Carol Roth on the War on Small Business
2021-08-15 · Guest: Carol Roth (Author of The War on Small Business) · 52:33
Government mandates and the war on small business
Bob Zadek interviews Carol Roth about her book, The War on Small Business, exploring how government COVID-19 mandates disproportionately harmed small businesses while benefiting large corporations and the politically connected. They discuss the massive transfer of wealth facilitated by the Federal Reserve, the dangerous erosion of property rights through measures like the eviction moratorium, and the ongoing shift from a free-market system toward a centrally planned economy.
Topics: Small Business, COVID-19 Lockdowns, Property Rights, Central Planning, Federal Reserve, Corporate Consolidation, Eviction Moratorium, Economic Freedom
Speakers: Bob Zadek, Carol Roth
Introduction to the War on Small Business [00:16]
Bob Zadek: Good morning everyone, welcome to the Bob Zadek Show, the longest-running live libertarian talk radio show in all of radio, and that is a mighty big universe. Thank you so much for listening this Sunday morning. We are this morning and always live, and the show of ideas, never once the show of attitude.
This morning’s guest, Carol Roth, has written an important book, a book that had to be written and it had to be written now. It’s the perfect book for the perfect time to sound a bit of a clarion call—maybe not a bit, maybe a loud clarion call—about what is happening to our economic system in America, the perhaps the last great refuge for a free-market system. And in the phrase “free-market system,” we emphasize profoundly “free.” It is a system where people, everybody thrives simply as a result of individuals being allowed to voluntarily, uncoerced, trade with one another, buy what they want at the price they want to pay for it, whether it’s goods or services, whether it’s for personal, family, or household use or for commercial purposes. We market in freedom, and freedom is the ultimate natural resource of a country.
Carol has written, as I said, the book The War on Small Business. Before that, Carol had authored a best-selling Entrepreneur Equation, where Carol evaluated the realities, risks, and rewards of having your own business. In short, Carol is the best spokesman one could possibly want for the free market and for entrepreneurship. Entrepreneurship is the world in which I have spent my entire working life. I passionately love it, will do whatever I can to defend it, and in that, with that motivation, Carol, I welcome you to the show this morning. Thanks so much for being with us.
Carol Roth: Bob, thank you so much for having me and for such a great introduction. I love the fact that you emphasized that part about “free” in free market because I do feel like that’s the crux of everything that we’re talking about right now.
The Devastation of 2020 [02:59]
Bob Zadek: Our listeners out there know generally, and I really mean generally, that the year 2020 was a very bad year for small business. But I don’t think we know how bad it was. And we will spend the early part of our conversation this morning learning, first of all, how bad was it for small business? And then why? Why was it that small business took the brunt of the economic pain which was—I was about to say caused by COVID, but it wasn’t caused by COVID. COVID doesn’t cause economic peril. The government caused the economic peril. COVID was just out there as a circumstance. So Carol, help us understand the magnitude of how bad it was for small business—and I’m saying in 2020, I don’t mean in the calendar year, I mean during the COVID era, of course.
Carol Roth: Yeah, so I mean, you really nailed it. This was not about COVID; it was about the government’s reaction to COVID. And what happened is that the government picked winners and losers. They decided who would thrive and who would fight to survive. And they did this not based on data, not based on science, but based on political clout and connections. And that really enabled the greatest wealth transfer that we had ever seen in our lifetime.
So as you ask, you know, how bad was it in, you know, 2020 and now 2021? You know, first of all, the government told you that you were non-essential. You know, it was bad enough that you’d heard, you know, a decade before or so that you didn’t build that. Now you were told that you were non-essential, which is something that the government should never be telling anybody. Obviously, if you were putting food on your table and you are adding value to your community, obviously that is essential. And, you know, there’s no sort of data or science to say, okay, well, you know, the liquor store can be open or the pet store can groom dogs’ hair and nails, but you can’t get a person’s hair and nails groomed.
