ALL RIGHT, TAKE A LOOK AT WHAT'S

HAPPENING IN THE LOWER RIGHT

PORTION OF YOUR SCREEN, A

SELLOFF GOING ON.

THAT KIND OF THING CONTINUES,

AND MY NEXT GUEST WORRIES ABOUT

SOLUTIONS THAT COME OUT OF OUR

NATION'S CAPITAL BECAUSE

INVARIABLY WHEN STOCKS GO

DOWN -- NOT SO MUCH WHEN THEY GO

UP -- THE GOVERNMENT TRIES TO

GET INVOLVED AND E TRIES TO HEAL

THE PROCESS.

IT IS A WELL-INTENDED SORT OF

PATTERN ON THE PART OF

WASHINGTON, AND HE WRITES VERY

WELL ABOUT IT IN DISCRIMINATION

AND DISPARITIES OUT TOMORROW.

ITS NOTED AUTHOR, WHO WE'VE HAD

ON ONCE OR TWICE ON THIS SHOW,

THOMAS SOWELL.

THOMAS, VERY GOOD TO HAVE YOU.

THANK YOU FOR TAKING THE TIME.

>> THANK YOU FOR HAVING ME.

NEIL: LET'S GO FIRST, IF YOU

DON'T MIND, I DO WANT TO ATTACK

SOME OF THESE NEWS DEVELOPMENTS,

THE BIG SELLOFF GOING ON ON WALL

STREET.

AND IT COULD BE SHORT-LIVED, BUT

DAY'S END IT COULD BE GONE, BUT

INVARIABLY WE HAVE SEEN

WASHINGTON INTERVENE WHEN IT

SEEMS TO THINK THAT PEOPLE HAVE

BEEN POORLY TREATED OR UNFAIRLY

TREATED.

IT'S A BIG THEME IN YOUR BOOK.

NOT THE MARKET PART, BUT ADVISE

VISE PEOPLE ON WHAT HAPPENS WHEN

THEY OWN STOCK AND WHY THE

GOVERNMENT MIGHT NOT WANT TO DO

THAT.

>> WELL, YOU KNOW, KARL MARX OF

ALL PEOPLE ONCE SAID THAT THE

CRACK-BRAINED MEDDLING BY THE

AUTHORITIES CAN MAKE ANY CRISIS

WORSE.

SO IT'S NOT JUST PEOPLE ON THE

RIGHT WHO CRITICIZE GOVERNMENT

INTERVENTION OF THE KIND THAT

THEY HAVE.

I'VE NEVER TRIED TO PREDICT THE

STOCK MARKET, THANK HEAVENS --

[LAUGHTER]

NEIL: YOU'RE A WISE MAN.

YOU'RE A VERY WISE MAN.

YOU KNOW, THOMAS, ONE OF THE

THINGS WE TALK ABOUT THE

GOVERNMENT'S ROLE HERE, THE

PRESIDENT, AS YOU KNOW, IS

TRYING TO EXACT CONCESSIONS FROM

THOSE WHO HE SAYS HAVE BEEN

DUMPING STEEL AND ALUMINUM ON

OUR SHORES, AND THEY'RE

RESPONDING IN KIND NOW

THREATENING TIT FOR TAT ACTION

THAT COULD GO GLOBAL.

I KNOW YOU HAVE CALLED THESE NOT

SO MUCH TARIFFS, BUT TRADE-OFFS

BACK AND FORTH.

DO YOU WORRY THAT THIS THING

GOES OUT OF CONTROL?

>> OH, ABSOLUTELY.

I HAPPEN TO BELIEVE THAT THE

SMOOT-HOLLY TARIFFS OF 1930 HAD

A LOT MORE TO DO WITH THE GREAT

DEPRESSION THAN THE STOCK

MARKET.

UNEMPLOYMENT WAS NOWHERE NEAR AS

LOW THE FIRST YEAR AFTER THE

STOCK MARKET AS IT WAS IN THE

FIRST FIVE MONTHS AFTER THE,

THOSE TARIFFS WENT IN.

AND IT'S LIKE MANY KINDS OF

WARS, IT IS VERY EASY TO START

THOSE KINDS OF WARS, IT IS VERY

HARD TO STOP THEM.

BECAUSE THEY GET GROWN

COMPLETELY OUT OF CONTROL.

THE IDEA THAT WE HAVE TO HAVE A

BUDGET SURPLUS, THAT THAT'S

BETTER THAN A DEFICIT, IS

COMPLETELY CON TOWER TO --

CONTRARY TO WHAT ALL THE

EVIDENCE SHOWS.

