that because they’ve grown so rapidly that I think they’re going to hit that minor brick wall – I don’t know if it’s minor or not – but that brick wall that fast-growing areas do, which is congestion, crowded labor market, rising prices on everything, higher levels of inflation. They have a cost of living that’s about 9 percent above the nation, and part of that is just because they were growing so quickly. The cost of doing business is not bad, but their housing – they’re overbuilt, so it’s going to take a while for the inventory to go down. They have the concentration, of course, in aerospace and that industry has kind of leveled off. They do have a lot of computer and electronics manufacturing, but that has actually been in decline.

They have a mortgage delinquency rate that’s higher than the nation that will have to be worked out, so I’m sure they have some mortgage resets that are still coming. Yeah, they have been a high performing, growth metropolitan area, but I think they’ve taken a larger hit than most areas of the country, and right now, the same things are happening other places, where half these places are starting to cause a turnaround in housing sales. But will it lead to housing permits quickly. I don’t think so. With the low cost of doing business, they still are going to be attracted to businesses in Southern California.

So our outlook for Phoenix is bad over the longer haul. The entrenched tech industries and the solid demographic trends will drive above average growth, but it won’t be the boom growth that you had from the last recession to the current recession. It won’t be at that level. It will be more in line with the growth rates overall in the United States.

Jason Hartman: One of the things we talked about on this show – and I know we’re going a bit long here. I do want to get in some stuff about your book and maybe we can have you back on to talk about it in detail because it’s so interesting. But one of the things, when you look at governmental policy, I heard just last week that Arizona passed a new bill. The attempt is to disincentivize foreclosures and make people hang on to their properties now that they’ve gotten much cheaper. And they’ve done something with deficiencies, saying that if you go into foreclosure, and of course, there’s going to be a big deficiency probably, the lender can go after you. I think they made it easier for the lender. I know they can do it in multiple states, judicial foreclosures and so forth.
It was just kind of an interesting point I wanted to bring up that may stem the tide of foreclosures a little bit there. I’m not sure.

John Stapleford: We’re seeing the peak net in-migration to Phoenix was – the population of Phoenix is like 4.3 million, and in 2006, they had net in-migration of around 124,000. They’re running right now around 39,000 net-in for 2009. So we see that net in-migration picking back up for all kinds of reasons, including retirees and including the businesses moving from Southern California. So when you look at that, you say okay, in this area, net in-migration is going to pick up, which is going to continue to drive the demand for housing. For a lender, it really would make sense to hold onto a property, as opposed to just bail out completely on the property. So what they’re trying to do may, in fact, make sense even from the self-interest standpoint of the people who hold the mortgages.

Jason Hartman: Okay. Let’s talk about your book for a moment here. This is an interesting book. Your latest book is entitled Bulls, Bears, and Golden Calves: Applying Christian Ethics in Economics. And you really mention some pretty interesting things here, just looking at one of your editorial reviews about how ethics are intertwined with economic and life analysis. The Possibility and Perils of Economic Growth, The Role of Government; we’ve touched on some of these things. The Growth of Work and the Loss of Leisure, Lending and Borrowing, Poverty and Distributive Justice, Environmental Stewardship, Business and Social Responsibility, Legalized Gambling; the Pornography Industry; Debt Relief for Less Developed Countries, Economics of Immigration, and Population Control.

That’s a lot. There’s a lot in there. Tell us about the book.

John Stapleford: When you go back to Adam Smith and he actually wrote two books and the first one was sort of a philosophy book, and then he wrote Wealth of Nations.

Jason Hartman: The famous one.

John Stapleford: The famous one. In his first book, The Theory of Moral Sentiments, he actually said when people come before God, they’re going to have a tough time because most of us don’t live lives that are all that commendable. And that’s the basis for him going on to say that not all people, but most people act in a self-interested way, which is a Judeo-Christian foundational element as well, that people are fallen.

Well, Adam Smith said, well, okay, given that, how do you turn that so people won’t destroy each other, and in fact, you can promote social welfare? You need to promote the social good given that reality of self-interested behavior. He said the first thing is competition. The only reason that 7/11 doesn’t charge you $40 for a Slurpee is because there are other 7/11’s and there are other places like Dunkin’ Donuts now that give you something similar to a Slurpee. In other words, competition forces prices down. So that’s No. 1.

