KXEL Presents: The Jacobsen Group Podcast - June 1, 2024

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This is going to be an epic episode.

Hold on to Senior Pants.

John Jacobson here on the Jacobson Group with Mike Shannon Studio on the blow towards 1540 AM KXEL.

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Let's roll, Mike Shane!

You're on KXEL, NASA the inimitable!

Mike Tone for Mike Shane, our engineer, 50,000 watts, clear channel, caraming across North America, the only 1540 in the Western Hemisphere.

We

have the Blowtorch, Mike Shane.

Thursday was my 53rd anniversary doing this.

The crowd is on their feet, 53 years for the great Mike Shane.

Just

goes to show, I haven't learned a thing.

Mike, Shane, he's with us.

We love it.

We're here with Coach Patrick J. Knapp Jr., the Georgetown legend.

Eastern Iowa's Tim Grover, David Overholster CPA, our political consultants, Sheila and Kip Murphy.

You're hearing Decision 24 music and you're going to hear an epic rant from yours truly here shortly.

Let's cue up Don McClain.

Guys did America die on Thursday evening May 30 is the great American experiment is the Constitutional Republic dead I'm concerned and time for my special report rant here if we can pull up the ABC

Retro Klaxons for our special report here guys, and then we'll have our panel weigh in on this absolutely Breathtaking series of events.

I can't say it better than Greg Jarrett said it Greg Jarrett Donald Trump did not lose on Thursday our once venerated legal system did and by extension all Americans lost something precious Because the failure of justice is a failure of the people

The conviction of the former president of Manhattan courtroom was preordained.

With the inexorable verdict, the ideals of a fair trial and an impartial jury faded into a figment of our founder's imaginations.

They knew that the worst oppression is done by the color of law.

They feared it and tried to prevent it.

So they too have lost.

No reversal or appeal can erase the ugly stain.

It is indelible.

ethical integrity equal justice and the revered rule of law became the fateful casualties of this assault on liberty.

There was no real crime to be found.

Prosecutors simply invented one, an undefined conspiracy that was factually impossible and unsupported anywhere in the criminal codes.

The trial itself that stretched for five agonizing weeks seemed to mirror formality a hollow exercise.

A bookkeeping entry magically morphed

from an expired misdemeanor to an active felony in the way that a porcupine is transmogrified into a prince at trial.

The accused was never informed of his alleged felonious conduct.

It was an egregious violation of his Sixth Amendment rights.

Jurors were then given a creative menu of three possibilities and informed that our cherished constitutional principle of unanimity had gone the way of the dodo.

We still don't know, and may never know, what conspiracy Trump supposedly committed.

District Attorney Alvin Bragg proved the English blasphering jurist Jeremy Bentham correct.

It is never the law itself that is in the wrong.

It is always some wicked interpreter of the law that has corrupted and abused it.

I will tell you further, folks.

I do not so much...

Fear for myself, but I do fear for my children and grandchildren.

Let's pick up Greg Jardigan, but Bragg did not act alone.

His accomplice and co-prosecutor, Judge Juan Merchan, blithely disregarded the established rules of evidence, manipulated standards of admissibility to favor the prosecution, sanctioned prejudicial testimony, bereft of probative value, and helped engineer a wrongful conviction by depriving Trump of a full and legitimate defense to which he was entitled.

Merchan did all of this without conscience or regret.

There was never any plausible evidence that Trump committed crimes.

There was no legal basis for the indictment.

Facts were contrived or exaggerated.

Statues were perverted or ignored.

The law enforcers became law breakers.

Bragg's scheme, to exploit a pathological liar and convicted perjurer as a star witness, was a devious maneuver by an unscrupulous prosecutor.

On cue, Cohen lied to the jury just as he had lied to everyone else.

It was no surprise coming from a man who told Congress, I have lied, but I am not a liar.

That is a twisted syllogism from an insufferable reprobate.

The problem with liars is that for them, truth has no meaning.

They are incapable of distinguishing fantasy from reality.

They lie to themselves about their own lies.

But that did not stop Bragg and his confederates from mining Cohen's skills as an expert prevericator and their relentless quest to convict Trump.

Did they suborn perjury?

Absolutely.

They knew Cohen would lie.

They wanted him to.

He did not disappoint.

Bragg never had authority to bring a case against Trump based on federal campaign finance violations, which appeared to be the centerpiece of his misbegotten case.

That's why he concealed it to the bitter end.

A competent or unbiased judge would never have allowed it.

Murchan was neither.

The tragic coda to the American Trump trial is that Americans can no longer trust our system of justice.

Faith has been squandered.

If it can be weaponized against a former president, it can happen to any of us.

We are all at risk.

When a district attorney who is a powerful force in government abuses his position of trust to subvert the legal process, and when a judge acts in concert to dismantle the due process rights of the accused, our system of justice is threatened.

Reverence to the rule of law is lost.

It was John Adams who said ours is a government of laws and not of men.

Sadly.

It is no more.

Will we get fooled again, Mike Shane?

Will we get fooled again?

I hope.

