Q&A: Economist Judy Shelton

this week on QA our guest is Judy Shelton economist and Wall Street Journal contributor Judy Shelton the last time you were in this studio was April around April the 9th 1989 20 years ago I have not seen you anywhere since then what have you been doing for the last 20 years I guess I'm a hermit I've still been thinking about all the things we probably talked about back then and I think even back then I was mostly interested in issues like international monetary reform I was probably working only on the Soviet Union which turned into a special case of an economy gone bad but I my husband and I live on a farm effectively just the right distance from Washington about an hour and 10 minutes and so I like to dabble in the intellectual and the political and the academic but I would say my personality is to just hide away in my little office with my computer and I'm not a big socialite type we're going to show some of the past interview that we did but before we do that let's go through some of the just some of the basics where were you born Los Angeles where did you go to school in the valley so I'm really kind of the classic valley girl for sure suburb of Los Angeles San Fernando Valley what kind of a family was it great great family I have a great family five kids mom very traditional a wonderful stayed at home took care of five kids I I don't think I ever fully appreciated then what a huge job that is I thought it was kind of glamorous that my dad was a businessman and went out the door with a briefcase so I think I probably aspired more that route and then you I know you got a PhD from the University of Utah what year was that eighty one back off of that where did you get your undergraduate degree I went two years to UCLA then I became miss independent left home went to Portland State University which I quickly found out when you're paying for your college yourself then you just go where you can afford and I started working and probably that's when I got serious was the first time I took an economics course from then on I was a very serious student I was offered a job at Paine Webber that took me to Salt Lake City I met my husband there I continued and received my PhD in finance wrote a paper that some very kindly professor decided was good enough to submit on my behalf to a competition at one his best doctoral student paper I ended up getting a postdoctoral fellowship at Stanford at the Hoover Institution what did you do there I worked for a gentleman who had named Martin Anderson had just come from the Reagan administration he gave me interesting projects without a lot of supervision which was perfect for me he had me researching international debt and finance statistics and one of the most invaluable things I learned right away is probe and find out where those numbers come from as a country providing it as anyone overseeing it how honest are the numbers so you were at Hoover for how long ten years live there right there in Palo Alto no no not really not really I ended up getting a fellowship to examine in particular Soviet statistics I was looking at the world but the ones that came up as most interesting numbers were on the Soviet Union Gorbachev had just come into power in 1985 the United States and the West were suddenly making loans to the Soviet Union new numbers were coming out about how much they were borrowing from the West and I proposed to do a very very boring very dry study of the impact of Western capital on the Soviet economy but as I was doing that I started thinking why is it that defense spending is costing us taxpayers so much money and then we're turning around with our NATO partners and making loans to this Soviet economy and supplying goods that they might otherwise have to divert their own resources to making instead of building nuclear weapons against which we were paying to defend ourselves so it all became sort of a policy issue and so I ended up this paper turned into a book with a very sensationalist title called the coming Soviet crash that said on paper this country is going bankrupt and then there were implications from that that even got me involved in defense issues so it got interesting I remember seeing you give a speech on this network back in 89 since the topic before us is perestroika who should pay for it I thought it would be useful to take a few minutes to lay things out the way Gorbachev must be looking at them in terms of the economic and financial situation in the Soviet Union so that we have an overall feel for the requirements of perestroika the cost in the sense of what is needed to get it off the ground and then we were doing the book show and I we asked you to come and we visited for one hour and I want to show the audience and you know several clips maybe before it's over well you were talking about back then and the thing that keep in mind is that on November the 9th 1989 it was the fall of the wall so there's 20 years ago but let's watch and see what you were saying back then what do you think of the Soviet Union I think that it's an idea that went wrong economically I think it's doomed and I I don't say that with glee I've only been to the Soviet Union on one occasion for a couple of weeks I liked it very much its treated very nicely in some ways I'm probably a closet - Slava file I like the Russian language I work at it every day I like Russian literature so one problem with the book or at least for me is I've had the sense of people thinking that I I want to see the Soviet Union collapsed I don't like the Soviet government I don't like the Soviet government's emphasis on military strength as its claim to superpower status I think it's misplaced so what do you think since then