HH: I’m pleased to welcome to the program now the Governor of South Carolina, Mark Sanford. Governor, welcome to the Hugh Hewitt Show.
MS: My pleasure, thank you.
HH: Governor, we’ve been talking about the stimulus package for the last three weeks, and I decided this week to talk to governors about whether or not they need it and want it. What’s your estimate of what the United States Congress is about to do?
MS: Make a big mistake, a mistake that would prolong, deepen and exacerbate the economic downturn that we’re in, one that would stack debt on top of debt, which is never the way of solving a problem created by too much debt. It is one that would rob my four boys, your kids, grandkids, go down the list, of a part of their future, because somebody has to pay this stuff back, and in the near term, one that could well tip us over the edge in really devaluing the value of the dollar such that it undermined every bit of economic stimulus that supposedly has taken place over the last year.
HH: Now both of your senators, Lindsey Graham and Jim DeMint, have been out there throwing bricks at this, and eloquently so, I might say. But it doesn’t seem to be registering. And I mean, we did this in the 70s. We tried this, we ended up with stagflation, high inflation and no growth.
HH: Does it seem to you like we’re just reliving the 70s at this point, Governor?
MS: Yeah, and the only saying is he who doesn’t learn from history is destined to repeat it. I mean, you look at the 70s, you look at what happened in the 1930s, you look at what happened in Japan in the 1990s, the pages of history, of economic history, are littered with examples wherein countries got ahead of themselves, and rather than taking the tougher medicine, they tried to Band-aid over it, and all they did was frankly dig that much deeper a hole.
HH: Now Governor, were you opposed to the TARP bailout in the winter?
MS: I was.
HH: Now I was in favor of that. Do you think that there is a limit to how much paper we can print here? Or do you just expect President Obama to keep printing paper with green on it?
MS: Oh, he may keep printing paper with green on it, but the question is who’s buying it? You know, 49% of all the Treasuries that are bought are bought by folks from outside of our country. And at some point, if you print enough of anything, if you are an artist, and you had a reprint of your famous painting but you printed not a hundred proofs, but you printed another thousand, another thousand after that, and another thousand after that, and another thousand after that, at some point, people would say you know, this thing just isn’t as valuable as it once was, all these reprints, because the first limited edition of a hundred may have had some value. By the time you get to 10,000 reprints, it’s not the same picture. And the same is true of currency, or for that matter, anything in life. If it is duplicated, duplicated and duplicated, it has less in the way of scarcity value. And so we are at a scary tipping point in undermining the value of the dollar, and what needs to be remembered is this exact thing happened in Argentina in the 1920s. It happened in the Weimar Republic between World War I and World War II in Germany, wherein it took a wheelbarrow load of currency to buy so much as a loaf of bread. You could get to a very scary spot real fast based on this running of the printing press.
HH: And how soon do you think we see inflation begin to manifest itself, Governor Sanford, in the economy of the United States?
MS: I couldn’t give you the day or the week. If so, I guess I’d be very, very wealthy. But all I know is that reality is something that doesn’t disappear. And so what we do know is the byproduct of what we’re doing right now at some point will produce inflation. Exactly when, I don’t know.
HH: All right. Now Governor, in terms of what the stimulus actually has, what’s it offering, if anything, to South Carolina?
MS: Well, there’s a pretty good sized bribe on the table, $2.1 billion dollars. But it comes with strings attached, and that’s the whole irony. Everybody’s saying we’ve got to do this, we’ve got to do this, we’ve got economic slowdown, we’ve got to do this. But oh, by the way, on the money that we do give to stimulate the economies of states, there are going to be lots of strings attached, that you really can’t get to the money unless you jump through a whole bunch of hoops that require you spending more money that you don’t have, or locking in certain spending levels that frankly aren’t worth locking in. And so $2.1 billion is the number, but for instance, to be eligible for the higher ed funding, we’ve have to spend another $104 million dollars in a tough budget year on higher ed to be eligible for the funds. To be eligible for the payroll portion of the bill, we would have to do something we’ve never done as a state before, and that is to increase unemployment benefits to part-time workers. Now mind you, this is from an unemployment fund in our state that has already borrowed $140 million, and want to borrow another $170 million from the feds. So I just say fair size check at first blush, but when you get down to it, A) a lot of strings attached, and B) you need to remember what the Congressional Budget Office said, and what it said was a lot of this money won’t be spent even in the first two years after this bill is signed. How does that fit with it being a “stimulus” bill to do something “now?”
