CW 357: The Abolition of Wage Slavery with Noam Chomsky Linguist, Author & Professor at the Massachusetts Institute of Technology (MIT)

Welcome to Creating wealth with Jason Hartman. During this program, Jason is going to tell you some really exciting things that you probably haven't thought of before. And a new slant on investing. Fresh new approaches to America's best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self made multimillionaire who not only talks the talk, but walks the walk. He's been a successful investor for 20 years and currently owns properties in 11 states and South 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.

Welcome to the Creating wealth show. This is episode number 357 and. And this is your host, Jason Hartman. Thanks so much for joining me today and happy New Year to everybody. I've got Steve here with me to talk about some stuff before we get to that communist bootlicker, Noam Chomsky. Oh, sorry to say that that's just what someone wrote on my Facebook page when I announced that I was interviewing him. But maybe you'll feel that way after the interview. I don't know.

Off to Siberia you go, Jason.

Yeah, I know, I know.

If I don't. Don't speak ill against the communist bootlicker.

Yeah, that's right. If you said that to Stalin, you'd definitely go to Siber.

Yep.

Not summarily executed. Or in North Korea. You know, apparently they feed people they don't like to 120 starving dogs. If that story is actually true, it's.

A very tolerant ideology.

Yeah, talk about barbaric, huh? Yeah, mind boggling. But speaking of barbaric, we have a famous economist who recently called bitcoin barbaric, didn't we, huh, Steve?

Yeah, yeah. Our good friend Paul Krugman.

Oh, Krugman. Yeah, he's a piece of work. Sometimes work. Well, yeah, work a piece of work.

I was thinking something else.

Okay.

That'S not podcast material. Sorry, everybody.

This is a family friendly show, so keep it clean.

Well, my wife, actually. People have heard on the podcast we had our baby a couple weeks ago.

And by the way, yes, we have to publicly congratulate you for having the little terrorist. You're not getting any sleep.

I'm the one that feels like a terrorist. I feel like I've been locked away in Guantanamo Bay with all the sleep deprivation.

Well, there you go.

Yeah, so that was my excuse for my poor behavior on the podcast. I'm blaming it on lack of sleep.

Okay, Blame it on the poor kid. So tell us about the baby. You had a big kid, huh?

Yeah, he was nine pounds six ounces.

He's a nine pound, six ounces. Yeah. That's a big kid.

Yep, he is. So he's doing great. And everybody's healthy and happy to have him here.

Well, good. Congratulations to you. So back to Krugman.

Yeah. Yeah. The little guy's being born into the era of bitcoin and Krugman thinks it's barbaric. He thinks that. Well, it's hard to keep track of this guy because he's kind of crazy if you ask me. But he's saying that bitcoin has no real uses and that it's not tied to anything. And he goes on and on making these arguments and I'm going to. Is he talking about bitcoin or the dollar? I think you could swap the names out here.

Well, I don't know. You know, I mean, I appreciate your sarcasm and all, but I gotta tell you, I mean, it's funny because I don't know if it was either Alan Greenspan or Ben Bernanke. Now we have officially a new Fed chair, Janet Yellen. It is official now who called either Bernanke or Greenspan, who called gold a barbarous relic. Okay, I don't know if you remember that quote, and I just can't remember which one of those Fed chairs it was. But you know, if you think about it, both bitcoin and gold and silver and anything that is not the government sanctioned currency in the country in which you reside really is kind of useless because, I mean, everybody knows I'm not a gold bug. And I'm not a bitcoin bug either. Although I think bitcoin in these. And you know, bitcoin just happens to be the most famous one. There are other crypto or cyber currencies out there. There's one called litecoin, there's several others, in fact, and we're going to talk about those at the upcoming Meet the Masters event in Irvine, California. And by the way, if you haven't purchased your tickets, there are still a few left, so please do so@jason hartman.com in the events section. We'd love to see you. So there are other ones, but I mean, your sarcasm against Trugman and the dollar is duly noted. And I agree with you. However, nothing is more powerful than a really powerful government with endless resources like ours and the ability at the point of a gun and the threat of imprisonment to enforce things that they want you to follow, whether it be Obamacare or, or using the dollar under the legal tender laws requiring you to accept it for all debts, public and private, as it says right on the fiat currency itself. So I just want to kind of make that distinction. You know, you can't use gold very easily to trade with and you can't use Bitcoin very easily to trade with. So just some equal time there is all I want to mention. So. Well, you can beat up on me after this recording off the air and say, you know, Jason, that really wasn't very fair of you to argue with me about that. I'm not. I'm just pointing out some distinctions is all. But go ahead, Jason.

You've got Noam Chomsky and Bill Ayers coming up. I think equal time is covered.

Yeah, I guess. And we're going to run those back to back. Bill Ayers will be the next episode, who, as I've said before, he gave a pretty darn good interview. I was, I was impressed that no questions were off limits. And unlike Noam Chomsky, he did not cut our interview ridiculously short when I asked him a tough question. So props to Bill Ayers, the self described communist with a small C, not.

A capital C. Ah, a small C, not the kind that ships you off to Siberia.

Yeah, I guess it's a lower level of communist. Oh geez. Anyway, let's finish this bitcoin topic because we got a bunch of stuff to talk about.

We can finish it. I'll give you just a quick summary from the article. Basically it says why the effort for gold in bitcoin? And he's talking about this whole phenomenon of these things happening. For one thing, there's the unfounded fear of the debasement of government backed currency. And with bitcoin there's the sense that it's high tech and algorithmic, so it must be the wave of the future. But really we just miss the days when money meant stuff you could jingle in your, your purse. We're digging our way back to the 17th century.