what's what's happened is over Union well I still like Russia and I like Russian literature and I like the Russian people I think what they found out was you cannot remain a viable country and suppress individual pursuit of prosperity or creativity or whatever it is people want to use their god-given talent life liberty happiness you cannot subjugate that to what some greater government decides is important and in the Soviet Union they decided military strength was the most important second to that was infrastructure they wanted to be independent and they wanted to be internally powerful and part of the control mechanism and a very poor third were the people themselves and I think it it bred a sort of hopelessness that I still think is is the biggest problem of over overreaching government have you been back yes a few times and now at the National Endowment for democracy I specialize in pro-democracy projects in Russia what is the National Endowment for democracy it's called Ned and the National Endowment for democracy Ned was started under President Reagan but as a completely bipartisan pro-democracy initiative it is funded by Congress through the State Department but it's independent of the State Department with an independent board who runs it the board and our staff and what we do is take grant money approximately 110 million a year and we have this year over a thousand projects but we never tell people in another country what they should be doing to have democratic institutions that is we think we think the best formula for people is democracy and that means free independent media fair elections honest elections rule of law right to assemble the National Endowment is is comprised really well there's four core groups and we give grants to them but they represent the Republican Party the Democratic Party Chamber of Commerce representing private entrepreneurship and labor solidarity center representing unions who nominated you for the board I was asked by VIN Weber who was the chairman whose chairman now he well it is just switch to Richard Gephardt because they do because it's so exquisitely politically balanced they they always make sure that there's a the same number of Republicans and Democrats there's lots of congressmen and ambassadors who are on the board but when the office when the White House changes they do change from chairman to vice-chairman to reflect the party in power do they pay you know do they pay the Chairman I don't think snow how big is the staff the staff is I think about a hundred and twenty or so and they operate on a pretty thin budget basically they receive the grants people in other countries apply for grants countries all over the world virtually every country where there is some need to improve the democratic process and they've been very active in the Middle East but they come to us they can get on our website and apply for a grant and then our staff makes sure that they're legitimate and that they have the wherewithal to to comply with the requirements we're very transparent but we do a lot of good in funding people who are willing to take the risk and in some countries it's it's significant risk to fight for democracy so anyone who's ever been cynical about democracy should talk to our grantees who thanked us and who are willing to be harassed put in jail sometimes worse because they demand what we have and particularly those institutions once again a free independent media the right to vote in an honest election the right to assemble they want to they want to have protests in most countries they're not allowed give us one example of what you would consider a success and how long you've been on the board I've been on for years I would say one of the great successes was Ukraine Ukraine the Orange Revolution and in fact Russia very much resented the work of Ned in in Ned helped support the groups that became part of that movement the Orange Revolution who said this will not stand we know it was a fraudulent election and they just refused to leave the streets until there was a runoff and that is when Viktor Yushchenko was elected he's a man who if you remember the toxins his whole face was destroyed he was not the favorite of Moscow but he rose to lead Ukraine to head Ukraine toward NATO toward the European Union now things have been rough in Ukraine the economy has really spiraled downward it's a very difficult situation there on the border with Russia but even though they've experienced real political difficulties and economic difficulties I still think that they have said it's better to be independent and we will decide our own destiny and probably even leaders whom we might now say were too pro-russian at one time they likewise say no we may decide to move ahead with European Union integration here's more from our 20 year old interview now if I was going to advise the Soviet government from a financial point of view what they could do to take part in the international international financial system monetary system I would urge them to put their money where their mouth is so to speak and and come up with a gold back ruble I think that the Soviet Union's only claim to credibility with Western financial types is to provide collateral behind a currency in fact I think it would be a rather brilliant coup on their part to come out with the currency that they agree to redeem in gold because they have mythical holdings not not mythical in the sense that they don't exist but bankers eyes just get round when they think of Soviet gold reserves so there is this implicit assumption on our part that they do have something valuable and clearly I think they're the world's second largest producer they do have goal what's happened to their gold