P.J. O'ROURKE: THE POLITICS OF MONEY

good afternoon everyone and welcome to the  Commonwealth Club I'm Lenny Mendoza I'm a   member of the Commonwealth clubs Board of  Directors and a senior partner emeritus at   McKinsey & Company and I'm moderating today's  discussion it's my pleasure to introduce today's   distinguished guest PJ O'Rourke noted humorous  and author of his new book none of my business   PJ O'Rourke's commentary and satire have earned  him plaudits all around the world mr. O'Rourke   is a contributing editor at the Weekly Standard  and the HL Mencken research fellow at the Cato   Institute he's also a regular panelist on NPR's  wait wait don't tell me and he's editor-in-chief   of the web magazine American consequences he  lives in rural New England which he says this   is about a far away you can get from things that  he writes about mr. o'roarke is a prolific author   he's written 19 books on subjects as diverse as  politics cars etiquette and economics in this new   book none of my business PJ tackles the politics  behind how you should conduct your business and   finance in fact the subtitle is the book is  PJ explains money banking debt equity assets   liabilities and why he's not rich and neither  are you it's a fabulous read with chapters like   how I learned economics by watching people try  to kill each other and proposals such as a 200   percent tax on celebrities mr. o'roarke clearly  holds a unique perspective on the proper ways   that we can spend our money so please give  a warm San Francisco welcome to PJ O'Rourke very much so welcome PJ thank you always a  pleasure to be at the Commonwealth Club it's   a great been an honor number of times in the past  and it's an honor today well thank you for joining   us and look forward to a terrific conversation  with you and I just want to start with a little   bit of context so you've written as we as I  mentioned on a wide range of topics and have   entertaining views on all of them but you decided  to tackle this one so why did you decide to write   a book on money banking debt equity assets  liabilities and complicated things like that   sick of politics I wrote a book about the 2016  election called how the hell did this happen by   the time I got done covering that election from  its inception you know and the police de'cine   age until it finally came to came to whatever  it came to and and in 2016 I was really sick of   politics and for years I've had an interest in  I was foreign correspondent I spent 20 years as   well foreign correspondents giving it a sort  of gravitas it and I was a [ __ ] specialist   and everything anything went really seriously  wrong in the world wars and insurrections mayhem   rioting other sort of human misbehavior I would  go there and I did that from the my first posting   was in the Lebanese civil war in the early 1980s  and I did that all the way through the Iraq war   when I woke up one morning realizing I was too  old to be scared stiff and too stiff to sleep   on the ground and had kids at home and what was I  doing here so but during that period of a being a   [ __ ] specialist and visiting a lot of shuttles  it became fascinated about why they were so poor   I mean besides the fact that they were all trying  to kill each other but also how they managed to   survive to have an economy anyway you you you  know I I was baffled and so it got me interested   in economics I wrote a book called eat the rich  about why cuz some countries are rich and others   are poor I wrote I actually read Adam Smith's The  Wealth of Nations which is I don't recommend very   long and wrote a book about that on the wealth  of nations and so this has been a fascination of   mine for a while and I thought what better time  to turn away from from politics and hatred and   war and stuff and write about something really  icky such as money okay great well as someone   who learned economics in college and learned it  by studying formulas and and looking at graphs   it must be a different perspective to actually  have a lens on it from what people actually do   so how was that different from what the textbooks  teach us well yeah I mean for one thing I was an   English major or as they called it business school  stupid I know nothing about business whatsoever I   still don't even know I wrote a book about it  I said no idea about business I mean best best   investment I've made lately I left $20 bill in  the in in a jacket of this this suit when I took   my wife out for dinner over Labor Day weekend and  I found it this morning so I'm not down anything   it was a good preservation of wealth that's  about it so when I arrived in Lebanon besides   being disoriented and terrified I am I'm not I'm  not even thinking about Lebanon having an economy   at all you know and my initial plunge into Lebanon  Island at night in Beirut every windows been blown   out of the airport all the palm fronds have been  blown off the palm trees all that although the   the lamp posts in the parking lot have been run  over by tanks it's just a disaster a taxi I get   into looks like it was used by Steve McQueen and  the Great Escape you know and just to get from   the airport to downtown to there was an old hotel  there called the Commodore hotel that was kind of   the unofficial press headquarters and he had to  go through like six or eight checkpoints to the   various different warring Lebanese factions you  know and they would stick the gun barrel in the   in the window and start screaming at you and it  was they'd scream they were screaming I couldn't   understand what they were say bass boat pisspot  and what they were trying to say was Passport   the peace and bees are very difficult Peas and  bees are the R's and L you know as Arsenal's   are at a certain Asian language bees and bees  are terrible and the Kate was the one English   word that every militiamen knew and no militiamen  could say you know and so anyway you know I'm not   thinking about this and then after a few days in  Lebanon and realized well of course it does have   an economy or all the Lebanese who weren't dead  from the Civil War which was a considerable number   of them would be dead from starvation and then I  look around I realized well all the shops are open   and there's traffic and right in the middle of a  war and it's noisy but not with the din of battle   the every house and shop has a gasoline generator  sitting out on the sidewalk with extension cords   going every which way and they were so loud  that it did it that drowned out all but the   most all but the loudest artillery fire it was  drowned out by electric generators not go WOW   and then I started think about it of course war  is a capital intensive activity guns and bullets   and stuff they're not cheap no you go where's all  this money coming from and then I went out to the   Bekaa Valley which is the the fertile agricultural  area of Central Valley of like Central Valley here   and I I dunno where the money's going from is  wall-to-wall marijuana plants big green lush   marijuana plants everywhere you could see so there  was you know they they used to call Lebanon before   the Civil War the Switzerland of the Middle East  it was actually the Boulder Colorado so are you   sure you weren't in San Francisco driving around  seeing