No. 2, you have a judiciary system that enforces contracts and kind of holds down abusive behavior. No. 3, you have private property rights, which is an incentive for people to be good stewards of their resources. So you have this combination of things that will work, that steer self-interested behavior into a way that in fact is positive for society.

But he also said you have to have some degree of moral consensus. The court system can’t do it all and competition can’t do it all. If people don’t agree that child pornography is a bad thing, you’re going to destroy your society. So he recognizes there’s a need for some agreement on basic values, like honesty. If you don’t have some amount of moral consensus, transaction costs go sky high. Even though the courts will enforce the contract, it takes two or three years. In developing countries, you can’t get a contract enforced because the courts are weak and they’re also corrupt.
So if you don’t have some amount of moral consensus, nobody is going to trust anybody and it’s very hard for an economy to function, particularly a market economy.

So, taking a step further, our thing says God set things up in such a way that free markets and economies will function more efficiently if in fact people recognize natural law, recognize God’s law. That was one of the compelling questions is: Is, in fact, our free market ethic more viable in the context of Judeo-Christian ethics?

Jason Hartman: I would say they are, certainly, because if you can’t trust the other party, it’s just too hard to hold them accountable. I always say the end result is the legal system. That’s the last step anybody ever wants to take. God forbid you have to do it sometimes, but it’s never profitable.

John Stapleford: Well, it does profit the lawyers, Jason.

Jason Hartman: Well, yeah, but I’m not looking to profit the lawyers. I’m looking to profit myself, see, the invisible hand of self-interest. What is the alternative, though? Are you comparing it to countries where people have less of an ethical context by which they govern their interactions just on an individual level, and like you mentioned before, a court system, a legal system that isn’t transparent. It’s more corrupt, inaccessible in many countries.

John Stapleford: Right. The Judeo-Christian is that God’s laws have been revealed to everyone. So everyone, down deep in their heart, realizes that cheating and taking advantage of other people are really against God’s will. Now, the Judeo-Christian ethic also says the longer you violate God’s will, those natural laws, the easier it becomes. You can get hardened.

Jason Hartman: Like a moral relativism sort of evolves within an individual.

John Stapleford: The interesting thing in developing countries with regards to corruption is that in developing countries, where you have a better flow of information, there is less corruption. In developing countries where you have more newspapers, where you have more landline phones, where you have more cell phones, where you have more internet connections, in fact, the level of corruption goes down. Corruption is measured is by – there’s a Corruption Perception Index put out by Transparency International. And this is statistically significant. I’ve looked at it.

So what does that say? It says once somebody can find out that you’re being corrupt, you’re less likely to be corrupt. It also confirms Adam Smith because, for example, now with cell phones, people leave the coast of India from these towns and villages, they go out in their wooden boats, and they catch fish. They used to come back into the fish market and they would take whatever price they were offered. Now, they catch the fish, they get on their cell phones and they call four or five fish markets, and they find out what price they can get for this, that, and the other, and that’s where they go.

So part of this increased communications is breaking down bottlenecks and monopolies and oligopolies, but part of, too, is just putting the light of day on practices that people feel pretty embarrassed about once they’re caught. I’m sure Madoff isn’t delighted about what he’s done with his life now that he’s been caught. That is the tie-in. In countries like Venezuela, where it’s a totally centralized power and resources are allocated on the basis of whom Chavez likes and he doesn’t like. The economy breaks down. They’ve got the worst economy in Latin America. They’re actually starting to approach the African economy in terms of their standard of living. A coercive system like that just doesn’t function as well as a system where people are given freedom and freedom of choice.

And the interesting thing is, Jason, when you go back to the Garden of Eden, in the Garden of Eden, God gave men and women free choice. In the book, you’re looking again and again at how well do these Judeo-Christian ethics function, and particularly with regards to different market activity.

Jason Hartman: That’s a fascinating topic to take on. Few economists have approached it from that angle I would have to say, at least not that I know of. One of the things that’s interesting about the communication aspect, shining light on people committing bad deeds. You look at the internet and you look at something like eBay, which I think is really ingenious, and so many other websites are using that type of model. You look at Amazon.com. I can go on Amazon.com. I look up your book. If it’s a piece of junk, I’m going to look at the reviews, knowing in looking at the reviews of a seller on eBay or a publisher of a book that some of the reviews will be fake. Take everything with a grain of salt. You go online and you look at websites like Ripoff Report. Everybody has some unhappy client out there somewhere or a competitor, who is making false statements about them.
But by and large, I think as long as people are intelligent and they try to kind of sort in their own mind the wheat from the chaff, these things are great tools, aren’t they?