That's what Krugman has to say about it. That's hilarious. And as soon as I posted that on our internal forum that we use, you know, that our team uses to communicate and share articles and videos and ideas and so forth. And some, a lot of this stuff is actually reposted in our members section as well if you happen to be a premium member for the whopping 10 bucks a month. But anyway, yeah, that, that, that's interesting. You immediately responded back, commented on that thread, and said, krugman is a barbarous relic. I thought it was very fitting. So, yeah, it's just. It's just ridiculous. But nothing is more powerful, unfortunately, than big government with massive resources and with the world's reserve currency, the world's largest brand, the world's largest economy, and not the least of which, the world's largest military.

That's exactly right. We can get off on this inflation and the Fed and all that, which is certainly unhealthy. I think it's the. The least bad. That's not very good English. But it's the. The option that is the easiest because those other options are. Are horrible. But that all aside, the United States still is the. The prettiest girl at the ugly dance.

Yeah. And let me tell you something. I think we're gonna win the game, okay? And like I've said before, I don't think it's fair. I don't think it's fair that we print all this fake money, ship it around the world, and require every country to do international trade in our currency. But guess what? We have the bully pulpit. We have the military to enforce it, and we got the biggest economy and the most weight to throw around. It's not fair, but it's just the way it's gonna be. In fact, it reminds me of a meme, and memes are where, you know, you've got these pictures and people put captions on them and trade them around social media, and it's a picture of Obama pointing his finger, and it says, when capitalists can't sell you a product, they work to make it better. When socialists can't sell you a product, they say, quote, you have to buy it. It's the law, unquote. And that's exactly the way we are.

Well, that certainly sounds familiar.

Yeah. Yeah. Well, that's given.

Given that it's 2014 now and all the. The new shenanigans that have taken place with the health care law.

Yeah. Yeah. Well, it will be a disaster. Let the disaster begin. And. And then. And then the people on the left will make a million excuses as to why it failed, or they will deny that it failed. I mean, there are people that still think that communism in Russia worked.

Well, Bush lied, Jason. I mean, what more do you need to know?

Hey, it's all George Bush's fault, Steve.

Much of it is. Yeah, you got to take responsibility.

Fair enough. Some of it really is George Bush's fault. But anyway, okay, so Dan Ammerman who's been on the show a couple of times, he really writes some great stuff and I'm a big fan of our work and, and, you know, some of our listeners have, have checked out his work and if you just Google his reading series, it's free. And he sent me an interesting article recently and, and then I shared it with you, Steve, and it was about how really inflation is such a great thing for us as real estate investors. Philosophically, it's such a bad thing, and, and most people, it will impoverish them, yet it will make real estate investors and people who listen to our show and to know and who know how to play the game. It will make them so much wealthier. And it also is a fantastic business plan for governments. Again, philosophically, I hate it. I disagree with it. But from a practical standpoint, it really is the best way out of the hole. And it is a hole. But I think we're going to go right on digging the hole, kicking the can down the road, and having a reasonably decent standard of living in America. I think it will decline a bit. But Dan Ammerman did a good job outlining, I believe in, like, eight points as to why the government will debase the dollar. Right, Steve?

Yeah, it's actually six points. And I'd like to ask you about them individually.

Sure.

Hear what you have to say.

Yeah, let's talk about it.

But it's. His article is titled the Six Reasons why the Government is Destroying the Dollar. And if you don't think that they are, you are probably not listening to this podcast. So I will not address that side of it. But the first reason he gives Jason is that creating money out of thin air on a massive basis is all that stands between the current state of hidden depression and overt depression, with unemployment levels potentially rivaling those seen in the Great depression of the 1930s. What do you think?

Well, I think that, you know, like I said, it's, it's, it kind of ties back into that Phillips Curve concept. And I would encourage every listener to look up Phillips Curve in Wikipedia. And there's, there's a great little piece there that just explains how economists, most of them, really like and foster inflation. I mean, they called Greenspan the maestro. Yet the dollar was massively debased under Alan Greenspan's tenure and, and under Ben Bernanke's as well, which was quite a bit. But it's just, you can, you can throw money into the economy, create it out of thin air. And what will it do? It will cause New restaurants to open. It will cause new businesses to open. It will put money into people's hands, or I should say currency that makes them think they have money. Money is real. Money is things. Money is portfolio of rental properties. That's money because it has intrinsic value. Whereas pieces of paper with green ink on them, they don't have intrinsic value. They have, they have the military and the police and the, and a set of laws and, and branding that creates their value. Yes, and legal tender laws, but they don't have legitimate intrinsic value. So if you do this, you can create, at least for the short term, like caffeine, you can. It's a fix. It creates employment. And so again, this is a good business plan for governments. It hides problems.

Right, right. It's. It's as he says, it's the only thing that stands between this kind of hidden depression that we have.

Yeah, I agree now over depression. Fair enough. And look, if we, if we wanted to do this right, when the financial crisis hit, first of all, we would have jailed all of the crooked banksters and all of the Wall street scum, which of course we didn't do. Oh, and by the way everybody, you must see the movie the Wolf of Wall Street. I saw it on the show. I did with Naresh on the last episode we talked about the Wolf of Wall Street. He had seen it and I hadn't. So I went out to see it the next night and it was just despicable, disgusting. I mean the. These Wall street people, just scum of the earth. Okay? But it's a really good movie and you really need to see it because it just. It's just really mind blowing.

I have read the book are mind boggling.

Yeah.

