In PodCasts
  • Freedom of discussion and the return of the salon
  • Politicians create and leverage disagreement to grab power
  • Employers cannot seem to get people back to work


The McAlvany Weekly Commentary
with David McAlvany and Kevin Orrick

Crises is Perfect Cover for Political Mischief
June 8, 2021

“We want to be loved, we want to be known. And sometimes we project our voices so loud and forget that there’s somebody else on the other side of the table who wants the same things. And if we listen more, again, you may not be able to control outcomes, but you can engage just as rigorously intellectually. I think as we have in the Iron Man challenge of this last week, just holding loosely with open hands what the outcomes may be, and prioritizing relationship in the process. Bring the salon back, bring it back.” — David McAlvany

Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.

Well, David, you’re in Hawaii and, man, I missed last night. You kept going in and out of service. Most of our listeners know that we meet on Monday nights, and we don’t necessarily always directly discuss what we’re going to talk about when we record on Tuesdays. But a lot of times there’s momentum to the conversation by the time we start recording because we’ve talked on Mondays, but you kept going in and out of service. I had my Talisker poured. We were trying to carry on a conversation and I think we just— I texted you and said, “Let’s just catch up tomorrow,” because you were garbled more than not, but man, it’s amazing how much I miss it when we don’t do it.

David: Well, it’s our version of a weekly salon. It’s on a Monday evening. We gather, we discuss, we learn from each other, we discover gaps in our thinking, we explore new ideas. Occasionally, this feeds into the commentary. Usually, it does not. But Mondays are a part of Tuesday’s commentary recording. Of course, it gets published on Wednesday. It’s like exercising and making the mind more pliable prior to the weekly podcast.

Kevin: I know I really look forward to it. When I took my daughter over to Oxford, you had said make sure you go to The Eagle and the Child, where the Inklings met, and we did. That was the first thing we did when we got off the plane. We got on the train to Oxford. We went over to The Eagle and the Child. We had fish and chips there but we went around to the back room. For any listener that gets to Oxford, I would highly recommend you go see where J.R.R. Tolkien and Owen Barfield and C.S. Lewis, where these guys would actually meet. It reminds me of what you and I do on Monday nights Dave, and it’s so intellectually and spiritually stimulating.

David: My only other suggestion would be if you go across the street to The Lamb & the Flag, they have a better selection of beers. That’s on a different point. Bring back the salon.

Kevin: Spiritually stimulating. Yeah, you went to the spiritually stimulating right away. I wasn’t talking beer, Dave, yeah.

David: Well, I wish we could bring back the salon. I have a dear friend who meets weekly in his basement, what he turned into a pub, to discuss ideas with an array of people. Typically, it’s over a gram of whiskey and with a pipe. Before we had kids, my wife and I engaged our community with what we called the Thought and Inquiry Forum. We’d do film critique one week, and then two weeks later, we would look at an essay from Mortimer Adler series, the great books, do that a couple times a month.

The salon was this old idea of bringing people together and curating a conversation, and having just the right people there for dialogue and debate and critical thinking. It’s something that I miss. I missed those, the Thought and Inquiry Forum. I think if we cannot discuss, if we cannot debate, then our ability to fully understand the realities around us are diminished.

On the commentary here in this podcast, we want to understand the nature of things. We’re interested in finance and economics. That’s our reason for existence more or less on this podcast. There are no-go zones—there’s a growing number of no-go zones, which suggest that interdisciplinary thinking is not allowed. That all spheres have their high priests, and those priesthoods write the dogma for those particular disciplines, and you’re either on board or you’re not to go there.

Economists are just one version of the dogmatist. This has long been the case. Even go back to what Keynes said decades ago. “Practical men who believe themselves to be quite exempt from any intellectual influence are usually the slaves of some defunct economist. Madmen in authority who hear voices in the air are distilling their frenzy from some academic scribbler from a few years back.”

Think about that. Do you know what madman is in your head? The sociologist, the psychologist, the scientist, the economist? Being the slave of some defunct thinker probably is not a good idea. What about being a slave to some defunct scientist? It was not that long ago that the Flat Earth Theory was pretty popular—popular in its day. It was the operative theory.

Kevin: Well, and theory, what theory is trying to do is just take what people are seeing and make some sort of story out of it that makes sense. And the story changes based on various fields of view. I know in science some of the more inventive laboratories, like Bell Labs, they actually have encouraged in the past this interdisciplinary discussion like what you’re talking about. Or at Princeton, at three o’clock in the afternoon they have tea. Well, they don’t have tea so that they can be caffeinated, they have tea so that they can take these various disciplines and get them talking to each other. And there have been some amazing discoveries that would have never been made within the field of, let’s say particle physics, or quantum physics, or mathematics where there’s an overlap. Well, that overlap can only be found in that interdisciplinary approach of discussion.