John Stapleford: Well, Jason, I especially appreciate the investigative reporting.

Jason Hartman: John Stossel.

John Stapleford: And when Dan Rather came out with his condemnation of George Bush and these documents, within 15 minutes, the bloggers said, oh, these are off of typewriters that didn’t exist at the time these documents were written.

Jason Hartman: I know. That was great.

John Stapleford: Bang and it just blew away the whole thing. And last night, they came out with, in fact, the information of Mary Mapes. The producer actually knew that George Bush had volunteered for Vietnam in 1970. But the point is that, as you were saying with the internet, so many people can quickly look at something, and it doesn’t matter whether it’s conservative or liberal. There was something about Obama having a press conference at town hall in Bozeman, Montana, that we thought that really was very, very critical of the President. And my wife looked it up. She couldn’t find it in the Bozeman papers. She went to a number of these sites, like Urban Legend-type sites, and they said, yeah, this may be a little bit hokey.

It’s terrific that the information exchange is so quick. But as you say, you have to be cautious. Take everything initially with a grain of salt. Don’t overreact to it. Back it up by looking at multiple sources of information.

But yeah, the information is reducing the amount of discrimination, reducing the amount of oppression. Even what went on in Iran during this last election.

Jason Hartman: Twitter could have saved the country. Unfortunately, it didn’t quite work out, but it was great to have it there.

John Stapleford: It didn’t quite work out, but the whole world knows now that this is a sham; this government in Iran is a sham. So it really is terrific. And then you ask the question in the case of Iran, do they realize that disadvantaging women is really not something that’s in accordance with God? I think they do because they’re so defensive about it. And the more the word leaks out that they’re beating the heck out of their wives –

Jason Hartman: The stonings and all this crazy stuff.

John Stapleford: All this stuff, yeah – the more embarrassed they become and the more likely that things will change in a positive direction.

Jason Hartman: Yeah, that’s the great hope for humanity is economic and informational freedom could really solve many of the world’s problems.

John Stapleford: Many of the economists, particularly Milton Friedman and his wife, they always felt that economic freedom was essential for political freedom. You just couldn’t have one without the other.

Jason Hartman: And that’s why I am very much in favor of a smaller government. It just seems like everything the government gets into it just mucks up through bureaucratic stupidity or corruption or some unintended consequence. I just think the whole thing is just make the government smaller. We all have our complaints about it. Make it do the basics to protect our freedoms, to provide the basic foundational things the founding fathers wanted to provide, and not get into all of these other things. Every time something like that is done, like this healthcare debate that’s raging on right now, I don’t know – let’s just look at the healthcare in the VA hospitals. Let’s look at the efficiency level at the Department of Motor Vehicles. Let’s look at the management of our Social Security system. No one would look at those as good examples.

John Stapleford: You’re absolutely right, Jason, and this argument goes back further than Adam Smith, but there are certain functions, like roads and stop signs and national defense and bridges that in fact require some amount of liberty be given over to government, and there’s no question of that. Has it gotten out of hand? Oh, my God, yes. You’re absolutely right that it has gotten out of hand. And the only thing you can think of doing that’s effective is just reducing the size of the whole thing, rather than arguing over the merits of this or that.

Jason Hartman: Of this or that – just make it small.

John Stapleford: Just reduce the size of the whole thing and that’s the only way to get back to some common sense.

Jason Hartman: The power grabs and the corruption, they’ll still be there. They’ll just be smaller and they’ll have less impact. And that’s why you just make the government smaller. You solve a million problems.

John Stapleford: You may have seen the – I think it’s on YouTube – on the John Murtha Airport?

Jason Hartman: No.

John Stapleford: The John Murtha Airport, which is near Johnstown in the middle of Pennsylvania, and $150 million has been put into it. They just got stimulus money to repair a runway. They have one runway that will accommodate any plane in the world it’s so big. They have three flights a day out of there. All three are to Washington, DC. Each one subsidizes the passengers’ tickets; it’s a $100 per ticket. They probably have 20 passengers a day.

