Announcer: Welcome to Creating Wealth with Jason Hartman, President of Platinum Properties Investor Network in Costa Mesa, California.  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: Welcome to another edition of Creating Wealth.  This is Show No. 92 and this is your host, Jason Hartman, and have I got a treat for you today.  It is my pleasure to interview Patrick J. Buchanan.  Of course, you probably know who that is – love him or hate him.  It would be hard to argue that he his not a brilliant man, very insightful person.

I first met Pat Buchanan back in about 1999 I guess it was when he came to my house and we did a little fundraiser for him.  I volunteered my house in Newport Coast as a friend of mine was working on his campaign.  I took a little bit of flack for that.  Some people, as I say, love him and some people are definitely his detractors.

I would say he’s too honest to be elected, but he is a very, very insightful person.  He’s written ten books.  He’s been an advisor to three presidents, a two-time candidate for the Republican presidential nomination, and in 2000, he was the nominee for the Reform Party.

He’s on the Creating Wealth Show today.  Of course, you’ve probably seen his writings and so forth out there, whether it be A Republic, Not an Empire, The Death of the West, or Where the Right Went Wrong, State of Emergency, A Day of Reckoning, and Churchill, Hitler, and the Unnecessary War.  I believe that’s his last book.

He has a lot of knowledge and insight, and I think what you’ll really find interesting is how inline our investment philosophy is.  In fact, it was great to hear him and you will hear in the interview where Mr. Buchanan says that “debt floats away on a sea of inflation.”  Boy, if that isn’t an insightful thing, I don’t know what is.

He also talks about gold price manipulation and addresses that a little bit.  He talks about the Laffer Curve.  Now, Arthur Laffer, as you may know, was advisor to President Reagan, and I actually met Arthur Laffer back in 1989.  I was at a convention of sorts at the Phoenician, developed by Charles Keating.  Remember him, Lincoln Savings and Loan?  And it’s a gorgeous hotel in Scottsdale, Arizona.  Arthur Laffer was speaking there and afterwards they had a little reception.  I got to meet Arthur Laffer.

And he, of course, coined the term the Laffer Curve and Mr. Buchanan talks about that in the interview, illustrates the idea of how tax increases – and this was sort of the Reagan philosophy – how taxation and when taxation is increased, it doesn’t necessarily increase tax revenue.  In fact, many times, it suppresses economic activity, and I would actually argue that 100 percent of the time, ultimately, it suppresses economic activity.  And tax revenue is actually decreased when taxes are increased because there is less activity, less hiring, and less stimulation of the economy.

So without further ado, let’s just go to the interview.  I’ll keep it short today.  We have a lot of great shows coming up, though.  The next show I think you’ll love.  We’re going to talk about the Mississippi SRAP, Small Rental Assistance Program, and a phenomenal opportunity for investors.  We’ll talk about Go Zone.  We have a whole bunch of experts on a whole bunch of different topics, so we’ll get these shows out to you as quickly as possible.  Please join me in listening in to Patrick J. Buchanan.  Here’s the interview.

Interview with Patrick J. Buchanan

Jason Hartman: It’s my pleasure to welcome Pat Buchanan to the show.  As you well know, Pat Buchanan is a scholar, an author, and a political expert, and it’s just great to talk to him.  Thank you for taking the time.  We appreciate it.

Patrick Buchanan: Thank you, Jason.  Delighted to be here.

Jason Hartman: Tell us what your take is on the current state of affairs, especially in the financial world.  It’s a crazy time we’re living in, no doubt.

Patrick Buchanan: I think the fact that we’ve had this AIG crisis, if you will, over the bonuses and the tremendous reaction on Capitol Hill to that, and the Republican reaction, and the reaction in the country to the excesses here, bonuses being given to people who are responsible fundamentally for the destruction of that company and the loss of hundreds of billions of dollars that the American people have made good.

This has completely, I think, undermined any support for any further bailouts of banks or other institutions, so I think we’re going to come to a period where we’re going to find out once the government says we’re just not bailing anyone else out, what exactly happens to the banking system of the nation and the world.

Jason Hartman: In a recent article that you wrote, “On the Road to Socialism,” you had a very good quote.  You said, “We are not headed down the road to socialism.  We are there.”  We see this nationalism of institutions, and when it started, people were outraged.  They were comparing it to Hugo Chavez and many other things around the world.  But now it just seems to be getting more accepted, which is a scary thing in my opinion.