HH: Now is there any shovel-ready product, as they like to say? That’s the new cliché that just showed up in the last couple of weeks, shovel-ready projects. Have you got any of those in the Gamecock State?
MS: I’m sure we do, but the question is, how many? And you know, watching somebody talking the other night on television, they’re talking about, you know, even with a shovel-ready project, you still have to get environmental permits, you’ve still got to lock in your contracts, you still have a lot of things that are a time delay, which is the whole break in logic that people are up in Washington, and he’s now making a campaign across the country saying we’ve got to do something now, oh, by the way, but for projects that won’t actually put money into the financial bloodstream of America for quite some time. If you’re really serious about that, just cut the payroll tax, give every working guy and gal across America money coming right back into their pocket in the here and now. Don’t delay, don’t wait, don’t create projects to get the money through. But it really comes down to control. Folks in Washington want to pick, again, winners and losers, who wins, who doesn’t, and choose how the money gets distributed. I think that’s a real mistake.
HH: Now generally speaking, what is the South Carolina economy like right now?
MS: I mean, we’re not immune from anything going in other parts of the country, so we’ve got a high unemployment rate, and people are struggling. So it’s not as if we wouldn’t like the money, but you’ve got to recognize the big string that’s attached, which is who pays this money back? And so yeah, for every dollar we get, we’ve got to give away $99 dollars to other states, and we’ve got to pay that part, too. So one, who pays the money back? And two, do we really begin to go to a spot we’ve never gone to before as Americans? I made the comment the other day, I was doing some television show, and I said you know, if you really look at what we’re moving toward, it’s a savior-based economy. And by that, I mean if you think about Zimbabwe or Russia or Venezuela, what matters in those countries is not how good your product is, or how you meet the needs of the customer. What matters is what’s your tie to the guy at the top, because if you’ve got that, you’re going to be just fine, and that is the hallmark of sort of savior-based economies. But think about the power that we’ve granted to the Fed and to the Treasury over the last number of months, I mean unprecedented levels of power, and the deal is okay, if you’ll just take care of this problem for us and make it go away, we’ll give you unbelievable amounts of power. But you get to pick the winners and the losers. Picking the winners and losers out of Washington, D.C. has never been what made this country great.
HH: All right, Governor, you’re pretty senior in the Republican Party. A lot of people look to you for leadership. And we’ve got three Republican Senators who slammed the door on making this a real stimulus as opposed to a Porkapalooza. I don’t know if you know Arlen Specter or Olympia Snowe or Susan Collins. What do you think is going on in their mind?
MS: You know, the classic Washington two-step wherein okay, I’m going to get some stuff for my state, and what do I care if it ain’t that great for the taxpayers as a whole, because I get to strike a deal, and I get some juice. So I don’t know where it is in the earmarks, but I guarantee you there’s some goodies for every one of their respective two states. And you know, call an ace an ace. I happen to be a Republican, but more than a Republican, I’m a conservative. And with all due respect to them, I wouldn’t put them in the conservative category. We need more folks that are not just Republican in name only, but will walk the walk with regard to actually watching out for the fiscal sanity of our country, because if not, we’re going to have huge problems well beyond what we’re fighting with regard to this stimulus and what comes next in the economy.
HH: Are you happy with the rest of the Republicans and the way that they’ve organized the opposition in D.C, much diminished in numbers, but much more unifies, it seems, to most of us?
MS: Yeah, I mean, I said it was a pleasing new development. I with it would have been around the last eight years as folks went wild spending money in Washington, D.C., when Republicans frankly were to blame on that front. But better late than never, I guess is the old story, and so I’m absolutely pleased that they’re doing it.
HH: Last question, Governor Sanford. Are the Republican governors all on the same page when it comes to this?
MS: Not exactly, but there are a number of us who feel very strong, and we’re making our voices heard.
HH: Governor Mark Sanford of South Carolina, thanks for joining us.
MS: Yes, sir.
HH: Look forward to having you back early and often during the Obama years, one of the governors who are making the Republicans come together around some very, very extraordinarily well-understood, deeply-held convictions about what makes sense fiscally in this country, and it does not mean this stimulus.
End of interview.