And the sequel, ironically enough, the, the self proclaimed Wolf of Wall street never worked on Wall Street. His office was on Long Island. But he. I read. And if you want to get even more sick, read the sequel. It's called Catching the Wolf of Wall street and it's a huge insight into the justice system and the preferential treatment that these clowns get. It follows the multi year period where Jordan Belfort was a, as he called it, a rat and was wearing a wire going around to all these people trying to get them to incriminate themselves and even down to when he gets to federal prison and gets better treatment there because he has money. It's insane.

A good old Club Fed. Yeah, yeah.

He had a butler and a masseuse in Club Fed.

In prison he had a butler and a masseuse.

Read the book. You'll see what I'm talking. It's very entertaining.

Life could actually be better in jail than it is in real life, in free society. That's unbelievable.

I know, it's crazy. He talks about how there were. There were actually the wives and relatives of various inmates. It's minimum security. It's on an honor system. I mean, you could walk out and leave and nobody would know for a while. And then they'd, of course, send the marshals after you. But people would leave care packages out in this field at night, and the prisoners would just walk out there at night and get their care package. And if you want to get. You've talked multiple times, Jason, on the podcast about the corruption of the prison system in the United States.

Right, because it's a business. They're putting people in prison is now a business. And we've got the highest incarceration rate in the quote, unquote, in civilized or industrialized world, if not the entire world. You know, I think our incarceration rate may actually be higher than really sketchy countries that Michael Moore loves, like Cuba or North Korea, that Dennis Rodman and, you know, people like that love. I'm not sure on that note, but I know it's the highest in the industrialized world, and it's just ridiculous. But, you know, Steve, lest we get off on a tangent, I just want to finish making my point there. When I brought up the wolf of Wall street. And that is that what we could have done, right, when we were entering into the financial crisis. Certainly we could have done a lot of things right to avoid it completely, but we could have taken the hard medicine, not done the bailouts. We could have let all of these scumbag corporate socialist companies on Wall street fail. There would have been a lot of devastation. It would have been painful. Just like taking your hard medicine when you're sick. It doesn't taste very good. Castor oil that they used to give you in the olden days. That was before my time, fortunately, but supposedly it made you better. And take our hard medicine. And you know what? We would have come out of this quickly and we would have come out of it much, much stronger. But all we've done, as we, I argue, we will always do until someone like Ron Paul or Rand Paul is president, and there's a bunch of those types of people in Congress, which will probably never happen. We will continue to kick the can down the road, spend more than we receive, print fake fiat money out of thin air, have a somewhat sustainable inflation rate, and by that I mean, real inflation of under 25 to 30%. And of course, official inflation will probably never be reported over 15%, maybe not over 10 or 12%, but the reality will be much higher. And that will just slowly boil the frost frog. You know, you put the frog in warm water and they feel like it's a Jacuzzi and then you turn up the heat underneath and the frog just sits there like the average citizen who's not taking action and managing their investments and their financial life for this reality that is coming. And they will just boil to death because they become complacent in the warm Jacuzzi. Right. And, and so that's, that's what I think our business plan will be. I don't ever think there will be a shock economy. You know, a lot of people are predicting that if you type in collapse, you'll find all the Gerald Celente and Peter Schiff videos and all of those doom and gloomers, but I say they're just not going to let it happen. Now, if we didn't have the reserve currency and we didn't have the biggest military, and we didn't have the biggest brand name and we didn't have the largest economy, then we would be subject to the laws of physics, the rules of gravity, and the rules of math. But we are exempt from those. Somewhere in the good old US of A.

It will not change until you notice we are on two, four and six year election cycles and the fix that you have advocated goes beyond that. And politicians are only capable of seeing until the next election.

Yep, no question about it. No question about it. So that's my prediction. More of the same, but a little worse.

Yeah, well, like you said, we're still the prettiest girl, but it's at the ugly dance. But it is just classic corruption. You know, I've never been one to advocate the government running much, but prisons, I got to think otherwise. Yeah, you see why when you read that book. But we should probably hit number two here.

Yeah, okay, go for it.

So anyways, going back to Dan Ammerman's article Six Reasons why the Government's Destroying the $I Number two, it's the most effective way to not just pay down current crushing debt levels using devalued dollars, but also to deal with the rapidly approaching massive generational crisis of paying for boomer retirement promises.

Absolutely. They're just going to print their way out of that one too. I mean, look, nobody really knows this for sure, but they say we've got the. I started calling it the $60 trillion time bomb, which is the unfunded entitlements coming over the next 15 to 20 years. And they're just, they're just massive. So first of all, we must raise the retirement age, or I don't mean retirement age, but I mean Social Security entitlement age. We've got to set that back a good 10 years. What is it, 62 or is it 65? I think it's 62, actually. Is it? I'm not sure.

I. I don't plan on getting it.

Yeah, I don't. I don't plan on getting it either. So I don't think much about that. But it's got to go back, roll back 10 years. So you got to be 75 before you collect it, first of all. Okay. And you know, the nice thing is nowadays most people, you can work longer, your health span is longer. And you know, we've done shows on this subject and, and I'm actually launching a new show entitled the Longevity show, because I think this longevity thing, while it holds great benefits for individuals to live longer and healthier lives, it has huge, huge economic and social implications. And so we're going to explore those in a lot more depth on the Longevity Show.

You can sit on a folding chair at the front of Walmart all the way into your 80s now.

Yeah, well, even. Even longer. Yeah, yeah. So, yeah, I think Ammerman is. He's right. Okay, next point.

Okay, I love this one. Reasons why the government's destroying the dollar. It creates a lucratively profitable 500 billion a year hidden tax for the benefit of the US government. A tax which is not understood by voters or debated in elections.