the marijuana plants or was that really   yeah that was yeah that was earlier and then  later but the economy really did work there's   still transactions happens so were they using  venmo or cryptocurrency well I think you know   one economic disaster of course that war always  causes is the Lebanese currency was worthless and   but that didn't stop the Lebanese for a moment  they were way out ahead of this they were doing   business in every conceivable hard currency that  they could find French francs English Pounds US   Dollars and little kids kids selling cigarettes  on the street could tell you the International   exchange rate every day and they were totally  aware of this well that's one way to keep it   flowing yes so I want to talk a little bit about  a some of the topics you cover in in the book and   so one of them was investment scams and we don't  have investment scams anymore not always sweetly   fixed that you have a view about what they're  like so what what are investments yeah I learned   a Recor lesson about investment scams in Albania  I went to Albania High River when it was 1997 I   think the whole of Albanian economy had collapsed  because of pyramid schemes they there were you   know there's greater fool theory at work you know  pyramid scheme guys the Bernie Madoff of Albania   some sort of crossed Bernie Madoff with an armed  John Belushi and you get kind of a it was Albanian   incidentally is you get kind of a picture of what  the very unfunny John Belushi would be so what the   country was like and so I take the last remaining  flight from Italy there's like one weekly flight   and there's one hotel left in Albania and they  send a driver and a driver and translator and I   go out trying to figure out how this happened  so what what had gone on was that the pyramid   scheme guys have offered foolishly high returns  and people foolishly put their money in there   and that foolish money was paid off with the  money from yet more foolish people who came in   later which in turn was paid off by more foolish  people yet and you know the greater fool theory   would tell us this could go on forever greater  fool theory is is a bedrock of economics not the   kind you study the issues the greater fool theory  is that no matter how stupid I am there's somebody   dumber out there and know by what I've got to  sell so but math would tell us that this doesn't   actually work because if you if his pyramid scheme  grows exponentially say 10 10 squared 10 to the   3rd power it takes only about 10 iterations of  that exponential expansion to include two and   a half times the population of Earth so you know  this is what happened to Bernie Madoff he's gone I   got I got practically everybody but not not quite  and it all collapsed so of course it did collapse   and you know people in the United States were  angry when Bernie Madoff scheme collapsed this   is nothing compared to how angry the albanians  were like I say armed John Belushi rioting broke   out everywhere troops were told to you know all  public assemblies were banned troops were told   to fire on the rioters the troops deserted because  they all had money in the and the pyramid schemes   too they looted the arsenal of Albania which  because it had been controlled by Stalinist   lunatics for for many many years was huge there  were all I was something like 1.5 million guns   and machine guns and rifles and so on in the  military and there were it was like like 1.5   billion rounds of ammunition and they stole the  heavy weapons - there was a bank that got robbed   by a tank and then that then the the rioting just  turned into vandalism and the vandalism looting   and it place just completely fell apart and I  thought you know just gives a country here that   has been Disick aliy destroyed by a chain letter  well what so I can say I flew over there it took   me half an hour to find out what had gone on I  stayed for a little while longer because it was   very entertaining but it took me half an hour  to get my story basically the translator took   me to a newspaper the newspaper took me to the  newspaper editor who spoke English I asked the   newspaper editor they said okay what how did all  the people in Albania get suckered in to this this   pyramid schemes I said well they just after all  those years of communist rule were they're just   innocent and ignorant of how money and investment  where he said no no not law so there'd been   pyramid schemes all over post-communist Europe  and most of them had failed before the Albanian   pyramid schemes began he said they realized that  pyramid schemes don't work he said all the people   who invest into pyramid schemes assumed that this  kind of return on money could not possibly be made   by anything legal that this must have to do with  drugs and money laundering and prostitution and   and theft of things from all over Europe and  he said you know the people of Albania don't   they didn't think they were victims of pyramid  schemes they thought they were perpetrators and   therein lies the secret Wow of all pyramid schemes  okay well a little closer to home there's a and I   know you're you're not a registered investment  adviser your register no I'm not no I I don't   even play one on TV but there are a number of  people now who are it's particularly in this   part of the world enamored of the opportunities  in cryptocurrency who you know if very first I   don't have to tell you I'm sure you too you have  told a number of people in your life that they're   very free before you ever do anything with your  money before you give your money to anybody else   in return for their making money with that money  you figure out how are they making this money I   have a good my investment Madhvi as a matter of  fact Lisa said that ignorance saved my ass he   said I was really looking to put some money into  Enron because it was hot you know back and about   2000 Fortune magazine had named Enron the most  innovative country company in the world and he   said I called in my analyst and he said he said  I told my analysts I said get out there and do   some digging on Enron and get right back to  me because I think this is hot in a week goes   by nothing from his analyst he calls him on the  carpet he says you know what's going on you know   we're still working on it another week goes by  nothing what's going on we're still working on   it month goes by and he calls us analysts on a  carpet and he says month ago I told you about   this hot tip on Enron and I asked you to go  do your due diligence and I have heard nothing   from him and his chief analyst said Mike do you  remember what you told us when you hired us he   says no he said you told us that the first thing  you do in analyzing a company is figure out how   they make their money and we have been looking  at Enron we got half a dozen people looking at   Enron for a month and we can't figure out how  they're making their money and of course about   five minutes later the whole thing comes crashing  down and I would say this a cryptocurrency is an   invention of the evil high school math club with  with weaponized slide rules and right now there's   some some pear-shaped fifteen-year-old as in his  mother's basement wearing emoji pajamas you know   floor is covered with Snickers