Patrick Buchanan: Well, it certainly is.  The government of the United States customarily has spent around 21 percent of Gross National Product during the Cold War, and local and state governments have spent about 12 percent for about 33 percent.  Now, that’s high, but it’s not as high as the European Nations.  Under Obama’s first budget, we’re going up to about 27 – 29 percent of Gross National Product spent by the federal government, which will take the total up to 40 percent state, local, and federal.

Now, that is socialism in my judgment because of our greater size of the risk to the economy is under government regulation and control.  So I think we are going down this road and I don’t think there’s any going back.  There was some paring back at the New Deal, but very, very little.  Very little paring back at the Great Society programs and once these ideas are in place and these programs are in place, it’s very difficult to get them pulled back.  I mean Mr. Bush’ No Child Left Behind I think has not been a success by any definition, yet Republicans, even now, are reluctant to pare it back.

So I think, Jason, we are headed down to a situation where more and more of the decisions and power and wealth of the people are going to be in the hands of government.

Jason Hartman: What is the ultimate conclusion of this, though?  You see the government creating this class of dependency that it’s been doing for decades, and now it’s doing it more than ever probably.  What is the ultimate conclusion of this?  Is it that businesses and smart people flee, and there’s a brain drain, as we’ve seen happen in other countries?  Is it that we see a revolution?  Or is it just that everybody sort of accepts this state of numbness, Orwellian government?  It’s hard to see where this goes ultimately.  What is the ultimate conclusion of it?

Patrick Buchanan: Well, I think you see a partial conclusion in the state of California, where you’ve had enormous debt, and you’ve run up social programs to really extraordinary level, and placed an extraordinary burden on the most productive and successful of citizens.

Now, from California, people can flee to Idaho and Arizona and Nevada and Colorado, and they have been fleeing.  The basically native-born Californians, for the first time, are coming over the mountains back east.  And the result is now the $42 billion deficit that Arnold Schwarzenegger has run up, which will be partially taken care of by the federal government.

I think when you have illegal aliens pouring into California and basically tax consumers coming in and taxpayers coming out, I think California is on the road to becoming something of a third world country, which needs constant infusions of IMF and World Bank loans.  Except in our case, I think it will be federal “revenue sharing,” federal stimulus packages, and things like that.

It’s hard for me to see California coming back.  I remember, when I was younger, California was the Golden State that had where it averaged 130 percent per capita income.  In other words, Californians were among the richest and most prosperous Americans, and some Southern states, like Arkansas, were only 50 percent of the national average.  Now, California is at or below the national average and falling.

But when you take a nation the size of the United States, Jason, I think what’s going to happen is the continued burden on the productive private sector and the export of American manufacturers is going to lead to a constant lowering of the standard of living.  And the more the programs are piled in and the more the burden on the private sector, the more the horse, if you will, buckles under the weight and moves more slowly.  And I see that happening and continuing to happen as some other nations, frankly, that are much more attuned Hamiltonian economic sacrificing and saving for the future, as they tend to pull ahead.

Jason Hartman: So by comparison, we’re seeing this sort of global equilibrium or homeostasis would you say, where other countries that theoretically have been communist or socialist – China’s a great example – are really much more capitalist than the good old U.S.A nowadays, by some standard, at least economically, right?

Patrick Buchanan: Right.  Well, I just saw the Chinese the other day, the Chinese have something like $2 trillion worth of reserves.  They’ve mounted those up, those tremendous reserves, which are rainy day fund extraordinaire because they cut the value of their currency and based their economy on massive exports into the United States of America, which basically destroyed a lot of American factories and companies here and they were moved over to China to take advantage of the low-wage labor, low regulations, low taxes, real benefits, no strikes.

And so all these economic powerhouses and industrial plants have been moved into China, and China has amassed enormous savings and runs up $250 – $260 billion trade surplus with us every year.  And as the factories go in, the RND follow, and China is doing to us what we did to the British Empire in the 19th Century, when we were ferociously competitive, looked upon the British Empire as our great rival, and we basically kept British goods out of our market to a considerable extent with tariffs, while we invaded their free trade markets.  And that’s what they’re doing to the United States.