And that is the, that's the inflation tax, right?

Yep.

Yeah. Yeah. So the inflation tax. Inflation is a pickpocket, a very, very smooth pickpocket artist. Because the vast majority of people, you don't notice the air. Well, hopefully, unless you live in Mexico City or Cairo or one of those, really, or, you know, many cities in China. Of course, I should have mentioned that. Hopefully you don't notice the air because you don't see it yet is it is the context within which you live. And the same is true about inflation. It's subtle enough that people don't notice it and they don't understand it, and they don't understand how government spending creates inflation. So this hidden tax, the, the tax code does not adjust for inflation. The IRS doesn't adjust for it properly. And most people are getting completely destroyed because they're playing the exact Wrong. End of the game. They'll keep their money tied up in home equity. They'll keep their money tied up in a bank account. They'll put it in the stock market, or they'll buy bonds. God forbid. God forbid, any of those things. But, you know, bonds. I just don't even see how you could consider that one. Okay. And then inflation will just eat away or tax their wealth. It's a. It's a hidden tax. And you'll pay taxes on the gross before inflation, not the net. So, for example, if you have a bank account, and let's say it actually earned 1%, which it won't nowadays, but I've got to pick a number to give the example. So you'll pay taxes on the interest from the account, and then you'll have inflation tax it again. And that tax comes after the IRS took their cut.

Yeah.

Okay. Because the money becomes tapeworm. Yeah, it's a tapeworm. It's a parasite. That's a very good metaphor for it. And it just. It just taxes you. And constantly, people become poorer and poorer and poorer, and they don't even know it's happening. So you don't see many. You see a lot of groups out there, Steve, political groups, political action committees that are against taxation, but very few of them that are against inflation because people just. They can't wrap their head around it. It sounds simple. Look, if you're a regular listener to the show, certainly you understand it, and I'm not saying anything new that, you know, is revelation to you, but the average Joe on the street doesn't really get it. The. The average liberal on the left side of the political aisle doesn't get it either. You know, they just sit there and say, hey, I want the government to pay for this. I want the government to do that. And they don't realize that that has to be paid somewhere. So it's either paid in direct taxation or in hidden taxation called inflation, and you're going to pay either way. And wealthy, sophisticated, smart people, and you don't have to be wealthy, you could just be sophisticated or smart. Those are. Or. Or. Or not. End, end, end. They might be all together. Hopefully you're all three of them, but if you're at least one of those people, you're going to know how to play the game to win through inflation. So just keep listening to the show. That's where we'll teach you how to win.

Yeah, your Obama phone isn't free.

It's definitely not free.

All right, we'll go to Number four here, reasons why the government's destroying the dollar. Drum roll number four. It creates a second and quite different form of hidden taxation by way of generating artificial market highs which while non existent in inflation adjusted terms, do create artificial investment profits that are fully taxable and highly profitable for the US Government.

I love this one. This is an excellent point. Nailed it. Because all of the middle class, the unaware middle class who has their money in the stock market, who is at the bar and walks by the TV and sees, oh, the Dow is up today, or the S and P is up today. Yay. Great. Good for me, right? They don't realize that all of that is fake. It's an illusion. When the Dow hit its high several episodes ago, we talked about it, you know, when it hit its first new breakout high and it was like at 14,000 and something. And I did a quick calculation showing that it would have to be at 15,800 just to break even above its prior peak. And that was like, I don't know, 11 years prior or something like that. So this is a complete illusion. Yet if you sell the stock, you've got to pay tax on the gain and you've really become poorer. Yet the government got their cut twice through inflation and taxation, you idiots. I mean, please wake up, tell your friends they are getting screwed and they don't even realize it. It's awful. Gosh, just crazy. And if you listen to your ridiculous financial planner, the salesman in the suit that works at Merrill lynch or Ameriprise or any of these companies out there, they just, they don't even have a clue half the time. And if they did, they're not going to tell you anyway. It's not in their interest.

No, watch. Watch the Wolf of Wall Street. That's what their priority is. Generate trades, make commissions. In a market where assets are being pumped up due to inflation, it's all the better for these guys who are in the little crony club with the government, because it's more trades, it's more commissions. Meanwhile, the poor institutional client, or the, the individual person is stuck with that whopping 2% gain or whatever it is they made for the year, or much more, even if it were 10%. But inflation took a huge bite out of that. And what happens when it pops? What happens when it has to correct?

Show me one person who has really created any real wealth in the stock market over time and I will be amazed. And please don't say Warren Buffett, because Warren Buffett is an insider. Show me a real person.

Bernie. Madoff. No, not Bernie Madoff.

Yeah, no, Jordan and Belfort. Not Jordan Belfort either. Striking out here, the insiders tend to do pretty well. You know, where are all the clients yachts?

Where are all the clients yachts? Yeah, exactly. Well, number five, the reasons why the government is destroying the dollar. It is the weapon of choice being used to wage currency war and reboot, yield U.S. economic growth.

Yeah, I think what he's referring to there, although I'm not sure, but currency wars commonly refer to the export and import, the trade balance. And so what they're doing is it actually improves exports of a country when the country devalues its currency. So if the US dollar, the US is pretty lousy as an exporter. Okay. We just like to consume stuff. We don't really like to produce it too much, you know, unfortunately. Or I'm not saying we don't like to. I'm just saying that's the situation in which we find ourselves through unfair free trade agreements. Thank you, Bill Clinton. And, and another globalist that wanted to sell the US down the river. But that, that was a way of hiding real inflation. Look at if you can, if you can get low wage workers, workers that work for 50 cents or a dollar an hour in other countries to build stuff, versus an American, unionized American who, who you know is like $40 an hour net with pensions and so forth, you're importing deflation, which hides true inflation here.

