ANNOUNCER: Welcome to Creating Wealth with Jason Hartman! During this program Jason is going to tell you some really exciting things that you probably haven’t thought of before, and a new slant on investing: fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self-made multi-millionaire who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it! And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.
JASON HARTMAN: Welcome to the Creating Wealth Show. This is your host, Jason Hartman, and this is episode number three hundred and forty-four, and today I’ve got Ben Ginsberg joining me, and we’ll talk about some interesting stuff here in a few moments. But first of all, an interesting CNBC report is out: Diana Olick commenting on home affordability and the market slowing just a tad, which is actually kind of a welcome thing, frankly. I’d like to see it slow down just a little bit, so it gets a little more—I don’t know how to describe it. A little more pleasant to do business in, I guess. This is probably partially seasonal. It’s also—we saw a little tick up in interest rates, and then a tick down, but in the markets we’re in, business is still quite good and quite strong. There’s definitely more inventory now, as we talked about on the last episode. So take advantage of that! The homebuyers aren’t really out that much in this time of the year, and this is the time when a prudent investor should be out—when demand is a little bit lower and more reasonable. Because most homebuyers move in the spring and summer, obviously. That’s just the typical seasonal adjustment that I became so familiar with when I was back in traditional real estate years ago. But what this CNBC report talks about is pretty interesting. One of the great barometers for a prediction on where housing prices and where the market activity is going, is the good old housing affordability index. Now, it doesn’t tell you everything. But it tells you a lot. It’s pretty good. And historically, the housing affordability index is awesome, okay? It’s still totally awesome. It was really, really awesome, as we talked about on prior episodes, maybe, I think we talked about this a lot, about 8-12 months ago on some shows how the housing affordability index was the best time to ever been in history since the National Association of Realtors started keeping tabs on it in the early 70s. and historically, it’s still excellent. However, it’s not as good as it was just even a few months ago, and this article profiles the least affordable area and the most affordable areas out of 25 metropolitan areas. So, you can probably almost guess this stuff if you’re becoming astute at the marketplace through listening to the Creating Wealth Show. But, least affordable markets: #21: Miami. No surprise there. #22: my hometown, Los Angeles. No surprise there. #23: New York, no surprise there, and #24: San Diego, no big surprise. #25: San Francisco. So those are the least affordable metropolitan areas. And those are areas that, you know, none of them really make sense for investment, because the rent-to-value ratio doesn’t work. So you’ll just notice that in the markets, our least affordable, they’re also markets where the RV ratios just don’t make any sense, and we wouldn’t want to invest in those areas. Now, the most affordable metropolitan areas are a little bit interesting, and they require some deeper analysis and commentary. Well, here they are. And you’ll recognize a lot of these markets. A lot of you listening may own property in one or two of these markets, hopefully. But hopefully not more than one or two of these markets, because they’re not markets we recommend. But we have looked at, intensively. So, the most affordable market—well, I’ll go up from the bottom, okay? I’ll go up from the bottom, it’s more suspenseful to do it that way. Most affordable markets: #5: Pittsburgh. I used to live in Pittsburgh when I was a little kid, and we have looked at Pittsburgh quite extensively, in terms of investment. And two things bother us about that market. We may overcome them, and maybe be tempted to overcome them at some point, because other factors outweigh them. But, one problem is that we don’t find it to be very landlord friendly. And as you know if you’re a regular listener and follow our work, we always want to be in landlord-friendly markets that are friendly to our cause as landlords, so that if we even get into a bind, or we have a problem tenant, we have a deadbeat, we have someone we’ve gotta kick out, we want the courts, the legal system, to favor the investor rather than despise the evil big land owner. Like the Socialist Republic of New York, California—those places, definitely not very landlord friendly, to say the least. And the next one, #4, is not landlord friendly either, but it’s interesting, because it always looks tempting to investors, and I’ve talked about it many times. But it’s not a place we have ever recommended, and probably not a place we ever will. Yes, you probably guessed it: it’s the D-word—Detroit. Yes, Detroit. The bankrupt city