1936: John Perkins, Confessions of An Economic Hit Man, Increased Loan Limits Equal Increase Housing Prices

This show is produced by the Hartman Media Company. For more information and links to all our great podcasts, visit hartmanmedia.com.

Hey buddy.

Just wanted to say thanks again for the awesome job you did Friday morning. That was great. Just started out our day perfectly and put a cap on our event. I just thought it was awesome, man. You did a great job. But even more than that, just appreciate your spirit in the room, man. Seem like you're just more alive and just more enthusiastic than ever about things you're working on and things the family's doing. So I just want you to know I appreciate you, man. Travel safe.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur whose own properties in 11 states, had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode 1936. 1936. Thank you for joining me today. Today we're do something we have never done before and that is not a flashback Friday, but a little bit of a different kind of perspective. Totally different. Today we've got the holidays coming up and this time of year it's kind of a different schedule for people. So we wanted to do something different on the show. Our guest today will be John Perkins. You've probably heard that name before. He's written several books, the most famous of which is Confessions of an Economic Hitman. But here's the thing. I actually recorded this interview a while back. See if you can tell the date by any references on my holistic survival show. And I've got another one of these coming up for you that I think you're going to find very interesting. All about some geopolitical stuff as it relates to Russia, Ukraine, because it's very interesting to see how things age. That is very interesting. But before we get to John Perkins today, our guest, I want to talk to you about housing prices and what is going to push housing prices up. Did you hear me? I said up. Yeah, I know.

Kind of crazy that I would say a thing like that. Well, the Question is, it could happen because what did they do? Well, they, the elites, the powers that be, the government, they increase the FHA loan limits and the Fannie Freddie loan limits. Okay, the agency loans, the GSEs, the government sponsored entities. So FHA loans, now the past loan limit. I'm just going to start off with Atlanta. If you're watching the video, you can see I got entire charts here with a whole bunch of cities on. But let's just take Atlanta. The FHA loan Limit currently is $471,000, but it's going up next year, which is right around the corner to $592,000. Wow. That's a hundred and twenty one thousand dollars increase. And that's in little old Atlanta, Georgia.

Whoa.

Wowza, wowza, wowza. Now this surprises me because going alphabetically here, Austin, Texas, the loan limit is 483, but they're only going to raise that one to 571. That's odd. Where do they get these numbers from? I have a feeling it's not from research, it's from lobbyists. Yes. You know all those guys that work on, what is it, K street in Washington D.C. and they walk in to the capitol building with brown paper bags full of cash or maybe cryptocurrency. Well, or maybe not. Whatever, you know, and they basically get these politicians to direct the agency to say, hey, you know, the guys in Atlanta, the guys are gals. Don't want to be like politically incorrect here, might be gals, but you know, hey, I'm saying the guys are more crooked. Okay? So gals, you know, don't be mad. Anyway, the guys come in with their favoritism and their favor swapping and their crony capitalist plans and they say, hey, the ones in Atlanta, they bribed us better than the ones from, you know, representing Austin, Texas. Right? So yeah, you know, you can't. This stuff's just ridiculous. In Los Angeles, my hometown, where I grew up, the prior loan limit, $971,000. The new loan limit increasing by $119,000 to $1,089,000. Can you imagine? That's an FHA government insured loan. You can put what, 3% down on FHA so you can buy a million dollar house with 30 grand.

This is silly, okay? It's just, it's just crazy. But what does this do? It pumps more money into the marketplace, allowing sellers to say, hey, we're just going to be like all those crooks running the colleges and universities for the last couple of decades. We see the tidal Wave of money coming at us. And you know what? We want some of that tidal wave so we can afford to raise prices. Now, granted, you still got to qualify for the loans, but hey, qualifying for an FHA loan is pretty easy, actually. You know, interest rates are higher, we've.

Got that, then there's that.

But when those rates come down, as they have been dropping a little bit, which is a nice little bit of relief, and when the money comes off the sidelines and you've got these higher loan limits, that's a recipe to light the market on fire.

