Koch Grand Strategist Lays Out Long-Term Strategy (FULL transcript)

AUDIO OBTAINED FROM SOURCE WHO WAS PRESENT.

HIGHLIGHTS:

[youtube https://www.youtube.com/watch?v=tnHDliL9FcM]

FULL REMARKS:

[youtube https://www.youtube.com/watch?v=q_FCDbCV940]

OPENING SESSIONS

June 15, 2014

SPEAKER:

RICHARD FINK

"The Long-Term Strategy: Engaging the Middle Third"

P R O C E E D I N G S

KEVIN GENTRY: Okay. Well, to round out this before we break, I'd like for Richard to come forward, and for those if you (inaudible) Rich has always played a role, sort of grand strategist. He helps us understand the path to get there. So Charles has started off by laying out the vision, and Victor Davis Hanson has helped us understand the nature of the threats we face. Will has helped us understand that there's a path there (inaudible) for a better life. Rich is going to tell us how to get there.

And as we all know, we stumbled upon the Thomas Jefferson (inaudible) for liberty (inaudible). That's always frustrating, so, Rich, (inaudible), right? So drumroll, please. Take it away.

RICHARD FINK: (Inaudible). That's something I always think about (inaudible). That's the definition of (inaudible). That was one of my bets (inaudible).

(Laughter.)

(Applause.)

RICHARD FINK: (Inaudible). It makes life worth living. If you don't have (inaudible). (Inaudible) They're really something special.

(Laughter.)

RICHARD FINK: So as Kevin summed up, Charles and Drs. Hanson and Ruger talked about what are our choices, okay. Here is the choice of collectivism, which as we see (inaudible) in the world today leads to devastation to the population. And wonderful for the rulers, but terrible for everybody else. We're a free society, and everybody has an opportunity to benefit and to live their lives as they choose to live.

So where do we stand now? Let's take a quick look about America on this debt. We've got $16 trillion in debt on a net times value basis. We've got $200 trillion in unfunded liabilities with no idea how we're ever going to meet -- pay those off and meet those obligations.

The labor participation ratio is the lowest in decades, and that's extremely important. Labor participation ratio. That means more and more people are out of the labor market. And as I talk today, you'll see how critically important it is because a job is a critical form of earned success and feeling good about yourself.

We're increasing dependency programs in almost every dimension. This Administration has gone nuts about handing out money they don't have, promising favors to people, the government's failure to (inaudible). In just about every area, you name the government agency that isn't screwing something up. The Federal Reserve depreciating the currency. The Post Office running billions of dollars' worth of deficits. The IRS is completely corrupt, losing emails, the Veterans Administration, K through 12 education.

You know, with our decline, which, is obvious to the rest of the world in almost every dimension, foreign leaders are now emboldened to do things that they would otherwise not do. So you'll see the Russians now invading Crimea, planning to take over Ukraine, and basically trying to recreate the Soviet empire. China is becoming more aggressive in Asia. The Middle East, of course, is a (inaudible) on that. Increased terrorism, focused on, on (inaudible) and killing Americans. And as Will pointed out, any journalist worth his salt knows the most important defense is a strong economy.

While this is happening, what are domestic leaders, domestic collectivists doing? They're attacking free speech. They're trying to destroy the dissidents. We have a speaker of -- we have a President of the Senate who has 200 times trashed really Charles and David Koch (inaudible). You'd think he might spend a little time focusing on some of those other problems, okay? He changed the filibuster rule to pack the courts. Mark Holden will talk about that tomorrow. And they're trying to amend the Constitution to ensure their continued dominance. So we live -- we live in a very, very dangerous time.

But I am not depressed because I believe that we are at a point, at a crossroads. Like Victor Davis Hanson said that (inaudible). Our decline is becoming more and more palpable to Americans across the country. And while they're not particularly intrigued with some of their alternatives, they recognize that we need to do something fundamentally different, and therein lies an opportunity.

And that opportunity is you, and you, and this seminar network because we are in the best position to challenge the collectivists and to turn this country around. We are the most credible threat that the collectivists have. Don't believe me. Let's look at what they do.