I hope.

We don't get fooled again.

Robbie screaming like Dalton Townsend.

From their great hit.

Won't get fooled again.

What I've said is true.

But they're not my words.

The words of the great Greg Jarrett commentator, Spandau Ballet.

We know this is true, the rant that I just went on.

And my comment would be, as we head into the panel here, years ago, I would have died to save my country.

Today, I would give my life to protect my children and grandchildren from what my country

has become.

Let's pull up the McLaughlin group music here, Mr. Shane and go to our round table for a great 15 minute discussion here.

Coach Patrick Jane App Jr.

the Georgetown legend, Tim Grover, our rover from East Iowa, David Overholster CPA, political consultants Sheila and Kepp Murphy, issue one, the only issue is what I said true is what Greg Garrett

Greg Jarrett said, true, is it the day that America died?

Will we get fooled again?

Is it goodbye stranger to the USA, our now strange republic?

Coach, I start with you.

Well,

John, I did read those comments.

And I agree with everything that you said.

I do have to look closely at

What what we will do that.

Yes, this is huge.

This is huge.

Yeah, there's there's no doubt that the The orchestration of the verdict is false in every way.

Yep.

So how do we strike back?

How do we overturn?

Listen to Jonathan Hurley yesterday GW Law professor always on Fox and he thinks That we should look to the system

to overturn the vertical on appeal and and that the system will bear out because we have a good system and i sat there shaking my head because i'm like jonathan you are uh it's too pie in the sky

yes he's an academic isn't

he yeah you see what you see what has happened is no different than the hunter biden laptop we're 51

Law enforcement officials.

Yep

signed a letter saying it was false Russian propaganda

as coach and now

and

now three years

later Everyone knows and even the FBI has claimed that it's not and that it's real big is they used it

to win the election and to win over that last month of the election.

If Trump, they will, they will trump it from the sky that Trump is a convicted felon.

They'll carry it as far as they can for the leverage that they need to change votes.

Coach, you are spot on.

That is such an outstanding take.

And I'll tell you, I know some Biden people, the whole calculus here is they've done polling and they're polling according to them.

shows that with a Trump felony conviction, that will swing 7% of Trump voters away from him based on pre-polling.

The whole inchpin here is to peel that 7% off

to get Biden the presidency.

They're not saying that those will flip to Biden, but they might flip to Kennedy or just not show up at the polls.

This is absolutely a calculus based on pre polling showing that this conviction yesterday can peel off seven points from Trump when Trump is leading a national polling right now.

Coach, you're exactly correct.

Tim Grover up next.

Well, this reminds me that justice

is like a gun.

It's only as good or bad as the person using it.

I don't think our system is dead because if we look back through history, this has happened before.

We use the justice system to attain some kind of truth that we perceive or some kind of outcome that we want to achieve, like the Democrats are doing now here to try to weaken Trump.

But it's going to backfire on them.

But going forward, as far as I'm concerned, and a full disclosure, I like Trump a lot, but I'm voting for our R-K junior.

I'm declaring my independence today.

I don't want to be a part of either party because both parties make calculations like this

and disrupt

everything.

I've got relatives already asking me 34 counts of what.

And that's it.

They used our tax money to do this, and I've had it with both parties.

Tim Grover here, you know, I'm reminded your first comments of Lavrenti Beria, the most ruthless and longest-serving secret police chief, police chief in Joseph Stalin's reign of terror.

His quote was, show me the man and I'll show you the crime.

I think we've devolved into Beria land here.

Heaven help us.

David Overholster, you're up next.

Well, you know what?

The

first statement I'm going to make is I'm digging out my my truck yard signs from four years ago and I'm going to go put it out in the yard here in about 15 minutes after we're done with this show because and I've actually had an opportunity to talk to two or three of my vendors from basically across the country this morning already with some business calls and every one of them says oh this is just going to get overturned on appeal and I really think that I'm optimistic that

you know that is what kind of the the rest of the country's seeing this this imagery of what i call flyover country you know new york and california just don't live in their own world and the rest of the world the rest of the country at least knows exactly what's going on by all of this and i i think if they think he's going to lose seven percent of the votes i think he's going to gain fifteen percent elsewhere i just i

It is such a travesty in so many different ways.

And I really think that the undecided voting populace sees this.

And it's still going to come down to come election time.

I saw a discussion earlier this morning on Fox News or on the Fox Business Channel.

They said, you know, a guy commented and he says, come election day.

The exit polling is going to ask people what the five top five issues are.

And this Trump trial is not going to be any one of them.

So there's so many other things going on in this country that the average voter is going to say, you know, whatever's going on in New York, these are the issues impacting me.

And these are what I'm voting on.

And I believe that.

These are good takes.

We're going to go around the table here again, too.

I would argue that this is not incendiary, but it's factual.

I would argue that what is currently going on in America is far worse than what Stalin and Beria did, because in those days, they did not have the technology of the surveillance state.

This is far worse.

They're not coming after Trump.

They're coming after you and me and our children and our grandchildren.

Coach, am I

wrong?