Now, it's not happening at the moment, but it's gonna happen. Will it be to the degree these insanely 5000 year low interest rates we had were. No, of course it's not gonna be like that. But you know, this is significant, folks. Okay, that's fha, but investors aren't really getting fha. Let's talk about conventional loans. The loans that most of you are using when you buy through your favorite website, jasonhartman.com and through our network. These are the GSE loans. Okay, These loan limits. So in Atlanta, because that's what we started off with for fha, you see, these loan limits are higher. So this one currently $647,000, going up by 79,000 to $726,000. Okay. For the traditional agency loans, right? Los Angeles, interestingly, it mirrors the FHA limit. See, when you go over this limit, this is a conforming loan. You're going to have to get what's called a jumbo loan. And a jumbo loan in a place like LA or Orange county, my other hometown, where I grew up as a kid in la, Orange county as an adult, same exact limits in Orange County, California, just south of Los Angeles, both on the FHA and the GSE loans. Okay, so that's interesting. What about a market like Phoenix that is quite cyclical? FHA, $442,000 going up to $530,000, an $89,000 increase. And on the conventional, the GSE loans, 647,000 up to 726,000, a $79,000 increase. So, folks, what this does is it gives sellers an opportunity to go get more money from buyers. This is simply inflationary. It always is, it always has been. Nothing's new here. Every time they raise these loan limits, we always see inflation in prices. Of course, we have to combat the higher interest rates. But with these two things playing together, look, ultimately the macro trend is higher prices. And this is what allows it to happen, is These increases in loan limits, I mean, look at this. Like Orlando, Florida, right? We do a little bit of business in Orlando still. 647,000 on conventional. What is that on FHA? 421,000 going up to 472. So that would be in the range of a potential rental property, a $51,000 increase for FHA. Now, why does this matter? You might be saying, well, Jason, investors aren't getting those FHA loans, right? So why does that impact us? Well, it puts more home buyers, owner, occupants into the market, competing with investors to push prices up. All right? And so Orlando for conventional, going from $647,000 to 726,000, $79,000 increase. So really interesting, folks. Inflationary pressure definitely coming from that. Tomorrow night, a live live stream with the Three Amigos, Ken McElroy, George Gammon and myself on my YouTube channel. So just look up Jason Hartman real Estate on YouTube and join us there. 4pm Pacific Time, 7pm Eastern Time. Bring your questions, ask us questions. Any of us, you've got a question about multifamily, about apartments. Ken McElroy is your guy. You got a question about macroeconomics. George Gammon got a question about anything we talk about on this show. Myself. You can fire those questions to all of us tomorrow afternoon if you're Pacific time, tomorrow evening Eastern time. Join us on my YouTube channel for that. All right, here is the setup. This is the room diagram for Empowered Investor Live coming up in Scottsdale, Arizona at the end of January. And I gotta tell you, I'm quite proud of myself for this setup. I like it a lot. I like it a lot. We have sold out the VIP tickets, totally, frankly, oversold. So my big issue was how are we going to fit all the VIPs? People just gobbled up those tickets right away. We still have general tickets and we still have elite tickets, which include a one hour of coaching with yours truly. I know I can't sell too many of those either because I just don't have the time to fulfill the one hour of coaching. But, you know, we're still selling those and can do those appointments with you individually, one on one with me. So we've got our trade show displays, our trade show vendors in a trade show room. And what we have, which is really unique about this setup is we have the green room, which is where the VIPs have access to the speakers and the green room opportunity. And what we did is we actually put seating in there and opened the air wall in a really big way. And so far, this is set up. You know, we're going to sell out this event pretty soon. We're getting close to selling out. So we're about, what, 40 days away? Something like a little less than 40 days away. So get your tickets@jason hartman.com for that and join us. It's going to be a phenomenal, phenomenal event. We're gonna have a great time. And by the way, if you're looking at the video and you see this diagram of the floor plan, all of this comes down after our session on Saturday. And we put in the dance floor, we put in the cocktail tables, and we have the band. And that's just gonna be a blast. We're gonna have a lot of fun. We're gonna dance the night away on Saturday. And the cocktail reception for Friday evening will be in the trade show area. So we'll have very nice reception in there on Friday evening. And then on Saturday evening, we'll have the band in the main room, on the main stage. And also, some people have asked, you know, when does it start? When does it end? We start on Friday at 1pm and we end on Sunday at about 5pm okay, so Friday at 1pm we start, and then we'll have a session. We're going to have Sharon Lecter speaking on Friday and many other speakers, too. And then after Sharon Lecter speaks on Friday, we will wander into the exhibit area and we will have the cocktail reception there. Okay. All right. And some of our empowered speakers, of course, myself, Ken McElroy, Sharon Lechter, Rudyard lynch, that's the guy you probably haven't heard of, but he's incredible. Tom Wheelwright, of course you've heard of him. Rich dad, tax expert, George Gammon, you know him already. And then Joe Brown with Heresy Financial. He's got a fantastic YouTube channel. And we've got many, many other speakers. Our local market specialists, our property managers, lenders, 1031 exchange specialists. You're going to learn tons of stuff and have a great time at this event. All right, before we get to John Perkins, our guest today, I want to just do another shout out for Matt Taibbi. He's been on the show over the years a couple of times. And he is just doing a great job with his Twitter. Now, remember when I went on my rant about the evils of big tech a couple of weeks ago, And I'm not sure I made the connection well enough, but now this is a good time to really make this connection. Just remember, we have the First Amendment in the U.S. we have free speech. We are guaranteed free speech by the Constitution. But that's only from the government. Right, the government can't impede your free speech. But a private company, like Twitter or Facebook. They're a private company. I know they're private company. Google's a private company. Amazon's a private company. These are all private companies. They don't owe you anything. You can just choose to go somewhere else because it's a free market. Oh, yeah, right. Like that's true. There's a free market with these monopolistic behemoths. I mean, these. These companies are just disgusting. They're abusing the human race in ways just beyond comprehension. I mean, it's terrible. But now we see what's really happening. Thanks to Matt Taibbi and Elon Musk. Give them a big hand, really. They deserve a huge hand.

What we see happening here is we see that the government. Okay, you can stop the applause now. We see that the government is using these big tech companies as a proxy to inhibit your First Amendment rights to free speech. Clearly, now there is evidence. We knew it was happening before. Of course we did, because anybody with a brain would just have to know that. You could surmise it. You could. You could just guess that it was happening, right? But from the Twitter files, Twitter, the FBI subsidiary. The latest documents show in bulk the grotesque master canine relationship, you know, master and dog relationship between the FBI and Twitter. The Twitter files have to be the craziest story in the history of journalism. There's a new drama every three minutes, it seems. The latest development had my phone blowing up with queries from multiple outlets. These included the New York Times and the Washington Post, two papers which didn't call after the original story or although the Post amusingly did take the time to temporarily label me as a conservative journalist. This is Matt Taibbi talking, but stubbornly hot for comment. Now, see, now they can't hide the.

Story, so they just want to be.

In on it because, you know, they're basically capitalist whores. What can I say? You know, they act like they're not. In a lot of ways, they're not. These are the oppressors. The New York Times, the Washington Post. They're disgusting. But now the story is out there, so they just have to get in.

On it, and they don't want to lose.

