Episode 156 – Common Sense Economics – Tom Wheelwright & Howard Yaruss

Speaker 1: 

This is the WealthAbility Show with Tom Wheelwright: way more money, way less taxes. 

Tom Wheelwright: 

It sure seems like the one thing we lack in the world right now is common sense, and in fact, you might call it the death of common sense. Today we're going to discuss, what do we do about it? How do we get common sense back into the dialogue, especially when it comes to economics, financials. How do we talk about things from a common sense point of view, instead of a lot of theory, and a lot of well modeling, and all this stuff, and instead actually look at what's the reality of things? Today, we have the king of reality when it comes to economics, Howard Yaruss, from NYU. Howard, it is truly a pleasure and an honor to have you with us today. 

Howard Yaruss: 

Oh, thank you, Tom. It's great to be here. 

Tom Wheelwright: 

If you would, give us a little bit about your background, and tell us where this whole topic came from for you. 

Howard Yaruss: 

Well, actually, you summed it up a bit. It was motivated by a desire to see more common sense in the world. By way of background, I grew up in New York City in a family that often faced financial difficulties, and I became very interested in the economy. I felt that if I wanted to make the economy better, work to make our government function better, to see better policies implemented, I first had to understand how it all worked. 

That's why I studied economics, and that's why I wrote the book, because I want to help people to understand how the economy works. Just by way of background, I went to a public school in New York City. We were required to take trigonometry. We're not required to take economics. I have a healthy respect for math. I was a math major, but I think it speaks for itself. 

The point is that even on the college level, for the minority of Americans who take an economics on the college level, it's offering a bewildering array of jargon, formulas, graphs, assumptions, that people have perfect information, that there are just so many assumptions, so that I wanted to write a book that didn't have any of that jargon, any of those assumptions, just basically showed how the economy worked. 

The hope was that with better understanding, people would be less likely to be fooled by politicians with ulterior motives, or other people with ulterior motives, and support better public policies, leading to a better economy for everyone. That was the goal of both. 

Tom Wheelwright: 

I like that. Reminds me of a story an economist told me once, said, “You can tell the economist on this street, you can tell which house belongs to the economist by all the hedges around their house.” 

Howard Yaruss: 

Well, supposedly, Harry Truman said he wanted a one-armed economist. 

Tom Wheelwright: 

I love it. Anyway, so the book is Understandable Economics, which I love. We were talking earlier, my goal is to make taxes, I call it fun, easy, and understandable. Understandable Economics, I love the idea of it, but let's get to this whole idea of the death of common sense. What do you mean by that? What do you mean when you say common sense is dead and it's absent in our economic policies? 

Howard Yaruss: 

I think people are often intimidated, as we discussed before we started this talk, that people are intimidated by taxes, and they're intimidated by economics. First of all, as we just discussed, they don't take it in school. When they do take it, in the rare case where they do take it in college, it's offering a bewildering array of formulas, and graphs, and jargon. I think people are intimidated by it, so they are more likely to believe what they're told by a pundit, or a politician, or someone with an ulterior motive. 

They don't use their common sense to put a check on what they're being told. They often just accept it and do not feel that they're capable of analyzing it. I think this, I could illustrate this best with an example: the federal deficit, the federal debt, I'm sorry, $34 trillion. That's an enormous sum of money by anyone's standards, but I'll be candid, I can't get my head around that number. 34 trillion sounds a lot like 34 billion. 

In fact, I remember our Congress person mixing up billions and trillions. The Congress person was mixing it up. The point is, it's the same as my telling you, “I had this delicious sandwich for lunch. I don't remember if it was $10 or $10,000. It was just good. I can't remember what it was.” That's the same order of magnitude. What I do in the book is I break it down per American. It's $70,000 per American. 

Now, there are all sorts of political views. There are all sorts of views as to what makes sense, but at least we could begin to start discussing rationally and in a common sense way, whether that makes sense or not. What are we getting for our $70,000? Is $70,000 too much for each American? It's an attempt to begin to have an informed, productive discussion. 

Tom Wheelwright: 

No, so this is interesting to me. There's been a lot of discussion over the last several years about modern monetary theory, which suggests that you can just print money. If you get inflation, all you have to do is tax, and you can tax people and that will then stem the inflation, which common sense would tell you, politicians don't like to raise taxes on the people they would have to raise taxes on, which is the people who are spending the money. 