wrappers and he's  making himself a darknet billionaire on the on   the crypto yeah if you don't understand it don't  go anywhere in there and with the with with the   the pear-shaped nerd I'm a hope and Walgreens  accepts cryptocurrency and in payment for acne   cream okay that's great you know you devoted a  pretty substantial portion of the book talking   about the digital age and the internet and what  it's doing to the world without giving away all   of the secrets in the book yeah a little well  no offense to this you know epicenter of the   digital revolution but whose bright idea was it  to put every idiot in touch with every other idiot you know I I know that the digital revolution  is all is doing all sorts of marvelous things   and the computers are absolutely marvelous things  and they're probably me included a lot of people   in this room wouldn't be alive today if it  weren't for the computer abilities you know   behind modern medicine and so on and so forth  but when it comes to like its offshoots like   social media I I'm just appalled and I've got  teenage daughters and so I was talking to one   of my elder of my teenage daughters and I said I  expected some vivid defense of social media from   her and she said no it's terrible dad it's just  terrible I said I wish I could stop using it I   wish I could get unentangled from this she said  what it's like what social media is like it's like   having a sleepover with everyone you know whether  you like them or not they are all at your house   for a sleepover and they won't go home so yeah I  found skepticism it even at the core market with   social media we wish we could be free of the thing  but we're not so it's here to stay well is it here   to stay and is that that was something that was  kind of interesting to talk to the kids about   because these are things I mean Facebook is not  really a corporation that makes anything it's a   corporation it is a fad a fashion now fashion  trends can last for a long time but there's   just no core product there and if enough people  like my teenage daughter change their mind about   this and in some ways they have see I said well  what's with Facebook she's Facebook it's so old   Facebook's for old people so won't use Facebook  cause it's like the community bulletin boards   so you know if we're having like a demonstration  at school and of course they are but that's what   kids at school do I will put it up on Facebook  because that way it reaches everybody but you   wouldn't actually communicate with anybody on  Facebook because that's for grandma's you know   and so this can change so fast and there's  nothing there are no physical assets there in   place to slow down the pace of change there's  no there's no Facebook Factory you know them   unionized factory workers saying wait a minute  you can't just fire us all you always for our   pension plans and they're not there okay you talk  as well about the mutations of capitalism and how   we've got mutant capitalists and people that are  doing weird things so what I was that was not a   segue from Facebook that was just a well no but I  mean it could be I mean okay the richest person in   the world ever Jeff Bezos well what what does he  do it's a glorified yard sale you know he doesn't   actually produce anything you know it just moves  stuff around and you know somebody's gonna come   along and figure out how to move stuff around  faster than he is sooner or later you know just   like you know Sears used to move stuff around -  and where are they today you know so it's puzzling   what puzzles me not is not so much this aspect of  the economy it's the valuation of this aspect of   the economy when I look at the stock prices for  these Fang stocks and I see what the p/e is never   mind doing any deeper analysis just like the most  shallow possible economic analysis you could do   if price earnings and and some of these companies  don't even earn anything and then many of them of   course what to what extent they do earn something  they're not distributing the profits it's all kind   of Albanian looking there isn't it I own this I  invested in his company because its stock is worth   a lot of money doesn't pay me any dividends and  you know I'm not even sure if it makes a profit   but the stock is very valuable and I'm gonna sell  it to somebody stupider than me for even more than   what I paid it for it you know worries me that  seems to work for a little while until it works   for a while yeah lots of things work for a while  okay so you wrote this book and you've been out   talking about it for a little while and people I'm  sure coming up into you and saying okay thought   that that makes sense so now where do I put my  money yeah yeah if I knew that I would be too   rich to have written this book I got absolutely  no idea but I really I don't I mean I I would   give the advice that everybody gives on investment  which is basically to mimic what Warren Buffett   does which is deep analysis of the fundamentals  of a corporation which is boring and tiresome   and also the fact that we have an information  system out there where the noise to signal ratio   is extremely high makes it I think actually even  though there's more information about corporations   and investments out there than there ever has been  before it's very hard to sort that information I   think there was a time 30 or 40 years ago where a  sort of strict buffa thean analysis of a company   was am I am i way off base no no I'm did you  read your the register self-admitted in my   ignorance which as my financial investor Michael  Farah pointed out I had saved him a lot of money   and I'm hoping saving me a lot of money to be  very ignorant okay that's great so we have a   lot of fans in the audience and the questions are  coming in and I'm gonna migrate to those in just   a second but okay want to ask you a little bit of  transition about you were writing about business   and economics and markets as part as you said  I know you weren't totally joking to get away   from the messy a lot of politics yeah but those  things aren't independent no they're not no so how   does what's going on in Washington influence your  view about about business and economic let's even   back up a little bit from what goes going on in  Washington talk about an even more fundamentally   political side of economics is that one of the  reasons that are so hard to give any coherent   investment advice not just because I don't know  anything but even if I did know something it   would be hard to do is that you cannot get a  reasonable rent for your money at the moment   I mean you go deposit your money in someplace  dead safe you know as safe as you can find as you   know an insured savings account t-bill whatever  you essentially are not keeping up with ye with   inflation I mean you are at zero or possibly even  negative return for your money now the I and this   is a political creation this is this is a central  bank not just our central bank but all basically   all the central banks in the world have decided to  print fiat money when they feel like it and fiat   money is money that is money that sits there for  what I call the the the lousy parent reason the   government you know it's just like we say to our  kids because we're lousy