Who are they attacking? They are spending more time attacking the Kochs and this seminar network than any other group in the country. Is that by accident? No, it's because they understand that we are the most credible threat to their continuing destruction of the American Dream.

So how are we going seize this opportunity? Well, let me -- let me present a diagram which I promise you I won't give you a (inaudible). Liz, I promise I'm not going to do this. But this is the integrated (inaudible) production which I shared with you during the first half of today that those who are returning have seen many times. We have built the most effective set of institutions, individuals, and ideas for the side of liberty that has existed during my lifetime. Now, it's still (inaudible) opposition, but this offers our best hope.

So we have been focusing on, as you know, educating and mobilizing people that are conservative and libertarian that believe in freedom, which has been critically important to our successes in beating cap and trade, and in turning the House of Representatives around. And while we did -- we were very successful in 2010, the electoral process. We got our clocks cleaned in 2012. We're going to get our clocks cleaned again. This is a long-term battle, but there's a lot of activity going on for 2014 in regards to the Senate that you'll hear a lot about Monday morning.

So let me tell you -- reiterate what Charles said. Okay. The two-year cycle -- the focus on the electoral process is a necessary, but not sufficient, condition for a win. And to the extent that we are overly consumed with the electoral process, that is a long-term losing strategy.

And I'll show you this picture, and I won't spend a lot of time on it. But I want you to tell me where Democrats and where Republicans have really controlled the government, and where we've decreased government spending, where we've increased free enterprise, okay? You understand? We don't know. As a matter of fact, some of the Republicans (inaudible) increased government a lot faster and a lot greater than previous Democratic Administrations.

So believe me, we need better people in government, and we're working hard on it, but it's not a panacea. And we can blame politicians about it, and we won't argue (inaudible) about politicians. But the ultimate responsibility is with the people, okay, because politicians are responsive to the people in the ultimate end (inaudible). When you lose touch with your constituency, you pay the price. It's not a perfect system, but that's what we need to focus on in addition to what we're -- what we're doing.

So let's take a look at what that exactly means. We need to have -- for long-term success, we need to get a majority of active Americans, okay, to understand the need (inaudible) for a free society. Now, I'm thinking 50 percent, 51 percent majority, but we need a margin of error there. It's a very uncertain and complex process. So we need to reach 60 percent of people who understand about freedom and who understand about collectivism.

Let's take a closer look at that. These are just rough numbers because everyone's got their own data. But roughly a third of this 60 percent of active Americans, okay, are very conservative libertarians, and we've been very successful in mobilizing them. And that's why we win mid-term elections. That's why we can defeat cap and trade, almost defeated Obamacare even though the Democrats held the House and Senate (inaudible). The collectivists have about a third, and they believe that growing government is the ultimate solution to all of our problems and (inaudible) very clearly.

The battle for the future of the country is who can win the hearts and minds of that middle third. That middle third is not ideologically unified in a way that the freedom, or the conservative, or the collectivist third is. So this is a combination of different ideas and different philosophies. But whoever can mobilize a majority of that 30 percent will determine the direction of the country.

So the thing (inaudible) we wanted to spare you a 20-minute dialogue about this strategy, put together a two-minute video that'll be a lot clearer than my 20-minute rant on this. And I'll tell you now, because we want your dollars invested in very effectively a fight for freedom, we couldn't hire a professional narrator, so we found one who would do it for nothing. And it's a third rate narration, but he really was the cheapest one we could find.

(Video presentation.)

CHARLES KOCH/NARRATOR: "The national conversation today is dominated by divisiveness: class warfare, government (inaudible) attacks on free speech and other constitutional rights (inaudible). We need great people today to drive the national conversation who want to help people improve their lives and have Americans working with each other to solve (inaudible) problems.

We support this effort through hard facts, (inaudible) leveraging science and universities (inaudible). We support a network of (inaudible) who will vote (inaudible). That's an opportunity. (inaudible) so people can understand our impact the (inaudible) lines that are removed. That's what state think tanks and citizens have to achieve (inaudible) to work with global decision makers to advance policies that help people put value in themselves (inaudible).