And I see this, quite frankly, as it really is, the Ants and the Grasshopper.  The ants, as you know, labored and sweated long and hard during the summer, preparing for the winter, and the grasshopper had a great ole time.  And when the fall came and the winter came, the grasshopper had nothing stored away, and the ants, as it were, were content and kept him out of their domicile.  I think this is sort of an allegory for what is happening to the United States of America now.

Jason Hartman: When we talk about the China factor, it’s very hard to understand why the Chinese would be willing to continue and continue to enter into what is seemingly a very bad business deal for them in buying our debt.  It can’t be explained.  It just makes me think along the lines of the more conspiratorial, back-door dealings.  Is the U.S. intimidating the Chinese in some way, militarily?  I mean why are the Chinese willing to continue to sacrifice seemingly for Americans?  It just doesn’t make sense.

Patrick Buchanan: Well, here’s what they’re doing.  What they’re doing is they’re holding our debt because they continue to export to the United States all these products down at Wal-Mart, and they continue to compete successfully against the other Asian nations in the American market.  And then they take all these dollars – if you read the Washington Post this week, I noticed they’re investing heavily in I believe it’s the Australian tin mining, which is the largest in the world.  They have oil contracts.  They’re buying natural resources and negotiating contracts and giving billion dollar payments in advance for strategic resources because they think the wars of the future or the future belongs to the nations that capture the raw materials and the resources to build a great and mighty industrial manufacturing, technological power.

So they are basically sacrificing the present for the future, while we sacrifice the future to indulge ourselves in the present.  And I think their policy is basically, in my judgment, succeeding.  They deny their people consumer goods.  They save 35 – 50 percent of the national income.  It goes into savings.  They’re able to use a lot of this, as I say, not only to buy up factories and strategic assets around the world, but to buy goods from Southeast Asia and places like that, and give those countries a trade surplus with China by buying their goods to tie them to China.

And so this is really a strategic policy, which is very, very easy to see.  It’s Hamiltonian in the extreme.  Hamilton didn’t sacrifice the interest of the American workers, but he did desire economic independence and strategic independence for his country.  And this is where China is going, and to me, to see Americans babble on about global free trade when every great nation in the world is running a huge trade surplus at our expense, it makes me wonder.

Under George Bush alone, Jason, we lost 4.4 million of our remaining 17 million manufacturing jobs.  They vanished.  We’re down around 13, 12 million now.  This is the lowest level we’ve had since well before the Civil War as a percentage of our working population.  And whereas the Chinese are closing down old state-run factories and they have these new, American built and European built factories in their country.

Jason Hartman: No question about it that it’s very wise for them to trade the ever soon to be depreciating dollar for real materials, commodities, resources because I would definitely agree that the nations of the future have resources.  They will control resources.  Resources are their money.  They’re a real currency.

Well, we have the reserve currency of the world, the dollar, and you just have to think it’s going to be so massively debased as the printing presses run and run and run.  What are your thoughts about the dollar as the continued reserve currency?

Patrick Buchanan: You’ve noticed that even U.S. government debt, people take out insurance on the government debt they hold, and the price of premiums has risen about six fold.  It’s still very small, but what the world is saying is there’s a possibility, a small but growing possibility, that the United States will follow countries like Argentina.

But I think that given the enormous amount of debt and the money that the Fed is pumping out and the federal budget is going to run at something like $1.75 trillion – that’s the figure even before the December growth figure was doubled, the non-growth, if you will, the collapse of the economy or the shrinkage of the economy was doubled – I think we’re going to run a $2 trillion deficit this year, and the Fed is pumping out additional funds.

And I think what’s going to happen eventually is simply the world’s going to say the value of this currency is going to go down, and people will speculate against it and I think they will bet against it, and I think eventually it will go down.  I think you get the signal in the recurring price of gold up around $900.00.

And I think when there’s a run on the dollar, I think that’s pretty much it for the United States as the world’s reserve currency.  I don’t know what exactly replaces it, but I do think what it’s going to result in is really a lowered standard of living for the American people.  And I think it’s almost inextricable.  I think it’s almost inevitable.  Even economists who approve of all this spending say that at some point, the Fed has to go in there and soak up all those dollars, and I wonder if the Fed’s ever going to do that.