and their ruble in the last 20 years well they should have done that I have to say I wish I had fought harder I went over with a Hoover team Stanford team in 1991 advising Boris Yeltsin I was given the portfolio to recommend whether or not Russia could break free of the Soviet Union it was that August that everything fell apart and in fact by December of 1991 the Soviet Union was no more I think that the Soviet Union or what the residual government's then decided to go with the Big Bang Theory and there was a Harvard approach and the net result was instead of solidifying the money first they tried to do everything and they ended up giving people a really bad taste for capitalism the Russian people who were very hopeful under Yeltsin ended up thinking that this is a way for for people who have access to the politically elite the cronies of those in power they'll get big rewards and the rest will suffer so throughout the the 90s Russia was really grasping with disaster and it was only really when Putin came to power that Russia started making money because of oil and people started saying you know this is better it's better to have a strong tough leader we're even we're willing to give up some of those freedoms we thought were important but it turned out we were we were worse off under so-called capitalism and I think even now if your currency has integrity you can build on it it's a foundation and Russia ended up having a disaster in 1999 where the ruble lost a third of its value in a matter of a few weeks there was a complete default and it put Russia on the lifeline to the IMF which they also resented and again it just fueled kind of this permanent distrust of the West which I think is why someone like Putin stays in power you've mentioned the IMF a couple of times what is it the International Monetary Fund has a wonderful legacy was set up during World War two actually the first draft laying it out was written by a guy named Harry Dexter white in the Treasury Department a week after Pearl Harbor was bombed and the idea was to say you know in the 30s because of the depression we had a breakdown of any kind of international system we had beggar-thy-neighbor competitive depreciations of currencies where everyone tried to make their currency cheap so they would get an advantage when they sold it in another country we had protectionism and in order to get the allies in Europe to feel like there was something worth fighting for the u.s. decided let's give people hope that if we get through this vicious war there'll be something good to come - we won't just go back to the 30s where it was every man for himself and a depression will show leadership and so the IMF came out of that the International Monetary Fund had one main job and it was to have a stable international monetary system fixed exchange rates among currencies they would have to be fixed relative to the dollar and the dollar would be convertible into gold at a fixed rate of $35 per ounce of gold any country in the world back up its currency with gold today no and this is why I now have real resentment of the international monetary fund because when the u.s. went off that system under President Nixon in August of 1971 instead of fighting to maintain a stable monetary system or figure out how to get back to 1 which is what I think the IMF should have sought to do it waited a few years kind of fumbled along and then it accepted that and now its attitude is any country can have any kind of exchange arrangement they want floating fix they can have a currency board they can they can piggyback and peg to another country's currency the only thing they can't do is peg their money to gold so it's not just a betrayal of the original idea it's it's almost perverse they can't take the gold meantime the IMF sits on most virtually all of the gold that was contributed from the beginning from countries who had to pay in gold or dollars to become a member of what was supposed to be a stable international monetary system then why were you mentioned earlier my recollection is that Jack Kemp was a big gold supporter and he had a outfit called empower America and that van Weber was involved with empower America and you were involved with Harvard I was on that board very out of that Kemp was a visionary there was recently an event in Washington to launch the Jack Kemp Foundation it's very invigorating to see the people who were part of that movement the supply side now we can proudly say supply side was something that brought economic growth it was based on the wisdom of recognizing that the free market works because it's it reflects the collective effort of individuals who use their talent and their intelligence to pursue their dreams and what you don't want to do is inhibit that all all entrepreneurs really want are good solid rules a solid foundation and honest money which is something Jack Kemp was willing to go to bat for sound money that to me is where you start you're not your personal detractors but people that would detract from or criticize what you're saying would say today that we are in the mess we're in today because of supply-side economics because of this thing that went on during the Reagan years it said spend spend spend and joy you've heard it the economic growth during the 80s completely turned us around from the stagflation the the stagnant growth and the inflation the worst of all worlds that we had under President Carter and in the 70s it looked like our country was permanently in malaise or even going into decline as if we just become in a business model kind of the cash cow but our our best days were behind us what we learned under the Reagan administration was that the potential for economic growth is