Lose their readership, so they're going to report on it. And Matt Taibbi is not a conservative. He's a very fair, formerly at least liberal. Read his book called Hate Inc. It was great. I read it a few years back. Again, he's been on the show several times. Go to jasonartman.com find the interviews with Matt Taibe. You'll love them. Anyway, let's get to our guest, John Perkins. Talk about Confessions of an Economic Hitman and a game as old as Empire. You'll really find this interview fascinating and it'll also be interesting to see how it has aged, which is pretty well. So let's get to that right now. Be sure to get your tickets for Empowered Investor live. Go to jasonartman.com, get those tickets right now if you haven't done so already. And here's John Perkins.

It's my pleasure to welcome John Perkins to the show. He is the author of several books. I discovered him at the book entitled Confessions of an Economic Hitman. And then he's got a new book out called Hoodwinked An Economic Hitman reveals why the world financial markets imploded and what we need to do to remake them. John Perkins, welcome to the show.

Thanks, Jason. It's great to be with you.

Great to have you on. Your work has fascinated me. I tell you, before I read the Confessions of an Economic Hitman book, I didn't know what an economic hitman was. I didn't really know this sort of undercurrent of really war even existed. Tell us about that and how it all works.

Well, you know, I think it's fair to say that we economic hitmen have created the world's first truly global empire. And it's also the first empire that's been created primarily without the military. And we work many different ways, but I think the most common is that we will identify a country that has resources our corporations covet, usually a third world country and with a resource like oil, for example, and then arrange a large loan to that country from the World bank or one of the other similar organizations. But that money doesn't actually go to the country. Instead, it goes to our own corporations to build big infrastructure projects in that country. Power plants, highways, industrial parks, things that benefit a few wealthy families as well as our own corporations, but don't help the majority of the people because they're too poor to buy electricity or have cars to drive on highways. They don't have the skills to get industrial jobs in industrial parks. And actually there aren't many jobs associated with those parks anyway. But they the people, the country is left holding a huge debt that it can't repay. So at some point we go back to them and say, since you can't repay your debt, sell your oil to us real cheap and without any environmental restrictions, or vote with us on the next critical United nations vote or allow us to build a military.

And in the few instances when we economic hitmen fail, and I talked Jason in Hoodwinked and how I failed with the democratically elected president of Ecuador, Jaime Roldos, and also the head of state of Panama, Omar Torrijos. I wasn't able to corrupt them. I wasn't able to get them to buy into this system. And when we fail like that, then the jackals step in and they either overthrow governments or assassinate their leaders. Both Roldos and Torrijos were assassinated because I didn't bring them around. And in a few instances when the jackals also fail, like with Saddam Hussein in Iraq, then the military steps in. So the military is always there, but it's not that unlike other empires, the military is not the first line of defense. It's the final line of defense, sort of the ultimate weapon or really the.

Final line of offense. Right. Because this is an offensive maneuver.

You're right.

Yes.

Thank you.

Yeah. It's interesting, John, because I saw a.

Mov movie and maybe you were involved in this deal, I'm not sure, but.

I saw a movie a few years.

Ago entitled Life and Debt, and it was all about Jamaica and how the World bank basically just put that country sort of out of business. And they loaned the money and then they said, you have to devalue your currency to make your exports attractive. And initially that seemed like a good idea to Jamaica, but later it turned into a real disaster and that country is just basically completely broke now. They haven't built a new hospital there in years. And are you familiar with that movie or that?

I have seen the movie and I was not part of it, but a couple of years ago, and that's a typical scenario, you know. And right now everybody's feeling very, very sorry for and compassionate toward Haiti. But we did the same thing to Haiti, and we'll probably do it even more as it recovers from this terrible tragedy that's happened there.

Well, so that's a good point.

I've heard a little bit about the Haiti scenari scenario and how in some ways people are blaming the US Saying the US Is somewhat responsible for the problem. And to me, that just sounded a little far fetched. I mean, what happened in Haiti, for example?

Well, obviously we're not responsible for the earthquake, but Haiti has this very long history. It was the first country to declare itself slave free back in the early 1800s, the first country in the western.

Hemisphere when France pulled out.

Yeah, when they drove France out, they declared their independence, declared themselves slave free, and France sued them for a tremendous amount of money, saying that the loss of slaves had hurt the French economy. Imagine that.

Wow.

And that lawsuit stood for 100 years. Then the US Marines went in in 1915 and occupied the country for almost 20 years and during that time essentially forced Haiti to pay off its debts to France. And ever since then, we've been very much in control. So most people have heard of Papa Doc and Baby Doc Duvalier, terrible dictators, but they were very supported by our CIA. We have to take a lot of responsibility for the fact that that country was extremely corrupt. And in the meantime, our companies are going in there and using very cheap labor in sweatshops and agricultural businesses and agri fuel businesses more recently. And so we've had a very, very strong presence there. And when Aristide was elected, he was elected twice, in both times overthrown or kidnapped essentially by our forces, by our people, because he had the gall to demand that the minimum wage in Haiti be increased. And incidentally, this is the same thing that happened in Honduras recently when President Zelaya, democratically elected, did something similar. And he was also overthrown by forces because for a couple of reasons, in both those countries you have very, very cheap labor, the lowest labor rates in the hemisphere. And so there's a lot of athletic companies, companies that make athletic equipment, baseballs, T shirts, tennis shoes, et cetera, and also agribusinesses in both countries, particularly in Honduras, in this case Dole and Chiquita. And they don't like to see wages increase because there's two reasons right there in each of those countries, they're making huge profits off low wages. But in addition to that, those two countries hold the bottom line for minimum wage in the hemisphere. And if their minimum wage goes up, then El Salvador and Honduras and Guatemala and every other country in the hemisphere is going to have to raise their wage rate because nobody wants to go below 80 or Honduras.

But isn't the minimum wage argument really just in a relativity or an inflation argument? Because when you see minimum wage increase in the States, inflation follows very closely with minimum wage increases. Now, of course we're talking about minimum wage here. That's somewhat reasonable versus in these countries, it's dirt poor minimum wage. I do understand that. But as soon as the minimum wage goes up, prices start to rise. Because it's a pass through, isn't it or no?