So, you know, you were told that you were non-essential. And then when they had an opportunity to make it right by compensating you—because basically what the government did was they took people’s businesses, people’s property for the common good, which under the Constitution is considered eminent domain. And the other side of eminent domain is if they’re going to do that, they have to appropriately and justly compensate you for doing so. And the PPP provisions of the CARES Act and the small amount of other aid that they offered up was not only a fraction of the overall dollars that were spent, but was a fraction of the overall dollars that were needed.
So you had these two different worlds going on. One where we know at least by the middle of 2020 at this point, hundreds of thousands of small businesses were murdered. They closed permanently, shuttered, never coming back again. Millions more were struggling to survive. At the same time, you had seven technology companies in 2020 that gained $3.4 trillion in value. It was a record year for initial public offerings. It was a record amount of value that was raised through SPAC vehicles. So if you were big, if you were inside the club, if you had access to capital, you actually had one of the best years, if not the best year ever, at the same time that the smaller guys were struggling. And this was all by mandate.
Political Clout and Centralization [06:56]
Bob Zadek: The important question to me is why? And let me expand on my one-word question: why? Small business, as you have explained in your book, accounts for approximately half of the business activity in the country. 99.9% of the number of businesses, of course not size but number, are small business. Small business are the engines of wealth creation. They employ lots of people.
Now, since government responds only to political pressure—that’s how government works, they don’t respond, as you said, on the basis of objectively the science or the mathematics or whatever objective measure you want to make in terms of establishing policy—and I thought to myself from your book that, wow, small business has a lot of people and a lot of economic power. Why were they totally ignored? Why was their collective well-being totally ignored?
And in comparison, we know about vaguely—everybody knows about it a little bit, some of us know about it a lot—lobbies like the South Florida sugar lobby, one family, which in effect dictates world sugar prices. And they’re one family in one area of one state, and yet they have profound political clout. So help us understand, if you can—you spend your life as an investment banker, in economics, you’re not, to your great credit, a politician or a political operative—so if you can, what accounts for the numbers on the one hand and the lack of collective political power on the other, so that they didn’t get their share of the COVID goodies?
Carol Roth: Well, there are sort of two theses. And if you go back to when the banks during the Great Recession took on too much risk, caused, you know, incredible havoc to the economy not just here in the US but worldwide, they were told they were “too big to fail.” On the flip side, as we got to 2020, you know, through no fault of their own, through government mandate, the small businesses were shut down. Now, the way they were treated, you have sort of two different theses: either they were “too small to matter” or they were “too hard to control.”
And whether you think that this is, you know, government incompetence, whether you think that this was nefarious intentions, whether too difficult to navigate, it sort of doesn’t matter because the outcome’s going to be the same. And this goes back to the entire thesis of decentralization versus central power. I love talking to people like you because you know the statistics, you know sort of the foundational issues. And as you said, about half the economy before COVID was in the hands of about 30.2 million small businesses. That is decentralization. That represents the free market. That represents that freedom, choice, transparency that we want to have.
The other half of the economy, which is the other part of the equation, is in the hands of about 10 to 15,000 big businesses. So when you’re trying as a politician to get lobbying dollars or get support for your campaign or try to move the needle, when you have that few entities having so much power, it’s just frankly easier for you to deal with them. So you can—and I lay out the argument in sort of a “choose your own adventure”—you can decide the intention. I’m not going to make the intention for you. But either you could say, well, this was intentional, this was an opportunity to get rid of some of those small businesses and transfer more heft to the side of the economy that’s in the hands of a handful of businesses. You could argue, well, the politicians wanted to look like they were doing something, so they made the small businesses cannon fodder. You can, you know, make a number of other sort of related arguments. But it doesn’t matter. The issue becomes that as we move towards central planning, you’re going to get more of that unholy triumvirate between big government, big business, and big special interest. And that comes at a very big expense to our economic freedom and to the wealth creation opportunities for this country. And we saw that play out in real dollars and cents over the last 17 months.