Jason Hartman: Or if they will ever be able to.  I mean even if they wanted to.  The Bernanke interview the other night on 60 Minutes, he says, well, we’ll use the tools we need to use at the time inflation rears its head and becomes a problem.  And I estimate that to be about two years away, but who knows really because the scheme that’s been being played for so many years, it seems like they can keep papering it over, if you will.

But is it even possible to soak up those dollars?  I mean sure, they can raise interest rates, they can tighten monetary policy, but the money’s out there and it’s progressively more and more worthless.

Patrick Buchanan: I think that’s right and people they finally are choking on dollars.  I remember I was in the White House when the gold window was closed, and the reason it was closed was because there were an extraordinary amount of dollars floating around overseas, and a number of foreign countries – and of course, foreign countries are the only ones that could hold gold and could cash it in – they were preparing to come in and clean out Fort Knox.  And if you didn’t slam the gold window shut, the gold would have been gone because of all those dollars we expended abroad.

Now, what causes those dollars to go abroad are a couple things.  Of course, foreign aid is one and tourism is another, and of course, interest and dividends on assets that others hold in the United States is one.  But wars are another.  The main thing in the current account deficit is this monstrous trade deficit we’ve been running, which has been growing ever since 1970, and it’s now a huge thing.  Of course, it’s diminishing somewhat because of the worldwide recession.

George Bush, in his first five years, ran the five largest trade deficits in the world history and the five largest current account deficits.

Jason Hartman: That’s amazing.  It’s hard to call Bush a conservative, that’s for sure.

Patrick Buchanan: Well, it is indeed, but somebody’s philosophy has insinuated itself into the Republican Party and the conservative movement.  And there just is a complete lack of concern about trade deficits.

Jason Hartman: When we talk about the left and the right side of the aisle, it just doesn’t seem to much matter anymore.  It seems like they’re all in the same club and no matter what, they’re going to increase the size of government, they’re going to reduce and restrict our freedoms, and they’re going to debase our currency.  And the left is worse, but the right, they seem to have sold out as well to all the special interests, don’t you think?

Patrick Buchanan: I think that’s right.  When they come to town, they all start fundraising again, and all these people that raise funds for them in town, or almost all of them, are folks who have real interests and they want breaks of some kind or other from the government of the United States.  When you have a government, as I say, which is going to spend more than a quarter of the U.S. economy and regulate another huge segment of it, it has the power to enrich, it has the power to destroy, and people are going to try to have that power used in their own interests.

And this is why Washington is almost recession proof of all the lawyers and lobbyists we have in here, and of course, federal and local governments are huge.  And so people come here and now they’re coming from all over the world to get the ear of the political figures here in Washington and try to get decisions made, which will benefit them.  And usually, “them” is not the American people.

Jason Hartman: Yeah, no question about it.  It seems as though New York used to be the financial center of the world and now it’s Washington, D.C.

Patrick Buchanan: It sure is.  They come here for bailouts now.

Jason Hartman: Where’s my bailout?  No question.

Patrick Buchanan: That’s exactly right.  But consider all the bailouts.  I’ve been thinking of it.  I remember again I was in the White House with Mr. Ford when it was, “Ford to City:  Drop Dead.”  He wasn’t going to bail out New York and he backed away immediately, and we bailed out New York.  Then we had to bail out Washington, D.C.  And then you had the South American debt crisis back in the ’80s.  I opposed bailing out the banks in that case and they bailed them out.  Bank of America in the ’90s.  It was Goldman Sachs down in Mexico in the late ’90s.  It was the Asian crisis and Russia and Brazil.  And they were all bailed out with IMF and U.S. money.  And now the U.S. needs to be bailed out.

Jason Hartman: Yeah, and 46 states they say are on the verge of severe problems.  I don’t know exactly what it looks like when a state goes bankrupt, but my state, California, is there.  Even after the last budget, apparently, they found another $8 billion shortage.

Patrick Buchanan: The shortages are going to grow because as soon as they put on higher taxes, that causes a number of people to say, all right, that’s the straw that broke the camel’s back.  We’re packing up and we’re moving to Nevada.  We’re going to Idaho.  We’re going to Arizona.  We’re going to Colorado.

And as the taxpayers leave, you have more and more folks coming in from Mexico and other third world countries, and enormous percentages of these folks are now much more poor than Americans are and much less well-educated, so they cannot pay the taxes that the Americans who are departing are paying.  And so you just have a built-in machine here, especially with all the welfare and all the programs that you have here that you don’t have in Mexico or Guatemala.  They come in and right away, they’re eligible for all manner of good things.