parents we say because   I said so and that's what the value of money  is set it's not pegged in gold it's not pegged   in silver it's there because I the government  said it's there you go to the Treasury with a   $10 bill they'll give you $10 until you meet two  young singles they'll give you 2 5 so I'll give   you quarters pennies if you like they will not  give you anything else they will not give you   anything of substance for that $10 is worth $10  whatever that may be worth at the moment so when   you will have a situation where interest rates  have been lowered so much by central banks that   you have an asset that you are expected to rent  for nothing or less than nothing I mean imagine   having a nice house and you want to rent it and  the and a real estate agent comes and says well   I can get you nothing for your run or a little  less than that and you'd be going wait a minute   well that's the situation with your money at the  moment and it drives of course it drives people in   seeking even a modest return it drives them into  fairly risky behavior which I do not think so   that's one political aspect and then of course the  fact the government just cannot keep its hands off   the economy you know I mean it used to be it just  taxed it okay that was bad but it was you know we   understood you know I mean it obviously government  has to pay the rent too you know so you know they   tax but over the years starting back in the 1930s  the government has been convinced that it really   knows what we should buy and sell and how much we  should buy and sell for better than we do and so   it's been on a you know an 80 year track I can't  even blame this on FDR it was actually so this has   started under the Hoover administration before  even before the crash of 29 the government was   getting involved in farm prices and so then if  you have a situation where a maniac is running   the government and I'm not saying that's the  case I'm just throwing that out there as a   possibility and the people who oppose the maniac  are completely disassociated from reality on on   economic terms like don't understand anything  about economics that's a bad situation where it   will go though I don't know so I'm kind of trying  bridge a little bit to some of the questions were   getting for her audience so and this one's the  the bridge in question so you were researching   finance topics and kind of having markets work for  the last while has that given you a different view   on government corruption and money not to connect  this to the current administration or anything but   right no well actually you know I mean it's yeah  corruption comes in in lots of different forms   yeah the thing about understand government you  you have to understand markets in general and a   key to understanding markets in general is that  everybody is looking to profit everybody's in   it for something the profit motive cannot be  erased from human being sorry Marx sorry Lenin   sorry Alexandria Ocasio Cortes it just can't you  can't get rid of the profit motive but you have to   be wide awake to realize what currency people  are trading in not everybody is in it for the   money most of us sensible normal people are in  it for the money but not everybody some people   are in it for power and I would rather deal with  people who are greedy for money than people who   are greedy for power because you know money's  not zero-sum more money can be made or in the   case of the central bank's printed at any  rate but power you know power you lose to   somebodies power that they have over you power  is zero-sum it's not like a it's not like like   the marketplace where you know if I have too many  slices of pizza you don't have to eat the pizza   box you know we can make more pizza but we can't  make more power some people are in it for power   some are in it for fame some and these are not  mutually exclusive categories some are in it to   have a ferocious angry of fearful reputation even  good people even the virtuous people are looking   to profit even you know when I was out being a  workhorse fun and even the aid workers and the   peacemakers were they were building up treasure  in heaven you know I mean they they they too were   looking for a profit so you have to include the  profit motive and everything so when you analyze   government it was it's actually James Buchanan  the economist that the public choice theory it's   called we have to analyze so say a government  there's a kind of government corruption that   doesn't have anything to do with money there are  corrupt powers within the bureaucracy looking to   expand their power their purview their there  their influence the size of their staff even   if they don't get an extra cent out of it you  always have to keep your eye on that kind of   thing okay someone said they saw you give a talk  35 years ago you must have been in kindergarten   or something yes exactly I wasn't born yet how  have things changed as you've been observing the   world what's different now than what it was when  you were first I am a bunch older and more tired   of it does the world really ever change you know  I mean yeah yes manifestations of human nature   changed but human nature itself I don't I don't  think changes much and you know 35 well there   seems to be as I if a glance at the television  this morning indicates anything there seems to   be a kerfuffle going on about what happened 35  years ago and whether things have changed since   then about which I have absolutely no opinion  because I have absolutely no information I   have no idea what went on at at Georgetown Prep a  generation ago but no I don't think I don't think   things have really fundamentally changed fashions  and fads change but people don't and is it as fun   being out writing and talking today as it was 35  years ago or people still engaged and interesting   and interested it's a little tough at the moment  because people are so angry and you know the only   value that humor has at all is to give one some  distance on things humor is a way of stepping   back from things and looking at the larger picture  and going heaven people always been goofs isn't   everybody pretty much a goof isn't it all fairly  goofy because if you get right up front on things   you get absolutely furious and sometimes you  get killed or you kill somebody else you know   and so detachment is really what's what's behind  humor and I would say it was probably easier to   be detached 30 years ago than it is to be detached  now but the other thing is I'm older so and with   that well a lot of grief comes from being older  more detachment definitely the passion goes   away and that's a good thing okay in addition to  writing and doing your shows you also are engaged   in a little bit in a thought leadership world  on and thinking about you know serious topics   but engaged in a way that that entertain people  as well as informing them so what ideas if any   are you excited about these days that you think  are kind of interesting that people ought to be   paying attention to I've seen one lately I swear  in fact I think we're kind of a low ebb with   the ideas that excite me personally I mean I'm  libertarian first and foremost philosophically   I'm a libertarian libertarian is not really