You are not wrong.

I'm afraid that we don't dip it in the mud or win an election.

It will get worse.

That's from coach Tim Grover.

Are we all in danger here?

Are they coming for us?

Yes, the future of America

is in danger here.

I have a saying, I always say, is this is how they do it in China.

In China, only certain people are going to have the only certain people have things.

That's what's going to happen here because of this.

trump is actually a martyr now a martyr of a system run by oligarchs who forget where they came from and don't realize the american dream allows anybody to to try to rise up to the level that they are at

then it's terrible this is an amazing take from grover and i'll fill this to you david overholster has the left unwittingly made trump into a

Martyr a la Nelson Mandela raising him to mythic status is He now like Obi-Wan Kenobi you strike him down and he comes back more powerful than before David overholster.

Is that possible?

Well, I pictured to me.

I'm seeing

Trump standing in front of a line of tanks

Somebody ought to put that meme out there somewhere.

Yeah That's a great image Sheila Murphy and Kip Murphy from from each of you does this unwittingly by the left make Trump a martyr a la Nelson Mandela and elevate him to mythic status as martyr now the Obi-Wan Kenobi if you strike me down I will come back stronger than ever before Sheila and Kip each of

you

I think it's made him a murder but the problem is we don't control a lot of the news and they're gonna be spending this like you wouldn't believe and a lot of people don't know the entire story I mean you listen to a lot of legal experts they couldn't figure out what the case was

yeah it's true it's just absolutely true so

yes and well and this is what I feared

People will have to narrow a view of what is happening here.

Too many people will think, well, it's those crazy New Yorkers.

They really hate Trump and they were just going to punish somebody they hated.

Well, this is about a lot, a lot more.

A man, a

man, Sheila, you're on to something to continue this thread.

You know, for years, the Democrats have very effectively been pushing into judgeships all across this country.

people that are anti-American, communist, socialist, pushing them hard.

George Soros has spent a fortune getting anti-American people ensconced as prosecutors from one end of this thing to the other.

And did he do that because he's compassionate, worried about that criminals weren't getting fair treatment?

Hell, no.

This is why he did it.

Now we see what the plan is.

Trump was just the test case.

He's just the tip of the iceberg.

From here on in, any Republican, any conservative that the Democrats view as standing in their way will be brought up on charges.

They don't have to be just, legal, they don't have to be provable.

Absolutely true,

Sheila.

to destroy everybody within their

way.

Sheila, you're so correct because look, they tried that with Chris Christie.

They tried that with Rick Perry.

They've in the past tried to indict Republican presidential candidates out of office.

But is this the ultimate election tampering?

Not by the right, but is this not absolute election tampering and voter suppression of an American presidential election by the left?

Coach.

Of course it is, except that

they're going to tell you that we're saving you from a criminal.

So we're not tampering.

We are saving democracy.

They are a freaking joke.

Yep, Coach.

You nailed it.

Tim Grover, is this the ultimate election tampering, collusion, rigging, and, you know, election stealing by the left?

Pre-election?

Actually, John, it's election tampering and stealing by the GOP because the money that Judge Machan's daughter is making off of this is coming from GOP donors.

Democrats do not spend money on stuff like this.

They spend money

on ground

aid and media focus.

This is totally funded by Wall Street fat cats.

Dave, do you think that there are folks within the deep state GOP that are winking and nudging on this a little bit?

Do you think that there are some that are silently hoping that this is the case part of the deep state Washington elites?

Oh, absolutely.

I think that there are people that Trump came in and challenged their hold on power and they will do anything, anything.

to keep control of that power and the fear of a second Trump presidential term terrifies them.

And,

you

know, I just, I absolutely believe that.

I think that the previous comments are right on spot.

Sheila Murphy, I'm going to ask you a very pointed question.

Kip can weigh into, I'm going to go philosophical here.

I've been ruminating on why the literally irrational obsessive

discordant Trump derangement syndrome, the literal obsessive hatred that is beyond the realms of rationality against Donald Trump.

I believe this is a spiritual battle.

I believe that these are literally demonic forces raging against Trump because he appointed justices that overturned Roe versus Wade.

How am I wrong on that Sheila Murphy?

You are not wrong.

That's definitely part of it.

I think that the evil has a stronger hold in this country than ever before and this is one of the battle fronts we are seeing.

I think you're totally correct.

I think also there's more pragmatic reasons why people hate Trump.

They hate Trump for one simple reason.

He challenged the media and a reporter would say something

wouldn't cower in fear, he would fight right there.

They cannot tolerate it.

They have to get rid of somebody who's got all the nerves that he has to talk back against the media because what's really killing us now, as always, and Kip mentioned it earlier, is that the media.

Who would defend us against this egregiously bastardized justice system?

It should be

the media, but it is.

And I think they have to make media stay strong.

Stay strong.

Trump stays weak.

And but definitely apply.

I do agree.

Well, that that that's a great take.

Coach, I know you've got to run.

We're going to give you one last take here.

I'm just going to close this segment by saying I'm more mega than ever before.