of Detroit. I was going to say destroyed. And it is destroyed. And that market is, of course, the poster child for how big government simply doesn’t work. The model cities program, the corrupt mayors, the corrupt government, the kickbacks, the just extremely mismanaged, formerly great city of Detroit—where the unions ruined that city, the liberals ruined that city, it’s just so ruined, I can’t even tell you what to think about it. Now, #3, that’s a market we’ve recommended, and we very much actually still like the market. We haven’t been talking much about it lately though, for other reasons. Oh, by the way—I don’t know if I mentioned this just now on Pittsburgh, but there were two reasons, right? Landlord friendliness, that was one of them, but the other thing is—look. I have been very transparent in talking about this on the show, and that is that—look. There are markets we would like to be in, markets we would like to be recommending to you as an investor. However, one of the big things—it’s not just about the market, folks. It’s also about the team. The provider. The local market specialist in that market. Because you can have the best market, but if you don’t have the right team, you’re not going to have a good experience. Now, that actually kind of relates to the next market I’m about to mention here. But, that would be similar to, if any of you are employers—if you have your own business, or you’re a manager in a company and you’re in charge of hiring people, if you’re in the HR world—the human resources world—I have long felt, and you’ll probably agree with me—that I would rather have an employee with a great can-do attitude and limited knowledge than an employee who knows everything, who’s got all of the knowledge and all the credentials, but a bad attitude. As Earl Nightingale says, “to estimate the role of attitude in one’s success is like talking about the role of water in the Pacific Ocean.” It’s pretty significant, right? And attitude is probably 99% of success. So that’s the thing, it’s about having the right team, not just the right market. Well, #3 market, I kind of hedge on this one, because I think it’s a good market, and I think, I don’t know. The team experience in this market is hard to really explain, because we have been having challenges with our team here, and we have a long list of promises our team here has—is slowly keeping. But, I don’t consider myself to be the most patient person in the world. I’m fairly patient. But, at some point even the most patient person, their patience runs out. And runs ragged. Well, that’s good old St. Louis. Pretty good market, I agree. Our most popular provider in there has been backlogged dramatically and has a huge backlog of promises to keep, so we’re dealing with that, and it’s like a slow progression, but if you’re in that market and you have any of these challenges, you’ll know what I’m talking about. So, St. Louis is #3, I guess I won’t go into much more detail on that. Another market that’s pretty good in terms of affordability but has other big challenges, one being weather, the other being liberal politics that make it landlord-unfriendly, but we have looked at this market fairly extensively, and that is Minneapolis. Minneapolis is #2 in terms of the most affordable. Not a market we recommend though. The action is in the Sun Belt. People are moving south. They want to be in warmer climes with low cost of living, natural beauty, recreational opportunities, and of course, employment growth. And that is in right-to-work states, which oddly, Michigan became one somewhat recently, a few months back. I don’t know if that’s enough to save Michigan. It’s probably too little too late. But #1 is one of my long time favorites. But it’s become a little less affordable. It doesn’t work as well as it used to, and that’s why we haven’t talked about it so much lately. But that is: yes, it starts with an ‘A,’ it’s the first letter of the alphabet, and it is Atlanta, Georgia. #1 most affordable metropolitan area of the 25. Now remember, this is only of the 25. So it’s like looking at the Case-Shiller Index, which is massively flawed in my opinion, yet that’s what you’ll hear about in the media. The media talks about the Case-Shiller Index, which only surveys the top 20, not even 25 metropolitan areas out of about 400. And 14 of those markets I really have never been very interested in. So, again, of the Case-Shiller Index, only 6 of them spark my interest, so. Anyway, that’s how this stuff is so flawed, and it requires greater analysis, definitely. But I thought you’d find that interesting, and just wanted to hear a little bit about that piece from Diana Olick on CNBC! Okay. A couple of housekeeping items—oh, Meet the Masters, our annual event that used to be twice annually, now it’s just annually—is scheduled, confirmed, it’s done, you can register, we’ve got the hotel special set up. And by the way, I gotta tell you, I am very impressed that we have been able to hold on to this great hotel pricing. And it’s at the same place as we’ve had it many, many