David: You and I have integrated dialogue into our lives. And the commentary is a part of that. I think what I prize most about that is that dialogue reveals gaps, it shows you blind spots, and it’s critical. For us, it’s critical for the body politic. It’s critical to our reflection on the events around us. It’s critical to what we do, again, for this commentary.

Kevin: Yeah, well, you’re in Hawaii right now, and I know that you guys… I missed that this time. Five years ago, I did the triathlon with you, the half Ironman, and it was great. But two of my favorite things afterwards were— it was just the get-together, the party where everybody got a chance to just sit down and talk. And I have to say, the second one, Dave, was a few days later, we got back into Hapuna Bay, and we were no longer competing. We just got to swim. I love both of those things. I look back and I think, what do I remember most about the triathlon? And honestly, it was the social interaction, and that last swim before getting on the plane.

David: Well, this time, there’s a group of 25 of us. We finished the half Ironman this past weekend. It was a grueling day, lots of wind, the heat was unbearable. We actually had two of the 25 end up in the hospital, unfortunately. But in that party you were talking about, the after-party. We were discussing, and there’s a commentary listener who joined us. There was a question posed. The question of QE limits and quantitative easing. There was a claim, he was saying, by a renowned deflationist, that we don’t need to worry about inflation when the Fed can only buy bonds in a quantity matching excess reserves and depository institutions.

Again, this is just a casual conversation over a beer after the race. And I thought, well, that’s interesting. I’m not aware of limits set on the Fed’s monetization schemes. But wouldn’t that be a blind spot in my thinking on inflation if that were the case? Is there something in the Fed’s bylaws? Is there something about a policy which they’ve had in place, and I can either remain content in my conclusions and not explore the potential blind spot, or seek to resolve the issue.

And dialogue reveals blind spots, right? Or at least the possibility of blind spots. And dogma hopefully recedes with this balanced approach to listening and researching and reflecting and responding. I should, in fact, be grateful even to this conflict, if I’m initially disagreeing. What if later on I discover I was wrong? The discovery is progress.

So I’m always asking the question, “Why are people so afraid to be wrong?” It’s a part of a growth process. And so, I revisited the Fed’s statistical release, the H41 statistical release, and the math doesn’t work. Matching up the QE limits in the reserves held from depository institutions—and I may not fully understand this deflation objection. But the idea as I understood it, is that inflation will not be an issue due to the limitation.

Frankly, the Fed statistics tell a different story. The monetized number can grow to anything imaginable. And so, if you look at the bills, bonds, and notes, which tally to much larger numbers than the excess reserve numbers—and that’s before we get to the money market, mutual fund liquidity facility, the commercial paper funding facility, the corporate credit facilities, which they are probably going to wind down in the next few weeks, begin winding down. Then you’ve got the municipal liquidity facility, the residual holdings from TALF 2.0.

All that to say, I had to check and I had to recheck, and it was healthy to do that. Healthy conversation has to happen, and if I’m missing something, I hope that someone will challenge me on it. Listeners will fill in a gap. Question an assumption, add to a deeper understanding of the issues in play. And oftentimes the two of us will comment to each other about comments on the commentary, and we’ll reflect on them. And they are insightful and they’re a teaching and learning opportunity for us. We appreciate them.

Kevin: I’m amazed at the intelligence and the thoughtfulness of our listeners.

Just thinking about what you were talking about on QE, though. If indeed there was some sort of limitation on that, and that limited inflation in a way, that would also say that modern monetary theory works. But as you think about it, Russell Napier about a month ago showed us why QE up to this point hasn’t created high inflation. It stayed in the financial system. The metaphor that you’ve used, or the analogy has been water behind the dam, like Hoover Dam, all that liquidity behind the dam. And what he basically was saying is once velocity increases, once that money starts getting spent, it can turn into inflation quickly.

On Sunday night, Dave, we have steak. I go outside, grill up a steak, and that’s been a tradition for years. We feel very blessed that we can have a steak on a Sunday night, but my wife told me on Sunday, she said, “Kevin, the steaks that I normally pay $11 for each are now $17.” She said it just happened—boom! So, if QE really did have limits, and if we are really going into a deflation, I’d like to see where it is. Can you tell me where deflation actually is occurring?

David: That’s a good question. I mean, we can see it, perhaps, in bitcoins dropping from 65,000 to 30,000. There’s always conversation about deflation when asset prices are moving down. Rarely is there conversation about inflation when asset prices are moving up. And that’s just with assets. When we talked about consumer prices, again, it’s a little bit different. Everyone likes to focus on the inflation side, no one really complains if you have deflation in consumer prices. Flat screen costs you less, a cell phone costs you less, whatever costs you less. We all look at that and say, “Actually, that’s like getting a pay raise. My money goes further.” So it is interesting. We actually have this idea that deflation is bad when in fact consumer price deflation is one of the great benefits— Who is the beneficiary of it? The consumer is.