By doing this, we will mobilize (inaudible) in support of the movement for well-being (inaudible) and focus on intensive efforts (inaudible) people are most receptive to a message of freedom. We can instill (inaudible) and in doing so, create the conditions to impact the federal government. If we are successful, there will be enough (inaudible) support to not only drive state policies, but also to elect a majority of freedom advocates in the House of Representatives and the U.S. Senate, and we need 317 electoral votes to elect a president who will advance (inaudible). The future of America ultimately depends on having a majority of educated and active citizens who understand and support a free and prosperous America."

(Applause.)

RICHARD FINK: Hired for nothing. (Inaudible). So our sessions this afternoon are going to focus in depth on those, the first few stages of that strategy. We have panels for each one, and Monday morning we'll focus on the fourth, the impact of the Federal government.

But I want to talk to you about something that I am very, very excited about, and I think (inaudible) as I've kind of alluded to. And I -- let's focus on the middle third. I think we're doing a pretty good job on the third set of freedom and libertarian conservatives, but we've got to reach the middle third. And I want to talk about three different topics that I think are critical for reaching the middle 30 -- the middle third -- I'm sorry (inaudible).

(Laughter.)

RICHARD FINK: And that is intent (inaudible) this is going to sound a little strange, so you'll have to bear with me for this -- intent, well-being, and meaning, and I'll explain that throughout the process. But one thing is intent, or intention, as Charles articulated in his comments last night for those of you who were here, is absolutely critical for this middle third. And for the, for the (inaudible) third it is somewhat less critical because they see the results of (inaudible). They see better houses, better clothing, better products. But intent matters to this middle third.

And throughout western civilization, intent has been extremely important. So we say you have intent. Well, the road to hell is paved with good intentions, right? Well so is the road to heaven, okay? So, so intent matters.

In the criminal justice system, to commit a crime you have to have knowledge and intent. There's a reason for this. When you have a complex state in the legal system, the jury can struggle with the law. What do they do? They try to figure out who's got the white hat, who's got the black hat, and they try to rule based on the well intentions (inaudible) Mitt Romney won on leadership. He won on the economy. He won on experience. What did he lose on? He lost on care and intent. Intent is extremely important.

So remember -- I've brought in a really simple little diagram to try to illustrate this. On the horizontal axis I've got failure in terms of advancing well-being and success. Everybody with me? Okay. On the vertical axis, I have good intent or (inaudible) intent. Okay. So this is about the middle third based on focus groups, based on meetings. Many of the people in the middle third (inaudible). I've kind of put this generalization together. So this not a complete science, so don't kill me.

But basically the middle third understand that fascists and communists are both, generate sadness and they're -- have bad intent, so they understand Stalin and Lenin and Hitler and Mao. Not everybody in that group, but basically they do. They have a sense of (inaudible), okay? But for liberals, they say, you should ignore all the liberal programs, haven't worked out that well, but we mean well, and that's important to me, they care about me. They want to do good things. What do they think about big business? Big business they see as very suspicious. Okay, yeah, they produce great products. They do all the wonderful things that you all talk about -- housing and clothes. You've got a lot of stuff.

But you know what? They're greedy. They don't care about the underprivileged. They don't care about people who don't have the same opportunities. What do they say? What do people like you say? I grew up with pretty much very little, okay. And I worked my butt off to get what I have. So, I see (inaudible) on the street (inaudible) I said, listen, get off your ass, and work hard like we did. We did it; you can do it, okay? We did it. That's what we did, okay. They've got (inaudible).

What this middle third sees is something very different, the people in the younger generation, okay, who have benefited from our productivity, our large -- our largesse. They go to good colleges, they have cars, they have decent houses. (Inaudible) now and they say, I'm not born into opportunity. I haven't really earned it. It was my generation. And why does (inaudible) not have it? They feel guilty about it, so they -- intent to them is not just opportunity for themselves. It's opportunity for other people. It's very important.