times—that’s the Hyatt Regency in Irvine, California, and it is confirmed January 18th and 19th, 2014 of course. January 18th and 19th, and we’ve got that great hotel rate, which is only $119 per night. And, you know, of course this is a beautiful hotel, very nice. And room rate is typically I think about $179 per night. We got our room block discount, so be sure to not only register for that event at www.jasonhartman.com, and we’ve got a special, by the way—this is the first time we’ve done this. But we really wanted to get—kind of role out the welcome mat to some of you who have not attended this event before. So, if you’re a first-time attendee, we have got a special, and it is just $397 for the two-day event. And the regular ticket price at the door is $1500. Non-first-timers, we of course love you, but we wanted to offer a little special for the first-timers, and see if we can attract some new people. We love our regular, but like the cell phone company offering the special for newbies, that’s what we’re doing. So we want to get some new people this time, so, $397 for them. And the early bird price, though, is $497. And we’ve got that great room rate while the room block lasts. And speaking of housekeeping items—wow, we’ve been deluged with orders for that special that I offered on the last episode. I only mentioned it once, but thank you for all of your interest in our closeout special for the physical product of Meet the Masters, which is a combination of two Meet the Masters events, sort of put together, kind of a best-of, and we closed that out. This is normally a digital download product for $497, and we made it half price at $247, and we still have several boxes left. So if you’d like to take advantage of that, I didn’t count them, but we went and shipped a whole bunch of them, and by the way—the estimated arrival from UPS is on Halloween! You’ll be receiving those. So that’s not scary, that’s good. But maybe everything else will be scary on Halloween. But you should, for those of you who ordered, you should be receiving your boxes of our physical product—I think it’s got something like 22 CDs and a big huge 500 page workbook in there, and thank you for all of you who ordered. There’s still some left, while supplies last—this is a closeout, so, we don’t plan to offer it again. And the next version we’ll probably just re-edit and update that as well. So, $247 for the physical product that will beautify any bookshelf for many, many years to come. And of course, the knowledge is priceless, and the education is priceless, and take advantage of that at www.jasonhartman.com/sale. That’s www.jasonhartman.com/sale. So there’s a couple housekeeping items, and one more thing I should mention to you—we’ve got some fantastic shows coming up. There are just so many in the queue, and one of the challenges we’ve had is that—and the way we structure the podcasts, actually, I owe this to my editor. He made a good suggestion—our producer, on how to do this and get more episodes out to you more frequently. And that is to number one, not do long intros [LAUGHTER]. And number two, not state the show number on every episode. So, the show number of course will be in the show notes, you can always reference it that way. But we’re going to get more episodes out to you more quickly, because we’ve got so many great guests, so many great recordings—by the way, wow, this was an interesting one, I had by interview with Obama’s buddy, Bill Ayers. Yes, I know. Probably a few of you who think, Jason, why the heck are you interviewing that guy? He’s a rotten egg, he’s a terrorist, whatever. Hey, he was interesting, let me tell you. I don’t agree with him on—I agree with him on very few things, okay, but I did agree with him on some things. And that interview was lively, no questions were out of bounds or off limits, so he let me grill him, and that’s an interesting one. So, we’ll have that coming up. We’ve got a whole bunch of others I can’t even remember. But I’ve been recording like crazy. We want to get these episodes out more quickly. So, some of them may not have show numbers on them coming up, or episode numbers, but we’ll get them out faster that way, okay? So, let’s get to our guest. We’ve got Ben Ginsberg, and we’ll be back with him in just a second.
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ANNOUNCER: Are you interested in a property outside of our network? Do you need a second opinion? No problem! Let Jason’s experts evaluate the deal. Our deal evaluator is only $50. For more information, go to www.jasonhartman.com now.
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JASON HARTMAN: It’s my pleasure to welcome Professor Benjamin Ginsberg to the show! He is professor of political science and chair of the Center for Advanced Governmental Studies at Johns Hopkins University, and that’s a David Bernstein Professorship, I should say. And he is coming to us today from—I don’t know exactly where you are today.
BENJAMIN GINSBERG: Well, as we speak, I’m in Potomac, Maryland, a suburb of Washington, D.C.