Kevin: Could you imagine, Dave, if we actually were paying for goods that were made in China, and the Chinese were making the wage that they would in the United States? Bill King just recently said that that is shifting. That at this point, China is fully employing their workers. And so, there’s no need for them to pay them the low wage that we’ve gotten used to. That could certainly turn into inflation very quickly here.

David: Yeah, one of the things that, as I went through that report, the H41 report, and looked at the litany of things that the Fed has put money into and supported, it’s kind of an unintended consequence.

But back to money markets, just briefly, money markets are this pool of resources we assume we can go to. Put money in—it’s a cash alternative, there’s some yield, but it’s an area that’s going to require more and more attention as time goes on because we’re operating in a near zero interest rate environment. And we don’t have a lot of interest in cash today. But the reality is the quantity of government paper with a positive yield is insufficient for the dollars that are likely to flow from equities as they move to the sidelines. So, any hesitation to be invested in equities at all, any flight to safety, and all of a sudden you’ve got a major structural issue. The Fed will just have one more problem to solve. Again, it’s one of many that stemmed from its policies as an unintended consequence.

Kevin: One of the things that the Fed has been told that they’re responsible for, too, are the unemployment numbers and to try to keep as many people employed as possible. This was a week of announcements on the employment side of things.

David: Yeah, bond market responded as we had the nonfarm payrolls disappoint, 559,000 on Friday, 610 was expected. 59% of the jobs created were in leisure and hospitality. That’s a good sign that we’re getting back to normal. 186,000 in food services and drinking establishments. The unemployment rate moved lower, to 5.8%. And that was not because of an increase in jobs, but actually it’s just the way the math works. You had a decline, 100,275 people left the labor market. And so, the overall number improved because the labor force participation rate fell from 61.7 down to 61.6%. So the Bureau of Labor Statistics household survey, a little different. Then the nonfarm payrolls showing 151,620 jobs on the growth side versus 559. So household survey was— Again, you could have described both of them as anemic, and an improvement in the rates, but only because the labor force participation rate fell.

Kevin: I see out of D.C. how much of a crisis everything is, Dave. It’s amazing to me that anything that will garner power is called a crisis. And this week with unemployment, the unemployment numbers, Biden was talking about things—I don’t think he even understood what he was talking about. But you look at the numbers, and you see that 100,275 people left the labor market, yet unemployment fell. Now, that’s a strange way to look at things. But my wife and I went to dinner last night, and we realized a lot of the restaurants, one, it’s tourist season in Durango. So it’s hard to get into a restaurant just impulsively. But since you and I didn’t have our meeting, and since normally I’d be talking to you. I said, “Well, let’s go out to dinner.” So we went out, and what we found, Dave, is the restaurants are strained. They cannot hire enough people. In fact, I’m not sure how old the people at the front were. But there was probably a 14 year old at one restaurant, and maybe a 15 or 16 year old at the other. And one of the waitresses in one of the restaurants said, no more. We can’t take any more. I’m looking at this, Dave, and this crisis of unemployment that Biden was talking about, isn’t it caused by the government actually sending people more money than they could earn if they were actually waiting tables?

David: I think that’s exactly right. But never underestimate the political elite and their desire to actively churn up a crisis here, there, and everywhere. To a politician, everything’s a crisis, and everywhere you look is a conflict.

I think the reality behind our employment situation is, well, you find politicians constantly whipping up the base. That’s an important way of creating energy. That energy is then harnessable for getting the change that you want. Biden and his administration have bought race theory hook, line, and sinker. It’s unfortunate because I think it undermines a lot of progress in race relations, which is just one space where conflict is, in my view, marginal, not structural. But, as I say, everywhere you look there’s a crisis. It’s the vocabulary of the D.C. politician, and that crisis mindset is used to justify actions, to grab political attention, to grab power, to exploit prejudice.

Kevin: Prejudice isn’t necessarily racism. Prejudice, isn’t it formed from the words pre judge?

David: Yeah, this is a conversation that my wife and I have had on a number of occasions. Prejudging someone takes place all the time, and there’s certainly limiting factors to it. Sometimes it’s healthy, sometimes it’s normal, and sometimes it’s very unfortunate and costly to relationship.

But a salesman walks to your front door, and you have no idea who he is. And you feel either more or less comfortable with him if he’s wearing a collared shirt versus a T-shirt. If a person walks up to you and has visible tattoos, you don’t really think of it that much if it’s on their arms, but you might if it’s all over their face. Whether a person is dressed well or slovenly, whether a person speaks with an accent that’s Southern or Northeastern, whether you’re listening to a person with a foul mouth. Judgments are made before the whole person is known. And of course, that’s a part of navigating life. It has to be accounted for as a prejudice, but not as the equivalent of racism.