Consolidation in the Banking Industry [12:07]
Bob Zadek: You mentioned something which I want to be sure our audience does not lose track of, because I think it was, in my opinion based upon my lifetime of work, you nailed it exactly when you mentioned that the reason that government has an inherent bias in favor of big business and, I dare say, an animus against small business is, as you have just mentioned, small businesses do not speak with one mouth and operate through one mind. They are by definition disparate all over the place geographically, all over the place politically, and they just want to be left alone. Small businesses—hairdressers and nail salons and gyms and restaurants—do not sit around collectively scheming how can they get goodies from the government. They want to be left alone. They have a dream and they want to make money and employ people. And therefore, by definition, they are the vestige of entrepreneurship, of free enterprise in America. And therefore, they are the anathema of what government is selling.
As a result, government finds it incredibly convenient to, on the one hand, reduce the number of players, second of all, increase the power of the remaining players, and then the government can trade goodies for goodies with the fewer players. Look at banking in America, which is the poster child for what Carol has just explained. They are the poster child. We used to have 15,000 banks in America. Small towns all had their own privately—their own bank, not part of a national chain or operation, but owned in the community. That doesn’t work if you want to control the economic economy. There are too many of them. And therefore, consolidate power in J.P. Morgan and Chase and Wells and BofA, and then you only have to make three phone calls when you want to do something and you’re the government, as opposed to making 50,000 phone calls. So government loves the concentration of business and is the natural enemy of small business in America. The natural enemy. And that, I think, is one of the important messages of Carol’s book. Remember her title: The War on Small Business. Well, wars are not accidental; they are planned and they have the goal. What is the goal of war? The acquisition of more power, whether it’s power over real estate or power over people. And the government wants power over business, and therefore the natural enemy of that power is small business.
The Fed and the Macro-Micro Impact [15:29]
Bob Zadek: Now Carol, give us some examples, if you will, because we have spoken somewhat in generalities about how policies specifically—I’ll say targeted, whether it was intentional or not, we’ll skip that part, we’re not name-calling—but give us examples of how policies born of COVID, out of the COVID era, clearly and directly harmed and, I’ll add, irreversibly in many cases, small business. Because you tell those stories with such passion in your book. Help us put a human face behind the statistics.
Carol Roth: So I’m going to start macro and then go micro into the story because I think, as you were talking, I think it’s important to understand that this is being done by the government on two levels: one that’s very easy to see and one that is a little bit more opaque but is probably as important. And so the first is obviously the picking of the winners and losers and the shuttering of the small businesses. So if you shutter a small business and somebody can’t spend their dollars there, they’re going to go spend them with the big businesses. And we saw the Walmarts of the world and the Targets of the world and the Amazons of the world who were allowed to stay open—and Amazon’s online, but they have a warehouse that was allowed to stay open and delivery trucks and whatnot—we saw them gaining record revenues. So there’s that revenue shift that’s direct.
The second piece which not enough people are really tuned into is what happened with the Fed intervention in the market. And that is what really shifted so much power and so much value from Main Street to Wall Street. Because if you are a saver, if you’re a retiree, or you’re a small business that doesn’t really have access to capital, you’re not benefiting. And in effect, if you have money, you’re getting no return on your investment. You have to take on more risk to get the kinds of returns that you would have, you know, 10 years ago, while these big companies have the opportunity not only to borrow at very low rates and use that money to compete with these small businesses, but the valuation multiples in the market expanded, and that’s how you had those seven tech companies gain $3.4 trillion in value. So there’s sort of these two different levels that are going on.
The Story of Pineapple Hill Saloon [18:05]
Carol Roth: Now, in terms of stories, and there are so many that are so ridiculous, but one that came about that I just think shows the complete politicization that happened in your neck of the woods out on the West Coast in California was Pineapple Hill Saloon and Grill. And this was a local business that had been in the community for years, and they were obviously shut down by mandate. But eventually, the mandates came back and said, well, you can do outdoor dining. And the reports showed that they spent around $80,000 to comply with outdoor standards because they needed to be able to stay in business. They didn’t know how long this was going to go on for. And so in the parking lot, they transformed sort of the outside of their business with all this money so that you could have outdoor dining.
Well, lo and behold, the city that they were in, that fell under the purview of Los Angeles, said, you know what, we’re going to shut down outdoor dining, which again was completely against the science, but let’s just put that piece to the side for one second. And so this entrepreneur who spent all this money complying was once again given another roadblock. So you’re asking yourself what’s going on? Well, right when this was happening, a movie production got the green light to not only go ahead with the movie shooting, but they set up a catering tent to feed the staff and the crew. And where did they set it up? A couple hundred feet maybe away from the Pineapple Hill Saloon and Grill and right in the same parking lot.