We talk to people about (inaudible). Yeah, we want decrease regulations. Why? It's because we can make more profit, okay? Yeah, cut government spending so we don't have to pay so much taxes (inaudible). There's truth in that, you all know, because we're in the 30 percent of the freedom fighters. But the middle part of the group doesn't see it that way. And who wins this country is whoever can get in that northeast quadrant. Who has got both success and good intent will drive the country because they'll drive that 30 percent.

It's going to be a lot easier for us because the liberals, to be successful in added-value is extremely difficult because their programs fail, okay? That's a lot harder. We're doing the hard stuff. We're actually producing well-being, but we've got to convince these people that we mean well, that we intend, and that we're good people.

Okay. Let's talk about one way we're going to do this, and that is our focus on well-being. Our focus -- when we focus on decreasing government spending, over-criminalization, decreasing taxes, it doesn't do it, okay? We've been reaching the third by telling them what's important -- what we think is important should be important to them. And they're not responding and don't like it, okay? Well, we get business -- what do we do? We want to find out what the customer wants, right, not what we want them to buy. You know, I'm one of those people in my narration (inaudible) give me a million dollars to narrate. What's the market pay? Zero.

(Laughter.)

RICHARD FINK: So we need to understand what they do. And what we've done is we took 20 years of objective research of left, right, middle scientists, and we've looked at 170,000 surveys of people around the world, in the United States -- they were all people in the middle -- and what they think is important. And what they think are important is summarized by these six categories. And I won't spend a lot of time on this because there is a session on Monday afternoon, for those of you who want to explore this in depth, I recommend that you go. But the problem is that session is at the same time there's a value added event. We're going to talk about how we're going to bring this to the -- to the middle third, so you're going to have to make a choice there. If you're a couple, I say one go to one, one go to the other (inaudible).

So here's this opportunity. People want opportunity, this third, the middle third, for themselves, for their neighbors, for their communities. Okay. They want a strong, healthy -- they want health, they want a clean environment, they want high living standards, they want freedom. We're talking economic freedom. They want political freedom, religious freedom, and (inaudible). So we've been only hitting on one out of four cylinders in that area. Community relationship is extremely important to them, and peace and security is as well.

So I talked a little bit about opportunity, but peace and security is also important to them, and it's an area we haven't focused on, and it's not just international security from terrorism or whatever. They're really worried about a free country, okay? They're worried about a police state, and drive down the street, and to go to their cars. And that's where we're talking with people to understand that problem, at the same time to prevent people from getting into a life of crime, providing them real opportunities and make their neighborhoods safe. And we'll talk about that on the next panel.

Okay. So what is -- the last one we're going to talk about meaning, and that's the meaning of life. And this is something that I've actually thought a lot about for four years. Matter of fact, it's one of the topics that (inaudible) constantly and mankind has wrestled with this since the beginning of time, and that is the meaning of life.

So let's talk about what the collectivists do to the meaning of life. They take people and they tell them that you're a victim and the American Dream no longer exists. The people who built those businesses, they built it on your backs, but they're getting the majority of the share. And if you know anything about psychology and about people who have "victimitis," they are the most -- they are the most (inaudible) depressed, unproductive people. They become depressed, they become addicts, or they become aggressive. You take two young children that grow up in horrible circumstances. The one that blames other people for it, tends to stay there. The one in the worst circumstance in the world that doesn't blame people, that works to build themselves up, tends to be very, very successful.

So when you destroy someone's meaning by making them a victim, okay, you actually destroy their purpose of life. And psychology shows that is the main recruiting ground for totalitarianism, for fascism, for conformism, when people feel like they're victims. And what we do is we take away their jobs or their independence. So the big danger of minimum wage isn't the fact that some people are being paid more than their valued-added -- that's not great. It's not that it's hard to stay in business -- that's not great either. But it's the 500,000 people that will not have a job because of minimum wage, because there is no such thing as a dead end job. As Martin Luther King said, "(Inaudible) every job is an opportunity." Okay (inaudible).