And I think this is, again, one of those area where there is a desire for the D.C. elite to exploit prejudices, turn them into issues of hate, and then harness energy for political means. And prejudice, I would agree, is inherently limiting to relationships, and prejudgments and be very negative. But on the other hand, I would never counsel my daughter to be unaware of social cues, to ignore signals that might compromise her safety.

If you grew up in a major metropolitan area, this is the difference between the city mouse and the country mouse. The city mouse knows there’s a certain degree of street savviness that ensures that you’re safer, but you are watching people and you are definitely, definitely profiling. Why? Because if you’ve grown up in a major metropolitan area, you’re not stupid. That’s what they call street smart.

It ties out to hasty generalizations, which are definitely a logical fallacy, and prejudgments, but I think it’s important you account for them. You know why you have them? You don’t let them limit relationships. Malcolm Gladwell looks at this issue from his unique vantage point in his book Talking To Strangers, and— love the book. It’s worth thinking about, and my wife has expanded on some of those ideas in terms of prejudice versus racism, the differences, but I recommended the book.

Kevin: Well, what you’re talking about, there are prejudices that will actually save your life in a pinch. I guess if I have a prejudice, probably more than anything, it’s a bias and a prejudice against the government’s intentions because they seem to want to divide us, Dave. They seem to want to find difference, and then leverage that difference.

David: That’s right. And I think it’s grossly manipulative. Framing everything as racist is not about improving relationships as much as it is restructuring power in society. And that’s what they’re in the process of doing. You’ve got the dream— a part of the dream spending package for Biden is on childcare, $225 billion—

Kevin: Do it for the children. Yeah, do it for the children, right, isn’t it? Some of the worst things that have ever happened in world history have been, do it for the children.

David: Well, and in this case, it’s offering to take your children for universal pre-schooling, for care, what I might see as imprinting, earlier than ever before. Pick up a few extra years of state-sponsored thinking and behavior modification, says the Senate, and it just begins two years earlier than normal.

But here’s the narrative. Here’s the narrative, and this is how it ties back in to crisis creation and opportunity for spending. The narrative is that struggling women can’t work due to the childcare crisis, and it’s a crisis. That’s what they’re saying. This is the case. Apparently, we have a childcare crisis. If you look at the employment numbers over the two-month period, over the last two-month period, women have gained 390,000 jobs, men have gained 381,000 jobs since February of 2020. Looking on the lost jobs versus— February 2020, women have lost total 3.3 million jobs from then to now. Men have lost 3.8 million jobs in the same timeframe.

The equivalence is there, if you can do the math, but politicians would prefer to create the impression that childcare is the obstacle to getting women back to work. So now we have a women’s rights issue in play, we have kids holding them hostage in the home. And oh, by the way, only the state can fix this colossal imbalance which does exist or does not exist. I mean, we have a childcare crisis as defined by D.C. politicians, meaning we have a spending opportunity. Anytime you hear the word crisis in D.C., you should hear it translated as a spending opportunity. D.C. has money they want to spend, or it’s going to go get it to spend it, and it’s going to be directly on constituencies. Crisis is perfect cover for almost any political mischief, regardless of party affiliation.

Kevin: Well, I mean, just look at the last year. The details that are coming out right now on the Fauci emails and what was known and how it was used. You talk about political mischief. There’s been an awful lot of political mischief based on COVID, real or not, as far as where it came from, and whether a mask works or whether you get the vaccine, all of that there’s political mischief behind it.

David: It was the crisis of 2020. And you’re right, Fauci’s emails suggest a whole host of conclusions that whether it’s on the Wuhan genesis or US funding of research at that facility, or on what Fauci knew and never said, what he said privately in contrast to public messaging, you just read the emails. And having information accessible, it’s kind of interesting, this whole Freedom of Information Act and the request that was made. Of course, it was not on his personal emails, but just the ones tied to his public role. Read them, come to your own conclusions, you get the impression—at least I do—that COVID has been capitalized on for a significant ratcheting in governmental power and oversight. And if you disagree with that, try not to be dismissive on that point completely because, again, crisis is perfect cover for almost any political mischief. You have this cover, if you will, of silence, media silence on the Fauci emails along with the White House press corps leaving what is a very hot topic off limits. It’s kind of intriguing.

Kevin: There seems to be an attitude these days that if an individual can do it, the government can do it better. But you look at the difference between communism and capitalism, and just some of the signs. We talked before about the difference between East Germany and West Germany as the road ran north from Munich to Dresden. And you could see the East German side was just horrific. And that was a command and control economy. And then the left side of that road from Munich to Dresden, going north was Bavaria. It was beautiful, beautiful farms. So, do you feel, Dave, that even the media is shifting things to take individual liberty away and move it to command and control and socialized everything?