still there I know it sounds hackneyed but the American Dream is still alive and I think a universal one people want to be successful they want to be prosperous doesn't mean just material wealth they just want to have the chance to pursue what matters to them and to define what matters to them and the two big parts of the Reagan Revolution were in monetary policy to to stabilize it to get rid of inflation and under Paul Volcker that's what we did it took it took a real squeezing out it was very painful but with high interest rates we attracted a lot of foreign capital he was following Robert Mendel's ideas Mendell laugher art Laffer these are the heroes of the supply-side revolution so on monetary it was to have a stable honest dollar and in the fiscal realm the idea was lower taxes lower taxes and give people a chance to be entrepreneurs before they get to an Atlas Shrugged point in their life where they say it's not worth it it's not worth it to be creative and take risk and go out there and be an entrepreneur I really think when you lower taxes you're finally recognizing the heroism of entrepreneurs it's 20 years later and remember back then it was all about the Soviet Union here's another excerpt and what you were thinking then could you sense from visiting there for the short time that the people there are happy unhappy how would you compare them with the general mood of Americans you know that's a that's a question that I think reflects human nature I'm I'm not sure that a highly consumerist society means greater personal happiness for an individual the people I met happy enough I think they had that that Russian characteristic of being resigned I think they're much more passive than Americans we're so demanding if something's not up to snuff we call the manager in the Soviet Union they shrug it off and if they get lucky they're able to buy this or that it's good fortune but you you wouldn't begin to see irritation of like you would in the United States have you seen any change in the Russian people since the walking down they had a taste of freedom there's still a certain resignation and they probably accept what's imposed on them much more readily than Americans but I am so glad Americans don't have that trait we do get mad thank thank goodness we get mad and we fight back and we have a political system that allows us to say we don't like the way we're going and we're Americans and this is a government over the people by the people for the people and we say we're the people and we really start asserting it and that there's still a difference or Russians don't quite believe it but one thing I do think is universal is is the entrepreneurial spirit and and it's not just about making money I agree with what I said then if you're resigned in its in any society it's not just because you can't necessarily be the wealthiest person it's that you can't fulfill your own dreams and in Russia in the Soviet Union it was that soul-killing aspect of living in a society where what you were going to do and where you were going to live was preset it was central planning all the way and and the liveliness of a dynamic society like the US I think comes from a sense of well we don't know exactly what's going to happen because I might just decide to go out and be this or that I'm going to take the risk I'm going to put together a plan there's a sense of the possibility of being successful however you define it that I think is the difference between being a caged animal where food is thrown to you predictably or saying no I'm going to live in the wild and I might just have to fend for myself if you like freedom that's what you live for and that that's what I think is worth preserving or bringing to bringing as a power to bear in any society today 20 years later this is a been a huge consumer society you hear a lot of people complaining about service stinks wherever you go in the u.s. you in the US a lot of the institutions that we revered 20 years ago have failed miserably all the airlines almost all on went broke what do you what happened here then I'd say wherever a competition is limited you're going to see a decline in service and value its competition Adam Smith who had a great sense of morality he wrote about that as much as he did about how capitalism would work if the invisible hand sort of directed individuals to do things he said that would ultimately give you the best society and I think it's really true maybe it even seemed selfish that people trying to enrich themselves cater to the demands of other people but but what else would we want it's it's people who are willing to to set up a service business or produce something and they're trying to please their fellow man yes because he's going to buy the product and they'll make a profit and that's how they'll they'll do better economically but it's also a society that pays attention to its fellow man because that person demands the best value for the lowest price and it brings to bear all of the forces of free markets and that's what I believe in I think that comes closest to reflecting a system that individual humans can can thrive within you have not I've not seen you on television do you not do these shows for a reason well I was especially pleased to do your show because I think it it's nice to speak in depth I appreciate that opportunity I don't think I'm a good soundbite person because I'm likely to say something that maybe is taking the wrong way I'm not sure but I avoid them on purpose I'm I don't avoid them but I don't often accept my kind of the Wall Street Journal blessed newspaper has been very kind especially in the last couple of years giving me a great forum to get ideas out there but I'm I like I know