This is the challenge I have with this, what I call magic money theory, which is we can just print all the money we want. If there's inflation, we'll just tax it back. The tax has to come from the people they gave the money to in the first place. It's the people who spend the money that you have to tax, it's not the people who invest the money. Let's just start with that. Am I off base? That just makes no sense to me. 

Howard Yaruss: 

Okay. There's a lot there. Modern monetary theory has some factual grounding in it, back from John Maynard Keynes in the 1930s. I would argue, and I argue in the book, that modern monetary theory is not modern, it's not theory. Arguably, it deals with money. What are they saying? They're saying that the government has a printing press. Deficits technically don't matter. The government could just print money for whatever it wants, unless it's going to cause inflation. From a technical perspective, that is right. 

If the government does have the authority to print money, right now, they've seeded it to the Fed, like in Wymore, Germany, and maybe this will show you where I'm going, they could take it back and give it to the clever people we have running our US Congress. If they took it back, they would be able to print money. They would have the legal right to give to themselves the ability to print money. As long as they didn't print much of it, didn't increase the money supply too much, it probably wouldn't cause inflation. 

The main flaw with modern monetary theory is, do you trust these people? Do you trust these people to keep trickling out just a few dollars or just, more accurately, the number of dollars that refers to how much our economy is growing? Do you trust them not to print more money, print money faster than the speed at which our economy is growing? I don't. The point- 

Tom Wheelwright: 

Well, let's look at this, Howard. Since beginning of 2020, how much money did they print? 

Howard Yaruss: 

Oh, there was an enormous increase in the money supply since then. Yes. 

Tom Wheelwright: 

Like $10 trillion. 

Howard Yaruss: 

Yeah, bank reserves have exploded. Yes, there's been an enormous increase. Yes. 

Tom Wheelwright: 

Shockingly, the result, inflation. We have enormous inflation, right? Their answer to that is, “Well, you just raise taxes,” because taxes slow down the economy. You really want to slow down the economy, you tax, frankly, if you really want to slow down this economy, you tax the middle class. You wouldn't raise- 

Howard Yaruss: 

They're the spenders, yes. 

Tom Wheelwright: 

You'd tax the spenders, which is the middle class. They're the spenders. That's what you would do. Unfortunately, there's no political will to do that. Okay. 

Howard Yaruss: 

It's not happening. It's a frivolous answer, because it'll never happen. 

Tom Wheelwright: 

It'll never happen. It'll never ever happen. Okay. 

Howard Yaruss: 

One of the few things, all the Republicans and all the Democrats- 

Tom Wheelwright: 

Exactly. 

Howard Yaruss: 

… [Inaudible 00:09:23] where they are on the spectrum, agree. 

Tom Wheelwright: 

Sure. Look at social security. Do we need some changes to social security? Well, yeah. Look what… Macron. Look how difficult it was. Macron in France, all he wanted to do was increase the retirement age by two years. That's it. He had massive riots increasing the retirement age by two years. No Republican or Democrat wants to touch that stuff. 

Common sense seems to be completely out the door there. Okay, so let's go to something else from a common sense standpoint. What else are you seeing that you feel completely lacks common sense in the economy? 

Howard Yaruss: 

Well, I would point to some of our tariff policies. Why do people buy foreign goods? They buy foreign goods because they're cheaper and better. If they weren't cheaper and better, they wouldn't be buying them in the first place. People always talk about American jobs. Well, it's just a bit of common sense there. What happens to those dollars when they go abroad? Think of it. Dollars go abroad. What happens when they go abroad? 

Do they have a giant bonfire and burn them? If that were the case, we should all go in the business of printing those green slips of paper. No. They float around. They go here and there. Ultimately, ultimately, they come back to the United States in spending. What do they buy? They buy Boeing airplanes. They buy services at Goldman Sachs. They buy armaments, for better or for worse. 

Tom Wheelwright: 

Or they buy treasury bonds. 

Howard Yaruss: 

Or they buy treasury bonds. They help fund our deficit. By the way, this is something that a lot of your listeners may not know. It's approximately one quarter of our national debt is owned by foreigners. The other three quarters is owned by Americans. In any event, yes, they buy debt, they buy stock. The money comes back. This idea that we'll put up this wall because of jobs, what would that result in? It would result in you and me not getting those goods that we want from abroad. 