And now what to do with them. We're taking these 500,000 people that would've had a job, and putting them unemployed, making dependence part of government programs, and destroying their opportunity for earned success. And so we see this is a very big part of recruitment in Germany in the 20s. When the Germans were crushed by World War I, the Allies put a very strong settlement on that. They lost their meaning in life.

And if you look at the Third -- the rise and fall of the Third Reich, you can see that -- they're fighting, the (inaudible) they don't know what to do, whatever. And what happens is a fascist comes in and offers them an opportunity, finds the victim -- Jews or the West -- and offers them meaning for their life, okay? The nation, Germany, the superior race.

(Inaudible) and professors and people who do the most horrific things, and this is not just in Germany. It's in Russia, in Lenin, and Stalin Russia, and then Mao. This is the -- this is the recruitment ground for fascism, and it's not just historical. It's what goes on today in the -- in the suicide bomber recruitment. It's not just these young kids who don't know what to do. They're looking for, you know, something.

We had in our seminar here a number of years ago an Egyptian doctor. I don't know if those of you here met him. But he was recruited to be a suicide bomber by Al-Qaeda, and he signed up. He's a doctor. He was an (inaudible) in Egypt. Why would he do that? I asked him why would you do that. Now he had the brain to not put on the vest and he ran to the States. But he said, I just don't (inaudible). He said, I thought I was successful just (inaudible) offered me during the battle (inaudible) gave my life meaning. And that's how I was recruited and a lot of my wealthy -- successful people were recruited. Meaning is extremely important.

It's (inaudible) in the United States. The environmental movement. Occupy Wall Street. These kids are searching for meaning.  They're protesting the one percent. They are the one percent, but they're protesting the one percent. The environmental movement and climate change. It's not about climate change.

I studied climate change for six years. I can't figure it out, quite frankly. Charles is ahead of me on this. I'm not a climatologist, but I'm not completely stupid. I can tell you I meet with people, particularly in California, that are convinced the world is going to burn up in you know, a year or two. They don't know the answer -- they don't even know the question, because it's not about climate change. It's about a cause. It gives their life meaning. And Harrison Ford is a great example of this. Harrison Ford said, I knew coming out of (inaudible) a kind of God. And he's now a radical environmentalist climate alarmist (inaudible).

So the meaning is extremely important, and there's a battle for meaning, okay? If these people become dependent, if they lose meaning in their life, if you put them on government programs, you put them on welfare, and you take away their job opportunities, we'll lose the country.

Viktor Frankl focused on meaning with those who have chemical addiction. And his success in getting people off of chemical addiction was 400 percent higher than any other competing therapy because all he focused on was helping people find meaning for themselves. You can't give someone meaning. You have to help them find it for themselves.

Here's a couple statistics on this. Ninety percent of alcoholics are not psychologically built. They see their lives as without a purpose. Same too with addicts, same percentage. Eighty-five percent of students who attempted suicide said life (inaudible) meaning. What's interesting is 93 percent of that 85 percent of those students are actively engaged socially, performed well academically, and had good terms with their families. So by the university's standards, they were well adjusted. They were -- they were exactly the people who you think would not commit suicide, or attempt to, but they did. Why? Because they lacked meaning. They lacked purpose. They didn't know what life was all about, whether it was worth living.

In surveys of, of students, 68 percent of all students in the United States -- well this is (inaudible) to show that the highest goal was developing a meaningful philosophy of life. Sixteen percent of students said their highest goal was making a lot of money. Seventy-eight percent of students said their highest goal was finding a purpose. And it's not just students, and alcoholics, and addicts. (Inaudible) workers. 1,532 workers were asked what's important to you in a job. Good pay came in fifth. Fulfillment came in first. And that's why Charles has that as one of our principles at Koch Industries. Fulfillment in your job is critically important.

Here's one that surprised me. There was a study of Harvard grads 20 years after they graduated, of a hundred Harvard grads all successful on Wall Street -- doctors, lawyers, and what else, made a lot of money -- by all stretches of the imagination were highly successful. An overwhelming percentage of them said they weren't sure if the success was worth it. They weren't sure why they worked so hard and what did it mean.