we need strong political personalities so you need people with charisma but I think I'm much more the kind who is sitting in jeans and t-shirt and pounding away on my keyboard and I don't even try to sell my ideas so much as I'll just slide it under the door and if people like it I'm happy to come in I sometimes will come in and meet with senators at the Capitol and tell them my thoughts about the debt situation or the deficit or where we're going as far as the dollar I love to do that but more is a behind-the-scenes teacher I guess not the doer the teacher is so David Walker who used to run the GAO government accountability office and now runs the peak Peterson foundation says that we cannot grow out of the situation we're in now it is a frightening is that true and if it is is it the first time in our history I never want to say we can't because we've been in terrible situations coming out of World War two we had a lot heavier debt to gross domestic product ratio we've had tough times before where we're confronted with the the loss of war financially as well as what it does to the spirit but I think the country is valiant I want to say resilient enough to come out of even this but this is unprecedented spending unending deficits and what I consider an unconscionable accumulation of debt it's a kind of debt that Thomas Jefferson said was the last thing he ever wanted to wish on this country where the the burden the yoke on the necks of American citizens is set by government without really their express permission I guess I guess we give our implicit permission because we elect the people we do but it's a tremendous debt level and I think at some point you can kill the goose that laid the golden egg at some point I can well imagine the creative productive people who have brought tremendous profits and salaries and built factories and made other people wealthy I can see an Atlas Shrugged scenario where they all say I'm going to Galt's Gulch I'm dropping out I'm going on strike because the country doesn't appreciate the risk I take on and how hard I work and the government takes me for granted I can imagine people saying it was a great dream but I don't know if it's worth it for me and if enough people feel that way then the country has real problems which politicians have been the most consistent for you in your life that you have any respect for certainly jack kemp i like john kyle of arizona Jim DeMint South Carolina those people come to mind I'm very pleased with Bob MacDonald I've met him the new dr. Virginia very pleased that he is talking about free enterprise and the American dream I those would be the people who come to mind which economists you know the in the Paul Volcker Alan Greenspan grupe do you respect the most the greatest economist the one for whom I have the most respect is Robert Mandel where is he is he alive he is a professor at Columbia he won the Nobel Prize in 1999 he is the father of supply-side economics he also has a magnificent castle in Siena Italy with his wife Valerie and their young son and every year and I believe he's done this since 1971 since the dollar went off of gold he has a fantastic gathering of economists from all over the world talking about how can we ever get back to a stable international monetary system and he has people like Paul Volcker in attendance I've met many central bankers and leaders of government there and so he's very much involved still in the future of the international monetary system he's been consistent intellectually and he's very interested in China these days he sees China as coming on board just as he supplied the intellectual groundwork for the creation of the the euro the European money and he now sees we could have some kind of a linkage between the euro the dollar and whatever China comes up with some kind of a yuan that's convertible and a stable currency explain something this is a simple thing I mean it's not simple explanation I'm sure but when the euro was created and what was that ten years ago yes there was a parody one dollar for one euro yeah and then it even dipped below where it was in the 80s on the Euro side and now it's a dollar fifty the other way now that tells you something because the whole idea of floating rates was supposed to be a s'more stable system and and the whole idea of fighting protectionism is to eliminate tariffs but because you have this huge area of the the European Union huge area of the United States having variations of 50% more than 50% in that relatively limited time span that tells you that the swingin currencies swamps the impact of a tariff of 5% maybe 10% when you have a swing of a currency of 50% you have just made your competitors products 50% more expensive which is completely unfair if you really believe in a global marketplace in a level playing field or you've given yourself an advantage which is certainly on the scale of the Great Depression when we call the beggar-thy-neighbor these competitive devaluations the u.s. now having a weak dollar to me is saying to the rest of the world we don't care we may be cheating because a weak dollar makes our products cheaper and your markets but we're doing it that's very unseemly for our country such a wealthy country to do that one of the things amateurs like me don't know is their who's making the money and I assume somebody in this country with this weak dollar is benefiting greatly well the problem is because there's no system money doesn't mean what it's supposed to mean it's supposed to be a unit of account a measure an honest measure it's supposed to be a store of value instead it's become a game the people who make money are speculators who bet on where the dollar is going to go relative to the