Jason Hartman: How is it, Pat, that the left can be so myopic?  Don’t they understand?  Is everybody just out there, sort of looking at what can I get in this little picture?  Raise my wages, strengthen the unions, give me more, and then the company leaves, goes out of business.  There’s always a balancing aspect to this stuff, but it seems as though the people, the citizens themselves, the individuals on the left side of the aisle, they just don’t understand.  They think money and good things and infrastructure and services just come from the Tooth Fairy.

Patrick Buchanan: They used to get away with it in a sense when we had a contained, self-sufficient economy.  They continued to lay these burdens on business.  You get the civil rights laws, the environmental laws, health and safety laws, the wage-an-hour laws, the union restrictions and regulations, and you keep piling these burdens on business, and business, of course, puts them into the price of what they produce.  An automobile, I think 50 percent of the price of a new car is in the various taxes, state, local, federal, payroll, property, etc, that the corporation pays in Toto, and a significant slice of the rest is based on all these other rules and regulations, how much they cost for compliance.

And so then you tell the auto company, well, this is what you have to do and this is how you have to build your cars, and these are the things that you have to pay, taxes, regulations.  And then the free traders come along and say, but if you move it to Hermacio, you can avoid all that.  So they move all the factories out of the United States.

And the liberals have all their rules and regulations and laws and taxes to make the cleanest, most fairest, most safe and secure plants on Earth, but the plants are all moving to places like China and going back to the same old ways because they’ve been driven out, and the conservative free traders have let them go.

Jason Hartman: Here’s what I’m having trouble reconciling is in Death of the West, I believe it was that book, you seem to be criticizing the modern corporation to some extent, saying it is a soulless entity that moves from government to government, to tax nexus to tax nexus, and it doesn’t have any hometown, which I agree with, but it’s being incentivized to do that with leftist policies, right?

Patrick Buchanan: That is true.  We’re structuring the incentive system – we used to structure it, the incentives and the tax system, so that American businesses were privileged in the American market and foreign businesses, if they want to really do business well in the market, would move their factory plant here and get inside the tariff wall and produce here and make all their parts here and make their final products here.  And that’s what I want – to bring all these companies in.

So there’s no question that in terms of incentives, they’re all disincentives to produce in the United States of America.  And you could range the tax system, I think, to turn that around.

However, it is also true that the American corporation is now we’ve had the managerial revolution, and these people at the top of these corporations have no allegiance or loyalty to any country or any community.  I think that they are more comfortable probably in Paris or Prague than they are in Peoria, Illinois, or other places.

And unlike the old corporations, many of which were owned and operated by people who started them out from scratch, but as you move up the ladder to the MBAs, if you will, and the other folks, I think you move toward these companies which are globalists.  They have no loyalty to any country, and half of the major entities in the world, Jason, if you talk in terms of economic clout and by their GDP, half are countries, and half are companies.  And these companies, I think, are dictating policies to government.  They are special interest.  They are very, very powerful special interests.

And what they want to do is they want to produce abroad and sell here, and they want to be able to shut down their factory here at a whim and move it abroad, come and sell their products back into the United States without any penalty at all, regardless of its impact upon communities and workers and people.

So you ask yourself in the last analysis, who is the country for?  To me, the country is for the people.  Predominantly, it’s middle class and it’s working class and the folks who really carry the burden and create the wealth and do the jobs.  It is certainly welcoming to people doing very, very well, and it’s welcoming to poor folks as well, but they are the ones, I think, for whom we should look out and for whom the government should look out.

And so people say that Buchanan’s a protectionist.  That’s right.  Every law protects somebody.  It might protect a creek from being polluted.  It might protect kids from fat foods or something like that, which I might not agree with, but every law protects something.  And to me, the tax and trade laws should protect the American worker and we should guarantee him, as we used to do, the highest standard of living in the world.  That was always my objective and I would make American businesses the most privileged and freest and best in the world, and I would do that by taking companies, which don’t work this way, and making their products pay a price to get into the United States.

Jason Hartman: So tariffs and protectionism.

Patrick Buchanan: Sure, I would take the tariff capital.  Suppose we put tariffs at 30 percent on all imports and there’s 2 trillion of them.  That’s $600 billion.  I would take it and eliminate the corporate tax in the United States.