And this goes back to the definition of "mid-life crisis." It's a lack of meaning in peoples' lives, and it affects all aspects of society. And in America right now, we're in a situation where we're living in a society where people have enough to live by, but nothing to live for. They have the means, but no meaning. In the past, in history, people every day had to get up to fight to survive to win (inaudible), for clothing and whatever. To them, meaning was survival, okay? And if you look at collectivist institutions, the institutions that have arised or developed over time to give people meaning are almost all the ones they target. Meaning is (inaudible) family.

If you look at most of the collectivist policies, they attack the family. They attack marriage, okay? You get a (Inaudible) on welfare if you're married. If you're single, you get more money, okay. They attack business. They attack religion (inaudible). Why do they attack religion? Because that was giving people meaning, and if people have meaning, they're not going to be (inaudible) to big government collectivist policies.

So what do we offer the middle -- the middle third with our freedom approach, with our well-being approach? We can work with them, okay, on issues that are important to them. One is we offer them an opportunity to pursue their dreams as they see them, not as some government official sees them, and we maximize the opportunities there. We offer a higher standard of well-being than the world has ever known for themselves, for their families, and for their neighbors.

But most importantly, we offer them the opportunity of not being a victim, of not being dependent, of not being depressed, not being mad at everybody, but of cooperatively working with other Americans to advance their earned success in their jobs, their communities, in any area that they think is important to them. That's what a free society offers. And that's what we need to be focusing on, and that's what we're spending a lot of time trying to develop. Now, we're not completely there, but that's what -- a very big part of what we're doing, okay?

If we can solve this problem and make this successful, I believe this seminar group will occupy that northeast quadrant, that we know -- not only be able to see (inaudible) results to our free market activities, but also earn the respect and good feeling through that middle third. I think you going to hear that with some of our partnerships with the United Negro College Fund, with the National Association of Criminal Defense Lawyers, and the other programs that we're developing.

So let me close because I'm running out of time (inaudible) go a little bit over, but this is so absolutely critical. And I'm going to ask for your patience and if you don't give it to me, I'm going to (inaudible).

(Laughter.)

RICHARD FINK: So this is extremely important, okay? And I want to close by sharing with you another Frankl quote, and I need you to (inaudible).

(Laughter.)

RICHARD FINK: (Inaudible) because I don't want you to get hurt, okay?   And you'll see why in a minute. What (inaudible). So I talked about what "meaning" is for the middle third. Now, I want to talk a little about what "meaning" means for us. To fully appreciate this quote, I'm going to ask you to go on a journey with me. So I'm going to ask you to please close your eyes, and for those of you that are standing up, I'd ask you to lean against the wall because I don't want anyone falling (inaudible).

(Inaudible) early morning (inaudible) you get out of the shower, you walk over to the sink (inaudible) in a moment of inner reflection, you ask yourself about how you have spent your life and how you will spend the rest of it, the meaning of your life. It doesn't matter if you're a professor, an activist, a mom (inaudible). What matters my friend, is the answer to this question: is my life what (inaudible)?

So I'm hoping that part of your answer to that question is like mine. And that is a big part of the meaning for my life is fighting collectivism, which has impoverished and murdered more people in the last hundred years than through all of past civilization. The fight for a free society that offers their fellow man the ability to advance their well-being to take care of themselves and their families, to a greater extent than has ever existed in the history of mankind.

We will offer a moral system where people advance to the extent that they help other people. So my father told me to look in the mirror over 50 years ago (inaudible) Father's Day. I ask you to not (inaudible). My father told me to look in the mirror, and he said every time you look in the mirror, you (inaudible). And I was thirteen (inaudible).

So when I look into the mirror (inaudible). I saw my family. I saw my spirituality. I saw the Koch family. And I saw the seminar people as representing the meaning in my life. So I want to thank you for being part of the fight for freedom. I can think of no better way to spend my life. And I hope you agree with that and devote yourself to (inaudible).

(Applause.)

(End of session.)