Euro or other currencies and you have banks banks betting now banks have to be able to exchange money because they handle international trade but the amount of money you would have to convert into another currency to carry out international trade is like less than 5% of the currency market the foreign exchange market is huge and it's absolutely just a gamble of betting which way it's going to go so banks get big profits from that speculators get big profits but what bothers me is that we've turned money into into a lottery instead of money being a tool and I think the most important tool for capitalism which requires free markets how do you interpret demand and supply for anything if you have the sliding measure of what its prices it would be like having a ruler and today an inch is this big and tomorrow it might be like that you can never have this reliable way to measure value so how can free markets work when you don't have a unit of account that means the same and through time to everyone you don't have that basic foundation up upon which price signals can then do their job and free markets can work and you're married to a banker I am well a former banker a wonderful very brilliant finance and monetary elect who was a very successful banker but who lucky for me got out of banking back in the early 80s and so is kind of a fellow farmer we both like to hang around the place and go out and visit the cows and this morning he was up in a tree stand watching deer didn't shoot any but I'm sure we'll end up having venison tonight so it's a different life it's not a Washington life you did spend time in Mexico though yes I taught at a at a great school it was a Business School graduate school of business called Dukes it was started by a great man named Alfonso Romo one of the billion or billionaires of Mexico but more important man who whose grandfather was was the president of Mexico the first democratically elected president of Mexico in the 20s he was assassinated but this man cares very much about the legacy of democracy and entrepreneurial capitalism and this Graduate School of Business he set up in Monterrey Mexico had all US and European faculty who he would fly in you take up residence at the school so that Mexico's cream-of-the-crop MBA students didn't leave he wanted them to stay there and work for Mexico did this school make it it did for a few years I guess I taught there six years but I think ultimately was absorbed into maybe the University of Monterrey another another institution of higher learning it was very expensive he was pretty much footing the bill for the students but many of them went on to fantastic careers I know some that ended up doing graduate work beyond that at Harvard because I wrote recommendation letters for them and they all have that spirit of free enterprise and the sense they can make a difference in the world by the way you mentioned the Wall Street Journal and you've written how many pieces in the last couple years well I just happen to know in the last two years 15 and I think almost always the lead op-ed which I appreciate very much and who first said to you yes well through the years prior to that maybe once or twice a year it would be the person in charge of the editorial page is that pause you go he is higher than that he has a higher title the man is Robert Pollock and his his partner is Howard Dickman they run the page now and I started getting a just a little email do you have anything to say on this and I think the first few times now this is because my issue I had written a book called money meltdown back in 94 and so we went through the Mexican meltdown after that in 95 Asian and 98 Russia 99 but whenever the US dollar has been going through its throes of agony I would get a little inquiry but especially a couple of years ago a little email what do you have to say about this any thoughts which is a dream come true when you get a query and I would say look you won't want it be I'm kind of a curmudgeon on this and I wish we had a neutral Reserve s asset like goal something universally recognized something that's had constant purchasing power over centuries I mean this is crazy you don't want to put this as a lead-up ed on the nation's premier business newspaper and he would write back yep sounds great write it up and and so I've had a chance I don't just some people call me a gold book but it's not really that what I'm saying is money is a tool it's not something that's descended from heaven and yet we live under legal tender laws of mandated money you have to use the dollar and I think that implies a moral contract on the part of government if they're going to be the producers of the dollar they better make it a good product to be a good product it has to fulfill those functions of medium of exchange unit of account and a store of value and it has to do it honestly and with reliability and with integrity do they pay you to do that or the journal yeah I think it's gone over the years from a hundred and fifty dollars to the one they ran a week or so ago I got six hundred four so you could not make a living I asked how many words usually twelve hundred I want to go back in history again because you had this I don't know what you call this relationship with Russia back then and with the wall coming down and one of years of Russia after let's let's listen to what you had to say I've always liked the literature Tolstoy and Dostoevsky and Pushkin goggle and what I'm trying to do now is I'm trying to memorize a day in the life of Ivan Denisovich by Solzhenitsyn so I I have tapes of Solzhenitsyn reciting his work and then I have a Russian in Russian or English in Russian and then I have the work in Russian and I have it in English