And I live to proverbially crush my enemies in the media to laugh.

as they're driven before us and love the lamentation of the women.

Coach, you're on your way out real quickly.

Caitlin Clark, is she gonna cut it with the Indiana fever?

I've been critical of the fever in their coaching.

What say you on your way out here?

Well, she will.

She will.

I agree with you.

I'm not sure this coach or the organization was up to handling her stardom and how to get her comfortable

as a rookie in the WNBA.

Caitlin is shooting well.

Her defense is poor.

Her turnovers are up.

Her turnovers will change.

She'll get better as the season goes on and she knows her teammates.

She's filling every gym.

They got to give her every chance to star and shoot and be the star that she was at Iowa.

Wow, that's a great take.

Give a super tramp on the way out, Mike Shane.

Our thanks to coach Tim Grover, David Overholzer, Sheila, and Kip Murphy.

Is our Constitution now a stranger?

Are we saying goodbye to our dear Republic?

Hopefully not.

We live to fight in our legal system and voting system another day.

But again, as I said before, years ago I would have died for my country.

Today I would give my life to protect

my children and grandchildren from what our country has become.

John Jacobson with Mike Shane on the Jacobson Group on KXEL.

Good job guys, thanks a million.

Oz, another great weekend in eastern Iowa.

Mike, I love this time of year.

The days are long, the sun sets late, we're heading

Now we're past that memorial deck where my tan poplin suits again and we are on with the great Clint Hames.

The next generation of this wonderful family has been such beautiful custodial stewards of bringing safe, lovely,

affordable housing to so many people in eastern Iowa over the decades in their two beautiful communities and guys go to their tremendous website hamshomes.com we're delighted to have Clint back with us we in the past have talked an awful lot

to Barbara and Curtis, but we're always delighted to have Clint back on in.

Clint, welcome to show the studio audience on their feet for you.

Listen to that crowd.

It's like Caitlyn Clark getting introduced for crying out

loud.

Thanks for having me.

Clint, I want to talk about on your blog site, there's a great article, single wide and double wide homes.

What is the difference?

A lot of people don't understand the difference.

Can you kind of give us a thumbnail sketch on that matter, my friend?

Yes, certainly.

So, I mean, the biggest difference between the two is kind of how the title set, how it's stated, where a single wide is going to be basically all one piece or set on one chassis.

where a double sectional is two chassis and two halves of a home put together when they're on site and that's what makes a double wide and typically your single wide is going to be 14 or 16 feet wide and then on the double sectional it's either going to be a 28 or 32 foot wide.

Here with Clint Hames from Hames Homes.

Guys you want to talk about comfort and beauty and value in eastern Iowa.

Think about this now for three generations

The Hames family has provided comfort beauty and value to our homeowners in eastern Iowa think about this 13,000 mobile and manufactured homes sold since 1969 now Let's just take the American average of let's say two adults and two kids 13,000 times four is over 50,000 now since 1969 homes turn over

every five to seven years.

Guys, that means that the Hames people have put, my goodness, if you really do the math on how many times that has turned over, Clint and Kurt and Barb and Kurt and Norma have put over half of a million people into their safe, affordable, beautiful homes.

And Clint, what I found impressive, I was visiting my mom

88 years old there in Marion.

A few weeks ago during that spate of bad weather, your homes held up beautifully during that rain, wind, storm, and hail.

They did great, just like in the derecho, Clint.

Absolutely.

Absolutely they did.

And Clint, one thing that I think we'd like to talk about too is it's a concern people are having with a lot of things in the news now about crime and what's going on in some of our urban areas in America.

I've been in your neighborhoods there.

You've got these beautiful, lovely neighborhoods at Summit View and Grand View.

You've really got some wonderful safety procedures set up to make these very safe communities for

whether you're seniors or whether you're kids, really easy for parents to make the buy, isn't it?

What do you do to keep the communities safe there?

You do a whole bevy of things.

Right, yeah, we have a handful of measures in place.

The biggest one is going to be our background check.

We do a background check on all adults

living

in the community.

Not just the homeowner, but their children or family members who may be living with them or staying with them quite often.

We require a background check for all adults living in the community.

And then, between some of you in Grand Beach, each community has two managers.

and then we always have a manager on call twenty-four seven

this is awesome out

to them for any kind of issues

yeah guys this is tremendous and that the the hems folks have given so much back to the community the food pantry they've won uh... big awards from uh... the corridor publication for their civic service uh... i was so honored to be a lunch guest of the late uh... curt hems who actually encouraged me

to run for elective office, which I did a few years later.

And I hope I honored him with my service.

He was one of the first fellows who offered to support me when I ran for office.

And I love your family, Clint.

Your grandfather and grandmother were patients of my father's dental practice.

My dad and mom admired so much.

Your grandfather and grandmother as they built that beautiful business and all of the

work they did to promote our veterans, their great military service.

As you know, I think about them this past Memorial Day that we just celebrated.

Great World War II heroes in their own right, your grandfather and grandmother.

and that MIAPOW flag still flying proudly at your corporate headquarters there along with old glory in the Iowa flag.