David: That seems like one of the early tragedies in the 21st century is that we’re already forgetting some of those valuable lessons of the 20th century. The global nature of power is shifting from individual people to central planners, and that’s been astounding. We have central bankers moving to center stage in the economic sphere. And the social and political acquiescence in the context of mortal fear in 2020 has been shocking.

I’m not saying some problems can’t be solved by a federal source or shouldn’t be solved. Study the Catholic social teaching on subsidiarity. And yes, there is room for requesting more resources to solve a problem that can’t be solved at a lower level of power. But a first response should always ideally come from the lowest level of power, according to the principle of subsidiarity. But those closest to the issue of concern, if you have the resources to solve it, great. If you don’t, then reach up and ask for some help.

But we’ve shifted dramatically towards seeing every problem as a federal and not a local or state concern. And then maybe it’s easy to understand. It’s where the money comes from. Whether you’re talking tax redistribution, or the money printing franchise, and you look at the COVID response. And yeah, I mean, to some degree, the federal government had to be involved. But that is the way we roll these days. The federal government is always involved, not just had to be in one situation, but it’s almost always the first to be invited.

Kevin: Yeah, look at the COVID response, Dave. And again, going back to just going out to dinner last night, and seeing that these restaurants literally cannot get enough workers to meet the demand. That is part of that response to the crisis. You socialized everything and sent everybody money, and why work?

David: The National Federation of Independent Business says that 44% of small businesses are unable to fill their job openings. And of the respondents that they spoke to, these are small business owners, 92% of the respondents said they’re not able to find qualified applicants for the roles they’re trying to fill. Top reason given for a shortage of workers was supplemental unemployment benefits, probably not a surprise to you.

But Biden has responded, you can bring people off the couch, you just have to pay them more. Raise your wages, you’ll get your workers. So, it’s really interesting to see this. We’re passing the $28.4 trillion mark on our debt. We’re paying people not to work and the big guy says, compete with us on the wage front for those who are going to be working versus just receiving wages for not working, and everything’s going to be fine.

I think one of the things that that raises, coming back to this issue of inflation/deflation: what about cost-pull, cost-pull inflation? Should we worry about wages rising along with materials costs? And I think the answer we’re getting from D.C. is no. No, because the Neo Keynesian economic fundamentalists have consecrated both the unemployment benefits and in faith they believe that inflation will help us not hurt us. Meanwhile, what are we doing? Not that we all go out and gorge yourselves on candy bars, but have you noticed, shrinking candy bars, shrinking cereal boxes, yet again. Nevertheless, keep the faith. Central planning is working.

Kevin: Yeah, you wonder if Life cereal is going to look like a thimble at some point. It brings me back to what you were talking about before, the deflationist who had the theory that any amount of quantitative easing that’s limited would not lead to inflation. Maybe I’m misstating that. But any economist or actually you don’t have to be an economist, anybody who’s read any economic history realizes that anytime you print money, it causes either shrinking of the boxes like you’re talking about, or inflation for the same amount of goods or services.

David: I enjoyed a Financial Times article by Wolfgang Schäuble this week. He was previously the German finance minister, and obviously, he’s been involved with the European Central Bank. And many people have viewed him as an inflation hawk. And they were surprised in recent years when he was agreeable to the idea of government intervention. And I mean, he’s just basically willing to say yes, but. And the key qualifier is there in what follows next. I’m going to quote from the Financial Times article, where he says, “Many governments focus on the easy bit of Keynesianism, borrowing, and then postpone repayment of their debts. This leads to continually expanding sovereign debt. Sooner or later, inflation looms. Keynes saw this as a major threat setting its potential for “overturning the existing basis of society.” I think that captures the concern well. I sometimes wonder, Kevin, if the current economic policies are accidentally destructive, overturning the existing basis of society, or maybe even intentionally destructive overturning the existing basis of society.

Kevin: Well, it goes back to Crisis and Leviathan. The Leviathan continues to grow and grab power. It’s the big oven. It’s so big that you have to actually tear down the house to feed the fire. So in the cold, you may have started with a house and an oven, but you only end up with an empty and cold oven when you’re finished.

The subsidiarity thing, this is interesting. I’m going to admit, Dave, I’m not as familiar with it as you are. But you’re saying that the Catholic Church has looked at an actual study of when an individual does something better or when a group would do something better? Can you elaborate on that a little bit?

David: Yeah, I started reading on subsidiarity in 1996 and 1997. I did a program with the Acton Institute, and very, very interesting group run by Fathers Sirico. I’m not Catholic, by the way. But in the exchange of ideas and the setting of various social issues, answers can be found in a lot of different places. John Paul II, in a number of the encyclicals that he wrote, was most insightful on subsidiarity and the role that the state should play in welfare versus individuals, and the role that we can and maybe even should play, being closer to those who have needs, with a better appreciation for the causal factors contributing to poverty and need and what have you at the local level.