It would result, I teach at NYU. If it weren't for foreign students, if it weren't for the ability for foreigners to get dollars in their hands, there would be a lot fewer people teaching at NYU. The money comes back. That's an example of something that if we could have more free trade, we'd all benefit. Yes, the people who sew shirts might lose their jobs in America, but we'd be a richer society and we could figure out how to offer them training, free training, or free education, or some kind of enhanced unemployment benefits. 

The book, I use this example, if you are a worker and you earn $50,000 a year working 45 hours a week, and someone says, “Hey, you can earn $80,000 a year working 35 hours a week,” is that really that awful a trade-off? Obviously it isn't, but that's what international trade offers a country. We get more stuff for less effort. It's just the political dysfunction that prevents us from realizing the benefits from that, from really helping out the minority people who are displaced by free trade, and celebrating the fact that people at Boeing, NYU, Goldman Sachs are employed as a result. 

Tom Wheelwright: 

Interesting. All right. I'm going to turn to an area that is near and dear to my heart. Where do you think we've… We could go on for days on this one, but talk about common sense and taxes. 

Howard Yaruss: 

Okay. Anytime that the economy turns down, there's this thought, there are politicians who claim just a tax cut for the wealthy. Wealthy people, I've been fortunate economically, it looks great, but this is something you really don't need advanced economic training to figure out. Think about what happens in a downturn or a recession. People aren't spending. People aren't spending, businesses are laying off people, which makes people spend even less. More people get left off. It's a downward spiral. 

Someone needs to come in and spend. The conventional economic wisdom that started in the 1930s was the government should come in. The government is the spender of last resort. Another way it could be done is through cutting people's taxes. We often hear from some politicians that the best taxes to cut are taxes on the wealthy. Well, think about it. What happens when a wealthy person gets a tax cut? They save it. It doesn't go right back into the economy. 

When a middle income person or unemployed person certainly gets a tax cut, they go right out and spend it. What happens when they spend it? Businesses have more customers. Businesses need to hire more workers, and the recession, the end of the recession comes into sight. That's something that we can talk about the equities of it and the politics of it, but it's something where applying some common sense would give someone more insight into exactly the effects of these policies. 

It's not as simple as, “Well, we believe that protecting private industry and protecting what people earned is one thing.” If the goal is to improve the economy, these are things that people with good common sense who look at the world, should be able to figure out. 

Tom Wheelwright: 

As an example, so George W. Bush changed the withholding during his tenure in order to stimulate the economy. In other words, he reduced the amount of withholding, so the people would have the money to spend. Instead of saving it until they got a refund, they had the money to spend right then. It's the cuts to the people who are paying the withholding that you're talking about. That's the middle class, right? 

Howard Yaruss: 

Yeah. Those are the people who, when they get a tax cut, are going to go out and spend what they get. 

Tom Wheelwright: 

Got it. Got it. Okay. You start with Understandable Economics, and that's the premise of what you're talking about here. In a nutshell, so give us economics in a nutshell. 

Howard Yaruss: 

Okay. Well, there are a lot of components to it. Economists divide economics into macro and micro. Macro is how the whole system works, micro is how individuals make decisions. My interest is macroeconomics. In the book, I use the example that it makes savings, that's a perfect example, actually. This is not in the book. Saving is a good thing. We're always told that, and I'd be the first one to, I'm sure we'd both be among the first people to say saving is a good thing. 

If everyone in America said, “Ah, we're going to cut back seriously on our spending and all save,” the economy tanks. That's what macro tries to look at. It's not just micro, but on a bigger scale. It's the unique way that all of us together affect the economy. What do I talk about in macroeconomics? I talk about the Fed. They pulled economic students and asked them where new money comes from. The majority did not know. It's just something that people are not taught. 

They may be taught trigonometry and how the angles work, but they don't seem to be taught where money comes from. Needless to say, money is probably more of a role, plays more of a role in people's lives, than the measurements of an angle. Where does money come from? I talk about the Fed, and why do I talk about these things? In order to use common sense, there is some fundamental knowledge people need. They need to know where money comes from. I talk about the Fed. 