a  political position it's more of an attitude it's   an attitude toward the individual and I believe  in individuals because that's all we got you know   I mean everybody is an individual and if we don't  have some faith in them you know what are we going   to do and so it's individual individual dignity  individual liberty and individual responsibility   now almost everybody's down with two out of three  of those responsibilities a little bit less so   and at the moment I think because we are engaged  deeply engaged in angry causes some site has been   lost this has been a really painful period for  the libertarians the the current administration   has absolutely nothing of any libertarian nature  to it whatsoever and the opposition to it as as   almost as little they're a little better on on a  human dignity and a little better on some aspects   of human liberty but but fundamental but they're  fundamentally you know if you're a leftist you're   fundamentally opposed to the idea of individual  responsibility it's all about collective   responsibility so it's been it's been grim days  for anybody of a libertarian turn of mind okay um   we of course given the fans and the audience have  some political questions can we go to a couple   those yeah I don't care you know why not you  know everybody else is why should we be special   all right so do you do you have any predictions  on what's what's the endgame for Donald Trump   no I well III think that the the Republicans are  gonna experience a pretty big defeat and in the   midterm elections and I think that's gonna be a  case of be careful what you wish for because the   the government which is pretty divided now will  then become radically divided in some libertarian   theory that might not be a bad thing because with  libertarians would like government to do less and   when it's paralyzed by by dispute in theory could  do less although it's been in my experience when   our government is radically divided between  say well let's call it right and left when   it's divided between right and left it they don't  manage to be able to agree on anything but the   worst possible ideas you know while one site will  have a set of bad ideas and the other side has   another set of bad ideas and they're in terrible  opposition with between these two bad ideas   sets of bad ideas they will settle on something  god-awful and that's in the middle and so I so if   my prediction comes true and and the Republicans  receive a I may say pretty well deserved defeat in   the midterm elections then there will be an  appearance and the impeachment historically   speaking probably won't be successful but what we  don't know for sure whether it be successful we   do know for sure that it will drag on forever and  it puts the person that everybody's mad at or not   everybody but enough you know half the nation more  than half the nation is very mad at unfortunately   this is somebody who wants attention of any kind  everybody in this audience has raised a toddler   knows this person's psychological makeup if they  can get attention by being adorable and saying   cute things great if they can't they'll grab the  tail of the cat you know I mean cuz bad attention   good it's they don't really have it sorted out  in their mind what did the attention is attention   you know and and like while it's it's great to  be coud over and praised getting yelled at is   interesting to you know so what we're gonna do is  this this person this unnamed person who's already   at the center of all this kerfuffle is going to  become far more at the center and he's gonna love   it he's gonna absolutely love it and you know the  only way to chase this person out of office would   really would would be for him to get bored with  it and as long as people are paying attention   whether that attention is lab praiseful praiseful  or bitterly scornful he's in heaven that sounds   like a great next couple years yeah doesn't it  no yeah you wonder why I'm a little gloomy about   this though it reminds me of an investment advice  that someone said to me that the best day to put   money in the marketplace is when there's snow in  Washington because no complete stop please stop so   someone did ask and I have to ask you why did you  vote for Hillary yeah I was a tough one because   I really don't like the woman but it was you know  my it came down for me too we had big conversation   and my wife and I had big conversation about  this we actually lived in a state where your   vote happens to matter we live in New Hampshire  and it actually is a swing state so it was not a   foregone conclusion as it might have been here for  instance it wasn't a foregone conclusion who would   win the the the electoral college vote from our  state so we couldn't just like protest vote you   know or or throw our vote away or right in Jeb  Bush or whatever it was you know we've done we   actually had some responsibility as voters and  I'd you know I looked at this guy and I just   thought you know I he's a toddler you know and  do we want to make a toddler though would you   would you give the button to a toddler you know  because it'd be interesting to push it you know   and I thought I consider Hillary Clinton to be  wrong about everything but she's wrong within   normal parameters eight years of Obama I'm used to  it you know I've figured out my coping mechanisms   so in the end I pulled the Hillary lever all  right so this is a more of a serious question   around at what point does becoming detached from  the environment become apathy and what do you what   do you have any thoughts on how do you prevent  apathy as opposed to people just saying throw up   your hands this is just impossible well empathy  is an aspect of despair and detachment is not   an aspect of despair Senay it's an aspect  of perspective and I don't think there's   anything dangerous about trying to get perspective  historical perspective psychological perspective   sociological perspective on questions I don't  think that the - but I do think that apathy is   one of a very understandable like anger apathy is  a very understandable reaction - to a situation   for which you don't see any immediate fix and  I think when you're faced with a situation you   don't see any immediate fix for remember this  situation won't endure forever all situations   are temporary and so when it comes time to for  another situation you want to have your head   straight about what you you don't want to simply  react violently to the situation that you don't   like you want to have a set of parameters in  place for the next situation that comes along   lest you trade one bag of snakes for another and  so I don't think there's anything apathetic about   detachment okay a couple questions around more  business and economics related topics so one is   around how do you think about the banking system  are they evil are they people too hard on them are   they over regulated but what do you think about  banks well it's you know because we have this   this this politically created money it's actually  hard to blame the bank for how they have to deal   with this and it's also it doesn't lend itself to  an easy solution you can't really go back on the   gold standard had its own problems and also the  very idea of that there