So, yeah, I was reading John Paul II on subsidiarity; that was late ’90s. In some respects, John Paul reminds me of Vaclav Havel, the Czech playwright. John Paul stood at the turning of the tide in Poland, and he was helping facilitate a transition away from socialism and communism, towards a more free and open society. Incidentally, he was kind of an outsider, first non-Italian Pope since the 16th century. Havel on the other hand, first democratically elected president in Czechoslovakia, not a politician, not a politician—a playwright. In that sense, I like them both as outsiders, and I like both of them as leaders standing at a historical turning of the political tide. And so, their life experience was invaluable and the perspectives were rich.

But yes, subsidiarity is, if an individual or an organization can accomplish on their own initiative something that needs to be done, then a higher authority is not necessary. And so, a greater and higher social institution should not step in and supplant the duties of the lower social organization. There may come a point where intervention is helpful. But again, it’s a subsidiary role to step in to help, and then ultimately to step out and allow individuals or smaller institutions to take on the task and be the problem solvers, if you will. I don’t know if I’ve done that justice, but subsidiarity is a fascinating concept to read on.

Kevin: The thing is, the more you do socialize something, the more the social system has to step on any kind of individual dialogue. I think about the last year, Dave, and how many changes there were to our ability to actually talk about the things we’d like to talk about. There are Monday nights where we talk about things and say, “I don’t know that we can even say this on the Commentary without it being blocked.” I heard recently that YouTube has blocked Trump for the next two years. And whether a person is a fan of Trump or not, that just seems wrong that this discussion level, and the ability to communicate— you call it the salon. That seems to be very much muted at this point.

David: Yeah. For me, the fascinating reality of 2020 was to see how fear scrubbed the salon, and again, this is not a hair salon. It’s not a nail salon. But it scrubbed the salon of dialogue and discussion and debate and replace those things with dogma. Dogma, of all things. In scientific dogma as it was framed, but clearly partisan politics was already trending towards the death of dialogue. But you had fear in 2020, which crushed conversation completely, and it’s ironic that new religious dogma has replaced the old.

The temptations to power never change, whether the religion be one of a metaphysical nature or of a scientific nature. What you basically have is the interpreters of reality standing and proclaiming all that is acceptable for thought and action. In this case, Fauci is something of a figurehead of a new religion. Time will tell if our faith in this man of science is justified true belief, or he was sort of a cult of personality, but here he was, the figurehead of science. And there is an interpretation of reality which gives you what is appropriate and acceptable for thought and action.

Religious dogma, as we know, if you look back in history, has been under critical review for a long time. It’s this post-enlightenment, and even beyond that post-modern critique that continues in ivory tower circles. And it makes it ironic that it’s the ivory tower which is so stridently moving towards a new fundamentalism. You see it in a couple of different stripes and strains. You get your scientific fundamentalism, your climate fundamentalism, in a number of different new forms of fundamentalism that exist today, where you’re simply not allowed to discuss. You accept what has been determined to be true, according to an interpretive theory.

Kevin: Well, and scientists right now are being held to the politically correct answer, whether it be global warming, whether it be COVID, whether— of we’ll just cut you off. These people have to publish papers, and these days, they have to have, if it’s a Twitter account, or some form of format that they communicate. Unfortunately, the communications format just gets shut down unless they march along with everyone else.

David: Yeah, absent is the dialogue. It basically is, we’re not here to discuss, we’re here, you repeat after me, this is the conclusion that has already been come to. Again, it’s interesting that an interpretive theory is being treated as fact because if you look at the history of science, and I would encourage you to look at two different places, read Rom Harré’s The Philosophies of Science or, a little less dense, but equally interesting, Kuhn’s Structure of Scientific Revolutions. And if you look at the history of science, it’s just like the history of ideas. What it suggests is that we are only a little less blind through time, and there are incremental improvements with each discovery. And what happens is, you have on the other side of a fresh discovery, a new explanatory theory.

As it turns out, science is not a set of facts we acquiesce to. Science is an operative explanatory theory for the facts. It’s the lens through which we see and understand things, and the lens of science is ever-changing. I think people forget that so quickly. If you don’t understand the history of science, you don’t appreciate that the lens of science is ever-changing. So when we call something scientific, we should keep in mind that we have thousands of years of scientific interpretation which was incomplete or completely wrong. Yet, it was the best that science could offer at the time. What we should say instead of “trust the science” or any other dogmatism, for that matter, “trust the economist,” or “trust the central bankers.” What we should say is “trust the explanatory theory. We think this one is better than the last. And yes, we remain ignorant of the next explanatory theory, which will bring us superior insight, but we’re going to go with what we have now. So forgive us for the areas in which we’re wrong. But this is as good as it gets for the time being.”