The Fed is America's central bank, and it has the ability to create money. Without going into too much detail, it's done through the banking system, through bank loans. That's something that people should know how it works. Also, when people talk about equity and issues of justice, you really can't comment on those things. It really frustrates me, because they don't know how the system works to really understand the effects of it. Again, you can't change a system you don't understand. I don't think it's fair to criticize a system you don't understand. 

People need to understand it. For your entrepreneur listeners, in order to make money in the system, it's imperative to really understand what's going on. I teach urban real estate economics at NYU, and I always make the point that the biggest impact on real estate, real estate investing, real estate values, is the general economy. I talk about those town homes in Manhattan, that when I was a kid, were selling for $10,000, and now sell for $10 million. 

That's not because they put trees on the street or something, or they've renovated the buildings. It's because the economy fundamentally changed. If you're going to be an entrepreneur,, or an investor or a business person, it's incredibly important to understand the larger economy, because arguably, that's the biggest impact on business there is. 

Tom Wheelwright: 

If there were three things that you would want people to understand about the economy, give us just three simple things. For example, if I were giving an example of something I'd like people to understand about taxes, I'd say, “Look, the tax law's a series of incentives. It's all about incentives, the tax law is.” I would tell people, “If you want to change your tax, you have to change your facts. That's all there is to it.” 

Anything can be deductible. There are simple things. There really are simple things, even in complex things like tax law. What are those simple things that you'd like people, really the base things from a macroeconomic standpoint, that you'd like people to understand? 

Howard Yaruss: 

Okay, well, I think I touched on one of them, where money comes from. It comes from our central bank, the Federal Reserve, through lending. I'd like them to understand the business cycle, because that's absolutely critical. A lot of students in particular think, well, it's just like the weather. It comes and goes. Well, there are influences on it. What are those influences? A lot of people, “Oh, it's very technical.” It's just not, and here's a point I'll make. 

When the economy turns down, you can look at the economy right before a recession begins and right after a recession begins. Are there fewer factories? Have workers forgotten their skills? Has infrastructure been lost? No, it's exactly the same number of factories the month before recession, as well as the month after recession began. What's changed? People's outlook. It's almost always a psychological phenomenon. I'll get into the exception in a moment. 

It's a psychological phenomenon. There's a reason why the economic term for a downturn, a severe downturn, depression is the same exact word as the psychologist's word for a severe downturn, a depression, because it's an economic malaise. There is an exception. That exception is where you have a war or a pandemic, and infrastructure is destroyed, and the economy just can't, physically can't supply the goods that it's accustomed to supplying. 

Fortunately, in America, those are rare. It's called the supply side recession. We had one recently, actually, with COVID. The last one that I'm aware of was when they had the Arab oil embargo, OPEC oil embargo in the 1970s. Generally, 90% of recessions are psychological, the classic one being the 2008 recession: housing values drop, people became very pessimistic, and they cut back on their spending, and the economy went into a recession. 

The trick in those situations is monetary and fiscal policy. These are terms that some of your listeners may know, some of them may not. What are monetary and fiscal policies? Very simple. One sentence: monetary policy inject more money into the economy. Fiscal policy, government spends or taxes less. We already talked about what kinds of taxes are best to cut. Obviously, inheritance taxes are much less, if you cut inheritance taxes, they're much less likely to result in a burst of spending than if you cut taxes on, let's say, low income workers. 

Those are the two ways. The government, it's not rocket science. It's the government just getting money into the hands of people to spend again. The government could spend that fiscal policy, government being the spender of last resort, or it can get people to spend. It's a political decision as to which they fulfill. 

Tom Wheelwright: 

Okay. Howard, you've talked a lot about the Fed, and there's a lot of discussion right now about a central bank digital dollar, which would make it really easy for them to get money directly in people's hands. First of all, would you explain briefly for everybody, to make sure everybody's on the same page, what a central bank digital currency is, and second of all, what would be the effect from an economic standpoint of a central bank digital currency? 

Howard Yaruss: 

Oh, that's a great question, thank you. Just so everyone's clear, it's very simple. We all have accounts at banks. You, me, the businesses you shop at all have accounts at banks. Banks have accounts at the Federal Reserve. The Federal Reserve is the banker's bank. We have accounts at the bank, the banks have accounts at the Fed. A central bank digital currency would cut out the middleman. We, in turn, would have accounts at the Fed. 

