Sept. 14, 2022

584: What Venezuela Can Teach Us About Inflation

On today's episode, I'm joined by Jorge Jraissati, Director of Alumni of Students For Liberty, to talk about the impacts of inflation and what we can learn about inflation from his home country of Venezuela.


Inflation. What is it? How does it impact people in different countries around the world?

 

On today's episode, I'm joined by Jorge Jraissati, Director of Alumni of Students For Liberty, to talk about the impacts of inflation and what we can learn about inflation from his home country of Venezuela.

 

Inflation is a phenomenon that impacts everyone differently depending on their circumstances. But in the end, it always comes down to money—and how much you have, or don't have. It's really important to understand how inflation happens so that we can prepare ourselves for the future and plan accordingly.

 

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Transcript

Brian Nichols  0:04  
The focusing on winning arguments. We're teaching the basic fundamentals of sales and marketing and how we can use them to win in the world of politics, teaching you how to meet people where they're at on the issues they care about. Welcome to The Brian Nichols Show. Happy Wednesday, they're trying to come here on The Brian Nichols Show. Ken, thank you for joining us. For another fun filled episode. I am as always your host. And today we have a guest on the program who's joining us all the way from Spain. Yeah, you're ready for that could be a lot of fun. But before we get there, I want to go ahead and get a shout out to today's sponsor, folks, if you want to go ahead and jump headfirst into the Liberty liberty movement and help elect pro Liberty candidates across the country and make a real impact. I have a great, great opportunity for you here Young Americans for Liberty is currently recruiting campaign field staff to help elect pro Liberty candidates across the country as part of Operation win at the door. These principle kids are dedicated to fighting for gun rights, keeping our troops home parental rights and education, criminal justice reform, ending our sensible spending in many other winning Liberty policies. And when I say winning, I mean their work speaks for itself. These are the guys that gals that helped pass constitutional carry in Indiana, Texas, and Alabama fought the lock downs every step of the way, all while helping make Liberty wins. So you want to help make a difference and get Liberty candidates elected across the country. Well, hey, how about if you want to be part of a fight that actually makes an impact in our insane political climate here in 2020 to vote you can join one of these campaigns now through November 8, gas covered housing fully provided and you'll be compensated a total of 20 $100 a month for your efforts on the campaign trail interested? How did Brian Nichols show.com forward slash ya ll to apply and make a real change in this country today? That's Brian Nichols. show.com forward slash ya l let's make liberty when let's make liberty when not liberty in liberty. When one more time Brian Nichols show.com. Forward slash why al folks, that's just the beginning of the I thought today I live in a message for a prospect when I was doing my sales job. And I said, Hey, happy Friday, and I want to stop and just start to cry. You know, it's Wednesday. And for today's episode, I'm so looking forward to today's conversation. Joining us all the way from Spain from Students for Liberty liberty, Jorge Gera Sadie, welcome to The Brian Nichols Show. Thank you, Brian.

Jorge Jraissati  2:34  
Thank you for me. So almost Thursday, so almost Thursday,

Brian Nichols  2:37  
I know it's late night here on Wednesday night, right? Exactly, yes. What time is it

Jorge Jraissati  2:43  
there is more than 11pm.

Brian Nichols  2:46  
God bless you. Thanks for joining the program. Hooray. I'm really excited to dig into this because you're approaching things today from not just the lens of an economist, but you're also joining things through the lens of someone who is approaching our American debacle from an international perspective, and some context of living through a lot of what we already are going through right now. So let's start things off, give you a chance to introduce yourself to The Brian Nichols Show audience and then obviously your roles over at Students for Liberty.

Jorge Jraissati  3:16  
Yeah, sure. I'm from Venezuela. So that's why you say that we have experienced many of the issues of for example, some Americans are facing right now. For example, the issue of inflation is something that we need to take on the control. Because we know in countries like Venezuela, or Argentina, or many developing countries, like the effects of inflation, inflation suddenly harms the people who need the money to loans. It's a policy that is very regressive. And it's something that the American public needs to talk about, because it's something that has to be fixed, are the Students for Liberty, and the Director of Alumni. And what we do is that we work across the world trying to spread and advance the ideas of a free market was a rule of law of democracy. For example, we have activists in 117 countries, we have almost 3000 activists. And again, what we do is to spread the ideas of a free society, the ideas that make people prosperous that yes, they give dignity to people, because I joined the movement. And I know you want me to ask a little bit about my background. I joined the movement when I was 16 years old in Venezuela, because I wanted to be free. I did not want it to live in a dictatorship. I did not want it to live in a country where human rights are not respected. So I remember joining, going to protests, talking about ideas, going to the people, talking to them why having political freedom is so important. And then when I moved to the United States, I went to university in the United States. I realized that also much my story and our experience can be useful for Americans in the sense that it gives you motivation. And also it gives you a wake up call, in the sense that these ideas can be apply everywhere. When it's Well, I used to be a rich kind of prosperous country, I used to be a democracy. And now we are in humanitarian tragedy. So basically what we have to do is to tell this type of stories is to study which specific public policies were implemented in countries like Venezuela. So we avoid future of Venezuela. So we avoid future in which other countries go through this kind of human suffering. For example, in my country, 5 million people had to leave. And it's a number of very cold number. But imagine how many families were broken? How many families are completely divided? Because of the mysteries of socialist policy spring? Yeah,