Jason Hartman: Very interesting idea.  But you know what would happen immediately?  The politicians would dip right into that money and they’d probably spend it on social programs to buy votes.

Patrick Buchanan: Well, no, I would do it dollar for dollar.  Every dollar of tariff would be matched by a dollar cut in the corporate income tax.  That would be right in the bill.

Jason Hartman: You know what?  There’s just not enough pork in that, Pat.

Patrick Buchanan: But here’s the thing.  Then all these foreign countries would say, wait a minute, it doesn’t make sense to produce here.  We have to get inside there where we don’t pay any tariff, and produce there.  Americans used to do that, Jason, and General Motors, you go over and you build the factory, you produce the Opals in Europe to sell to Europe, and repatriate the profits.  In China now, General Motors is doing very well, but the factories are there, we sell there, but you want to repatriate the profits.

And then you want to get a favorable trade and current account balance.  And you get a favorable trade and current account balance.  Your dollar gets stronger.  You’re able to conduct a much more foreign policy much more consistent, but broad national interest.  For the first 70 years of the last century, America basically ran a trade balance with importing 4 percent of all we consumed and exporting 8 percent of all we produced.

Jason Hartman: So the people that would disagree with you would probably say, well, then you can’t buy cheap goods at Costco and Wal-Marts.  So the Americans are benefitting from it, right?  They’re buying cheap goods.

Patrick Buchanan: I disagree with that.  I disagree with that.  I mean I bought Keds and Converse All Stars when I was a kid.  They’re the best tennis shoes going and they cost $3.00 – $5.00.  Now, we get these other shoes, running shoes, basketball shoes that cost you $150.00, and they’re made in Indonesia for $10.00.

Jason Hartman: Right.  Basically, it just seems like the corporatocracy, which from my heart, I want to be a capitalist, I want to say free markets are great, but it’s such an unequal playing field and it’s so complex.  And it seems like the corporatocracy has really hijacked Washington.  That’s a special interest group with a lot of power.

Patrick Buchanan: Well, it is indeed, but I will say this.  In the 19th Century, I think the interest of the corporations coincided with those of the country.  The corporations said, look, we have the largest market in the world now, just about, and it’s growing by leaps and bounds.  And we want to maintain privileged access to that market and so we want high tariffs, not to keep out products entirely because if they do, you don’t get any revenue, but you want to get enough of the maximum revenue from those, according to the Laffer Curve, at the same time foreigners, who come into our market, pay a price to get access.  And you incentivize Americans to build factories to compete with and eventually defeat the foreign companies and capture the share of the American market.

The whole idea is a self-sufficient and an independent republic, which can then look out at the world and doesn’t get itself involved in wars over raw materials or resources or oil or things like that.  And this was the dream of the founding fathers and it worked.  And I think we gave it all up beginning around the 1960s.  I’m at fault.  I was a Freedman Free Trader, right there in the Reagan White House, the biggest one in there.

Jason Hartman: Yeah, interesting.  Pat, before we go, I just want to get your take on a few quick little sort of line items.  First of all is Hank Paulson.  When I look at Paulson and what he did, and he seems to have this cronyism going on with his friends on the street and Goldman Sachs, of course.  It seems to me that Paulson should be indicted.  What’s going to become of him and his legacy?

Patrick Buchanan: Well, you know this is what really bothers me.  I just learned this week the enormous scores of billions sent to AIG, initially.  The biggest winner there was a French bank and the second biggest was Goldman Sachs, and there was a German bank and Barclays Bank and Canadian banks and Swiss banks.

And here Paulson and Ruben were up there devising this bailout of AIG and not telling us that the biggest beneficiary was a company for which they had worked and at which all their friends still labored and worked.  And Goldman Sachs wasn’t bailed out so much as any potential losses were covered.  In other words, that what AIG had insured and the contracts were going to be broken, there was going to be no more insurance, these losses of Goldman Sachs were picked up by the American taxpayer.  And it was done without the knowledge of the American people.