All accounts at the Fed now, even now, are digital. They're all electronic. There's no physical money between the Federal Reserve and the banks. It's all electronic. Instead of having the banks as the intermediary, we would just have an account, all of us would have accounts at the Fed. It would make it very easy to transfer money. It would make it very easy for the government to have monetary policy. What am I talking about? 

When the economy is not doing well, they could tell people with a lot of savings, “Hey, you don't spend. We're going to reduce your savings by 10% a year,” like a negative interest rate. Right now, you can't really have negative interest rates. Citibank cannot have a negative interest rate. If they said, “Oh, your interest on your checking is negative 10% a year,” you'd grab all your money and put it in a vault somewhere. 

If you had a central bank digital currency, and did away with the greenbacks, the government would have enormous control over the economy. If they needed more spending, they just threatened to cut everyone's savings by 10%, go out and spend it. If they wanted people to slow down spending, they would just increase interest rates to whatever they thought was appropriate. It would make monetary policy more efficient. 

My big problem with it, and here's the big problem, if you cut out banks, how do you get a loan? Who's lending money? You can go to an individual, but it would be incredibly inefficient. How does a big company that needs several hundred million dollars get a loan? That's the problem with the central bank digital currency. Right now, we have these private organizations, banks, they take in deposits, and lend out money based on those deposits. 

You could have the Federal Reserve making loans, but that's essentially this, it's obvious where this is going, the federal government deciding who gets a loan and who doesn't. 

Tom Wheelwright: 

Well, it's not just that, but it's the federal government deciding who loses the 10% and who doesn't lose the 10%. 

Howard Yaruss: 

Exactly, the government. 

Tom Wheelwright: 

With the amount of division we have in this country right now, honestly, the last thing in the world we need is the government having more power over our lives. To me, a central bank digital currency would be really the death of democracy. 

Howard Yaruss: 

Oh, [inaudible 00:26:24] power. 

Tom Wheelwright: 

I truly believe it'd be the death of democracy. 

Howard Yaruss: 

For three reasons. One, they would control who gets the negative interest rate, and how much, and when; they would control who gets the loans, which is enormous power, and this third thing may be most troubling to people, they would know every penny you ever spent. 

Tom Wheelwright: 

Yep. 

Howard Yaruss: 

They could assure us that that would be kept safe, but there's no guarantee on that. 

Tom Wheelwright: 

The challenge is when the 16th amendment was passed in 1914, the promise was, it's only going to apply to the very rich, and it's only going to be a small percentage, right? Top rate was 7%. Now, who does it apply to? Mostly it applies to the middle class. It's pretty easy for somebody who makes a million dollars or more to pay very little tax. 

The government's figured out, “We're going to give incentives,” and all you have to do is do what the government wants you to do, and you don't pay any tax. It's actually pretty simple. The idea that, “Boy, we're the government, we're here to help,” to me, it's a very scary proposition. 

Howard Yaruss: 

Yeah, it's a scary proposition, and I think it would become obvious if they ever tried to implement it, the amount of control. Again, anyone who ever saw the loan would have to go to the government for the loan. That kind of power is, they would have a monopoly on lending money. I don't see how that would be acceptable to most people. 

Tom Wheelwright: 

Well, I hope not. I hope not. 

Howard Yaruss: 

That said, there's a lot of cryptocurrencies. When I started writing the book, the market value of all cryptocurrencies was $3 trillion. Today, it's $1 trillion. There's a lot of thought that, well, they talk about, I guess I'm segueing from central bank digital currency to private digital currencies. There's a lot of, some people, maybe fewer now than maybe a year or two ago, had the idea that that would take over in some significant way. I'm very skeptical about that as well. 

Tom Wheelwright: 

Yeah, of course, the primary difference between a central bank digital currency and a cryptocurrency, is cryptocurrency is decentralized. By definition, it is the opposite of a central bank digital currency. A central bank digital currency is very centralized. It's centralized in the central bank, right? It's a central bank digital currency, whereas a cryptocurrency like Bitcoin is completely decentralized. 

I want to take you one more place if I could, Howard, because it's something that I've been worried about and I've been thinking about. That is this seemingly move towards socialism in this country. To me, I hear these proponents of socialism, going, “That is the least amount of common sense I've ever heard.” If you look at China right now, they rose on capitalism. Now, they've given up capitalism, they've gone to socialism, and now they have all these big companies failing right now, another real estate company failing. 