should be some basis for   currency you know gold was really nothing but a  sort of a fad in the fashion a very long-lasting   one that you know gold comes from a time when  when shiny unblemished things people included   were very rare and a new generation may arise that  that considers gold to be vulgar and wrong the way   Millennials consider veal you know you don't know  there probably is a theoretical solution to this   a sort of market basket basis for for currency  valuations but it's but but politicians have   so much fun playing with the currency that it's  very hard to imagine politicians doing that and   so I don't actually think that our banking system  does such a bad job given the flawed tools that it   has to work work with regulation yeah you know the  the the most important regulation you can have in   finance from my point of view is transparency the  more honest information that is available about   what's going on in the market that's much better  than a regulatory agency because the regulatory   agency is always going to be outgunned regulatory  agencies gonna pay like their lawyers may be under   grand a year and the corporations are gonna pay  their lawyers a million dollars a year now what   kind of lawyer you know I mean there may be some  brilliant lawyers that only want to make under   thousand dollars a year maybe you know but I mean  on average what kind of lawyer you're gonna get   for the price that you pay and so the regulatory  agencies are always going to be outsmarted by   the and also what's in it for the we go back  to the profit motive what's what's in it for   that regulator a little prestige small promotion  maybe a big job in a private sector well he'll be   attacking his fellow regulator whereas a lot is  on the line for the corporations being regulated   and they will put their resources behind that  their attacks so so insistence on transparency   I think is it tends to be more effective than an  insistence on regulation okay well we can't be in   San Francisco without someone asking a question of  this vein so at what point do robots take all of   our jobs come too soon for me as long as they'll  keep paying us the robot is hot you know let it   go let it rip I suppose they won't keep paying us  though that's that is the problem no I think it's   gonna actually be a while we all have except  for you know those of us who have ducked out   of this with vintage vehicles we all have a bunch  of robots at our command in our car how well does   that work you know I mean yesterday a Dave and I  here were driving around doing you know various PR   dates and we got stuck on the Bay Bridge for about  three hours huge surprise to anyone that's wrong   we're stuck on the Bay Bridge and we're trying  to make a phone call with voice commands language   that lady speaks that's in that box but in English  you know he goes you know three cuz we're trying   to call I had to say that we're gonna be late you  know we're going three five six and it goes V vibe   or X you know and so we all know how robots work  and you know they and anybody who's backed over   the bicycle while staring in the screen listening  to all the beeps and stuff you know I knocked out   the beeper on the back of my I got Chevy Suburban  I knocked a beeper back I not by backing into a   tree the beeper warning thing why did I do that  it's not just cuz I'm stupid it's because the   thing had been lying to me it had been lying to  me for years every time I would back up over you   know and the grass was long behind the car the  beeper would go off so the beeper went off one   more time and but at this time it was telling this  little it was a little beeper that cried tree so   we shouldn't be worried about robots riding books  any times I don't think so no yeah maybe very   robot ebooks ok so a couple more questions from  fans so do you think drunk stoned brilliant Dead   was fair and accurate from what you can remember  you know I didn't see it this is a movie about   drunk stoned brilliant brilliant dead was a movie  about the is a movie about the National Lampoon   where I was for many years and which I ran at the  end of the 70s beginning of the 80s and I just I   you know a lot of those people that were you know  as in the title a number of them are dead it was   just too sad I didn't want to go back to all that  who was it was fun while it lasted and you know   I sort of felt like watching that movie be sort  of like going back to college you know and like   I think I'm I'm getting a little too old for the  fraternity initiation you know okay so forget the   movie but what was it like at that time there uh  it wasn't much fun actually I mean the National   Lampoon and I think this is probably you could get  the same answer out of Saturday Night Live writers   and so on is that you really don't want a whole  bunch of humorous and comedians in one place at   one time it's like bad enough it's like having  a sack full of cats really get along and it was   like the inverse of a usual job you know a usual  job is the job it's a pain in the neck you know   the work is nobody likes to work but you kind of  like the job because you go and see your friends   you know and you gossip and flirt and stuff like  that you know and it gives you something to do   in the middle of the day so the jobs kind of  cool to work socks you know but the jobs kind   of like Lampoon was the exact opposite the work  was fun you know we had enormous for you just me   or ripping everything to shreds and making fun of  everybody in the world the work was lots of fun   that the the the the job was horrible because you  you know got to be had to come into the office and   visit the sack full of cats job of visiting a cat  fullest accident that sound like a lot fun so so   dear children read your books and what are they  no no my children don't read my books they I've   got a good friend Andy Ferguson who's wonderful  writer he writes for the Weekly Standard mostly a   number of other places but anyway Andy's a brain  guy man and Andy's kids are a little older than   my kids and when my kids were little and his kids  were teens I asked Andy I said okay your kids are   teens now what are you telling him about drugs  what he's telling him specifically what are you   telling him about you and drugs because it's gonna  ask you know and and he said I never touched them   never touched drugs dad but never went anywhere  near drugs that picture of dad with the hair down   to his but that's you know on a shelf over there I  I was in a folk rock band we did folk masses never   drugs evil bad wrong dad never done I said Andy  you've written about doing you lived out here in   San Francisco in the 70s you've written about you  know some days in the haze and he says you know PJ   you can't trust anything that you write in your  life it's gonna pop up someplace later you can   never get rid of it you know you can trust you you  can't trust anybody not to accept your kids your   kids will never read a word you've read they you  know they've heard enough of you around the house   so that's been my experience with them came and  so I'm sure they didn't read them then but they   must know about what you write about what do they  think of what you do for a living they think I'm   boring