JASON HARTMAN: Fantastic. Well, how are you doing?
BENJAMIN GINSBERG: I’m fine, how bout you?
JASON HARTMAN: Well good, good. Welcome. I’m in very hot Phoenix, we have a huge heat wave going on.
BENJAMIN GINSBERG: Yes, so I heard. I keep saying that we have a lot of heat here too, because we have so many senators and members of Congress; they had about eight degrees of hot air.
JASON HARTMAN: [LAUGHTER] I love that. They are partially responsible for the global warming issue right there.
BENJAMIN GINSBERG: Yeah, well, there you go. When people talk about global warming, they never think about reducing it by cutting the size of the government.
JASON HARTMAN: Yeah, well, that’s a great place to start, if you ask me.
BENJAMIN GINSBERG: That’s my plan, because I can tell our views are very similar.
JASON HARTMAN: Well, first of all, let’s talk about student loan debt, and the cost of education that has risen—depending on how you look at it and what survey and time frame you look at, about 2 – 4 times quoted inflation—the official numbers for inflation, which I believe are understated, you might agree. But what’s behind this, and what can be done about it?
BENJAMIN GINSBERG: Well, you know, one reason for the quantitative student loan debt is that colleges and universities are constantly lobbying to raise the amount that students can borrow. And they do this claiming that we want to make sure that everyone has access to college, but of course, as soon as the limit is raised, we raise our tuitions.
JASON HARTMAN: Absolutely. I mean, this is just classic inflation to me. you’ve got more dollars chasing a reasonably, a somewhat limited supply of goods and services. And our course, universities can expand, the Internet has helped them scale quite a bit with tools like Blackboard as so forth. But they still have admissions, and at least the put on the air of being picky about who they accept and who they graduate. Doesn’t anybody realize, this is just the classic definition of inflation?
BENJAMIN GINSBERG: Yes, I often use this as an example in my classes. I’ve had students that—the first step in being a good citizen is to be a cynic. The press is always telling us not to be cynical, but I don’t know anyone more cynical than reporters. So I say, you have to listen with a very [unintelligible] ear to the claims that people in government and in all sorts of institutions make. And, this is one of my examples. I say, colleges and universities lobby incessantly for increased limits on how much students can borrow. And they say they do this for the public good. Whenever you hear the phrase “the public good,” you should lock up your wallet. The reason they want to raise the loan limit is so students can borrow more, and then we raise tuition accordingly. And one of the great drivers in high tuition is student loans. That money is there, and we go for it. So you’re absolutely right. But for some reason people don’t want to understand this.
JASON HARTMAN: It is just ridiculous. Well, it doesn’t pay to understand it. And you know, it’s amazing how the politicians—well, I guess it’s not that amazing. But it’s interesting, I’ll say, how the politicians pander to it on both sides of the aisle. We need more grants, we need more availability of student loans, and all they’re doing is increasing this debt burden on Generation Y, which is now over $1 trillion. Well, that’s on all generations—probably Gen X and Gen Y, pretty much. But the interesting thing too, Ben, is it’s not dischargeable in bankruptcy!
BENJAMIN GINSBERG: No, it’s not.
JASON HARTMAN: It’s the only debt, as far as my understanding goes, that is like that! Where you never get a second chance!
BENJAMIN GINSBERG: Well, that’s right. Here’s another case of lobbying. The universities lobby for more debt, and the lenders have lobbied successfully for extra protection. So it is generally not dischargeable in bankruptcy. But I would say that this, this debt is a greater fraud than many others, and should be the first to be dischargeable in bankruptcy, not the last.
JASON HARTMAN: Now why do you say that?
BENJAMIN GINSBERG: Well, because I think it’s given—it’s granted under the most false of pretenses. You know, if I borrow money for a car, we all understand what the goal is. We understand the parameters of the loan. All the facts are on the table. But if I borrow money for my education, I’m literally buying a dream. I’m being sold a dream! I don’t know if my debt is going to ever be worthwhile. The lenders have every reason to deceive me about the value of the loan. I have no idea whether this loan is justifiable or not. So I would say, it’s far more susceptible to fraud than is allowed on a car or even a loan on a home.