First of all, why? Why is there this, is this just a lack of education? Why is there's this drift towards, seemingly a drift towards socialism? 

Howard Yaruss: 

I wanted to read the opening line of the first chapter of the book, “What do Helen Keller, Adolf Hitler, Oscar Wilde, Joseph Stalin, and Nelson Mandela all have common? They all call themselves socialists.” Socialism is a word that really is, it's almost devoid of meaning. 

I think what people say in America when they talk about socialism is they just want more government control, more government spending. The government should be responsible for a larger percentage of the economy. The government is actually… 

Tom Wheelwright: 

Why? Who in their life has had a positive impact from the government, really? Honestly? Who says, “I want more government in my life?” That's what I don't understand. To me, there's no common sense to that. 

Howard Yaruss: 

My view of that is, and this is also in the book, some people say they're for regulation, some people say they're against regulation. That's a diversionary discussion. We all believe in good regulation, all of us. No one wants the water poisoned. No one wants the air poisoned, no wants a 12-year old without a license driving on the wrong side of the highway. The question is, good regulation versus bad regulation. 

Tom Wheelwright: 

Yep. 

Howard Yaruss: 

There are some people on one side of the political spectrum who have never met a regulation they don't like, and there are people on the other side of the political spectrum who have never met a regulation that they do like. Both of them are wrong. We have to use our common sense to come up with regulations that make sense, and make us make the economy better, do a cost benefit analysis, that's something economists like to do, and be reasonable, and use common sense with regard to it. 

I think this ties into what we were discussing at the very beginning. There's a loss of common sense. There are people on one side of the political spectrum that believe corporations can do no good, and we have to impose all of our thoughts on them, and regulate everything that they conceivably do. There are people on the other side of the spectrum who believe it's anarchy. Just there are different words for it, libertarianism. 

The reasonable position, the position that would create the most good for the most people, is somewhere in the middle. Not is regulation good or bad, but is the regulation that's being proposed itself good? We have to get into that mindset. It's not a political question. It's a question of dollars and cents. Is this going to make us healthier and wealthier, to use that expression? 

Tom Wheelwright: 

I agree. I totally agree. I'm a student of the internal revenue code and the regulations, and there are some good regulations, and there are some really bad regulations. That's true in the tax law. I want to come back to something you said, which is people want more government, and they want more government in their lives. I'm trying to… 

Howard Yaruss: 

Some people do and some people don't. 

Tom Wheelwright: 

I'm trying to understand that, why? My question is, if we had, you talk about you don't get much of an economics class in high school or college. Nobody takes a tax class. There are zero tax classes unless you're going to be a tax professional, zero. Yet tax is something that every single person on this planet deals with every single day. 

Howard Yaruss: 

For most Americans- 

Tom Wheelwright: 

The most practical topic for a school, it would be taxes, and yet that's not taught at all. 

Howard Yaruss: 

Well, for most Americans, taxes are the biggest expenditure of their life. 

Tom Wheelwright: 

Of course. 

Howard Yaruss: 

It's more than their home, more than anything else. 

Tom Wheelwright: 

Of course. My theory is that it's primarily a lack of financial education, because when I hear people talk about socialism, and the benefits of Marxism and communism, I'm just going, “You haven't read any history.” Honestly, it's like, I heard once somebody say, Jordan Peterson said this. He said, “Capitalism is the worst system we've ever had, except for every other system.” 

Howard Yaruss: 

Right. 

Tom Wheelwright: 

Is it? You think it's just a lack of education? Your goal here is education in Understandable Economics? Is it that lack of education that caused people to say, “Well, I don't understand it. Maybe the government understands it better than I do?” 

Howard Yaruss: 

Well, as I said, I think there are problems on both sides of the political spectrum. We're focusing on the people who want government to do everything now, there are the people who don't want government to do anything, and they're, in my opinion, as much of a problem. Let's focus on the people who want government to do everything. There was the national socialism in Germany. There was the Union of Soviet socialist, emphasis on the word socialist, Republics. There's astonishing lack of knowledge of history. 