an old relates you know it's you know you  just yeah if we think back about this they've all   been through this thing how invisible parents  are to their children do you remember when it   first occurred to you probably not until you  were in your middle 20s that your parents had   sex I remember that actually occurring to me and  actually thinking twice right I once once for me   my sisters are twins so I was confused about  this for a little bit I've gone did they do it   just twice or did they do it two and a half times  but parents are just invisible to people and what   parents do is largely invisible okay to the kids  so you've been out talking about your your book   and getting a chance to interact with a lot of  different people across the country and when   they're not asking you questions about their book  your book what's on their minds what do you find   interesting on what people are talking about  these days yeah well it's been you know really   really politicized and I I think that is just a  bad thing and I think that it's a bad thing not   because they're you know aren't political fights  to be fought not because of who's right and who's   wrong I just think that that moving all sorts  of categories of life into the political is a   dangerous thing to do and the reason I think that  is because the entry entry bar into politics is   so low that it is always going to make wrong  decisions and wrong decisions are going to be   made by idiots think about the other politicians  are very important in our life they have enormous   power over our existence you know they create the  parking rules you know they create the tax laws   they create all sorts of things you know they  tried to remember when they tried to draft me   tried to drag me off to some place with noxious  flora and fauna and shoot people that I didn't   even know and what's more they were expected to  shoot back I hated that idea of us having a good   time it was the 60s so you think about all the  other people that are think about your investment   advisor think about your doctor think about your  lawyer think about your your priest your Minister   your Mon they all have to climb over a pretty high  threshold to get the level of authority that they   exercised and then what do politicians have to  do to get the level of authority they exercised   which is actually a lot more than your lawyer or  your doctor or financial advisor or your minister   they have to eat a lot of spaghetti dinners you  know in the middle of the afternoon with people   they don't like in places they wouldn't normally  be that's the threshold to become a politician   you want to turn large parts of your life over to  a system run by people willing to eat spaghetti   dinners in the middle of the day in places that  they hate to go with people that they don't like   just in order to become a politician so be out  anything that can avoid being politicized should   be should be okay and so people you can't get in  a turn on your news in the morning without seeing   politics when it starts but there's still a lot  of other things going on in the world that that   are more entertaining or fun or exciting whether  it's you know okay I can't think of anything but   so yeah I've reached the age where that would  be staying home yeah sleeping in in the morning   that's good you know staying home that's that  that's nice you know not ever getting on an   airplane again they can't come to that teleporting  thing can't come too fast I just know this is not   the world's youngest audience here remember when  it was actually exciting fly people got dressed   up you know you know dad food okay so you had  some other portions of your book that talked   about bigger topics that are in the news today  that aren't aren't necessarily political but   interact with decisions like trade and tariffs and  things like that what do you have a perspective   on what's happening to trade and what the role  of China and it's gonna be in all of us yeah a   little bit I mean I said one thing is that if  you study economics at all you begin to realize   that fundamentally free trade is at the core of  any kind of prosperity I mean Adam Smith had had   three basic principles which was self-interest  Adam Smith realized that the profit motive as I   was talking about in its largest definition was  absolutely central to all human beings and then   specialization which was you know basically the  concept of you learn to do something and you have   to distribute the the doings of things you can't  do everything I mean he used the example of a pin   or a Milton Friedman used the example of a pencil  something as simple as a pencil would require you   to be a graphite miner a lumberjack you know run  a you know to have a facility was to grow rubber   trees to have a facility with spray paint you  know to get the yellow on the outside it'd be   impossible for any one of us in this room to make  a pencil or a pin we couldn't do it and so you   have to have this specialization and then for an  order for the specialization to work in a way that   fulfills people's self-interest you have to trade  and so trade is by its nature now not only is it   necessary deck any economic growth or any economic  well-being even but it's also part and parcel of   our rights our freedoms if we were not allowed to  trade our freedoms are being limited our economic   freedoms are being severely limited and which in  turn limits our personal so I'm a free trade guy   now does free trade cause distortions and does  free is free trade you know is it liable to to   to do various kinds of government corruptions do  the Chinese agree to allow American imports and   then say oh oh except for except for black and  white pigs you're not allowed to bring those in   because those are forbidden under this Saturday  other thing or you know your your you violated   this idea or you violated that idea or so on so  we're gonna say you can trade it you can bring   import anything from the United States but no no  you can't import that computer because it might   be able to connect to other computers and you  know people would have freedom of information   which we don't want over here and China that kind  of thing so do these things have to be fought out   and argued out they do is trump doing this in  a way that I think of as sane trade negotiation   no but then it brings up the larger question of  Trump the kind of unanswerable question of Trump   is that - what xx extent is this guy a Venn  diagram here is he crazy is he crazy like a   fox or is he crazy like Fox News and that that's  not mutually exclusive you know those those Venn   diagrams overlap you know and so hey what if we  wake up tomorrow and China says ok ok we surrender   you know you can import whatever you want over  here you know we're gonna live up to our trade   agreements because Indian there's a possibility  for that interesting story in New York Times   yesterday the Chinese would like to retaliate  but they don't important enough of our stuff   to retaliate on there like out of retaliation  you know so I guess they could go like bomb the   Spratly Islands you know or something you know and  upset us in another way but or you know but but   you know what if what if this this mad tactic that  