Kevin: It’s interesting, Dave, sometimes you can have several theories in science that help enhance each other because they’re— It’s a little like the different parts of an elephant. I think about physics over the last 150 years. Quantum physics does not match particle physics or relativism. You’ve got various theories right now. And then you’ve got string theory that’s out there as well. And they all play a role in being able to maybe get something to work just a little bit better from a certain angle. Okay, so quantum physics works at an extremely small scale, but it’s a lot easier to just use Newtonian physics to get to the moon. So, in a way, the new theory doesn’t always even have to cancel out the old because all of science is just an approximation of, like you said, of the facts and taking the facts and trying to tell a story that makes sense so that we can actively use it.

But Dave, I want to go back to the power grab because if indeed you are trying to maintain power, you definitely, and if you’re part of the priesthood of a particular dogma, you’re going to want to squelch any other theory.

David: Well, that’s right. And so, yeah, as I say that soft version of trust the explanatory theory instead of trust the science. I’m not even questioning some of the theories that are operative today. But what I see is the body politic being moved in a particular direction. Crisis is perfect cover for almost any political mischief. And so, if you can, through your theories, affirm that a crisis exists now, you have political leverage, and you’ve got latitude to do what you want from the standpoint of an agenda.

So, there’s a lot of things that are being appropriated and abused for the sake of grabbing power and increasing social coercion. It could be gender, it could be sexual preference, it could climate, COVID, childcare. I mean, at one level, there are legitimate issues there and a healthy dialogue on those and other controversial areas. It’s healthy, but at another level, when you’re talking about power politics, power of domination of narrative, there’s a lot in play. Again, you’re not going to see meaningful dialogue amongst elected officials because they’re not about getting at the truth of the matter. They’re about using a matter for their own ends, which, again, is something of a power grab.

Kevin: Well, and isn’t that why we should be going back to the salon format? We talked about The Eagle and the Child, or I mentioned that earlier, the Inklings, C.S. Lewis, Barfield, Tolkien, and the rest. These guys, none of them were a leader of the group. That’s one of the beauties of salon is you don’t necessarily have a leader. In fact, you shouldn’t because at that point dogma takes over and you have one particular viewpoint. But what you have, and I think also the economists and the logicians that met in Austria, in Vienna, back in the 1930s. It’s not a particular leader, necessarily, but that’s where some of the greatest ideas— Ludwig von Mises came out of that Vienna society.

David: That’s right, and it makes it even more important for us to revive the old salon. You go and facilitate a healthy dialogue. You have a place to gather, a place to discuss, you host a deliberate group that thoughtfully engages and even respectfully disagrees on issues. And it doesn’t matter if they’re social issues or political issues or religious issues or scientific issues. Keep it rigorous and exercise your mind like you exercise your body.

Kevin: And don’t let dogma replace dialogue.

David: Because that to a large extent is what has happened. Dogma has replaced dialogue. You’ve got the shouting, you’ve got the shaming. That has displaced the listening and the engaging and the responding. Very careful and active listening needs to occur today. If you look at the political right and the political left, it’s just too easy to harness for their own energy. Democracy has to tap the power of the people, and it’s not being done in a productive way at the moment. It’s being harnessed in a way that I don’t think respects the power of the people. Politicians are exploiting their constituencies by emphasizing differences, by creating hate, by generating more heat than light. But taking that heat and turning it into a power advantage.

Political opportunism is the primary source of hate in our culture today. And yet, I say this because I have great conversations with all kinds of people across the political spectrum. And this happens constantly. I have friends that are incredibly diverse. Whether it is along racial lines or specific cultural lines, you name it. I get the sense that we can have really healthy conversations. But there’s this added element of, it’s very disconcerting. I really don’t know you, you really don’t know me. And that doubt is being seeded, being planted by the political class for their own benefit.

I think, okay, look at the presidential debates, and my kids were classic viewers of these things. They just laughed hysterically, like, “What are they talking about? This isn’t even meaningful.” They were right. Even kids, grade school kids listening and going, “This is ridiculous. They’re just making fun of each other. They’re just tearing each other down. Where’s the content?” And honestly, it’s like art reflecting culture. Our leaders to some degree are reflecting us. And I’m not meaning to insult you, the listener, but think about Schumer and McConnell and Pelosi and AOC and Trump and Pence and Harris and Biden. They’re shouting down. There’s character assassinations. I mean, if you go back to the presidential debates and the vice presidential debates, they’re all terrible listeners. They’re all practiced power brokers. Are they trying to resolve conflict? Hell,  no. They live and breathe and feed on division. Conflict and crisis are tools of leverage to move forward a political agenda.

Kevin: You brought up Vaclav Havel and the revolution that occurred in Czechoslovakia. It was amazing because it was called The Velvet Revolution. And I think a lot of that actually had to do with critical thinking. I mean, he was a playwright. Dave, you’re talking about art reflecting truth. Well, he was a playwright. He saw the story a certain way, and as a politician there was an awful lot of blood that was not shed in the Velvet Revolution. It was actually a throw off from the statism and the communism that had held that country in check for decades.