So you’re going to say, well, how is it that you can’t have this outdoor dining, but this movie company got the go-ahead to have the equivalent of outdoor dining? Then it was found out that Gavin Newsom had had dinner, breaking his own mandates, at the French Laundry, and one of the folks in attendance was a lobbyist for the movie industry. So then you just start to see all the dots being connected and say there’s no science behind all of this. This is complete political tyranny.
Bob Zadek: Carol, I would have been disappointed if you didn’t surreptitiously sneak in a plug for Recall Newsom, even though that is not the topic of the show, but you’ll gain five minutes of extra airtime on my show as a reward for doing that. So thank you very much, that was clever.
Carol Roth: I just have to say on that, I do have to say on the Gavin Newsom recall, if you just need anything else, we had a bracket tournament on Twitter to find out who was the worst governor in America for small business. And by the way, the competition was fierce, but I am happy to report that Gavin Newsom took the title as the worst governor for small business in America. So if you needed any more reason to go out and recall him, there’s another little piece for you.
Capitalism vs. Central Planning [21:30]
Bob Zadek: Carol, in the intro of my show, I indicated to our listeners that you spent your life in finance as an investment banker and as an author and as a hosting your own pod show. I now—and I said you didn’t operate in the unpleasant world of politics. I take it back. You just keep it very stealthy, but you sure do. So thank you so much, and that was an unfair—I deprived you of credit for which you deserve. So thank you so much for that little plug. I was trying to sneak it in, but you did a much better job than I could have.
Now Carol, your book does some interesting and provocative analysis of the free market in general, more specifically examining capitalism and sort of helping us play with the question: are we a capitalist society today given how we are mistreating small business and making it so hard for people to fulfill what is called by many to be the American Dream? Everybody tries to capture that wonderful phrase and apply it as they wish, but we all know that certainly a component of the American Dream—although that is quite personal—but one of the components is you can come here and with your own skill and grit and investing your own money, you can build a business from scratch and employ people the way you want to do it. That is for sure part of the ethos of the American Dream. That is—and that can only take place in a bottom-up capitalist society. So are we—how does what is happening to small business in America, what does that do to the concept of are we a capitalist society? Are we losing it? How does it fit in with what we all think of as part of our founding DNA?
Carol Roth: Yeah, so this is a really critical point. And I think for people who believe in freedom and choice, sometimes when we talk to people who are resistant, they don’t have a good grasp of economics. We have the sort of terms that are being used around this that have been completely bastardized. So I try to go back to concepts and principles and lay it out in a way to give people tools to be able to have these conversations and convince people who probably at their core believe the same things, help them understand that they’re kind of moving in the wrong direction.
So I think of the choices that we have in terms of organizing an economy and of freedom along a spectrum. And on one side, you have what you call capitalism or free markets. And that to me is just freedom, choice, transparency with the guardrails of property rights. I mean, it’s very, very simple. It’s not even a system really; I call it an “un-system” because nobody’s organizing it, right? We’re just doing what it is that we want to do freely by choice, and that determines the outcome. And that’s the beauty. I mean, we have proven throughout history that that is the best way to create prosperity. And as you mentioned, it doesn’t have to just be financial prosperity, although a lot of people attribute that as part of the equation. It’s also just the ability and flexibility to do what you want to earn a living. I mean, the fact that we even have that choice is a privilege vis-à-vis many parts of the world where they don’t have the choice of, “Hey, I want to follow this passion” or “I want to do this particular thing in order to survive.” They just have to think about survival. So all of these things are wrapped up in that sort of capitalism or free market side: freedom, choice, transparency, guardrail of property rights.
On the other side of the spectrum, and this is where we get a lot of confusion, I just call it central planning. You know, whether you want to call it socialism or communism or sort of dissect it, I don’t think it really matters. The point is if you have a handful of people who are making decisions on behalf of the masses and they are using force, they’re using control, they’re using coercion, and usually much of this is very opaque. You know, that’s the part that we care about; we don’t really care about the name.