Mr. Paulson and Mr. Ruben were up there, Mr. Geithner, and all the others, and it seems to me there ought to be an investigation.  Let me say this, Jason, a confession.  I’ve had a good bit of my retirement in bank-preferred stocks.  All of these big companies, banks that have been hurt, I’ve been hurt very, very badly by it.  And if I’d been in on this decision and the decision had gone the way it did, I could be credibly charged with a conflict of interest.  Now, why are they not being investigated and looked at for conflicts of interest?  Are they so big and powerful that they are above the kinds of considerations they put on every individual?

And so I think it really ought to be investigated if they were not heavily influenced in taking tax money or Federal Reserve dollars and bailing out companies where their friends were and their investments may have been.  And I really think that ought to be looked into.

Jason Hartman: Who’s going to do it?  It just seems like it’s a rigged game.  Where is the Ken Starr for this problem?

Patrick Buchanan: Well, you’re right about Congress.  Look what we found about Senator Dodd.  Now, he put in the language that basically may have preserved the bonuses for these AIG characters in the financial products division, who are responsible for bankrupting that company and costing American taxpayers $175 billion.

Jason Hartman: And really, I’d like to add to that it’s not just really American taxpayers.  It’s American dollar holders because the devaluation of the currency that will ultimately occur.

Patrick Buchanan: Sure, it’s going to be every American citizen is going to see the value of his currency in the world diminished and the value in the United States in terms of what he can buy with it, diminished in the value of all his savings.  And the IRAs, they’ve all been horribly wiped out, and now the value of his income, if it’s in fixed dollars, and the value of his Social Security checks.  These are all going to fall.

Jason Hartman: You know what seems to be the strategy?  It’s the one I’ve adopted with my investments is that when we have this devaluation of the dollar, the beneficiaries are going to be – and I hate to even use this word nowadays because it’s so unpopular and so many people have gotten themselves into trouble with it – but people who have a lot of debt.  I mean that debt is denominated in dollars.

Patrick Buchanan: What it does is it benefits the debtors and it wipes out the people who earned the money and lent the money.

Jason Hartman: That’s going to be a crazy state of affairs.

Patrick Buchanan: And the biggest debtor of them all is the federal government.  It’s the world’s greatest debtor.

Jason Hartman: Yeah, right because they wipe out their debt.

Patrick Buchanan: They float it away on a sea of inflation.

Jason Hartman: Yep, exactly, so that has to be part of the plan, of course.  A couple other things just before we go.  The Tonight Show, first time ever a sitting president has come on the Tonight Show.  That’s happening tonight.  Do you think this diminishes the value of the office and cheapens it?

Patrick Buchanan: I really do and I think that President Obama is making a terrible mistake.  His greatest asset is the Office of President of the United States.  It is a majestic office.  It is a great office.  It is a high office.  And as such, the occupant of it commands a respect that the individual would not.  The individual – you may not like Richard Nixon or you may not like Ronald Reagan or even Jimmy Carter – but he’s the President of the United States and all of us accord that individual a measure of respect and rightly so.

And I think the occupant should not bring himself down to the level of really a candidate on a late night talk show.  And that’s what President Obama is doing.  He’s bringing himself down, if you will, from a position of majesty and a position of height and a position of distance and reserve as not only the head of government, but the Chief of State of the United States.  And to be on a talk show, I think it’s a terrible mistake.

Jason Hartman: I couldn’t agree more and it seems as though it’s his attempt to try to be “cool.”  I don’t think there’s a better word than that.

Patrick Buchanan: Exactly, try to be one of us, but that’s not what we want in a president.

Jason Hartman: No, absolutely.  Well, let’s talk on the other side of Obama just real quickly.  I have a couple more things for you that I want to get your take on.  So you’ve been a participant in some legendary presidential summits, Nixon with China, Gorbachev in ’86.  What summit should Obama be doing?

Patrick Buchanan: In turn, I don’t think there will ever be summits like those that they had during the Cold War.  Certainly, I think the greatest were some of the Cold War summits and when you have things like Yalta and Tehran with Stalin, Churchill and Franklin Roosevelt, and Potsdam and Truman and Stalin, it’s really hard to reach those levels because I think the issues are just not as great and the times don’t seem quite as dramatic or heroic as they were.

In terms of summits, I think the president – I think he certainly should reach some kind of understanding with the Russians, as he should with the Chinese.  Those are the two I think great countries with which we have to concern ourselves.

I also think he ought to engage with Iran.  Now, I agree basically with the direction of what President Obama is doing in a lot of these areas, but I think the approach is showing signs of real immaturity.  Setting a reset button and giving that button to a foreign minister, that little joke thing that Hilary did, can you imagine John Foster Dulles doing that with Andre Gromyko?