he's using what if it actually works it's possible   but you know it's certainly not the way that most  of economics I think you'll back me up on this   nine-tenths of economics maybe 99% of economics  it's not competition its cooperation cooperation   is the fundamental principle of economics the  more we cooperate the more we are all better off   so I don't like the approach the Trump is taking  but I don't I don't I'm not mystified by it okay   so just a couple more questions so gern partway  through your visit to the People's Republic of   California which certainly has a different feel  and perspective than what you might see on the   Fox News do you have any impressions how is a  difference you're here this time what any views   on California yeah well I think California is a  good example of of over expansion of the state   in this case at the state level California during  its years of tremendous economic growth the it's   sort of you know post-world war two 50s and 60s  20 the state of California undertook to do a lot   of wonderful things a fabulous transit system  terrifically generous pennis pension program for   its a university system unequaled in the world  there was never any thought in California that   every time you create a government program it  begins a process of infinite expansion and I   don't think California foresaw that for one thing  that it's it's economy could change in its nature   might slow down that the population of the state  would grow enormous Lee and a lot of people in   that enormous population growth might not have the  set of skills that that brought California either   its original prosperity or its future prosperity  government programs are by their nature rigid and   especially true of anything that falls into the  entitlement category it is very hard when Social   Security was created by the federal government  people lived to be people retired at 65 and then   they died five months later walk you know they're  out you know people live to be 62 you know and   that was that now that people live to be a hundred  and two the whole system doesn't work Medicare the   same way even in the 1960s people by the 1960s  see I can I can forgive Social Security because   they really didn't understand a lot of actuarial  statistics very well back in the 1930s by the   1960s when Medicare comes along they had the kind  of actuarial information to project what does   population they knew that medical advances had  happened and more on the way they could foresee   that the population of old people being served by  Medicare was going to grow maybe not as enormous   Lee as it did but they could foresee that when you  craft these government entitlement programs you   have to be very careful about what the actuarial  realities are going to be in California really   dropped the ball in that respect they they thought  there was like an endless pool and they thought   like the 49ers you know who founded the state  they thought there was an endless amount of gold   and there just wasn't okay well unfortunately  we've reached the point in our program where   there's only time for one more question and I I  wanted to ask you you're you know a large part   of the way through your book tour still have a  little more time in California and then you're   gonna go back to your lovely home state of New  Hampshire and besides taking a nap yes exactly   always good what else is in the in the future for  you what are you gonna be doing after your after   what what you would be looking for next from PJ  O'Rourke well that's a here's where I get to plug   my magazine I have a free online magazine called  American consequences it's sponsored there's an   investment advisory company down in Baltimore  called Stansbury research and they've kind of   turned me loose with this monthly magazine which  we are doing is most that we can to make it like   the good and interesting and and and and and and  and beautiful-looking and sort of controversial   magazines of the past and we're having an  enormous amount of fun with it I commend it   to you won't cost you anything on the other hand  once you once you open it up it'll probably never   go away either you know I confess to that but I  don't think it'll do any harm or not spying on   you or anything and so it's just you know we're  having some fun with with business and him you   know we're doing a politics issue that will be out  in the middle of next month you know where we're   loaning politics but one of the big points to it  is that politics doesn't or some of our experts   say politics doesn't affect the really fund of  the fundamentals of economics and no matter what   happens in the in the midterm it is not going to  be able to destroy the boom that we have going on   right now our November issues about the crash  should you be burying Krugerrands in the yard   so we're having fun you know and it gives an  opportunity for a lot of people like lawyers   financial analysts tend to be good writers they  really do you have to be clear with this they   don't have much of a chance to write for fun and  it's always you know purpose directed writing   and so we get to tap into one of my favorite  contributors as a anonymous friend of mine and not   the anonymous fanatic because I incidentally I'm  anonymous I just wanted to announce that because   I I want the book contract you know you say well  PJ you're not a high government official I said   no but I'm a journalist and anybody a journalist  talks to as a source becomes a high government   official highly placed government official have  you ever seen anything sourced to a lowly placed   government middling government official you know  I kind of important but not really no it's always   a senior government senior administration official  and I want that book contract from anonymous gonna   get but anyway I've got this great guy who's  he's the chief risk officer for a big insurance   company and he gets to let his hair down in the  magazine we have to conceal his identity lest   his life insurance get cancelled or something  but but anyway it's fun to hear what a risk   officer what really thinks is risky which is  everything incidentally that's great so where   would people find the magazine how do they use  Google American consequences and there it is okay   American consequences so you hear it here first  the author of anonymous is sitting here yes but   please give a warm Commonwealth round of applause  for PJ O'Rourke thank you thank you very much so again PJ O'Rourke is as we all know a  wonderfully interesting man and author   of this new book none of my business we  also want to thank everyone here as well   as our audience on radio television and the  internet and as a reminder for those of you   are here that copies of mr. O'Rourke's new book  are on sale and it'll be pleased to sign them   outside the room following the program  so again I'm Lenny Mendonsa and now this   meeting of the Commonwealth Club the place  where you're in the know is adjourned thank you

Channel: Commonwealth Club of California

Views: 9,169

Rating: 4.875 out of 5

Keywords: P.J. O'ROURKE, THE POLITICS OF MONEY, National Lampoon, politics, economics, Commonwealth Club

Id: gFIoMdW6wf8

Length: 66min 26sec (3986 seconds)

Published: Fri Sep 21 2018