You guys are everything that's good about the free market enterprise system in America.

You guys are what Adam Smith had in mind when you couple virtue with free markets and we're really proud of you guys and proud that you sponsor our show Clint Ames.

Thank you so much.

We love being a part of it and love being a part of our community.

Clint, tell us how we got a lot of people listening in today.

This is the time to make a move, guys.

They've got good financing rates that are very competitive with what the banks have out there.

Clint, how they contact you by phone, by email, by website.

Give them a few shots at even driving by where you guys located so that they can get there and see for themselves.

For sure, yeah.

Kind of the best way to reach us is on our website at www.hameshomes.com.

There we have all of our pictures and descriptions of our homes we have available, tons of information about our communities and what it's like to live out here, and then you can reach us by phone at 319-377-4863, or if you prefer email, you can reach us at salesathameshomes.com.

And we're here Monday through Friday, seven days a week from nine to six during the weekdays and then on Saturdays from nine to five and Sundays noon to four.

Those are great hours.

What intersection are you guys at?

So we can just drive there to Southwest Cedar Rapids, not far from the airport, retail and find you guys.

Yes, it's right now.

Our main office is in our Grandview location, which is going to be on the corner of Wilson Avenue and West Post Road.

Some of you is just down the street right on Wilson Avenue.

But again, our main office is here in the Grandview, and come on out.

We've got open house format, and we'd love to see what we have out here.

Guys, that's the great Clint Hames, part of the next generation of leadership at Hames Homes.

Clint, always great to have you on.

Give our best to Curtis and Barbara, and we'll talk to you guys next week.

Most certainly.

Have a great week.

All right, guys.

Hames Homes, the Homes people.

Well, guys, there is good news.

We have got free marketeers.

Yes, they exist in academia in the United States.

Free Market Enterprise.

Economist and you guys all you have to do is look at Argentina what President Javier Malay is doing there He's already turning it into the Argentine miracle Argentina racked by devastating high interest rates super high inflation a ruinous economy What did Malay do?

He's come in and in 90 days like Reagan like that you're like John Kennedy.

He's cutting regulations He's cutting spending he wants cut taxes and all of a sudden Argentina's economy is improving by

leaps and bounds.

We're going to go to Ottawa University to the Guartney Institute, Dr. Peter Jacobson, PhD, and the Guartney chair and a professor of economics at Ottawa and his fellow academician professors at the Guartney Institute with a great segment about our free market system.

Take a listen.

All right.

Well, we posted a debate last week and I debated our current president.

President Reg, Dr. Regis Winica, on the premise, the resolution for the debate was the social responsibility of businesses to increase its profits.

And that is the title of a famous article from 1970, where then Milton Friedman being kind of in the heyday of his career, actually he's a little prior, I'd say his heyday might have even been a little later after that, but you know, shared with people kind of a ethic or a moral

argument that we'd be better off having businesses worry about profits and not be worried about other social ills.

And so even way back in 1970, believe it or not, there was the beginnings of environmental concerns.

Of course, racial concerns had been around for a long time and that was still being addressed in those days.

And unemployment, inflation was starting to get crazy.

So we had these other

things that were let's say external to the operations of a business and there was starting to be pressure on businesses that hey what about environment you can't just maximize profits and there was a hint I think at that time of you know businesses should be playing a bigger role and perhaps

government would start to force them to play an active role in, let's say, environmental concerns or poverty or welfare, that sort of thing.

So that is kind of the nature of the argument.

And what he claimed was that by businesses being able to focus in on profits, those things will be easier to take care of by the people who should take care of them because businesses don't have morals.

people have morals.

And so businesses are a construct or an institution that help facilitate the accumulation or building of wealth and income for the owners of that business.

So we have in a free society, focus on individual property ownership, people can choose to earn a share, own a share of a particular company, the objective of building wealth and income.

And we are not

getting all of the benefits from that system by having a CEO that is directing funds to other activities outside of the profit objective.

And before we go too far, I mean, Milton Friedman, even in his original article, said that if a business finds it profitable to do, let's say, an environmentally sound thing like use recycled material, let's say, just for one thing, because

The consumers demand it, right?

So if the consumer preferences are such that they're not going to buy as much product unless you're using recycled material, then that's great.

That's part of the market mechanism that's addressing a concern, a preference by consumers for particular good.

And then those sorts of actions are within the scope of profit maximization or increasing profits.

But his argument was there shouldn't be this burden to go beyond that.

That the only scope that's needed and what will be best for society is for businesses to keep, you know, focused in on what they're good at.

And that is with trying to make a profit.

And profit, again, is the leftover from the business activities.

So when we think about

the cost of production they're paying their employees which is usually for many businesses a good chunk of their expenses and so we're creating income for employees giving getting people jobs so that's naturally reducing unemployment and creating income for people which is a good thing they're purchasing product or intermediate goods from suppliers those may be coming from overseas they may be coming domestically but that's generating again income for those stakeholders as what we call so we got

The whole theory is a contrast between shareholders, the owners of the company.