Yeah, exactly.

And that's what you do. So if you want to increase American exports, what little we have in comparison, then just devalue our currency and that makes all of our goods cheaper overseas so that China might actually buy something from us for a change. And, and, and your, your, your net account balance will be more favorable and people in America will think, hey, I'm making my widgets here, and they're buying them in China or in Europe or wherever. And that's good. Hey, Obama has improved things for me. Right?

Well, Jason, China buys a ton of our bond widgets.

Yeah, well, they do because we essentially hold a gun to their head and force them to.

I see.

They wouldn't do that. That wouldn't be rational behavior.

Yes, well, welcome to government intervention. Now this, this last one, the reasons why the government's destroying the dollar, I think it ties everything together and is the main reason it's an essential component of political survival and enhanced power for incumbent politicians.

Oh, of course, yeah. No question about it. No question about it. I mean, look, everything we just talked about equals more votes for the incumbent and that's why we have in presidential elections and in any election the power of the incumbency that the devil you know is always better than the devil you don't know, as the old saying goes. Right. And so if you can make things look good for your short 10 year by using these monetary practices and fiscal practices that we talked about, you're going to win the next election. And I mean, Obama's business plan is essentially as I see it on the economic side is get in bed with a big large corporate interests and the unions on one side of the spectrum and then give a lot of payola and a lot of freebies and Obama phones and food stamps to the other end of the spectrum. And you've basically made the low end of the spectrum and the very high wealthy end of the spectrum dependent on you. And they will keep you in power. And unfortunately, the middle class doesn't have much to offer Obama's. Yeah, you know, administration. And so subsequently the middle class is getting burned. And mostly the middle and upper middle class is listening to this show. And I hope you tell your friends about it and get them to listen to it too, because we want to teach you and help you play the same game they are playing at the first Federal Reserve on a personal level to your benefit in the same game they're playing on the governmental level. You know what Dan Ammerman just talked about in these six points, we can apply those as real estate investors and really, really benefit from them. It's an excellent opportunity.

Yeah, yeah. If, if you're playing football and you're not successful, look down, you might be playing on a hockey rink and most people are playing these different things. You need to put some skates on, play the same game these guys are playing.

Yeah, these guys know what they're doing. They're not stupid. And you just want to play what they play on a personal level. So that's the thing to do. Okay, Steve. Hey, we're running out of time here. Let's talk about a property real quickly.

We've got a property in Atlanta, Georgia area.

Love Atlanta was just there.

Yeah. And our team in Atlanta is very solid too. Been doing business with these guys for a long time. Remember, we've really just hit this point a lot lately that a well functioning team that knows how to run a business is probably more important than the market itself.

You give me a mediocre market with a great team and I'll take that over a great market with a mediocre team any day of the week that's right. But Atlanta's not a mediocre. Atlanta is an awesome market. Okay?

Yeah, exactly. That's why this is even better. They say in the business world that a execution of a C idea beats C execution of an A plus idea every time.

This is what's so funny about people that come to me and want me to invest in their business and they, oh, I've got this great idea, you know, sign a non disclosure agreement. And they're like waving it in my face. I'm like, I'm not going to sign your non disclosure agreement. Because you know what, someone else has probably already presented the same idea to me. And the world is full of, full of ideas, but very few people actually execute them. And that's why our slogan is the complete solution for real estate investors. Because we actually go through end to end execution. This is not just where you go and you pay 10, 20, 30, 40 or $50,000 for a coaching program and then run by a telemarketer, by the way. Yep. Who probably has never even owned a property and just tells you to go out and do it yourself. We actually have a whole network of support people, over a hundred contractors throughout the country to help make all of this stuff happen for you. So team is critical.

It really is.

And the team behind this property is solid. I like the numbers on the property. Keep in mind the figures. Many of the figures I'm about to give you are projections, like the rental amount and the return. There are some hard figures that I'll give you like square footage and stuff. Obviously that is what it is. But this is a Property built in 1985 in Jonesboro, Georgia and it's a.

Pretty good looking house. Not that that.

Yeah, yeah, I've seen a lot worse, that's for sure.

Nice curb appeal on this one.

Yeah, it's got curb appeal.

It's got, it's got one of those big wraparound porches too. I love that.

Like in the South.

That's a southern deal. Yeah, it's great.

Yeah. So it's 1600 square feet. The purchase price is $99,000. And what I like about that, that's a cost per square foot of 62 bucks.

$62 a square foot. Building cost in this market I would estimate for new construction is about 80 to $90 a square foot.

That's not even including your land.

Yeah. And this is a big piece of land. That's pretty good.

Yeah, yeah, exactly. And the projected rent is 950amonth. And so what that does for you is it gives you a cash on cash projected return of 8% and a total projected return of 32%. With everything in on this kind of property right now. Because I have my finger on this pulse, especially with what Wall street has been doing to prices of homes built 1980 and newer. This is a good deal, getting 8% in the Atlanta metro at that cost per square foot. I don't think see that very much these days. That's pretty rare because usually the hedge funds and all those guys are at the auction and they're on the MLS bidding everything up through the ceiling. And so the returns available to you, our clients, they go down because our local market specialists are forced to pay more to acquire these properties. So this is a good little exception. If you've been looking for something a little bit newer in Atlanta with a decent cash on cash return, I'm skeptical that you would see anything better than this for quite a while here.