and I have about four English Russian dictionaries and every morning for an hour I start reciting what I've memorized so far and adding on to it and working my way through the book why it's it's a great pleasure i I think the way you you get a feel for a language unfortunately is through this exercise of memorization so I need to hear it and read it and think about it so it has meaning to me personally to really embrace it how long was one day in the life of Ivan Denisovich how many pages 109 maybe did you memorize Quechua so futre coccyx de problema Yom malakoma Prelude stop novo Baraka para grievousness one slab of partials Boise Oakland on your shift wobbles scores a cheek holonovel in adhirata lu new hot valid auger coma hot vana chick Zack Nancy Oh - Irina no Chi cago suka Staubach perish the rata ma atima tapa de la vaca no tree wrote - olya the Ranas anya jeans new tree logorrhea yeah I have no idea all right or wrong why were you doing that and have you have you gone back to this do you still read Russian yes I am very interested in dmitry medvedev I have you he's the president I think he is different from Putin I would love to see him be his own man he's very much against corruption he appreciates the ideal of democracy whether he can rise to challenge Putin when it comes to that because I think it would have to come to that I'll be very anxious to see but I read what he has to say virtually every day the Russian presidential website is excellent he has video Russian and English so that's a good way if you want to learn Russian you can read it in both languages you can watch the video with with English beneath you can get transcripts and in English and Russian well before you go any far let me show you another clip because things have changed a lot since then but here's what you were doing back then at your home out an hour from Washington we contracted with a gentleman who had set up a satellite system for Columbia to listen in on Soviet television we set up the same operation at our house and it involves a big dish and a little computer and since the Soviet satellite is not geostationary and and I am not I don't know anything about these things except what was explained to me but the Soviet satellite keeps moving so the trick to latch on to it is to get a system that can follow it and track it so our dish now wired to this computer does a little search about every eight minutes figures out which is the strongest direction the strongest signal and locks onto that and follows that for a little while in the meantime feeds through and in my office set up in the house I can watch color soviet television from about 4:30 in the afternoon to about 7:30 in the morning that comes out of a lot of a stock and then i get live Soviet radio straight out of Moscow all day long so I it's a pleasure for me to hear the language I enjoy that I don't pretend to understand all of it but I can get some of it and every once in a while there's something interesting that comes on the news what happened to that system at your home I I presume the people who bought our house dismantled it because I mean this was a great big dish one time a military helicopter just stayed near it I'm sure taking pictures as I understood at one time that there were only three such setups and one was it NSA and one was at CIA and we had one so these days you can you don't have to intercept Russian broadcasts which is which is great but that's interesting yeah that was a real indulgence my husband let me get that and I really did I loved to listen at a certain time every day they would go live to Red Square and play the Soviet anthem and that came out of World War two when they would try to reassure people by radio that the country was still there and it actually is a beautiful anthem and of course it was thrown out when the Soviet Union ended but it was pried back with different words and I have to say it still is great music but that's what you can hear now I listened to voice of Russia with earphones now at my computer live if you live in Northern Virginia you can watch 24 hours a day seven days a week Russia today a full time television network in English with people that sound almost American in some cases they might be or British yeah as anchor people yeah have you seen this and why are they doing this well that is Russia today is a state-controlled broadcast it looks a lot like our American television oh I think they actually probably tried to copy Fox News because it's it's just it just happens to be state-run and you will find in in many cases similar type stories at least the old Pravda approach under the Soviet Union was to highlight whatever was the worst thing that happened in the u.s. so if we had a natural disaster or something embarrassing politically or socially catastrophic someone walks into a school and shoots ten people boy that would be on the news that's and and they still tend to highlight that they ran a huge feature last week on Russia Today explaining why and this is just so irritating 9/11 was faked and the US knew it and I mean just these incendiary accusations and they do it as investigative journalism this Russia today is part of a package of ten channels that is supported by the state of Virginia and it's a public television station I love that we can choose to watch those things I found that the most useful thing to me at the time I was working on the Soviet Union when they were very secretive was to have access the state controlled modes of information it doesn't mean you can't learn a lot from that you can learn a lot I go first to Voice of Russia which is also state controlled and often look at Russia today which is sort of as I say the Zippy version of what the