So if you look at how we have shifted—and it’s been going on for decades, but it really has accelerated in the last 20 years and then the last 17 months has been insane—but if you look at the amount of government spending, if you look at the parts of the economy that the government has in effect nationalized, like the student lending business, if you look at the number of laws, if you look at the purview of the things that government is now involved in making decisions instead of us making them freely as individuals, you would argue that we were in definitely at least a hybrid central-planned economy.
And if you look forward into the future, the immediate future, the $3.5 trillion budget framework that is currently being proposed that just came out of the Senate takes us further in that direction. So if you take all the things that happened over the last 17 months—the stimulus checks, the enhanced unemployment benefits—now you’ve got proposals for expanding education to pre-K and “free” tuition for community college. You know, that is walking people into universal basic income. That is walking people into more government control. They’re lowering the age or proposing to lower the age for Medicare and expanding the benefits. That’s trying to move us towards Medicare for All. So all of these things that are being done and have been done over the last 17 months are in effect trying to consolidate more and more power. And what it’s doing is it’s limiting the wealth creation opportunities, right? It’s harder to succeed in a business. It’s harder to succeed in the stock market without taking on more risk. Certainly harder to be a retiree or a saver without “government help.” The Fed is destroying the dollar. So you’ve got all of these things that are limiting wealth creation opportunities that have been orchestrated by the government at the same time when they are off generously offering you a lifeline: “Oh, we’re going to be there to help.”
Now, what people always tend to forget is that the government doesn’t do anything productive. So it’s not their money. It’s the money of us as the individual taxpayers, or it’s them printing money out of nowhere that basically either decreases the value of our dollar today or takes on debt that has to be paid back by us eventually. But at the end of the day, we are paying one way or another. We’re just adding a sort of mafioso-like middleman in the middle of all of this. And so that is really the big threat to our economic freedom and sort of the overarching message of the book.
Property Rights as the Guardrail [29:32]
Bob Zadek: I loved the phrase which I’m so glad you mentioned on our show this morning, describing, summarizing so beautifully the economic system which—and I’m going to paraphrase it, I’m even ask you to repeat it again because it’s so important. If I want our friends out there to carry away one message—I hope they carry away 40 messages—but if they carry away one message, it’s your summary of what a free market system is like with property rights, protection of property rights being the guardrail by which people can trade. And there’s so much wisdom in that one sentence that you mentioned, Carol.
When third-world countries, when other countries want to become more economically significant, they almost invariably, if they are motivated in that direction, they ask the United States and other parts of Western Europe, but mostly the United States, to help them build a stronger economic system. And the first place they start is: help us build a system where we protect personal property. Everybody—it’s beyond debate—that it’s only the protection of property rights that—it’s only with protected property rights that any economy can grow. Because you will not spend money to try to build a productive activity if what you built can be taken away on a moment’s notice by government. Of course, it can be taken away by bad guys, by organized crime or the like; that also is a break, but that’s not this morning’s show. This morning’s show is government and its role in the economy and why government has been, in the classic sense, biting the hand that feeds it, the hand being small business. And it is the protection of property rights that is crucial. As property rights diminish, the economy becomes more fragile. And you shared that message so powerfully in your book. That itself ought to be the lodestar by which we guide ourselves: protect property rights and the economy will prosper.
The Erosion of Property Rights During COVID [32:59]
Bob Zadek: And so Carol, during COVID, what happened to property rights? You explained it a bit, and property rights were of diminished—were taken away. Property rights: the right to retain what you have acquired lawfully, the right to use what you have acquired lawfully. Once you take that away, we are doomed. So you explained beautifully in your book in discussing the COVID era how property rights became cheapened. And when property rights are cheapened, we are saying freedom has become cheapened and devalued. And once that happens, there’s no coming back. So expand upon that if you would, Carol, or disagree with it.