JASON HARTMAN: Well you know, that’s so interesting. After we had the mortgage meltdown a few years ago, all of the lenders were being accused of predatory lending, and I’d say that student loan representatives are probably the most guilty of predatory lending.
BENJAMIN GINSBERG: I fully agree with you. I think they’re very guilty of predatory lending, and I’m ashamed to say that colleges and universities, for their own reasons, are party to it all. The guaranteed student loan program is a source of enormous financial hardship to hundreds of thousands of students who just don’t understand what they’re borrowing and why. They’re taking on enormous quantities of debt that they couldn’t possibly repay, given the educations they’re receiving.
JASON HARTMAN: Well, let’s talk a little bit about the quality of that education, and the need for college. Now, it’s really interesting—and I must commend you, because you’re in the industry. I mean, most people in the industry would be saying glowing things about it, and encouraging people to go into debt and so on. But you seem like you have a very level and reasonable view about it. Is the value of education—advanced college education—is it the same as it was before? When I talk to people that are of age—I have an employee that didn’t finish college, and she occasionally says to me, you know, maybe I should go back to school—she’s still in her twenties—maybe I should go back to school, blah blah blah. And I said look. If it were 1980, I would say go back and finish your degree. But nowadays, it’s just a different world. People seem like they judge more on action than they do on credentials. Maybe you can speak to that a little bit.
BENJAMIN GINSBERG: Well, I think a college degree is a very good thing to have, and I think a college education is a good thing to have. Look, there’s no substitute for a good education. And I don’t mean necessarily training in a particular skill set. I mean being able to think and read and write. These are things that college should teach, and often does teach. So, I’m not, certainly not opposed to a college education for those who have the intellectual ability. What I’m opposed to is the cost. I think college is substantially overpriced. Now look. If you—if your kid gets into a selective, private college, and you can afford the tuition, and want to pay it, fine! People drive Mercedes, right? I don’t think you get a bargain at the Mercedes dealer. I’m not sure that it’s a good car. But if that’s what you want, go for it. However, when I look at state schools and I see that state schools are charging tuitions of 12, 14, $15,000 a year, plus room and board—to parents who are already taxpayers in that state, there I think people are being grossly overcharged. And when I look at the cost factors built into that tuition, one thing I see is an enormous over-inflation on the administrative side. About 35%, perhaps more, of the cost encountered by that school is usually bloated administration, which is absolutely unjustifiable. You know, in Indiana where Mitch Daniels has now become president of Purdue, I think one of the first things that he’s tried to do is to cut back on the administrative side, and I wish him the best of luck. Because this is—in the last 25 years, half the growth in the cost of higher education has come because of the growth of administration. So, my concern is not with what Harvard charges. You know? Harvard can charge what it wants, and if people want to pay it? Fine!
JASON HARTMAN: It’s the free market.
BENJAMIN GINSBERG: Everyone is entitled to the Mercedes. This is America. We used to be entitled to a Cadillac, but what the heck. But state schools? It’s state schools where I’m appalled that the taxpayers who already support the institution are then being asked to pay exorbitant tuitions for their kids to go into debt for a lot of things that they shouldn’t be paying for.
JASON HARTMAN: Well, you mentioned the administration issue, and I don’t know if you have any specific stats on that, but they’d be interesting to hear. Because I remember years ago picking up William Bennett’s book, The Leading Index of Cultural Indicators, and there was a very telling graph about the public school system. And it basically showed ratio of administrative to teaching staff in I believe it was the 1960s versus the 1990s. And, it amazingly had completely flipped upside down. Where all of this administration is so top heavy!