Well, it may or may not be a pass through, but if you're only paying people two or three dollars a day and they're working under terrible conditions also, so you're not really spending much money on the conditions and you've got yourself this amazing workforce that some of your competitors don't have access to, and they're paying five or six dollars a day, two or three times what you're paying. It does make quite a difference, and it may not even make such a big difference in the price of the product at the store, but it may make a huge difference in the profits that are made and the salaries that the executives make and so forth. And I also think that again, a lot of it is psychological. So you want to keep that base down low because if it starts to rise in the lowest countries, it's going to rise even more in the countries that are already paying higher wages.

I want to explore, John, just for a moment, making sure the listeners understand what an economic hitman is. I mean, you were an employee of the US Government?

No, never. My official title was chief economist at a private consulting firm. Charles T. Maine. We had about 2,000 employees, mainly in Boston, and I had several dozen people working for me. I was chief economist. I was one of the owners of the company. It was a closely held corporation, like a partnership. About 5% of us owned the company. And many of our the contracts for the company were most many of our contracts were with the U.S. government, the Treasury Department, the State Department, USAID, or with the World bank or one of those organizations. They didn't pay me directly, but they did hire my company, which then paid me.

And your company was hired under sort of what terms? I mean, what did the government, they came to your company and said, go negotiate a deal for us in a foreign country. Is that basically the.

No. Usually they came to us and said, do a study. Let's look at Indonesia, for example. They would say, or Colombia or whatever. They'd say, you know, we want to invest a billion dollars in Indonesia. In 1970, my first job was Indonesia. It was looked as the place to stop the domino effect. We knew we were going to lose Vietnam at that point. And there was this theory that if Vietnam went down, Cambodia, Laos, Indonesia, the whole Southeast Asia would fall to communism. And Indonesia was looked at the place to stop that. It was also a country with a lot of petroleum reserves and also had the highest Muslim population of any country in the world. And so Indonesia was looked at a key place. So the decision was made to invest a large sum of money there. And my company would be hired to go in and do a study and decide whether that money would be better spent on building power plants or highways or ports or communication systems, what kind of infrastructure would best serve our interests in that country. And our interest being basically what would serve big industry best and multinational corporations best. And then my job was to go in and convince the leaders of that country, the president or various cabinet ministers to accept this loan. And these men would know that this loan, for the most part, was not going to help their people. It was primarily going to help big multinational corporations, and that their country was going to be left holding a huge debt and that eventually they would have to pay off that debt by selling oil cheaply. But in the process, they and their family and their cronies would get very wealthy. In the process, they would get extremely lucrative deals. They would get major bribes. And usually those bribes were legal bribes. There's many ways to legally bribe someone, and we did that proficiently.

But in the long run, the people that gained were the big companies that our companies that went in and built the power plants or the ports or the highways and provided all the equipment, the general Electrics, all the companies behind the scenes, as well as insurance companies, insured these companies, banks and so on and so forth that got involved. And the other big winners ultimately would be the oil companies, because at some point we'd go back to Indonesia and say, hey, you can't pay your debts, so sell oil really cheap to our oil companies.

And what you're saying is, is that. But this didn't benefit the regular citizen in Indonesia at the time. It only benefited a very small number of people. And this is where I think, John, a lot of people are really going wrong in their thinking about quote, unquote, capitalism. Because when you look at the us the knee jerk reaction of the people on the right is to say, oh.

Big business is great, get government out of our lives, deregulate big business. I'm the friend of big business.

But it's really not capitalistic. It's not that way on Wall Street. Wall street is a rigged game, in my opinion. And all the wealth seems to be getting so concentrated, whereas the middle class, now I'm Talking about the U.S. of.

Course, is really disappearing.

Yeah, and Jason, you're talking about the US but this all started in these other countries. And the US now is following that example. The economic hitmen have come home to roost here. And yes, and you're exactly right, it's and what would happen in countries like Indonesia or Panama or Ecuador or Congo or you name it, where any of the places where I worked is that these big loans would go and these infrastructure projects would be built. And statistically you could show the GDP that the economy grew as a result. But only a few people in these countries really benefited from the economy. Most of the people really live outside the economy. They live on existences. And that's not, that doesn't show up in gdp. So what you had, in fact was our big companies getting rich, we being able to exploit resources, oil, natural resources and human resources, and the poor getting poorer. The gap between rich and poor growing significantly as it has over the last 40 years throughout the world. And so we were creating this form of capitalism that I call predatory capitalism.

Yeah, good distinction by the way. I really like that phrase, predatory capitalism.

Yeah. And it's, you know, it's resulted in an extremely dangerous world, in a very unsustainable world. Ultimately we can't, you know, we really, we cannot continue like this. We've produced a failed system. It's all you can say about a system where less than 5% of us live in the United States and we consume more than 25% of the world's resources. Now you cannot call that a model that you can sell to India or Africa or Latin America, the rest of the world, you can't do it. I mean, we'd need another five or six planets just like this one without human beings on it in order to be able to replicate that model on the rest of the planet. So it's a failed system. And I have a two year old grandson and I hold this baby in my arms and look down at him, I think, what in hell is this planet going to look like when he's my age, six decades from now? If we continue on this course, it's going to be disastrous. We must turn it around. We must recognize that this is a failure. And we've got to come up with something a lot better.

In the Hoodwinked book, you start out by saying that this is not a fluke. And I assume you're talking about the financial crisis. What about it is not a fluke?