Brian Nichols  5:43  
well, and folks, if you want to go ahead and check out one of our old episodes here in the program, all the way back to 20 2018. I think it was we had it was the episode, the tragedy in Venezuela with my good friend from college, Hillary Andalus, Aguilar, and we talked about what she saw in her life, you know, and it happened so quickly, right, where and that's what I think is so important to discuss. And that kind of goes into what we want to talk about today. Because you can go from a country where things are going pretty, okay, if not, to your point, pretty good. And then in a heartbeat. The proverbial crap hits the fan. And you saw that in Venezuela, and I don't want to put the red flashing lights on. But are we starting to see that you're in America? What are your thoughts? Well, I hope, I hope

Jorge Jraissati  6:35  
that things get under control. But I think that's the citizenship has to be active. Because as you say, things kind of fall and things can unravel so quickly. So that's why we need an active citizenship that defends the ideas or defend the policies that we need to, you know, advocate for, before things get into a really bad situation. People think that the time to fight oppression is when you see oppression, no, is before is to be prevented. For example, in a country like mine, we don't have elections, we don't have human rights, we don't have economic freedom. So the time to defend these ideas is not what you lose them is before. So you don't go towards that.

Brian Nichols  7:23  
Yeah, how profound it is to stand up before it's too late. I have family that, uh, so they've married in to some Hispanic family, and they've mentioned how they've seen live. And you mentioned, the families, the number of families who have been crushed over the past how many decades of these more socialist movements across South America, for example. And a lot of these folks, especially here in America, that they are, you know, first second generation remove. They're not they're not on board with this, they see the creeping socialism, and they're rejecting it entirely. And I mean, did the Democrats misplay their hand here, I think he looked back to the Obama approach in 2012. And beyond where he was going to start playing more of this identity politics coalition game, and then bringing that to the table thinking that, well, we're going to have all these, you know, these Hispanics, we're going to be coming into America moving forward, and they're going to just naturally vote Democrat. That's not the case, it's actually proven to be in many cases, the exact opposite. And I think it's freaking a lot of them out.

Jorge Jraissati  8:25  
And it's really interesting, because people tend to think that, for example, the Venezuelan society is very socialist that says, similarly, the immigrants, and when you talk to them, they're really the most intrapreneurial ones. They're not, they're the ones who really believe that the ones who have the chance to improve their future, and they don't need to wait for a politician. And beyond that, you asked me whether the US was going towards the same direction of Venezuela. And of course, we need to be careful with the magnitudes of like a humanitarian disaster. And a problem that, for example, is occurring in the US, let's say the problem of high inflation. In terms of policies, there is a big gap. However, something that I think we need to be careful, is the type of ideas and the type of narratives and rhetoric that is establishing the political elite. Because that's I think, when you can see some similarities, for example, this narrative against against the wealthy, or this narrative against companies or against profits, this narrative that, for example, profits is the cause of inflation is completely misguided. And not only that, it can create a lot of issues. Because if, for example, you have politicians like Elizabeth Warren, she's saying that corporate greed is the reason that then you have inflation. Then, of course, the natural tendency, if people believe in that is to advocate for more business regulation, and is to advocate for policies that will make the problem even worse. because all economists we know that the reason that inflation is rising in the US is not because of corporate greed is also not because of all our external factors. It is really because of an increase in the monetary supply an astonishing rates between the stimulus programs that have been enacted in the last couple of years, the US stimulated the economy by $3.4 trillion, this magnitude of bond increase have not been seen in percentage of GDP, since the Great Depression, since, you know, since the Roosevelt years. And if you compare that to the amount of output, for example, was lost during the pandemic, this stimulus is over three times that. So it's not to compensate the pandemic is really a stimulus program of money creation of fiscal looseness, that the only result is really inflation. And we have seen that that's something that again, all economists agree there is no really at the empirical debate on that. Then when people talk about, for example, the fact that Russia has on this, and of course, he has some effects. But again, we economists have tools to measure that. And the tools, what they, what they say, is that the overwhelming percentage of inflation, it comes from internal factors, specifically, and increasing the money supply that is chasing lets less goods. And of course, the prices rise, especially at prices that hurt the people the most, which again, which is food, which is essential needs.