That's. That's a pretty nice deal. So basically, you know, subject to qualifying for the financing, you would put about $31,000 into this property total, and then your cash flow would be projected at about 2,500 and change per year. And that's a cash on cash return of 8%. If the property goes down in value and you maintain that income expense ratio, you still got 8% return on investment every year and 32. And that's cash on cash. And then overall return on investment, again, you projected at 32%. So even if it only goes half as well, you're at 16% annually. You can't beat that.

That's.

That's pretty awesome. Okay, good. Well, let's get to Noam Chomsky. Did you have anything else we needed to cover?

Let's get to Chomsky the commie here, see what he has to say.

So, so here's the thing I want to say about this interview. I was really intrigued by. I saw an interview on YouTube that with Noam Chomsky and Julian Assange. And I've become rather interested in WikiLeaks and Assange and following the Edward Snowden and the Bradley Manning story and all of that, and what Noam Chomsky said that really intrigued me and why I wanted to get him on the show is he said this. He said that capitalism and free market economies were not linked together throughout history. He said that that concept was a marketing ploy of the United States to use as propaganda against the. So the former Soviet Union during the Cold War. And those aren't necessarily linked. You can have capitalism without free markets. And you. I. I couldn't understand that, but I just was wrestling with that. The way he just flippantly made that remark. I. I was like, I gotta ask this guy what he means by that. Well, as you'll hear on the interview, that Noam Chomsky cut very short on me, and I'm suspicious that he did it because I started asking him some hard questions where he was saying, well, you know, we should just do some more stimulating. Stimulating. And I think I brought up. And, you know, I recorded this interview a little while ago, so forgive me, I can't remember exactly what I said, but I. He was saying something more. Government stimulus. You know, it's all worked. And I said, well, Noam, you know, why don't we just give every American a million dollars and they'll go out and spend that money in the economy, and that would be a great stimulus. People would feel richer. You know, we could just print the money, create it out of thin air just overnight. The government could just magically put it in everybody's bank account, and then suddenly, you could write more checks and use your debit card and your credit card more and pay for everything. But, of course, in reality, we know what happens is just Monopoly money. And then very shortly thereafter, we'll have massive inflation, like Argentina, Hungary, Zimbabwe, the Weimar Republic, all those great examples throughout history. And, you know, of course it doesn't work. But it seemed like Chomsky was saying to me, well, no, that would be too much, as if some guy like him in an ivory tower needs to decide exactly the right amount of stimulus. You can never expand their idea or their argument to its logical conclusion. Because then they all say, oh, no, no, that's not what I meant. But it either has to be true or it's not true. I don't know. Call me an extremist.

Well, yeah, you'd have. That would imply that there is a logical conclusion.

Yeah, there isn't. It's just the conclusion will be inflation, and it'll be a disaster, and it'll ultimately make people a lot poorer.

And if you gave everybody a million dollars, what. What's the over.

Under.

Jason. On how long it was would take for everybody to end up right back where they were previous to it.

I don't know, because there's so many other factors involved, but, I mean, we would just have massive, massive inflation, and everybody would think they're rich for, I don't know, several months or a year. And then the market would adjust, because the classic definition of inflation is too many dollars chasing a limited supply of goods and services. And so instantly, everybody would say, hey, I got all this business. I'm going to raise my prices. You know, I know our vendors would. They would make every house more expensive. Every. Every smartphone would become more expensive. You know, every piece of furniture, every. Every meal at a restaurant or food at the grocery store would become more expensive because everybody just be buying everything without even thinking. They'd become stupid consumers. They would just. It'd be like people with no financial education who win the lottery and are broke two years later.

You better get on that bitcoin train.

Yeah, yeah, right. I'll jump right on that one. I have never owned a bitcoin, but, you know, now I'm kind of kicking myself because when I learned about bitcoin, it was $42. But I have a feeling I'm not going to be kicking myself when this thing all ends. So we'll see. I don't know, we'll see how it goes. I could be wrong, but you notice I'm not jumping in on that train.

Yeah, that story is far from over.

Yeah, Yeah. I like real things, actual things that have universal need. Everybody in the world needs a place to live, and I just want them to rent it from me. And that's what I suggest you do too. Listener. Okay, so, hey, let's get to Noam Chomsky. We'll see what you guys think and sign up for Meet the Masters and join us. It's just less than two weeks away, so we hope to see you there. In Irvine, California. You can get your tickets@Jason Hartman.com. we've got only a few left. This room has a hard limit on attendees because it's the conference center with the big leather chairs and the built in desk and stadium seating. So no one's head is in front of you.

And if you were on the fence.

Yeah, I'll be there. Yeah. Yeah. I don't know if that helps. Steve will be there. Yeah, of course. Steve will actually be one of our speakers, but we got a lot of great speakers lined up. I just went over the schedule with Brittany yesterday. This is going to be an awesome meet the Masters, so I'm really looking forward to it. Okay, get your tickets if you haven't done so already. Jasonartman.com and we'll be back with Noam Chomsky in just a moment. Hey, I'm here with Chailie Ridge and I was wondering, Cheli, what are some of the things that an investor needs to be prepared for when applying for a mortgage on a new property.

Good question.

Lots of different variables, but the top three things they want to be concerned with are their credit score, their debt to income ratio and their asset allowance.

Where can they find you?

Www.ridgelendinggroup.com Fantastic.

And if you don't remember that, you can always contact your Investment Counselor through jasonhartman.com and get the information. It's my pleasure to welcome Noam Chomsky to the show. You've probably heard his name. He's an American linguist, philosopher, cognitive scientist, political commentator and activist. He has worked at MIT for most of his life where he currently serves as a professor emeritus and he has authored over 100 books on various subjects. So he's got a huge body of work and it's a pleasure to have him on the show today. Noam, welcome. How are you?