Carol Roth: Yeah, no, I mean, this is the crux of the issue because when you don’t have those—that protection of your rights—and we have to remember, I get a lot of people who come to me and think that the government grants you property rights. No. You are endowed with rights by your creator, and that’s what makes it a right. The government’s role is supposed to be to protect those property rights and to help you do so and create a system to ensure that your property rights are upheld. And instead, they were the primary infringer upon those rights overall, individual rights, and that includes property rights as a subset. Obviously, we saw things like you couldn’t travel interstate to your home. We saw that you couldn’t go to church. The shuttering of small businesses and saying that you could not use your business that you had built obviously is the biggest one that was out there.
And again, if they had given appropriate compensation for that, even though it’s again our money and isn’t ideal, at least it preserves that principle. But that was completely thrown out the window. Small businesses got crumbs and they did not get what was due compensation. And there are several organizations that are actually taking up class-action lawsuits finally on behalf of small businesses who are suing their states and their local jurisdictions over this very thing. So I’m a little bit heartened to see that.
The Eviction Moratorium and CDC Overreach [37:01]
Carol Roth: You’ve seen it more recently in this CDC moratorium on evictions, which has so many layers of insanity because now you have not Congress even, but you have an agency that, by the way, isn’t an economic agency, is a health agency, getting involved in making mandates about the economy and saying as a small landlord, you cannot evict somebody even though they may owe you all kinds of money. And so there again, we’re seeing the infringement upon property rights in a way that is unconstitutional. And the more that the government is able to just completely sidestep the Constitution, the Constitution basically doesn’t retain any value. I mean, it’s a set of principles, it’s a piece of paper, it’s a guiding force, but if we all don’t buy into that and ensure that that’s upheld, then do we really have that Constitution? Do we really have those protections that make the United States the unique example of what protecting individual rights is in the world? And that’s the really scary part.
So you have this decimation of individual rights including property rights, you have an increasingly powerful government, you have not enough people willing to say no. I mean, that was the craziest part to me is, as I said, we’re starting to get some of these lawsuits, but you didn’t have enough of these small business owners saying no. And that’s why I highlighted folks like Shelley Luther from Texas or Atilis Gym in New Jersey that basically said, “I’m sorry, you don’t have the authority to do this. I’m going to go ahead and do what I have the right to do.” And we just didn’t have enough entities willing to do that.
Bob Zadek: It’s amazing, Carol. Before you started that last paragraph, I was about to say to you, what about the eviction moratorium? It was on my lips, Carol, and you went ahead and—because you and I must have been separated at birth because you went ahead and you jumped right to the eviction moratorium. Now, just to give our listeners just a little bit of background about the eviction moratorium and as Carol correctly mentioned, of course, it’s a moratorium which is an economic measure imposed by a bunch of doctors who couldn’t make it in private practice so they went to work for the government.
So the eviction moratorium: the government needed to protect an important constituency, renters. There are more renters than landlords, and renters are more powerful. So in order to make a political calculation, let’s protect the renters. The way they decided to do it, as they met in their sinister back rooms, is let’s prevent landlords from evicting tenants who don’t pay their rent. And somebody else no doubt said, “What a great idea!” And then somebody else in the room in my hypothetical storytelling said, “Wait a minute, we don’t have the power to do that.” “Drat it! Why do we not have the power? Let’s find the power.”
So they dusted off some quite old statute which empowered the CDC—then operating under a different name, but the same institution—to take all steps necessary to prevent the spread across state lines of a communicable disease. And then the statute went on to say, “such as,” and it added killing the rats and quarantining people who are sick, all of the usual stuff that anybody listening to this show would have included as a sensible health measure. And CDC said, “Since we can take all steps, comma, including blah blah blah, ‘all steps’ is unlimited. Therefore, let us reason as doctors, let us reason that if people are evicted, well, they’re going to be in the street and they got to find a place to live. And everybody who’s evicted in New York might very well move to New Jersey; it’s only a train ride. And therefore, they’re going to take their COVID-infested bodies that they just got evicted and they’re going to bring the COVID to New Jersey. That works,” say the doctors.