Jason Hartman: Wow, it’s another Amtrak.

John Stapleford: Would a market economy have put an airport there? And the people who live there, they interviewed them – “Oh, I love it. No parking problems; the drinks are free.”

Jason Hartman: Oh, sure you do. There are 20 people on the plane. Yeah, it’s great.

John Stapleford: But that’s what comes when you have coercive power and resources coming out of a centralized source. You get crazy things like that. And for every John Murtha, I’m sure there’s somebody in Congress who’s a wonderful person and a forthright person. But once you centralize power like that and let somebody be able to grab money like that, you’re going to have somebody who’s not a good egg.

Jason Hartman: No question about it. The central planning has never worked. It doesn’t work anywhere on the planet. It hasn’t worked anywhere in history. There’s no example of success that any of the proponents of it can give. When you ask them that, they can’t come up with an example.

John Stapleford: And my feeling is there are economists who are very, very much in favor of the stimulus package, and who, in fact, favor another stimulus. And to me, in talking to them, what they didn’t get is that you are going to lose freedom and liberty when government gets larger. And that’s going to dampen innovation and entrepreneurship. In other words, they didn’t understand the political economy, the whole thing. They just said, oh, there’s a government multiplier, and if government chucks a couple trillion dollars out there, we’re going to get a multiplier of 1.8 or whatever it might be. But you obviously grasp that and I think what’s showing up in these town hall meetings, the frustration is people see their lives being diminished because government is getting bigger.

Jason Hartman: Well, that leads me to my last question for you, and I think, of course, it stifles innovation and entrepreneurship and all of this stuff you just mentioned. It also, I think, has a devastating effect on the value of money and I see a lot of inflation coming down the pike, maybe 18 months, two years away. I think we’re going to start seeing it. What do you think?

John Stapleford: I agree with you. We’re not in the majority. There is a minority in the Federal Reserve and there is a minority in the Congress who agree with you as well. But I’m in your camp.

Jason Hartman: What is that going to look like for people when inflation hits?

John Stapleford: I think we’re going to have a Jimmy Carter economy because we already know that it’s going to take about four years – it’s going to take until 2014 for the national unemployment rate to get back down to between 5 and 6 percent. So in 2010 – 2011, we already know we’re going to have high unemployment, 8 – 9 percent, and I think we’re going to have rising prices for the reasons we talked about before and just as you think we’re going to have, and that’s the Jimmy Carter economy giving us back inflation.

Jason Hartman: I agree. So investors need to concentrate on protecting themselves from inflation. We talk a lot about that on the show. We won’t bother getting into it now because I have kept you way too long. You are very interesting, John.

John Stapleford: It was fun. And it was fun talking to you. You really have a great deal of knowledge about a lot of things in regards to economics, so I think your listeners do well by tuning in to hear you. I don’t know about your guests.

Jason Hartman: Well, I love my guests, too, and John, thank you so much for joining us today. It’s been very enlightening. Bull, Bears, and Golden Calves available on Amazon.com and I assume at all the major bookstores, right?

John Stapleford: Right and it’s actually on Kindle.

Jason Hartman: Oh, yes, I have my Kindle and I love my Kindle.

John Stapleford: And for those people who are interested, there’s actually an edition of it that’s in Korean.

Jason Hartman: Well, fantastic. So for our Korean listeners –

John Stapleford: Don’t ask me why. When I have to send a free copy to people, I send them the Korean one.

Jason Hartman: Oh, well, you sent me the real one, so I appreciate it. Or the English version, I should say. What other websites would you like to give out? Of course, Economy.com, I’m sure?

John Stapleford: People are so internet savvy that I don’t have any. Economy.com for people who are really interested in staying on top of what’s going on in the national level and then if they want to at the state or local level, Economy.com, our Dismal Scientist website is, I think, just terrific. I enjoy it myself.

Jason Hartman: And that’s how we found you because I saw you quoted somewhere representing Economy.com, and I’m glad I had you on the show. Well, John, thank you so much for joining us today. I really appreciate it and we’ll let you go. Thanks for staying long.

John Stapleford: Okay, Jason, take care. Have a good day.

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End of Audio

Duration: 47 minutes