BENJAMIN GINSBERG: Oh yeah, what then it showed about public schools is now true of America’s colleges and universities. There have been very good studies of this issue, and in fact, I’ve written a book on this called The Fall of the Faculty, and what I and others show is exactly this flip flopping phenomenon, that the administrators now outnumber the teachers! It’s as if you send your kid to college to work with a good assistant dean, instead of a professor. Because they don’t hire professors—they hire, I call them deans, deanlets, deanlings, dingalings, and dingdongs. Those are the people. There are now about two administrators for every professor, around the country! About two administrators for every professor. And number of studies have shown that the reverse is the economically optimal ratio: about two professors for every administrator. That’s about what you need in terms of optimal cost allocation. But we’ve gone the opposite, and it’s getting worse. Every year there are fewer professors and more administrators. Because you know when a college gets into financial difficulties, the administration doesn’t fire administrators; it cuts back on courses! You know? We don’t need a language department, we need three more deanlets! And unfortunately, that’s been the direction in which we’ve gone. And much of this cost studies show it’s internally generated. It’s not because the federal government made me do it, that’s what they usually say. It’s internal. It’s the growth of the bureaucracy growing on itself. So, I would say that if you’re going to look for a villain in the story of higher education costs, I would look first at the million dollar president, and $500,000 associate provosts. I say in my book that if a million dollar president was kidnapped by space aliens, it would be months before anyone noticed. People on campus would think that the president was off on retreat, which is where they often are. However, if some poor, underpaid adjunct faculty member earning $3000 a course disappeared—
JASON HARTMAN: Everybody would notice.
BENJAMIN GINSBERG: Everyone would notice! The students would want to know where the professor was!
JASON HARTMAN: Right, yeah. It’s really amazing. It’s interesting that you didn’t talk about the football and basketball coaches.
BENJAMIN GINSBERG: Well, you know, you’re going to get me going on this. But I will—I’ll tell you the following. I like athletics. I’m a big fan of athletics. But, I believe in playing athletics. When I look at a school, I’m going to pick on any Big Ten school—I’m going to say Ohio State. Okay, they say they have a football program. I say they don’t. They have a football-watching program, where you have 11 kids on the field, and 110,000 in the stands eating junk food. Why don’t they call it what it is? It’s a junk-food-eating-football-watching program. It’s not a football program. So, the unfortunate fact of the matter is that those athletic programs, even the most successful ones, don’t produce revenue for the school. They produce revenue for the athletic program. Hardly any of that leaks into academics. So, you know, if I ran a zoo, I’d have every kid play a sport. I think learning how to play a sport is a good thing, but learning how to eat junk food in the stands—I doubt the value of that, and moreover, I don’t want to pay tuition for my kid to eat junk food in the stands.
JASON HARTMAN: Couldn’t agree more. And you didn’t mention the alcohol consumption that goes along with it either [LAUGHTER].
BENJAMIN GINSBERG: Well, that’s what you say. That’s denied. Every school denies that there’s alcohol consumption associated with athletics.
JASON HARTMAN: What about tenure? What do you think about that? That’s probably a touchy subject for people listening.
BENJAMIN GINSBERG: Well, I’ve had tenure for 45 years, and it hasn’t done me any harm. So I’m for it. Let me say something about tenure. You remember Churchill’s definition of democracy? It’s the worst system—
JASON HARTMAN: It’s just better than everything else, yeah.
BENJAMIN GINSBERG: The tenure system has many, many defects. I could tell you more funny tenure stories than the critics of tenure can tell you. I’ve seen some of the problems. but the thing is, if you eliminate tenure, then you also eliminate any possibility of the faculty playing a role in the governance of the university. And to my mind that would be a tragedy.
JASON HARTMAN: How is that? Can you explain that relationship?
BENJAMIN GINSBERG: Well, because the tenured faculty have some power within the university. The administration can’t push us around as much as it would like to. We play a role in the governance of the school. If you didn’t have tenure, and you had professors being fired for insubordination, which is what would happen, the university would be left in the hands of its worst people. The deans, deanlets, deanlings, dingalings, and dingdongs would be in complete charge. There would be no checks and balances whatsoever. And you know, the university is a very special place. The thing that we do best—where American universities have served our country—is because they’ve been hotbeds of new ideas. Now, I will grant you, a lot of those have been crackpot ideas. Possibly even some of my own, I don’t know. But new ideas come from the universities in our country. Ideas in the sciences, ideas in humanities and so forth, they come out of the university. And that means the faculty have to be free to voice opinions, because you have to try out—I feel that I have to try out 15 silly opinions before I get out one good one. So, I think tenure is critical to the functioning of the universities. That’s why I say it’s like Churchill’s democracy. It’s the worst system you can think of, except for all the other ones.