So sometimes it's called shareholder theory versus stakeholder theory.

And so stakeholders are is more broad.

So people who own the company are a stakeholder, but so are the employees, so are the managers, so are the intermediate suppliers, the customers.

So people related to the business's activities are called stakeholders.

And so there's been a pretty strong movement over the last 50 years.

So this is, I remember the Wall Street Journal put out a 50 year celebration because Milton's claim back then is still hotly debated today on what is the appropriate way to do that.

So let me turn it over to Dr. Clark to kind of color in where I went wrong, maybe with some or to add and then maybe to talk more about the stakeholder angle.

So as I see it, this, you know, you're right, the

the title of Milton Friedman's article is the social responsibility of businesses is to increase profits.

And this debate is sometimes usually couched in terms of what should matter for a business, profit or people.

And you're right that the other way to cash this out is in terms of stockholder versus stakeholders.

And when we talk about

Before we talk about who a stakeholder is, let's just define a stockholder really quickly.

And the stockholder is anybody who owns stock or is the owner of the company.

So if you're the sole proprietor, my wife has this photography business, she's the stockholder.

She's the owner of that company.

If it's a publicly traded company or shares of it, then you're a stockholder.

And so far as you own a share in the company.

And it's very easy to determine

who is a stockholder, right?

Whether or not you are a stockholder in a company is usually binary.

You are or not.

So it's very clear.

That's one of the things that's beautiful about Freedmen's Theory.

On the other hand, stakeholders, whoever is a stakeholder in a decision made by a firm, because stakeholder, whether or not someone's a stakeholder is usually relative to a decision that's being made.

And it's anybody who's affected by that decision.

So obviously all shareholders are going to be affected by affirmed decisions.

But also...

you know, the employees of the firm are going to be affected by a decision.

The people married to the employees of the firm are going to be affected by the decision.

The people whose income depends on the employees of that firm spending their dollars.

Their businesses are going to be affected by a firm's decision.

So you can see pretty quickly how whether or not someone is a stakeholder, this is going to be a much wider circle than the shareholders.

The question is, whose interests ought to count when a firm is making decisions?

Should the firm weigh the interests of their shareholders?

Or should the firm also weigh the interests of the stakeholders?

Putting it that way is slightly different than the way Friedman's title puts it, because Friedman initially says something like, well, the social responsibility is to make profit.

And then if you read the article, he says, the reason their social responsibility is to make profit is because a business is responsible only to its shareholders.

And what its shareholders want is for the business to turn a profit.

So really, that depends on it being the case that the only thing that the shareholders want is for the business to turn a profit.

And so sometimes you find people and people like John Mackey or somebody who will say, well, John Mackey was a CEO and founder of Whole Foods.

I mean, he will say things like, well, we as a firm, we make decisions and we do include the interests of non shareholders, but we do that because our shareholders want us to.

And we have found that when we do that, it actually helps us be a competitive business in.

in our industry or something like that.

So one of the things that I think you find in this debate is that a lot of people end up talking past each other or just kind of trying to build the other person's position into their own.

And so you will find this by people saying, well, I support the Freedmen side.

That doesn't mean I think business should be

fleecing everybody except their shareholders or something like that.

What I think is that it's best business practice to blah, blah, blah, include some.

And in fact, our shareholders do want us to do that.

And then on the other side, you will find people saying, well, of course, the social responsibility is to include all stakeholders.

But insofar as we are a firm in a market economy, we do have to remain profitable.

So we have to at least kind of privilege the interests of our shareholders

and make sure

that we are turning a profit before we can incorporate the interests of anybody else.

And what's

done that on either side becomes very tough to disentangle.

Yeah, I think it's murky and I think that's what we found out during our debate and I think that was some of the feedback I got from our students that you know once you try to toe the line but then you as you explain it it's like it's so close but I think there's for some people there's a difference of the heart with it.

And I think with other people, it's a difference of the mind, but they end up getting pretty close together.

And it's hard to disentangle.

I don't

know.

I think both sides of the debate are wrong.

That's what I thought for a long time.

They are both incorrect.

Perfect.

And I didn't want to say, for a long time, I reflexively wanted to argue for Friedman because I'm an economist and I like thinking about how...

Purely selfish motivation can benefit people more than like, you know, others if you have the right institutions.

I think you see that in the con a lot.

But

the problems are what Justin pointed out.

So stakeholder folks will say, well, it's good business anyways.

It makes profit anyways to support customers in the environment and workers.

And it's like, in so far as that is your arguments.

that helping other stakeholders makes you more money, then you are just saying that the ultimate goal is to make money and this is like a strategy to do that.

Yes.

And

so you've conceded the other side immediately.

You conceded the treatment.

And so like what we really need to have in order to adjudicate between these two positions is a point where you helping a certain stakeholder is going to hurt the shareholders.

Yes.

That's what you need to make that judgment.

One example that I use in my management class when I talk about this is a company that wants to move overseas.

So if a company wants to leave the United States and go to China, let's say it's Harley Davidson motorcycles or whatever, it might be the case that that earns more profit because it may be slower labor costs or whatever.