And therefore, the CDC became the location of and the only constitutional justification for a nationwide ban—not a ban, but a moratorium on evictions. Now, who got hurt? Well, landlords are not all Donald Trump and this guy Durst who’s being tried for murder right now and these huge real estate families, but it’s also small business. Lots and lots and lots of small business in America. They are, to borrow a phrase from Frederic Bastiat, the “unseen,” but they have been damaged. Now they lose their rental income and can’t pay their mortgage. Tough luck, you take a hit for the common good. So that’s another example, and Carol was exactly right, of how the phrase “the war on small business” is not hyperbole; it is actually going on. And once again, the small business collectively who own rental real estate are invisible and they are the victims, they are the cannon fodder, the roadkill of the government’s war on small business. So Carol, thank you so much for reminding us about the adverse effects of eviction moratorium on small business.
And by the way, in case you follow this stuff, in my opinion, what President Biden did is committed what arguably is an impeachable offense. Gee, we haven’t heard the word “impeachment” for about six months; nice to hear it again. Biden has said, “I know it’s probably unconstitutional and it’ll take us a while to get slapped down in the courts, so let’s run with it for as long as we can.” How is that defending the Constitution?
Carol Roth: Yeah, well, that violates his oath of office to uphold the Constitution. And we had the Supreme Court strike this—not strike it down, but basically say after July 31st, you can’t do this because it’s basically unconstitutional and we’re not going to strike it down just because it’s about to expire. So the fact that he got all of these constitutional scholars to say, “Yeah, this doesn’t pass muster,” and then he said the quiet part out loud—I mean, this goes back to they used to be quiet about this, now they’re just throwing it out there: “Yeah, I know it’s not constitutional, but we’re going to go ahead and do it anyway.” Those kinds of things that they’re just willing to throw aside the Constitution—the Constitution basically doesn’t retain any value. I mean, it’s a set of principles, it’s a piece of paper, it’s a guiding force, but if we all don’t buy into that and ensure that that’s upheld, then do we really have that Constitution? Do we really have those protections that make the United States the unique example of what protecting individual rights is in the world? And that’s the really scary part.
So you have this decimation of individual rights including property rights, you have an increasingly powerful government. And I want to go back to what you were talking about with the eviction moratorium and the small business not being able to pay rent or mortgage or maybe just not wanting to deal with the headache. So this goes back to kind of the larger thesis of the consolidation of wealth and power. So what is happening—and this is happening at the small business level, it’s happening in terms of small landlords—the small landlords give up or they don’t pay or whatnot, and who do you think is there stepping in to buy these properties and to replace them? Well, it’s these big companies that are flush with cash from the Fed. BlackRock. Yes, so we’re seeing—whether it’s BlackRock or all different kinds of private equity firms and even pension funds—they’re coming in to compete not just with small landlords for rental buildings, but also with individuals for properties. And it goes back to the roadblocks to wealth creation opportunities. They don’t want you to be financially successful. They want you to be on the government dole and they want the people who are in the club to be able to consolidate all of that wealth and power. That is the underlying frightening thing that is going on right under our noses that not enough people are screaming about. And one of the reasons why I think the book is so important to educate people so you can start seeing these things, because we have to stop this. Wealth creation opportunities, our economic freedom, and overall freedom hangs in the balance.
The Myth of “All In This Together” [44:39]
Bob Zadek: In your book, you do a beautiful job—it’s beautiful prose—talking about the lockdown. And you remind us that the government mantra was, quote, “We are all in this together.” How cynical, as you point out, how cynical that phrase became in the carrying out of the so-called policy of lockdown. How contradictory was the concept, as you explain in your book, “We’re all in this together,” with the concept of lockdown, which was hardly all of us?
Carol Roth: This is the big gaslighting lie. And if you go and you talk to somebody who believes the policies were appropriate, the first thing that they’re going to tell you is, well, lockdowns were important because we have to save Grandma and, you know, we all had to pitch in. And people believe that we actually locked down everybody and that we were all in this together. But the reality is that we locked down about a third of the economy, and mostly that was done by mandate and the burden almost entirely fell on small businesses.