Pretty good.

Well, good. Thank you for joining us today. Your body of work is so large and there is just so much to talk about. But tell us what you're working on lately.

Well, I guess the next just mainly keeping up with the sequence of talks and preparing articles and books on other things. One of the, I guess the last article that came out a couple days ago was based on a comment by a Chinese commentator who was writing about the kind of absurd farce going on in Washington and pointed out that if the United States cannot learn to behave as a responsible member of international society, the world will simply have to become de Americanized. And that statement received a certain amount of publicity here and also a degree of international applause even from the international financial institutions.

Well, I saw that article and it's really interesting and I'm just, yeah, I mean there are so many ways in which America is not acting as a, as a decent player and you know, certainly we throw our weight around. Was that comment made from a monetary perspective because certainly the Chinese have in my opinion, a lot to worry about in terms of the value of their treasury bonds.

Well, I presume that was, I doubt that that's what he was concerned about because there's no threat to the value of those. He was talking about the inability, the self destructive actions that are being taken in Washington which are just severely harming the United States and its ability to act in the world. And I presume he had in the back of his mind, though he didn't say so, aggressive actions that do outrage a great deal of world opinion. But I think he was mainly talking about the dysfunction illustrated in Washington with the shutdown of brief shutdown of the government and the inability to meet the. To continue with the standard approach of allowing next year's budget to continue, which is coming up again in another couple of weeks.

It's one thing to another. It's like this comedy of errors that we just watch on the news. It's beyond. I mean, you couldn't write fiction like this, I wouldn't think. But you said something kind of interesting there. You said that you didn't think there was a threat to the value of the Chinese payment for our imports. Do you not think that inflation is a threat?

The problem is closer to deflation. The deficit scolds, as they've been called, keep claiming we're on the way to inflation. They've been saying this for years. That's the argument that they give for focusing on the deficit, which is a non problem. Instead of focusing on jobs, which is a real problem. They say, well, if we don't deal with this deficit, we're going to have inflation. There isn't a sign of it. The markets don't believe it. Nobody believes it. That's why interest rates remain very low. U.S. treasury bonds are being bought up at the normal rate. The only thing that's harming the kind of sense of credibility in US institutions is that Congress might not permit the United States government to pay its bills. That worries people. The Chinese are worried, naturally, that Congress will not permit the US Government to pay its bills, which means the interest on the bonds that they already have. And they're not concerned about inflation because there isn't a sign of it. Maybe sometime in the indefinite future.

I mean, that just seems so. Just help me think about this, please, because that seems so crazy that we're paying our bills with money created out of thin air, aren't we?

No, we're creating. Our bills are paid out of money created by the increasing productivity of the society. That's the way you grow your way grow to the point where you pay your bills. It's the same as if you're running a business. Let's say we don't want to compare it to a business because it's quite different since you can't produce your own money supply. But to a limited extent it's the same. Suppose you borrow money to pay to start a business. You got to pay back your debts. How do you do it? Well, you do it by growing your business, of course. Okay, well, suppose you have a national economy. You borrow money and often print the money yourself and you pay off the debts by economic growth.

Well, that's I agree with you.

That's the way we've always done it.

I certainly agree that that's the ideal way to do it.

No, it's the actual way. It's the actual way. Not ideal. Nothing ideal about it. We've been doing it forever.

Okay, but is it happening now? I mean, we've got this anemic growth, we've got deficits, but that's the problem.

We have anemic growth because there is a lack of demand in the economy. People don't have the money to buy. They're in debt. Businesses, corporations, corporate profits are going through the ceiling. Oh sure, but they're, they're not spending it. So demand is not being created by investment. It's not being created by sufficient consumer demand. That leaves one source, government stimulus. And government stimulus is the way to create demand to put another, to put tens of millions of people back to work to develop a productive economy to overcome the loss that we're administering to ourselves by refusing to get the economy moving. Actually, read this morning's New York Times. There's a column by Paul Krugman reporting a major international study which included representatives of the Federal Reserve, which estimated that the United States is, is losing about a trillion dollars a year by virtue of its failure to stimulate the economy. I mean this deficit hawk absurdity is causing, is striking us a blow of a trillion dollars a year. I mean, even for a rich country like us, that's a big amount.

So I mean, with that rationale, then we should just stop. Stimulate indefinitely, right? I mean if we, if we handed every.

Not indefinitely, we should stimulate until the economy becomes self sustaining, as was done after the Second World War. So there was a huge debt after the Second World War? Enormous. The way it was paid off was by a rapid period of growth. 50s and the 60s were the most rapid period of economic growth in U.S. probably world history.

Well, we all want growth. I mean, no one will discover agree with that. However, the question is how do we get it? I mean, if we, if we had.

How to do it. Okay, driver, I don't know where you are, but take any city you like and you can see a thousand things that ought to be done to improve the city. Sure. Fix the roads, build more schools, repair the bridges, weatherize the houses.

Mass transit, go on and on.

Right? Okay. There's plenty of things to be done. There are tens of millions of people who want to do the work. There are huge financial resources available sitting in the pockets of corporations. But the system is so rotten that it cannot put together Huge resources, plenty of idle hands wanting to work, and plenty of work to be done. Well, there's one way out of this impasse, namely a government stimulus of the economy until it becomes self sustaining. And that is blocked by illusions about inflation, about deficits, none of which mean anything.