And maybe the owners of Harley Davidson actually just want the more profit.

Let's assume that's true.

Let's assume that they are not interested in, you know, some sort of like American loyalty.

Maybe they are in real life, but let's assume they're not.

So the company can make more profit for the owners by moving, but there is this and I like using this example because it's because it's counter to the left-right thing that often happens

in this

issue where like leftist or stakeholder rightist or shareholder because this is more of a right-wing issue.

A stakeholder is the American workers who work at Harley Davidson, right?

And so if you believe we should say to Harley Davidson, no, it's not moral and you should not

maybe two separate things.

A, it's not moral and B, you should not be allowed to.

I think not moral is all you would need to do though.

It's not moral for you to leave the United States because this community has some sort of stake in your company and just because your owners want you to move to make more profit, it's wrong of you to do that.

And if you feel that way, then you're a stakeholder person.

If you don't feel that way, you're a shareholder person.

And at the end of the day, I think that's where the rubber meets the road.

And so I don't know where we're at in terms of the break time, but I do think that we can find fundamental issues, though, with shareholder theory, too.

Yeah, I think that's a good way to tee it up.

I like the Harley example, and then what I started thinking was, well, how much profit?

And you could kind of push somebody like, so Harley's going to move to China, kill all the American jobs.

And it was for $1,000.

Is that the profitable thing to do?

And then we can bring in uncertainty whether that's enough or, well, if it's a million, then it's OK.

You can have those marginal conversations.

But as soon as you say, no, you shouldn't move for that much more money, you're saying I'm a stakeholder theory person on this march.

Ultimately, that's where the rubber meets the road, I think.

think that's what i'm thinking too is that your stakeholder if you can make that number as high as you want and the stakeholder says don't ever move right or not

no your stakeholder your stakeholder person if you move for any amount of money because at some point what you're saying is the owners don't move

It's stakeholder.

You're a stakeholder person.

Yeah.

If there's any amounts of money that would say don't move.

Yeah.

That would say don't move.

Yeah.

If

it's even like, if it's a dollar and you say, nope, the owner shouldn't get the extra dollar, we should preference the American workers.

You're on that margin as stakeholder theory person.

Yeah.

So I just wanted to make one distinction here just to be clear.

We sometimes have used the word shareholder theory or stockholder theory.

Those are the same thing.

So we talk about owning shares of a company.

or you own stock in a company, so shareholder, stockholder, same thing.

We'll try to say stockholder from here on out, but I can't promise listeners that that'll happen.

Dr. Clark, our philosophy professor, how did Peter and I do on how would you grade us on that last interchange here of the morality of moving the Harley-Davidson over to China?

I mean, I think you're both right in that it becomes very, very difficult.

What what each side does in this debate is just to kind of try to build the the other into their own and I think the way so I think that the the the grain of truth to Stakeholder theory is something like we recognize that as I think Peter and you both said that it seems like at least for the moral valence of an act we think that

It's whether or not it's right or wrong and really that's freedom is making a moral argument here, right?

We think that the moral abalance of an act surely depends on something more than whether or not the Stockholders are how the stockholders are affected if it's like terribly affecting people who aren't stockholders And then so I think that most people have that intuition and that's what

pushes them into the stakeholder camp.

And what I think the intuition behind the stockholder camp is, and this is why I think that usually building the stakeholder concerns into a stockholder approach is a better way to think about it than the other way around.

This is that a lot of the concerns for stakeholders

Will also be concerns of stockholders Yeah, and this is Friedman's point partly when he says a corporation doesn't have moral duties individuals have moral duties

So he starts out by saying things like, you know, only profits matter.

But if you really press him on it, he'll say the concerns of the stockholders are what ought to motivate firms business decisions.

And he will say those stockholders do have moral duties.

And he actually kind of flip-flops on this in places about whether he thinks those stockholders ought to use the firm's decisions to

fulfill those moral duties or whether or not the stockholders should only be taking their profits from the firm and then be using those profits privately to address the moral duties.

But at times at least he seems open enough to saying that if

that you know there's a vote and the stockholders in a company like unanimously think that they ought to pursue a decision that lessens profit by any margin in order to increase the well-being of non-stockholder stakeholders by any bit then he would find that acceptable provided it's what the stockholders want.

So I think that the benefit for the Friedman approach

comes down to something I said earlier about it being very easy to calculate who is a stockholder and also to calculate the weights at which their concerns can be addressed.

You either are a stockholder or you aren't.

This is binary.

If I get

notices from companies in which I hold stock saying we're having our annual meeting this year.

You can come vote if you want,

right?

And when I go vote at the stockholder meeting, I know exactly how much my vote is going to count.

It's going to count by exactly how much stock I own, right?

So there's a very clear decision procedure for the stockholder theory about what a firm should do.

Now, that isn't to say that this is going to guarantee that the firm's decisions are invaluable.

I don't think that they are.

But it does provide a clear decision procedure.