So if you had locked down Walmart, if you had locked down Target, if you had told Amazon, “I’m sorry, you can’t have your warehouse open and you can’t do deliveries,” if the Fed had not propped up the stock market and reversed that huge dive that started at the end of February and continued into March before the interference, and all of these big players were really feeling the pain the way that the small players were, there’s no way that these lockdowns would have lasted even maybe two weeks. Those with the power would have been screaming and saying, “We can’t do this.” But the fact of the matter was that they got the golden ticket, they got the free pass, and as we talked about at the beginning of the program, in many cases they were getting the dollars directly from the small businesses that were shut down, as well as this Fed intervention that was doing nothing but juicing the valuations of their stock. So they loved it.
I keep saying there are a lot of very powerful people who don’t want this pandemic to end. And you’re seeing that in a lot of the literature that’s coming out and the media is running cover in large part for that. And we keep hearing about the Delta and the Lambda and the Omega Mu and, you know, Alpha Male and, you know, whatever other variant that they’re coming up with because it was just a power grab. That created power and wealth. So anybody who says that there were full lockdowns or that we were all in this together, that’s one of the first myths that we have to push back on. And it’s why I’m so thrilled that my publisher approached me to write this book because even though it was a Herculean task, it’s important to document these things in reality before the entire narrative is changed in the media.
Fear as the Fertilizer for Power [47:51]
Bob Zadek: And of course, things like COVID, as I have—I and my guest have often mentioned on my show—is that the petri dish, the fertilizer by which power is able to be accumulated, is the fertilizer is fear. As soon as large numbers of people become fearful, it is natural to look around for an institution or a person to offer cure for the fear, to solve the problem. Whenever we fear, it’s natural in our personal lives that we have a problem that’s beyond our capability to fix. You look externally, whether it’s to religion or to somebody in power or to somebody who may know more than you or at least you think they do, you seek help. Well, government is perfectly happy to come in and offer the solution: “We will make you free from fear.” And so COVID was created a fear for which the only help people believed was not themselves, was not their own resources and working together and making intelligent decisions, but some wise people far away in government.
The “New Normal” and Closing Thoughts [49:24]
Bob Zadek: Now Carol, as you look into the future, because you have thought about this with such intensity and so wisely, what do you see as—I heard an ad right before my show from Dennis Prager when he used the phrase “as we return to normalcy.” I found that to be kind of naive, maybe just to sell. What is—what do you think is the new normal? And what wisdom can you share with us in our closing minutes as to what we ought to be alert to and press for, lest the abnormal becomes the normal?
Carol Roth: Yeah, I mean, I don’t see any return to normalcy because we continue to move on the spectrum towards more central planning. And the laws and the spending and the proposals and the programs that are being put out at a rapid rate are continuing to rapidly transform that landscape and moving us further away from economic freedom. And we always have to remember that economic freedom is the best path to prosperity. Nobody’s going to get wealthy other than the politicians and their lobbyist friends being on the government dole. So it’s really important. The system is broken. We’ve created a Frankenstein monster, and we need to get at a minimum the right people in there to start disabling that monster. But we should also be doing everything we can to vote with our dollars and support those decentralized small businesses and stand in the way of more power consolidation.
Bob Zadek: Carol, this is Bob Zadek. I was speaking to Carol Roth, who has just written The War on Small Business, who publishes her own blog. How can our friends out there follow your blog, Carol?
Carol Roth: Actually, the best way to connect with me is on Twitter at @CarolJSRoth. If you like economic freedom and have a slightly warped sense of humor, you will enjoy it. And of course, The War on Small Business is available everywhere, but get it from your local bookstore. Go to bookshop.org; they’ll fulfill it locally. I’m a capitalist; you can obviously buy it wherever you want, but if you like this discussion and you want to support decentralization, again, think about how you spend your dollars.
Bob Zadek: Carol, thank you so much for sharing your wisdom. The book is a very important book and you tell it with a style that makes it impossible to put the book down. So thank you so much for the style, for the wisdom, for the content, and for the principles that you espouse. Bob Zadek thanking publicly Carol for her sparing an hour of her time this Sunday morning and inviting all of you to follow Carol’s podcast and most importantly, read both of her books. You will be wiser as a result. Carol, thank you so much for your time this Sunday and thank you to my friends out there for listening. Bob Zadek saying so long for now. I’ll be back again next Sunday. Have a good rest of the weekend.