state wants you to hear and they will even throw in stories that are sort of critical of Russia I think to make it look like they're not preordained from the government so they do try to do that but no I'm happy I think those those stations should be available you can learn a lot by the way a government wants to present itself the differences you should also be listening to radio echo Moskvy and some of the very few media outlets out of Russia that are genuinely free it's it's the competitive media that gives you a chance to make for you to decide to hear the news and then you to decide what's really happening you were talking in your book that we talked about 20 years ago about the military and the money that Soviet Union's all their focus was on the military 20 years later this country spends 700 billion dollars in the new budget on defense and you can hear people say that it's all the rest of the world's military combined doesn't add up to 700 billion why are we now in the position of still being this strong military country and do you believe we should be well just to put it in perspective that's still about four percent of our gross domestic product and right and the Soviet Union in its final days was probably devoting over 20% maybe 30% of its gross domestic product to the military I mean it was definitely a priority over everything else in this country people don't like it to go above about 4 4 % so but but to your larger question of why does the u.s. have to bear the burden I don't think I don't think Americans are war mongers I think we sort of just shrug our shoulders and say somebody somebody has to do it I think we would love it if NATO would take on more of the burden but in the end we find that the u.s. ends up looking or the rest of the world ends up looking to the US to to be the force for security it's too bad it's it's an awful burden and I think it's I think the American people are generous with their people and with their treasure to support it because I think most of the things we do aren't just necessarily to help ourselves I think they're to help other countries so in a very few minutes we have left what would you tell this president or anybody else that's responsible for the future how to get out of this mess out of Afghanistan no out of the financial mess around oh well first I think you go back to the source of wealth in this country which is private business and I think you change your attitude and start saying we over tax people we overburden with regulatory requirements we do not support entrepreneurs and and we don't give them sound money money that doesn't inflate money that doesn't put them into higher tax brackets than they deserve what do you say to those that criticize the fact that the regulators were didn't do their job in the last couple of years I I think that's totally missplay totally misplaced I am so tired of the criticism of this was even among Republicans of Wall Street greed or predatory lending I think government had much more to do with the financial crisis because government interjected itself into the private market when government distorted the the risk of Fannie Mae Freddie Mac securities by sort of winking and saying these are guaranteed and then allow those to be sold and resold and derivatives which are just these same kind of financial bets that multiplied by by 30 times over the leverage of that small group of bad risk subprime mortgages it was the government intervention and all that I mean let's face it finance and banking are the most heavily regulated industries we have you can't you can't regulate a distortion of markets and and to suggest that people were greedy because they were pursuing profits legally it was legal to make a profit by selling derivatives selling them 10 times over is perfectly legal but why have an incentive system that makes it more profitable to write up this complex financial instrument that's a bet of whether the European Central Bank will move on interest rates or the Fed and they both keep their deliberations secret or whether this currency will rise or fall relative to that currency instead of having one unit of account and not playing games with money why would you set up an incentive system that rewards people for betting on so-called investments that have nothing productive associated with them versus people who make things or furnish real services they're saddled with having to pay when a system like that built on financial air collapses so I blame leaders for not giving capitalism a sound monetary foundation and that would have provided the stable financial atmosphere for carrying out productive capitalism at a time how much your time do you spend on the National Endowment for democracy we have four meetings a year I / I review our projects so I would say I probably spend 20 percent of my time we don't have much time to go over but 80 percent of the time I think about international monetary form right about it work on written projects I'm going to be at the Cato Institute monetary it's their 27th annual monetary conference in a week or so another book I'm not working well I'm working on a book completely different it's more on a religious theme and it's fiction so Judy Shelton on that note we thank you for joining us thanks so much bye for a DVD copy of this program call one eight seven seven six six to seven seven to six for free transcripts or to give us your comments about this program visit us at Q&A or Q&A programs are also available as c-span podcasts next week on Q&A we

Channel: C-SPAN

Views: 10,337

Rating: 4.7385621 out of 5

Keywords: C-SPAN, cspan, q&a, economy, shelton, lamb

Id: 5f8QpKktgtM

Length: 59min 14sec (3554 seconds)

Published: Mon Nov 23 2009