Well, you know, we could all see it coming, couldn't we? I mean, if you really looked at it, if you looked at the huge amounts of debt that we were taking on, if you looked at the fact that businesses were operating essentially without regulations, unfettered. And so we had, you know, the obvious ones like Enron, but there was so much going on behind the Scenes and still is where we're seeing bankers today making huge profits in bonuses. Wall street people making huge profits and bonuses despite the fact that they're doing it off of our taxpayer money to a large degree. We bailed them out. This is a terrible system and it's bound to crash. And the crash is not over. We're not going to come out of this. I mean, there may be blips and we seem to come out of it. And right now we're being told, well, looks like recession's ending because GDP seems to be growing, but so is unemployment, so are housing foreclosures. And so it's, it's kind of like what I described in these third world countries. Statistically you may be able to say, well, things are getting better, but that's only for a few people at the top who are getting a lot better. And so they're spending a lot of money, they're investing money. So that increases gdp.

Sure.

And the statistics are also so manipulated by the government, I just, you can't trust any of it anymore. But the government's response has been, and by the way, just to dovetail on what you just said, I say that we're at the, we're at the middle of a W right now and we're going to see a further collapse. I think the stock market is completely manipulated and I don't think we're going to see that sustained unless the dollar just becomes so debased where it's so worthless that the stock market stays up there but in real constant value. It's not really true, but the government's response has been pretty much the John Maynard Keynes response. Prime the pump, inject money into the system. And chapter two, you say the Titans, Keynes versus Friedman. What are your thoughts on the government's response so far?

Well, I grew up, I mean, I went to business school in the 60s and we were Kinseyans and you know, even Nixon said we're all Kinsians and everybody was until Reagan came along in 1980 and really embraced Milton Friedman's form of economics, Kinsian economics, that I was taught. The aspect of it that most appealed to me was that it was fairly compassionate. I had professors in business school that used to say, you know, if you become CEO of a company, or they always said when you become CEO of a company, you want to take, you want to look up at the long term interest of the company, make sure it's sustainable in the long term and realize that your company needs to take care of Its employees, its suppliers, and its customers, as well as its stockholders. And also, it needs to be a good citizen in the community. Company needs to be a good member of the community.

Right. A good corporate citizen.

A good corporate citizen. And that was drilled into me. Now, that all changed under Milton Friedman's form of economics at Chicago School, which is, I think, is based on essentially three principles. One is the only responsibility of business is to make profits regardless of the environmental and social costs, and to make them in the short run. And two, businesses should not be regulated because regulations get in the way of making profits. And of course, we all know that business executives have complete integrity and are totally honest and wouldn't steal from anybody. I think that's the implication. And three, everything should be run by private business, including schools and jails. And in the military, you know, which we're seeing happening now in Afghanistan.

You're talking about like Blackwater.

Yeah. I mean, right now they're saying that roughly 60% of our forces in Afghanistan are private military, not government military. And so these three principles, I think, have created a very greedy world and a world where the rich and the powerful have become much more rich and much more powerful. And it is an unsustainable form. It was adopted by Reagan in 1980 when he was elected by Thatcher and Oddson of Iceland and many, many other world leaders. And it's been accepted and adopted by every major leader since every president of the United States, including the current one. Obama is accepting this, too. And I think it's a very, very dangerous form. It's very predatory. It's the first time in history we've had a form of capitalism that is so predatory and so uncompassionate. And other times in history, there have been, you know, robber barons who kind of sneaked into the system, sneaked past it, but there have been a lot more controls on these things, and eventually they came around. But in this case, it's been. It's really. It's. It's really spun out of control.

I think, though, on the other side.

Of that, John, you have the government that is just so totally inefficient and doesn't have like. Like an aligned set of incentives. So that becomes this bloated bureaucracy that also has its own monumental problems.

And I think on the flip side of that, too, you have this sort.

Of predatory government nowadays because the government is broke. And you look at all these municipalities looking for ways to increase revenue because they're on the verge of bankruptcy. Cities, states, counties. Of course, the Feds are, but they can just keep printing money. And they're installing speeding cameras, red light cameras, which all under the guise of public safety. And of course we shouldn't go through red lights and we shouldn't speed and nobody should be driving intoxicated. I couldn't agree more. But they're making these fines so enormous that they're attacking again, a small part of the population that usually can't defend themselves very well. And it seems like the government is becoming very predatory too, because. I agree.

And not only are they making, you know, these large fines, but. But it is Orwellian. It's 1984, where somebody's watching you all the time. I recently discovered, much to my chagrin, that there's thousands of people out there who can break into all my emails even though they don't know my password and even though I may have deleted and permanently deleted my emails from my computer, they're out there and we have very, very little privacy. I'm extremely disturbed by this. You know, you love it when you see on television that some kidnapping was stopped because a remote camera in a parking lot picked up a man trying to pick up, trying to kidnap some little kid. That's wonderful. But every time I see that I also think, yeah, but that means what.

Else did that camera see?

Exactly. And what. Isn't that a tremendous invasion on privacy? And I think it is a tremendous invasion on privacy, notwithstanding the fact I'm awfully glad that the kid didn't get kidnapped. But it's very, very Orwellian. And you know, I feel that we're all in a very precarious position today that way. The government has very much overstepped its bounds. And I think we need to understand that at the very highest levels of government, it's run by the same people who run the big corporations. The revolving door, they just jump back and forth.

It's really a fascist corporatocracy. So the socio fascist on one way you want to, you want to buy votes from people and then you want to get in bed with the corporations and with Wall street and the same guys, they work at Goldman Sachs, then they work for the Treasury. I mean that, that's just insanity that we have. There's like no separation of church and state here.