Brian Nichols  11:43  
So to use a silly analogy, the crack in the dam was there. And instead of using cement to seal it up, it seems like we went ahead with a sledge hammer and just started to smack at that crack. And now the proverbial dam has cracked the monetary just flooding the markets has just exorbitantly hit our inflation skyrocketing right now. So now I guess that since the dam is broken, what do we do? Like what what can we do to try and rein in the inflation before it crushes people more than it already has?

Jorge Jraissati  12:22  
Okay, so when you tell us what kind of we do, okay, let's start by what the policymakers should do. The policymakers should be very responsible in saying that, if the cause of inflation is really an excess in the monetary supply, if we are overheating, the economy, overheating the labor market, overheating the price mechanism, then what they have to do is to increase interest rates. Again, that's standard economics, something that all economists agree, then the degree of doing that, and the mechanism of doing that can vary. But that's what they have to do. All the other solutions, such as trying to limit profit margins, or blame corporations, or blame external factors, they will not resolve the issue. In fact, they will create more uncertainty in the market. So that's what the policymakers have to do, and especially the Federal Reserve has to do. From a citizens perspective. There is to be a campaign, that is to be a communication campaign, to explain to people that when you have crisis, like the pandemic, for example, you need to be very, very careful which solutions do you apply, because the solution can help you the short run, but then at the long run, you have other issues or even worse issues. Because what is going on right now is that, sadly, the price of inflation will be paid by the middle class by their workplace. They are the ones that will see their salaries diluted. They are the ones that have the biggest budget constraints. So when they go to the supermarket, that is much more difficult for them. They're the one who have their savings, not in the stock market, or not on real estate, but on savings in the bank, that there have been depleted. And the worst part of it is that when the Federal Reserve eventually raise interest rates, then the recession will continue in the US, and the first jobs that are lost, or those jobs are more vulnerable with people. So basically, what we have to do is to explain that, that's why really the concept of fiscal balance of fiscal responsibility of monetary responsibility. That's why it's so important. It's not just an intellectual concept that we use in classrooms. No, it's something that affects real life with real people and have real consequences. And I think that's what we have to acknowledge.

Brian Nichols  14:51  
Well, and thankfully, there's great organizations out there who not only acknowledge it but are helping fight back and we need to not only encourage us support of those organizations. But I would say full throated Lee go and endorse them and participate in them. We mentioned one of them. Today's sponsor for the episode Young Americans for Liberty, I was down at revolution 22, down in Orlando, Florida back in August, had a great time got to meet literally 1000 plus student activists. And then what's happening here, October 14, and 15th, something very similar Liberty con, but rumors you might have around 4000 or so Liberty activists attending.

Jorge Jraissati  15:30  
Yes, you were to go national, we have in Miami, of the Hyatt Regency. And for example, inflation is one of the topics that we will discuss will bring experts and policymakers will bring activists as well. So we all talk about it, and we find solutions. So we have a big event in the US, which is called Liberty calm, we'll have an email. And all of you are welcome, really all of you who are interested in these ideas, because what you will find is a community of people, you know, people like me, people who are deeply interested, and people who are, you know, at midnight, doing an interview to talk about these ideas, because they're really matter. So we'll talk issues such as inflation, we'll talk issues such as socialism in Latin America, or the rise of authoritarianism, or populism, and also issues such as the drug, drug war, and how we can make, you know, much more smarter policies in that regard. And you know, also how technology can also help us to advance freedom. And, you know, here are our Students for Liberty, we have 3000 activists all over the world, some of them will come, you'll be able to meet them, talk to them, because I think that's something that we have to those who believe in freedom is to be connected to work, which is to go to conferences, and to, you know, join forces, because that's the only way to really, we can advance freedom. So at Liberty comm we will do that. We have people from all over the world, people from Venezuela, from Iraq, people from Iran, people from Russia, people from also the Western Hemisphere, that we also have issues in countries like the US or in Western Europe, because we need more vibrant economies. We need much more societies that embrace markets like the US too. So yeah, that's a big given that we have. We have many interesting panels. We have people coming from all over the world. All of you are more than invited.

Brian Nichols  17:24  
All right. Well, Jorge, with that being said, time for some final thoughts here for today's episode. And with that being said, I think my final thoughts I started things off are that it's exciting to know. And frankly, to see that not only is the corporate media wrong about who the liberty movement is, but we got verifiable proof, because the narrative is the liberty movement is the racist, the white nationalist. And that's the caricature that's created. But when you look at who's actually in the liberty movement, you look at organizations like Young Americans for Liberty, or Students for Liberty, and you look at Liberty con, right, you're gonna have 4000 student activists, and liberty activists from across the country of all different ways of life, from different creeds, nationalities, race, ethnic ethnicities, it doesn't matter. And that's the beauty of Liberty, Liberty ideas is that they transcend the isms, they transcend the things that we think matter. But frankly, don't what really matters is liberty and the personal autonomy and individuality that comes with that, that allows us to be our best selves for our communities. So that's my final thoughts for the audience today. Jorge, what are yours for folks to take away from the episode? And of course, final thoughts?