Socialism has a terrible, and that's an understatement, history. I'd say two things going on. One, just colossal ignorance, they don't know what they're talking about. The second thing is there's a political side to it. There's the feeling that corporations have a certain amount of power. Many corporations have more power than many people. The feeling that, “Well, we need to seize control. We want to be in power.” What I'm trying to say is for them, they see it as a power grab. 

Tom Wheelwright: 

Interesting, interesting. Yet, do you see people actually, to me, I look at entrepreneurs. I love entrepreneurs. Entrepreneurs, they're willing to be in control of their own life. They want, they're probably the most libertarian people on earth, frankly, are the entrepreneurs, because they go, “You know what? Don't tell me what to do. I will do the right thing, because the market's going to dictate that I do the right thing.” 

I'm not talking about Google, Apple, et cetera. I'm talking about the true entrepreneur, that they will try to do the right thing, from the one just starting out to, frankly, an Elon Musk, or a Jeff Bezos during their entrepreneurial time. I think a company becomes less entrepreneurial. Amazon's no longer an entrepreneurial concern, and I don't think Google is or Apple. I think Tesla still is. I actually think they're still in their infancy in a lot of ways. 

It seems like you've got this class of people that is willing to be in control of their own life, and they're saying, “You know what? I don't need somebody else to be in control of me,” and yet you have this very large class of people that says, “I want a boss to tell me what to do. I want the government to feed me and protect me, and I want Wall Street to take care of my money.” 

Howard Yaruss: 

I don't agree with the first of the three things. I don't think they want a boss to tell them what to do. I think there are a lot of young people who go into businesses these days and have their own notions of how the business- 

Tom Wheelwright: 

Oh, and I think those are the people, those are the people that we're talking to. I think they are that group, but there is a very large group of people just want a job. 

Howard Yaruss: 

My feeling is that one, as I said, there's a lack of knowledge of history, but more importantly, I think a lot of these people, and we'll call it the left side of the spectrum, feel, this is their way to assert their power vis-a-vis the big companies in America. They feel they can't do it through entrepreneurship. 

What is a good entrepreneur? They come up with a great idea and usurp other businesses. They can't do that. They feel maybe they could get power through the political system. They can't get through the economic system, so they'll go the route of getting through the political system. 

Tom Wheelwright: 

Interesting. Yet, what's interesting to me is when you look at some of the big companies, a lot of them really veered to the left, certainly in their social and political views. Are they just trying to, like big tech especially, are they just trying to appease people, or do they actually believe, do they believe it? It seems like it's a paradox to me. 

Howard Yaruss: 

The book tries to do away with these labels. I read you the first sentence of the book because it just shows how distorted the term socialism is. I think there are a lot of people who are just, again, they're ignorant of history, and they have their own ulterior motives. You get all of these types of unhelpful views. The goal for your listeners, for me, for the people I wrote the book for, is to try to use common sense and think about what makes sense. 

Obviously, anyone saying, “All regulation is bad,” or, “All regulation is good,” that's not helpful. We need some basic, common sense, cost-effective regulations, to make sure we all live in a free and healthy economy. 

Tom Wheelwright: 

For the average person, what's the one thing they can personally do? That one person, we're not going to change the system one person. What's the one person going to do? 

Howard Yaruss: 

Pay attention to politics. There's an old adage, democracy is not a spectator sport. You get the government you show up for. What do I mean by show up for? I mean vote. You get a lot of demagogues, a lot of very destructive people in office, because they have their influence in the media, and they're on social networks. 

That's not helpful. I think if all of us carefully analyzed who was running for office, who had the best common sense, who was the most rational, who was the most reasonable, we'd have a much better government, and a much better economy as a result. 

Tom Wheelwright: 

Awesome. Thank you so much, Howard. The book is Understandable Economics, because understanding our economy is easier than you think, and more important than you know. The website is Howard Yaruss, Y-A-R-U-S-S, Yaruss. Okay. That's the way I would remember it, dot com. Thank you so much, Howard, for writing the book, first of all. 

Thank you very much for writing the book. Thank you for being on our show. Just remember, everyone, what happens when we start really understanding the broader side of economics, and understanding how things work is in the end, we're always going to make way more money, and pay way less tax. Thanks, everyone. 

Howard Yaruss: 

Thank you, Tom. 

Speaker 1: 

You've been listening to The WealthAbility Show with Tom Wheelwright: way more money, way less taxes. To learn more, go to WealthAbility.com.