That's just fascinating to me that you say that. It's very tough, honestly for me to wrap my head around it. I mean, if we printed enough money to hand everybody in America a million dollars, they would go spend it, they would do a lot of the things that you just mentioned in every city and there'd be a lot more money circulating around. But that money, it would just be created out of nothing, just fiat.

Well, first of all, that's not the best way to do it. The best way to do it would be what I said before. Take a look at the things that have to be done, of which there are innumerable numbers, and use the government, the printing of money that you're talking about to pay people to do those things. That creates an economy that will function at a much higher and more productive level and will produce more and will yield growth and will pay back the debts. That's the way to do it. That's the way it's always been done. All right. Incidentally, this is not my idea. This is standard economic. This is Economics 101. You can read it all the time.

It's Keynesian Economics 101.

It's Keynesian Economics 101, which we have every reason to believe.

Well, how is it fair then that the US is in such a unique position that since we have the reserve currency, we can print indefinitely and other countries can. I mean, you look at what's happened to Argentina, Zimbabwe, Hungary, Weimar, everywhere else. It just hasn't worked for them. It can work for us because we're the reserve currency.

On the contrary, it's worked for everyone really. That's the way economic growth has taken place. How do you think the United States became a rich country in the first place? It wasn't by a market. The United States always had large scale state intervention in the economy. This takes a mass production. 19th century US Innovations in mass production in industry just astonished the world led to the modern industrial revolution. Where'd that come from? Mainly government armories started in government armories, where they developed the techniques of quality control, interchangeable parts and so on and so forth, which after they were developed in the state sector, were taken over by private enterprise. And in fact, Andrew Carnegie built the first billion dollar corporation, US Steel, largely on the basis of government subsidy. He was building ships of the navy. That's government subsidy. Procurement is one of the major techniques by which state intervention stimulates the economy. Let's go up to the modern period, the IT revolution. You know, information technology. That's a big change in the modern economy in the last 10 or 15 years. Where'd that come from? Well, it came from decades of work, primarily in the state sector in the 50s and 60s. Right. For example, in the place where I'm sitting now, mit, in fact, physically the same place where there was work developing the basic nature of computers, the Internet, microelectronics and so satellites and so on, almost entirely funded by the government. That's the way economic development has taken place. Suppose you go to the doctor and he prescribes a drug. Well, technically it's produced by some pharmaceutical corporation. But if you trace that back a little, you'll find that a lot, a lot. Probably majority of the fundamental research and development is in the state sector. There are innumerable ways in which state intervention maintains the economy and keeps it moving.

I don't deny that there are times when the state should be involved and the state can move things along faster. I agree with you, and I see those examples throughout history. However, it just doesn't. I mean, then you get into the business of where the state gets to pick who the beneficiary of this money is, and you look at the scandals, like Solyndra, for example, and it's always a crony capitalist issue that comes up. It just. It invariably happens.

When you say for a period, that's kind of misleading because for the United States, the period is from 1783 to the present. It's never stopped. Goes back to the present.

Well, there are varying degrees.

I mean, there are varying degrees, but it's never. And in fact, when it declines, that's when we start moving into economic problems, like right now. But yes, Solyndra. First of all, Solyndra was not a scandal. It was not a scandal. It was an error. An error based on a misassessment of the level at which solar panel prices would decline. Okay, that's not a scandal. What's a scandal is Enron, the WorldCom, JPMorgan Chase.

Agreed, agreed, agreed, agreed. Totally agree.

But not Solyndra. That's propaganda.

Okay, well, what about. What about Tesla, then? Tesla has received a lot of help from the government, and Fisker didn't. And Fisker went out of business. I mean, they. I guess they got a little bit, but then they didn't. Get their next round.

That's right. And they take a look at any corporation, it's going to make investments. Some of them will work, some won't work. That's not scandals.

It just doesn't seem fair that the big companies get it and not the small businesses, though.

Small business and the business, big businesses both do it. I mean, the big businesses tend to be bailed out by the government. Like for example, the US automobile industry, major industry in the 1980s, 70s and 80s. US management was so incompetent and backward that the US auto market was being undermined by superior Japanese production techniques. Well, the government had to step in. Ronald Reagan, who was an arch protectionist incidentally and a great believer in massive state intervention in the economy. No free markets for him, certainly in the defense world.

He was in the world of defense. He certainly was. Yeah.

I'm not talking about defense. I'm talking about the automobile industry. Reagan stepped in and introduced a very high. What amounted to protective tariffs. They called them voluntary restraint agreements. But voluntary when it's imposed by the United States means you better do it or else. It's like when the Mafia don says you have a voluntary payment. So that amounted to a very high tariff which temporarily rescued the backward American auto industry. No, they don't do that for small businesses. You're right, but that's the power of private capital.

What do you think of this? You know, I love the title of this book and I had the professor, forgive me, I can't remember his name, but he wrote a book entitled the Winner Take All Society and We're in this World.

It's a very good book.

Yeah, I love the title. I didn't follow all of his ideas. Maybe you can do a better job at promoting them than he did. But we're in this world where we have these. I mean, the distribution of wealth is just becoming so lopsided that the corporatocracy, really. The plutocracy, that's not a free market, is it? I mean, that's just. They're all the insiders. Right.

Well, you know, this book you're talking about by Hacker and Pearson is a very good book. And what it's describing is the. I think crime committed against the society by the. By concentrated capital escalated sharply under the Reagan years and has increased since he described. They. The two of them describe in detail how this took place. I'm sorry, I don't have time to talk about it now. My higher authority has stepped in. Maybe some other time.

Well, very interesting talking with you. I know you have to run, Professor Chomsky, but thank you for joining us today.

Glad to be with you.

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