Well, our economic policy under Obama is being run by Goldman Sachs and Wall street because, you know, they gave them a lot of money. And our agricultural policy is being run by Monsanto and Dolo and Chiquita. There's no question. Yeah, it's scary. It's dangerous. And I think it also points out to the fact that we're at a very pivotal time in human history. We're at a time that I think is similar to when city states became nations, except now the nations are becoming less relevant. And despite the size of governments and so on, government's really not that important anymore. The president of the United States is not a very powerful person really anymore. The big corporations are what are calling the shots. And I think back when I was in business school, you looked at a globe and you said, well, there's about 200 countries on that globe, and a few of these are very powerful. Back then, the Soviet Union and the United States, the British Empire. But today, you look at that globe and you say, you know, the real geopolitics are like huge clouds drifting around this planet. They're not countries. They don't know any particular sets of laws. They don't know country boundaries. These are the big corporations, and they strike deals with the Chinese and the Taiwanese and the Tibetans with the Israelis and the Arab nations with whoever has the resources and the markets that they covet. They strike deals with, and they're really calling the shots now. It's what I call the corporatocracy. The heads of our biggest corporations are the people who have the greatest power today, and they wield it. And of course, the recent Supreme Court decision made it even easier for them.

That one really scares me. And what he's referring to is how corporations can now advertise to support political candidates. Right?

Exactly. Terrible.

It seems like the world basically evolved this way. First the church had all the power, and it was religion, and that was where the power was really concentrated. Then the power got into the hands of government, and now the power is in the hands of corporations. Big, giant multinational corporations who are free agents. They have no loyalty to a location or a set of laws or a philosophy. Their philosophy is just pure money and resources and control.

That's correct. They have no loyalty whatsoever. They may call themselves US Corporations, but they don't care. You know, we saw Halliburton Moose to Dubai if it thought it could make a little bit more money, pay fewer taxes by going there. And yet it calls itself an American US Corporation. It's really. It's not.

That's crazy. What do you think about what's going on in Iran right now? You said we're at a very pivotal point in human history. And I couldn't agree more. And it's amazing to me how few Americans really realize that everybody Seems like they're worried about just these dumb little things in their normal everyday life. And it seems like we're really at a time where things are dramatically changing.

Dramatically, yes.

And the Middle east is a powder keg. I mean, we've got Israel and Iran. And Iran this morning said they're stepping up their enrichment of uranium to the next weapons grade level. They insist it's just for energy and peaceful purposes. And what do you think is going on there?

Well, I think, you know, it's very complex. I think part of our real issue with Iran is that Iran has threatened to open an oil exchange they call the oil burst, where they would sell oil for yen or euros or something other than the dollar. Right now you can only buy oil with dollars on the, you know, in the international market in any large amounts. And they threatened to change that. And Saddam Hussein threatened to do the same thing. And so did Chavez before the first coup against him back in 2002. We don't want to see that happen. So we don't want to Iran to do that. The nuclear issue is a convenient one. That's a very emotional one. Nobody wants more nuclear weapons in the world. Nobody wants more nuclear weapons. So that's a really good one to shout about, because who can object to it in the oil exchange? One is something very few people understand or even want to talk about or care about. But, you know, when you come right down to this nuclear issue, think about it. If you were Iran, how would you feel? You're surrounded by nuclear weapons. Russia, Israel, Pakistan, India. You know, we probably. We've got them in Iraq now. We've got our military there. We've got them on Diego Garcia and a huge military base in the Indian Ocean. Iran is surrounded by nuclear weapons and we're saying you can't enrich uranium.

Sounds like a double standard is what you're saying.

It's totally a double standard. And don't get me wrong, I, I don't like nuclear weapons. I don't want to see Iran get nuclear weapons. But I think it's pretty hard to demand that Iran not have these when everybody around them, including their enemies, have them. It's kind of like us telling the Lakota Indians you can't have guns.

Fair enough.

And I get where you're going with that. But if they want to be a member of the nuclear club, Ahmadinejad has gotta shut his mouth. I mean, he just, he says such inflammatory things.

Yes, but Ahmadinejad, you know, he really doesn't. The Iranians, Iranians are so clever. I lived in Iran. I spent a lot of time in Iran in the 70s. I know Iranians pretty well throughout history. They've been incredibly clever. Let's remember that they essentially defeated Israel in Lebanon. We say it was Hamas and Hezbollah, but they were both backed by Iran. But Iran's never taken credit. That's the way they work. They're very quiet. They're very behind the scenes. And Ahmadinejad is probably crazy, and he's stuck out there to make the world think the Iranians are crazy. But behind Ahmadinejad is a real power. He doesn't have it. The mullahs have it, and they're not crazy. I think they're approaching this, and I think that they've got probably a pretty good chess game going there. And they've got their front man out there, their pawn. Ahmadinejad is out there making a fool out of himself and having a good time doing it because he's off his rocker. And we're all saying, jesus, you know, Iran's crazy. But the fact of the matter is they have a tremendous amount of. Of power in the Middle east today. They're the ones who, when Palestinians die, give money to the families. You know, when the suicide bombers blow themselves up, who pays for the families afterwards? The Iranians do. They often do it through Hezbollah, Hamas, or some other organization, but they're the ones doing it. And they feel that they can control a lot of the oil lanes in the Middle east and that they need. They want to get recognition for this. So we're dealing with a very, very tricky situation here. And I don't think the Bush administration had any idea how to deal with this. And it appears that the Obama administration doesn't have a much better idea. The fact of the matter is we're just not dealing with Iranians the way that you should be dealing with Iranians.

How should we deal with them?