DURING THE GREAT DEPRESSION IN

THE 1930s, WE HAD TRADE

SURPLUSES.

IT DIDN'T DO US A BIT OF GOOD.

DURING THE PROSPERITY OF THE

1990s, WE HAD TRADE DEFICITS

THAT DIDN'T HURT THE PROSPERITY

AT ALL.

THIS IS A NUMBER THAT THERE'S

LESS TO IT THAN MEETS THE EYE.

NEIL: ALL RIGHT.

WELL, THAT WOULD BE NEWS TO THE

PRESIDENT WHO'S MADE IT A CAUSE

IS CELEB.

DO YOU THINK IT'S A MISTAKE THAT

HE FOCUSES SO MUCH ON --

>> OH, ABSOLUTELY.

NEIL: GO AHEAD.

>> CONCEIVABLY, A CATASTROPHIC

MISTAKE DEPENDS ON HOW FAR HE

WANTS TO PUSH IT IN DEFINES OF

WHAT MORE -- DEFIANCE OF WHAT

MORE EXPERIENCED PEOPLE AROUND

HIM MAY BE TELLING HIM.

NEIL: YOU KNOW, THE REASON WHY I

KEPT ECHOING THAT THEME WITH

HIM, I'VE BEEN READING A LOT OF

THE EUROPEAN PRESS, THE ENGLISH

VERSIONS THAT I GET, AND A LOT

OF THEM HAVE BEEN SAYING ALMOST

TO A PUBLICATION THE PRESIDENT

IS UNLEASHING SOMETHING HE MIGHT

REGRET.

YOU SEEM TO AGREE.

>> YOU CAN'T, YOU CAN'T CONTROL

IT.

NEIL: YEAH.

>> WHEN YOU START IT, AND YOU

CAN'T STOP IT.

AND THAT'S THE BAD PART.

IF THIS IS SOMETHING HE COULD

PUT IN AND AFTER A MONTH OR TWO

HE SEES IT'S NOT WORKING, HE CAN

STOP IT.

NO, BY THAT TIME IT'S ACQUIRED A

LIFE OF ITS OWN.

OTHER COUNTRIES WILL ALREADY BE

TAKING RETALIATORY MEASURES, AND

THE NET RESULT IS ALL THE

COUNTRIES PUT TOGETHER ARE GOING

TO LOSE BECAUSE IT'LL CUT DOWN

THE TOTAL VOLUME OF

INTERNATIONAL TRADE AS THEY DID

IN THE 1930s.

NEIL: YOU KNOW, I ALWAYS SEE

GOVERNMENT AS SORT OF LIKE THIS

GIANT, WELL-INTENDED BEAST, AND

I DON'T MEAN TO DISPARAGE IT,

BUT YOU DO IT FAR MORE

ELOQUENTLY THAN I DO, WHERE IT

TRIES TO CORRECT ILLS THAT IT

SEES.

SOME VERY OBVIOUS, SOME MAYBE

NOT SO OBVIOUS.

BUT THE GOING AGAINST THE GRAIN

OF COMMON SENSE, YOU MENTION

EARLY IN YOUR BOOK AND I'M

QUOTING HERE, IN NATURE AS IN

HUMAN ENDEAVORS, THERE CAN BE

MULTIPLE PREREQUISITES FOR

VARIOUS NATURAL PHENOMENON.

AND THESE MULTIPLE PREREQUISITES

CAN LIKEWISE LEAD TO VERY SKEWED

DISTRIBUTIONS OF OUTCOMES.

IN OTHER WORDS, WHAT WE TRY TO

FIX, WE CREATE A BIGGER FIX,

RIGHT?

>> THERE IS THAT, BUT THERE'S

THIS INVINCIBLE FALLACY THAT IN

THE ABSENCE OF SOME SPECIAL

PROBLEMS, PEOPLE WOULD HAVE

PRETTY MUCH THE SAME KINDS OF

ECONOMIC AND OTHER ACHIEVEMENTS.

AND THAT DEFIES THOUSANDS OF

YEARS OF HISTORY.

THERE ARE SO MANY FACTORS

INVOLVED THAT FOR ALL THOSE

FACTORS TO COME TOGETHER THE

SAME ONE GROUP IS FOR ANOTHER IS

VIRTUALLY IMPOSSIBLE.

AND YOU CAN COMPARE ANY KIND OF

GROUPS FROM AROUND THE WORLD.

AND I SOMETIMES THINK, YOU KNOW,

IF BLACK AND WHITE AMERICANS