JASON HARTMAN: Right, right. It’s just better than anything else out there. Let’s maybe talk about politics a little bit. You mentioned that you were close to DC—what are your thoughts about what’s going on? The first one I’d like to really ask you about is Mr. Snowden, and see if you have any thoughts about the NSA scandal.
BENJAMIN GINSBERG: Well, you know, here you have an agency charged with collecting and guarding a variety of secrets. An agency which is spying on all of us, even though it shouldn’t be, but it can’t protect itself from one dumb contractor working for one of the big consulting firms. So, I would say that NSA has a bit of a management problem. But you know, what it reveals is how our government, when it doesn’t have an enemy to work against, it turns on us! I think it’s just outrageous that a government agency is collecting they say metadata, on all of our communications! Any time we pick up the phone, or use the Internet, this is being monitored by a government agency! This is a violation of the Constitution run amok, as far as I’m concerned!
JASON HARTMAN: Of course it is, it’s just unbelievable. I mean, do you think Snowden is a public servant? Has he done us all a favor by exposing this?
BENJAMIN GINSBERG: Well, he’s not a public servant. He is a—
JASON HARTMAN: I didn’t want to use the word hero.
BENJAMIN GINSBERG: No, I think whatever he did—we can’t have people, you know, revealing all the nation’s secrets to anybody they can, but in this particular instance, we’ve learned a lot from this. This has brought home to us just how far outside its constitutional limits our government has gone. People don’t like to believe that our government operates unconstitutionally on a regular basis. We don’t want to believe that about our own government, about ourselves. But unfortunately, the truth is that this government is spying on us. It’s engaging in activities that we just don’t believe that the framers of the constitution would have been appalled to learn about. At the time the constitution was drafted, they didn’t have the Internet, they didn’t have communications. If they had all the stuff, you can perfectly believe that they would have listed it as being among the things the government can’t intrude into.
JASON HARTMAN: Of course, no question about it. There’s just no way they could know that. What can be done—I mean, with the current state of affairs, we look at a country that is $17 trillion in debt. Much more than one year GDP. We’ve got maybe, depending on who you ask, $120 trillion in entitlements coming due over the next couple of decades. What do we have to look forward to, and can we do anything about it? And when I say what we have to look forward to, particularly I’m curious about your thoughts on inflation.
BENJAMIN GINSBERG: Well, I think unfortunately I think we have taken on some of the attributes of a third world country. That is, we pay our debt with debt, we pay our debt by printing money, we develop programs designed to enhance the popularity of elected officials without any thought to how we’re going to pay for those programs. And politicians, as you know, have a very short time horizon, right? They don’t care about the long-term future. They care about being re-elected tomorrow. So, I think that we as citizens first have to be extremely cynical. That is, we should not believe what we’re told. And of course everyone says, oh yeah I don’t believe, but Americans are not cynical enough. Americans need to be cynical, they need to educate themselves, they need to learn some economics, they need to learn about politics, they need to learn a little bit about history. They have to be citizens! You know, a citizen, to the ancient Greeks, was someone who knew enough to engage in debate in the marketplace. If you couldn’t do that, you were an idiote. So we have to stop being idiotes, we have to be citizens. And one of the few powers left to us is that we do have the right to vote, and we have to use our votes wisely and judiciously, and vote for those politicians who offer some hope—cutting spending, cutting borrowing, working to eliminate unnecessary programs. Now, there’s not many of them, but there are a few.