Well, I think you've got to go in there and you've got to recognize, first of all, you've got to say, listen, we understand that you. That you guys have got a lot of power, that you want to negotiate as equals, and maybe you do have a right to nuclear weapons. You're surrounded by nuclear weapons. But how can we work this out? Is there some way. Can we work toward a deal where nobody has nuclear weapons pointed at you or some such thing, where you've got to sit down and talk to them like equals rather than constantly calling them crazy just because they've got one front guy out there who really, that's all he is. He's a mask. That's the way they work. And we've got to remember too that they're extremely angry at us. We overthrew a democratically elected Premier Mossadegh back in the 50s, Time magazine's Man of the Year. Democratically elected. We threw him out in a coup that the CIA initiated. Kermit Roosevelt, Teddy's grandson, went in there as a card carrying CIA agent and threw out a democratically elected President, replaced him with a despot, the Shah, who is still strongly resented. And so there's a long history. It's not an easy task to deal with the Iranians. I'm not suggesting it is. But it's going to take time and patience and to cut out the saber rattling which is what we're doing right now.

Hey, I want to ask you about a couple things. In the Hoodwink book in chapter eight, you talk about the coming deregulation. Now it sounds like you've already been arguing that we have too much deregulation and we need more regulation. But then you talk about the regulation scam and I have some thoughts on that regulation scam. But what are you getting at in the Hoodwink book on those two?

Well, when I was in business school, Jason, I was told by many professors that we'll never have another depression or like the one that we had in the 30s or even a recession like we're having now because we've put rules into place after the depression to keep that from happening. And I think that was true. I think we really did do that. But over the years, since I was in business school in the late 60s, we've thrown away those rules. And you know, the most famous one is Glass eagle back in 1999 under the Clinton administration. And we got rid of that one. But there's been a lot that we've gotten rid of. And so we haven't had this recession. And we've all seen how getting rid of those regulations has allowed many firms, Wall street firms, banking firms, insurance companies, companies like Enron and many, many others to get away with what should be considered terrible crimes because the regulations weren't there. So we need to understand that we, you know, that these businessmen are like the rest of us. They succumb to temptation. They need some laws to regulate them just like the rest of us do. We're not allowed to go out on the street and pick people's pockets. We're not allowed to break into our neighbors homes. They shouldn't be allowed to do Those things either on a corporate level, but I think we need to also go beyond that. And during the first hundred years of this country's history as the United States, no corporation could get a charter unless it proved that it was going to serve the public interest. And then it had a charter for about 10 years on average, with some exceptions. It had to go back and, and prove that it had served the public interest. And we continue to do that. I think we need to reinstitute some sort of theory of policy along this line where corporations, it's recognized they're there to serve the public interest, as you said, to be good corporate neighbors, community neighbors, good citizens, corporate citizens. So if we look at Milton Friedman's idea that the sole responsibility of corporations is to maximize profits regardless of the social and environmental costs, and we just changed that a little bit to say the responsibility of corporations is to make profits, but within the context of creating a sustainable and just world, in other words, while maintaining standards of environmental and social responsibility. Let's only buy from corporations that are committed to being sustainable, to creating a sustainable world in a world that my grandson will want to inherit and every child on the planet will want to inherit. And let's create a set of laws that make that hold corporations to that standard whereby they have to operate in a way that creates things that make this world a place that we're all going to want to live on.

There's so much abuse with entities nowadays. Corporations and LLCs and Enron with their special purpose vehicles, their SPVs. We've got to really re examine how we look at that. Because. Because it's not right that these crooked business people can just set up these entities, take investors money, take all the money out themselves and just bankrupt the entity. You know, that's just crazy the way people are abusing the system.

It's the Wild West. You know, when I was a kid we did the westerns were very popular, you know, movies. And there were a lot of them about the lawless town. This is a town without laws or without a sheriff to enforce the laws. Then you get this criminal element that goes in. Of course we see that in ghettos too, in places like that where criminal elements go in. In a way we've created a form of capitalism that's almost lawless. It's permitted to let these corporations run wild, run amok. And it just creates a foundation for terrible, terrible abuse. And we've certainly seen that happened. We must change that.

We really must change that. I completely agree. So here's the regulation Scam, though, in my eyes. I don't know if this is what you're writing about because as I mentioned, I have not read the Hoodwinked book yet. But the regulation scam is that a lot of these large companies, these multinationals, usually they ask to be regulated as a way to keep competition out of the game because they know that the little guy engaging in the free enterprise system will never be able to apply, afford the compliance. They can't jump through all the legal hurdles and hoops in order to comply.

And so that's kind of like the.

Law of unintended consequences in a way, isn't it? I don't know what you're getting to when you talk about the regulation scam, but I'd love to hear that in your comments.

Well, I'm talking about regulations that don't permit these companies to have such power, like Glass Siegel, that, you know, did not permit investment banks to also do things that commercial banks do. And when Glass Siegel was torn down, suddenly the commercial banks and the investment banks became partners. They became one company. So you're mixing the ones that take big risks with the ones that aren't supposed to take risks at all. And how do you do that? It created problems. So laws that don't allow that to happen. I think we need to do exactly what the opposite of the Supreme Court has done. Laws that don't permit corporations to get so deeply involved in the political process, to invest so much money in supporting candidates, restrict that or don't even allow them to do it at all, in my opinion. And laws that do not allow corporations to control media. We used to have those laws. I go in a lot of detail and hoodwinked about a whole series of different laws in many different parts of our economy. Media is just one example where back, you know, it wasn't so long ago that you could not control the newspapers and radio stations significantly in any given market. That's changed now. I think those were important laws that kept corporations from becoming too big and too strong, that allowed the entrepreneur to own radio stations and newspapers and not be wiped out by these huge conglomerates that can just wipe them out overnight. They end up cutting them. And you get the same thing with the big box stores like Kmart and Walmart. They go in and just destroy entrepreneurs and community after community after community. I think we need to put some halters on that type of activity.

Yeah. It's so hard to do though, John, because the question is it's all a matter of degree. And what do you Set that number at. Do you set that number at saying you can be this big, but you can't be that big?