Jorge Jraissati  18:44  
Yes, I would like to reiterate when to say, what is delivered. When a join, for example, Students for Liberty a few years ago, I did it because I remember that I was trying to find a place that could help me fight for the Esri belief, and could find a place with people that could support me, I could join me into this idea that I have to have a free and democratic country, a free and democratic Venezuela. And these people that had never been to Venezuela, but maybe I'm the first Venezuela, you know, they told me, yes, you know, let's work together, what is important you want to help you? And, and your idea, are also more ideas. And I think that's delivered to me. What do we have in common? What to, for example, all of us are Students for Liberty, having coffee. We believe in freedom of speech. We believe in economic freedom. We believe in political freedom. And we believe in open societies in which we are tolerant with each other, in which we hear each other and in which we find ways to cooperate peacefully, and that we can build better societies which there is no born, in which you know, which we don't have a political system that runs people's life. So I think that's the liberty movement, and we have people Like you, for example, were devoting your show to talk about these ideas. Because again, these ideas change, like they fundamentally change the life of millions of people. If you're born in the US, then you have many, many opportunities that people from my country do not have. And I think that's what we need to cherish. That's what we need to understand. And that's what we need to defend these ideas that can make prosperous life possible. And never forget that the majority of people in this world live in places where there is not free, live in places where there is not opportunities, and to these people, who not only need to help them have freedom, but also preserve the freedom of the countries that are pretty happy. So that was my final thoughts. And again, I would like to help you, and all of you are interested in joining the movement. Go to Students for Liberty and go to our website, go to social media, interact, engage in any way of shape or form that you want. Because we need you because without you we have people committed to the ideas, then there is no future.

Brian Nichols  21:06  
Amen. Well, folks, if you enjoyed today's episode, I'm gonna ask you do me a favor number one, go ahead and give today's episode a share. When you do please go ahead and give yours truly a tag at being Nichols liberty and make sure you get Jorge A tag as well. And for you folks there who are playing along with a home game, don't worry, we'll make sure we include it. In the show notes. All you got to do click the artwork and your podcast catcher, it'll bring you right over to the Brian Nichols show.com where you can find today's episode, you can find the entire transcript from today's episode. And oh yeah, by the way, you can find all 583 other episodes we have here of the program, which goes back to Jorge's point. Yes, what we're doing on here the other program, it is definitely a labor of love. So if you get some value from The Brian Nichols Show, I'm gonna ask you to do me a favor, head over to the Brian Nichols show.com forward slash support, and you can either a become a superfan $5 a month you get monthly one on ones with yours truly, we're not really one on ones they're more question and answers. But if you're there in the Patreon, you will more than likely have a close very close to a one on one environment. So there's that but also you get some Mystique behind the scenes behind the scenes stuff. And then also if you're like, No, I'm gonna do the $5 a month thing. No worries, we can do a one time Pay Pal donation every bit helps. It goes right back here into The Brian Nichols Show to help us have amazing folks like Jorge, who's joining us, oh my gosh, God bless you from Spain, Madrid, Spain, and it's so late. So here's what we're gonna do, folks, we're gonna go ahead and give, give Jorge the rest of his evening back so you can go you actually get some sleep. And when that folks, if you enjoy the episode beyond giving it a share, please go ahead and support Students for Liberty. They're an awesome organization Liberty con, I'm so excited for you guys. Unfortunately, I will not be able to make it this year because I was literally just down at Young Americans for Liberty. But I'm so excited to hear about what you guys have in store for next year. If we didn't get a part of that we'll see. But otherwise, folks, we'll make sure we include the links there for Liberty con, October 14 through 15. In the show notes, it's a month away literally a month away today, so make sure you get your tickets fast. All right. Thank you for joining us, folks. Thank you for joining us as well. And with that being said, Folks, if you enjoyed the episode again, go ahead and make sure you give it a share. But with that being said Brian Nichols signing off, you're on The Brian Nichols Show.

Unknown Speaker  23:17  
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Transcribed by https://otter.ai

Jorge Jraissati Profile Photo

Jorge Jraissati

Director of Alumni of Students

Bio: Jorge Jraissati is the Director of Alumni of Students For Liberty, an international network with over 2,800 freedom activists in 117 countries. Jorge’s work is focused on establishing alumni initiatives aimed at advancing liberal democracy and economic development in several countries. Jorge is an economist by training; he does research about the Venezuelan crisis at IESE Business School. Jorge’s work has been presented at universities like Cambridge and Harvard and published at places like Foreign Policy and Oxford University Press.