JASON HARTMAN: What can we do about it, though? Being citizens, are we just too comfortable in this country? Do we need more adversity? Do things need to be tougher to get people off their rear ends, to go and do something? And you know, in terms of doing something, what do they do? Communicating, raising awareness, that’s all important. Voting, that maybe is a minor part of it. But writing your Congressman—
BENJAMIN GINSBERG: Well, we have to be as active and cantankerous as we possible can. And you know, things have not gotten to the point that the citizenry is utterly powerless. Look at a variety of political movements in recent years have had an impact. And I say movements both on the left and on the right, have had an impact on politics—perhaps not as much as we want to see, but have had some impact. But, you know, I think that if Americans educated—this is, we come back to education. Everything is tied together. Most Americans don’t know enough about politics to know—to have any idea what to do. They don’t know what the right thing to do is. And I think we have to educate ourselves. We have to understand economics. How many Americans do you think understand even one little teeny bit about economics?
JASON HARTMAN: Even econ majors. I like right near a college, I live right near ASU, and I mean, even people majoring in economics don’t know about economics.
BENJAMIN GINSBERG: That’s very sad.
JASON HARTMAN: It’s rather sad, it really is.
BENJAMIN GINSBERG: Well, this is where education—you asked me before whether a college education is still worthwhile. I would say that in a democracy, if you hope to be a citizen rather than an idiote, then education is absolutely critical. There’s nothing magical about politics. People do engage in political action, and we see all the time that organized groups do get what they want. We bitch about it, right? So, there’s nothing to prevent citizens from organizing, from using social media, which is an enormous and incredible organizational tool.
JASON HARTMAN: Sure, monitored by the NSA, mind you.
BENJAMIN GINSBERG: Let the NSA monitor it. For the moment they can’t stop it.
JASON HARTMAN: I think the NSA really needs to open up a polling company, because they could do great polling with all of their data mining.
BENJAMIN GINSBERG: Well, they could. I’ll tell you, here at Johns Hopkins we’re starting a program in government analytics to show how data can be used more effectively.
JASON HARTMAN: I mean, they could put the Gallup Organization, and Rasmussen, to shame with what they know!
BENJAMIN GINSBERG: Wait until we get to work on those baseball statistics. So, I would say that I think—I’m strongly in favor of being a cynic. I favor what I call cynical realism. You have to be cynical, and not believe what politicians and the government say. But you also have to be realistic, and try to develop tactics and techniques for bringing about meaningful change. Perhaps, you know, I think President Obama claimed that he was for that, but I’m a little dubious. So, I don’t think it’s too late. I’m not cynical about that. I believe that the country has taken a bit of a turn for the worse, but you know, in the life of every country there are ups and downs, and America has—to me it seems, enormous resources. We have a citizenry accustomed to exercising its liberties. We still have a good deal of wealth and power in private hands, which is very important. And among those resources is an educational system that has always been the best in the world. It’s fallen on harder times, but it’s not beyond hope. So I’m very hopeful—I’m cynical, but hopeful.
JASON HARTMAN: Yeah, yeah, I think that’s a very good way to put it. Well, thank you so much for sharing your thoughts on these important issues with us today Benjamin Ginsberg. Do you want to give out your website?
BENJAMIN GINSBERG: I don’t have a personal website, but anybody who want to communicate with me can do so through the website of the Johns Hopkins University Center for Governmental Studies.
JASON HARTMAN: Okay, so would that be www.politicalscience.jhu.edu?
BENJAMIN GINSBERG: That would get it. Or, they’re free to email me at [email protected].
JASON HARTMAN: Fantastic. Well, thank you so much for sharing your thoughts again today, and keep getting the word out. It is rare to hear from someone with your thoughts in the academic world. I’m sure you’d probably agree with that.
BENJAMIN GINSBERG: Well that’s okay, they tell me at the faculty club, they say, I’m wronger than anybody.
JASON HARTMAN: Well, it’s very refreshing. You keep being wrong, because I think you’re right.
BENJAMIN GINSBERG: Okay, thank you.
JASON HARTMAN: Thank you, bye bye.
BENJAMIN GINSBERG: Bye bye.
[MUSIC]
ANNOUNCER: This show is produced by the Hartman Media Company. All rights reserved. For distribution or publication rights and media interviews, please visit www.HartmanMedia.com, or email [email protected]. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, or business professional for any individualized advice. Opinions of guests are their own, and the host is acting on behalf of Empowered Investor, LLC. exclusively. (Image: Flickr | LendingMemo)
Transcribed by David
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