David: It seems like we’re being moved in the direction of critical feeling instead of critical thinking. And to me, critical thinking is like the vaccine: necessary, needed to protect against the disease of statism. Engage, notice that books are burned and ideas are limited, and conversation is shut down. And there’s only appropriate topics. This is the nature of statism. So the vaccine against statism is critical thinking. Revive it before your mind gets addled beyond repair. Practice it with your friends, practice it with your family members. Make mealtime a time to converse on the controversial, maybe it is on economics, maybe it is on investing in finance, maybe it is on politics, maybe it is on religion and science. Maybe you’ll discover that you’ve got a lack of bandwidth in yourself for tolerance of differences. And maybe you’ll find that you’re not a very good listener. Maybe you need to engage in a healthier way. That might be a challenge. You might just grow from it. Is there anything wrong with that?

Kevin: Dave, I’ve been trying to practice something. I’ve been trying to practice the Columbo technique when I’m talking to somebody who I know disagrees with me. And instead of me giving my opinion, right off the bat, I just basically do what Columbo did, just to ask questions, what do you mean by that? Can you elaborate? And it’s amazing, sometimes these statements really don’t have a depth more than one or two layers deep before the person realizes— Either one of us may realize that whatever position that we’re holding really doesn’t have a foundation.

So, it’s an amazing thing if you just simply ask a question. What do you mean by that? Or where did you get that information? Can you give me more information? I’m not talking about challenging them in a way that demeans the person. I’m talking about just simply being interested in more dialogue. And it’s amazing. So you talked about diverse— talking to diverse people. No matter what a person believes, they probably bring something good to the table that you don’t know, and it’s worth finding out.

David: Sometimes we’ll have comments from listeners on guests who don’t hold the same views that we do. And yeah, that dialogue is very important for us. As we turn over every stone and look at things from different vantage points and attempt to remain objective, it is important that we understand the world as it is, not as we want to be. I studied philosophy. Debate is implicit to the history of philosophy. Dialogue. Discussion. I mean, if you look at Plato and Aristotle, this is where we go. Disagreeing with others is not a big deal. Dialogue is older than Plato and Aristotle. But obviously, even in his dialogues, Plato’s there with it. Disrespecting anyone on the basis of disagreement is ridiculous. And we’ve got to do better in terms of dealing with what is being curated for us, which is an age of disrespect and resentment politics. We can do better. And I think dialogue is a part of that.

Kevin: Yeah, you say disrespecting anyone on the basis of disagreement is ridiculous. But it’s something that it’s easy to do. One of the things that I would encourage people to do who are listening, find a couple of people who you enjoy sitting down with. Whether you agree or disagree, you enjoy sitting down and discussing things and come up with a set of rules, basically, say, “Look, no one’s the leader, let’s talk about this issue. Let’s find out what we don’t know individually about it, and maybe start meeting.” You talk about that being a vaccine for statism. Instead of worrying about vaccines for COVID, maybe what we do need to do is come up with these discussions, these salons, these vaccines to statism. Otherwise, we’re not going to have a voice.

David: Kevin, we just finished a really interesting period of time, the 25 of us that are out here in Hawaii, there’s a lot of things that you can control and some things that you can’t control. There was rigorous training that went in to preparation for this race. And in the end, you just bring what you have on the day, and you find that you’re not in control of everything. You can’t be. And you do your part, you plug in. I think that as rigorously as these colleagues and friends of mine have engaged their bodies, and still we’re left with this sense of there’s things that you can’t control and you have to be okay with that.

To me, that’s almost the same attitude that you bring towards the salon, which is, yes, you engage fully. Yes, it is rigorous. Yes, you bring your very best. And to know that the point is not for you to control an outcome or to convince the world of anything. But just to engage and to better understand not only someone else’s point of view. But for them to know that they have been understood. Kevin, we’re really basic people, if you think about it. We want to be loved, we want to be known. And sometimes we project our voices so loud and forget that there’s somebody else on the other side of the table who wants the same things. And if we listen more, again, you may not be able to control outcomes, but you can engage just as rigorously intellectually. I think as we have in the Ironman challenge of this last week, just holding loosely with open hands what the outcomes may be, and prioritizing relationship in the process. Bring the salon back, bring it back.

Kevin: You’ve been listening to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany. You can find us at That’s and call us if you’d like, 800-525-9556.

This has been the McAlvany Weekly Commentary. The views expressed should not be considered to be a solicitation or a recommendation for your investment portfolio. You should consult a professional financial advisor to assess your suitability for risk and investment. Join us again next week for a new edition of the McAlvany Weekly Commentary.

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