We used to do it, you know, we used to. I mean, if you just take the media business, you used to say you could just define it in ways that related to not having control over a market in any given metropolitan area or any given community. So if you owned a radio station, you couldn't also own the newspapers and you couldn't own more than a couple of radio stations in a certain geographic area and you couldn't own a television station, or you could own one radio station and one television station. There are standards like that that you can set up that make it so that no one entity can go in and control a market. And you can do that with retail establishments too, so that a Walmart or a Kmart just is not in a position where it can go in and then start to undercut every other local business that might be competing with them. I know a business in a town in New England where Walmart went in, this business had opposed Walmart coming in. The owners had opposed Walmart. And as soon as Walmart finally got into the town, the products that this business sold, which were chinaware and silverware and stuff like that, Walmart offered all the same things at under cost to them. It was very obvious that they were losing money every time Walmart was, every time they sold these products, but they very quickly drove this mom and pop organization out of business.

Yeah. In other words, the strategy is lose money for a little while in order to monopolize a marketplace.

Yeah. And I think that's very contrary to true principles of capitalism where a corporation that's that big and that powerful should not be in a position where it can drive people who owned a family business, perhaps for generations, out of business, people who are doing a really honest business and one of these conglomerate giants comes in. I just think that that's contrary to our principles, both of democracy and capitalism. That's predatory capitalism that's preying on other people because you just happen to be bigger.

The problem is though, the consumers don't care.

They just want the best deal. They want the instant gratification. And if Walmart's going to sell things at a loss, leader, they're going to.

Go buy it there.

Obviously they didn't in that example.

Well, the consumer does have to take over a lot of responsibility, Jason. And part of what I talk about when I'm on these speaking tours and incidentally, people can check out my website, johnperkins.org I'd love to meet some of your listeners and I'm traveling around, speaking in a lot of different cities and universities.

Great, great website, johnperkins.org, a lot of resources, videos there, links. So some good stuff there. I really enjoy your website.

Yeah, thank you. My son in law did that. He did a great job. I think he still does it. Does it every day.

Yeah. Good.

Yeah.

Well, I think we must take more responsibility. I think we have basically sent the message to these corporations that we want cheap T shirts and if they're made by slaves and sweatshops in Indonesia, we'll just turn the other way. And we want cheap petroleum. If that means destroying rainforests in the Amazon and the people who live and the animals and plants will look the other way. And I think now we're seeing that this is coming home to roost, that when you do that, it eventually comes back and bites you too. And let's all aim our sights higher. Let's say, you know, that's really not what we want. What we want is a good world for ourselves and our children and our grandchildren and to recognize that we live on a very small planet and our children and grandchildren are not going to have good lives unless every kid growing up in Bolivia and Botswana and Palestine and Israel had that same expectation. We're at a time in history, Jason, that's like none other. You know, we're totally interdependent as a planet. Used to be you could watch out for your own city, your own state, just for the United States. Didn't matter what was going on anywhere else. That's all changed very rapidly today. For the first time in history, we're all suffering from the same crises. We're all facing climate change, we're all facing extinction of species. We're all facing resources that are diminishing and accelerating rates and prices of essentials like food and fuel that are increasing at accelerating rates. Everybody on this planet is facing this overpopulation. So many crises. And for the first time in human history, and this is only a couple of years old, we're all communicating with each other. People in the highest village in the Himalayas, who never thought they'd ever get telephone lines, now have cell phones and through them the Internet. Same is true deep in the Amazon. We're at a very revolutionary time in history.

And that communication, though, may be really the savior because the fact that we are talking and we're interconnected in a communications way, I mean, look, you're a lot less likely to go to War with someone or even economically hit them, if you will. If you have friends in that place that you talk to online, that you are friends with on Facebook, it makes everybody more connected. So maybe that is part of the.

Formula for saving ourselves. Right?

I totally agree. I mean, look what you're doing. Where does your program go?

Listeners in 26 countries around the world.

It's just amazing.

And if you had one of those old radio stations that were restricted to Southern California, you wouldn't have that option. Today we have this amazing option. I get hits from my website every day from all over the world.

I know, it's really incredible.

It is incredible. And to me it's very encouraging. I take great hope in this. I think we're at this pivotal time in history, but we must recognize that we, the people, must do it. We've got to demand a better world. And, you know, let's not support corporations that don't do a good job when I'm speaking. And sometimes I have audiences of a thousand people. So I say, you know, if just 10% of you and 10% of the people I'm going to speak to over the next three months in audiences like this, as I travel around the country, if just 10% of all of you send an email to Nike and say, listen, and I'm not buying any more from you because you have slaves working in sweatshops in Indonesia, Nike will have to change. If enough people do that. Nike, I don't want to disemploy the people in Indonesia, but what I do want is for Nike to give them fair wages and decent working conditions. And they can do that. And if enough of us just speak out and realize that we are terribly, strongly related to those poor people in Indonesia who are working for terribly low wages in terribly unpleasant conditions, they're connected very strongly to us. And they're the future terrorists and their kids are the future terrorists. We've got to recognize that. That in order for our kids, in order for us to have homeland security in the United States, we have to recognize that the entire planet is our homeland. And this is first time in history that this is true. We get to recognize that we really are on space station, but there's no shuttle to rescue us. We got to rescue ourselves.

No question about it.

Well, it's a good message. And John Perkins, you keep promoting the good message. The website is johnperkins.org and that's P E R K I N s. By the way.org johnperkins.org and his new book is Hoodwinked it's available in stores on Amazon, all the usual places. And John, thank you so much for being with us today. We appreciate the insights.

Keep up your wonderful work starting this work to all these many countries that you're spreading your word to and expand those countries.

Thanks.

We'll.

We'll try. You do the same.

John, thank you.

Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out the show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest opinions are their own and if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to itunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episode. We look forward to seeing you on the next episode.