Jason Hartman: No.

Patrick Buchanan: The administration is showing, if I could say something, a lack of seriousness, a lack of maturity, a lack of the sense of the gravity of the times and the situation.  It’s like behavior you would expect of someone in junior high rather than the offices they hold.

Jason Hartman: Very good point.  Two more things.  We talked a lot about the debasement of the dollar and our concerns about that and what we see as some coming real inflation.  Do you think that gold prices are manipulated because all of the gold bugs say, even before these bailouts came along last fall, gold should be $2,200.00 an ounce?  I heard one estimate that if our currency were actually backed by gold as it was under Nixon, before Nixon closed the window, it would be $40,000.00 an ounce.

Patrick Buchanan: Well, I hope so.  I do have some gold.

Jason Hartman: Me, too.

Patrick Buchanan: That would recoup some of my losses in Citibank, Bank of America, Enron, and others.  I noticed the other day some of the third world countries were demanding the IMF sell gold, which has a huge pot of gold, which the Americans foolishly gave to the IMF after World War II and I’ve always argued we should go and get back.  But I do think some of these governments have gold and it would not surprise me in the least if there were a measure of manipulation because gold sends such signals to markets around the world.  So it would not surprise me in the least, but I don’t have the kind of evidence that other folks do.

Jason Hartman: One thing greatly concerns me.  It has to be the most falsely named thing ever and that is the Fairness Doctrine.  And it seems to me that we have two types of media in this country.  One media, that I call the monologue media, traditionally controlled by the left, and that would be publishing, it would be movies, it would be television, it would be newspapers, and they get to say what they want, and everybody gets to read it and decide to believe it or not.

And then there’s the dialogue media and that includes really the internet, blogs, talk radio, where people can call in and they can debate with the host, with the person who is expressing the ideas.  My theory, when you look at things like Air America, Pat, the reason it doesn’t succeed is that their ideas cannot withstand real debate, whereas the reason that conservatives seem to control talk radio is people can call up and they can debate.  Of course, there are shills and the host can cut them off.  We all know that.

But largely, it’s a dialogue media, blogs, the internet.  Those are dialogue media.

Patrick Buchanan: My view has always been the conservatives do best in “small d” democratic media, and whereas the elites control the network news.  You have three networks and a little group selecting the news, all the news that’s fit to print, as they do at the New York Times, and you look down the big elite media from the Boston Globe to the Hartford Current, the New York Times, Philadelphia Inquirer, Baltimore Sun, Washington Post, etc, Atlanta, Los Angeles, Chicago, they’re all liberal.  And they all tend to be monopolistic and they all tend to have the same party line.

And I agree with you on terms of dialogue and debate media.  The conservatives tend to do very, very well in formats like that.  I will say that I was glad that after I wrote that speech for Spiro Agnew, just blasting the networks first, and then the Times and the Post second, all of a sudden, these newspapers started blossoming with op-ed pages.  And I managed to get on them.

But I do agree with you basically.  See, the liberal media were not enthusiastic about the Fairness Doctrine when those of us back in the ’70s were demanding it be applied to the networks, and that we get someone to balance Eric Sevareid and these other liberal commentators.  But then when talk radio came along and the conservatives were winning out, all of a sudden, it became a demand to balance them.  Is it hypocritical?  Certainly, it is.

Jason Hartman: How are we going to stop it?

Patrick Buchanan: I don’t think they’re going to win with that.  I really think they’ll have difficulty with that.  I just don’t believe they’re going to win in that one, Jason.

Jason Hartman: Hopefully, there won’t be any sort of censorship like that.  Well, Patrick J. Buchanan, thank you so much for spending some time with us.  Anything you’d like to say in closing?

Patrick Buchanan: Let me just say this.  I recall well our getting together out there in Newport and that area in that campaign, and those were great days, and we always appreciated the loyalty and the support of folks like you who helped us do as well as we had done in those days in the brigades in the 1990s.

Jason Hartman: Well, thank you so much.  It was great to visit with you then and again now, and I look forward to doing it in the future.  I appreciate you being on the show.

Patrick Buchanan: Take it easy, Jason.  Bye-bye.

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Duration:  48 minutes