And if we assume something like, well, markets generally function pretty well, then we could also think that a lot of the firms that make really bad decisions are going to get weeded out.

These are background assumptions going on in the Friedman model, as far as I'm concerned.

The stakeholder theory, on the other hand, it's very unclear who is a stakeholder.

And it's also unclear whose

interests ought to count for how much.

And so it becomes very unclear how to even make a decision.

And when it's unclear like this, this actually usually necessitates this kind of decision being made either like dictatorially or by like the government.

And so I think that given these two models, I don't think either is perfect, but I do think that the first model

tends to work better and result in what we might call, ironically enough, the best outcome for stakeholders.

Whereas

in the

second term, I think the second approach is much more open to being gained by things like regulators.

even by things like

the CEO,

the CEO saying, no, I know who this the stakeholders are here.

And that's why I'm going to pursue my pet project of cleaning the river, even though it wrecks the company

or

whatever.

Yeah.

Rhetorically, I think you're right, that Friedman has the advantage in that his theory tends to be interpreted in such a way that there's less room for for gaming.

I think that's a good way to put it.

Here's where I think Friedman's

theory fails in the exact same manner though a stakeholder theory because you're right that stakeholder theory does not identify like how do we determine stakeholders and what is the weight of their preferences like that that's their big failure and there's no way to do that that's on arbitrary that's like the big problem is you can do this in small cases like I I use the example of my class like think of your wedding like who are the stakeholders in your wedding meal

It's like everybody.

Everybody who attends the wedding is a stakeholder in your wedding meal.

The company that brings the food to, they're a stakeholder, right?

Should you consider... Yeah, the companies that don't bring the food.

Should you consider the stakeholders on your decision on your wedding food?

It's like, no.

Or very rarely.

When might it be appropriate to include someone as a stakeholder in your wedding food decision?

Maybe if they're, like, deathly allergic to something in an enclosed space.

And you care about

it.

Yeah, and you care about it.

Wow.

No, no, actually, no.

I won't.

That's not necessary.

They're deathly allergic to something.

Then maybe it matters.

But notice there actually is something to the extent of, like, we do tend to believe that, like, a stakeholder can matter in something sometimes, and not other times.

Now, here's, I promise I'd say where Friedman's idea

sort of fails.

It's Friedman cheats.

And here's his cheat.

He says, So long as companies play by the rules of the game.

And then he does a great job of giving maybe some examples how you would break the rules of the game, but there's no clear defined standard by which people determine what the rules of the game are.

It's like not fraud is one example that he uses.

He doesn't say not pollution, but given Friedman's other work we can infer he thinks that pollution would be breaking the rules of the game.

But Friedman gives no clear standard by which we should decide what the rules of the game are.

who should determine them and how much weight each person's feelings about the rules of the game should be.

Now, you can make your own conjecture.

You could say the rules of the game are something like don't hurt people and don't take their stuff.

That's like a very libertarian rules of the game approach.

Maybe, but this is like you're making at that point.

At that point, you're making a moral claim, right?

And your moral claim is based on, you know, maybe you have some sort of deep reason for it, but in the same sense of like someone might have a deep reason to preference one stakeholder over another.

For the same, in the same sense, you have a deep reason to preference one set of rules over another.

So Friedman builds in stakeholder theory, as Justin pointed out, by saying things like, oh, a pollution is against the rules.

What he's saying there is the stakeholder of people who are affected by the pollution, their preferences matter more than the owner in certain cases.

And so there's actually not functionally whole lot of difference between these two and like how powerful they are in some like true sense.

I do agree rhetorically we tend to underestimate the importance of owners and companies and so it's valuable to rhetorically support Friedman from that sense.

But I think you can come to the exact same conclusions 100% of the time.

With these two theories, if you just develop the right rules of the game or the right stakeholders, I think they actually become functionally identical, as long as you don't have some standard by which to legislate what the rules are.

Alright, so I agree, I think with both of those, but well, especially Justin's with the gaming thing, leaning towards Stockholder.

theory being better, and I want to add this, and I tried to do this in the debate.

I'm not sure how successful I was, but exchange in a market system leads to what I call win-win exchanges, right?

So it's voluntary, and so both parties agree to the exchange, and the company profits, and the person who purchased the good values it at least as much as what they paid for it, and probably more.

So we get this

win-win.

And so we go to great lengths to show how a market system based on voluntary trade is more successful.

We got evidence from around the world about economic growth, and that ultimately usually ties into income, income per person, and places that do this more.

All right.

Well, this has been a production of the Gorton Institute here at Ottawa University.

I'd like to thank you all for listening.

Thank you, Dr. Peter Jacobson.

From Ottawa University, professor and head there of the Gwartney Institute, those podcasts readily available on Spotify and anywhere else is called Faith and Economics, Gwartney Institute, G-W-A-R-T-N-E-Y.

There is good news out there.

We are teaching in some spheres free market enterprise economics in American higher education.

Just follow the Javier Malay wave.

We need to be more like Argentina, both with our economic system and it looks like our legal system as well.

Guys, what a great show it's been as we bring in our closing music here.

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