WBD287 Audio Transcription
Bitcoin in the Senate with Cynthia Lummis
Interview date: Monday 14th December
Note: the following is a transcription of my interview with Cynthia Lummis. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
In this interview, we discuss how she became a Bitcoiner, her political goals, the understanding of Bitcoin within the government and the US debt and deficit.
“If we reach the point where we have overspent so much, that things start crashing down, the black swan event occurs… there is a backstop available to every government in the world, and that backstop is Bitcoin.”
— Cynthia Lummis
Interview Transcription
Peter McCormack: Senator Elect Lummis, how are you?
Cynthia Lummis: Very well, Peter. Thank you for spending some time with me today.
Peter McCormack: Well, thank you to you; you're far more important than I will ever be and it's great to talk to you. You're my first senator and first congressman I'm going to speak to, which is incredible, and the first Bitcoin senator as I believe; is that true?
Cynthia Lummis: I might be. I need to visit with Senator Kelly Loeffler from Georgia. I understand that she may have had some connections to Bitcoin in the past; I hear that third-hand so I need to, when we get together in January, learn whether that is in fact true.
Peter McCormack: Well, I know of Senator Loeffler and I know her background, but you talk about Bitcoin a lot more. I've watched some of your interviews; you're a bit more of a bitcoiner. Before we talk about Bitcoin, I do have a few questions first. Okay, what was it like winning; I mean, that must have been a huge moment?
Cynthia Lummis: Well, we'd worked at it for 18 months, so it was a long campaign. It just felt wonderful, such an honour to be the first woman to represent my State of Wyoming in the US Senate. I am a native of Wyoming, graduated from the University of Wyoming, showed cattle and sheep in 4-H and am now a rancher in Wyoming and a lawyer. But, it's just an honour to be able to represent my state which I love so much.
Peter McCormack: Do you know I've been to Wyoming?
Cynthia Lummis: Where?
Peter McCormack: I've been to -- oh, now I've forgotten the name of the place. I was there with Caitlin Long at her event. Why have I forgotten?
Cynthia Lummis: Oh, was it the Hackathon?
Peter McCormack: It was.
Cynthia Lummis: Was it Laramie?
Peter McCormack: Yes, it was Laramie; I can't believe I forgot. I've been there, I've drunk whiskey with Tyler Lindholm, I've had the best steak I've ever had in the US. I love Wyoming.
Cynthia Lummis: Well, it's a very special place. The smallest population in the United States but because of that, people here innovate, they're very independent and it grows special people; I believe that.
Peter McCormack: Yeah. I found it was probably, of all the places I've been to in America, the best representation of the America that you see in, let's say, the old films, the old American Dream, not too much government, let people get on with what they want to do. I fell in love with the place; I could live there.
Cynthia Lummis: It is very much a libertarian-leaning climate and culture in terms of our self-reliance, our willingness to help each other in a voluntary way to achieve some pretty astounding goals. So, it should not surprise anybody that Wyoming has become the leader in policy towards Bitcoin, in creating state policies that have nurtured our ability to actually charter banks that can transact banking business in Bitcoin.
We not only did that, but chartered a report that will interpret the law and hopefully build a body of law that will help guide certainly Wyoming, but hopefully other states in the nation as well perhaps, with regard to developing policy in legislation and in legal interpretations that will be used for years to come.
Peter McCormack: So, you're going to be known as The Bitcoin Senator. That's what I imagine people are going to refer to you as. But, let me ask you, could you possibly one day become the Bitcoin President; is it possible? Can we just find that out now, because I would like to think I'm talking to a future president?
Cynthia Lummis: Well, I suspect that that will not be the case, however I really want to use my time in the US Senate, in part, to help introduce the topic of Bitcoin, increase the understanding in the Senate about Bitcoin, what it is, what it does, how it can be an asset that can grow and develop as an adjunct, or basically alongside our fiat currency; and that it should be allowed a clear path, an avenue, an interstate highway in fact, to grow and develop alongside our fiat currency.
Peter McCormack: Well, Bitcoin does feel like a very American idea to me?
Cynthia Lummis: It does to me as well. If you look back in history, and I know you have, at what constituted a currency over the decades, really this period of time where fiat currency has been the go-to currency is sort of short in the grand scheme of how people have exchanged goods and services throughout history. So, the fact that something has come along now that transcends traditional fiat currency and is available worldwide for individuals to transact business among themselves, without the constraints of a fiat currency, is unique in our time period, but not unique in the history of people.
Peter McCormack: Well, it's a very unique issue, Bitcoin, in some ways; because, for big government, I sometimes see it as potentially a problem because it's a currency they can't control, they can't print, they can't really seize. They can regulate heavily, but they can't control it. And, I would always expect senators and government people to be quite fearful of Bitcoin and I think that's reflected sometimes; yet, my experience in Wyoming is that it's the perfect currency for the kind of people that live in Wyoming.
So, there is that kind of clash, because not everywhere in America is the same, right? Lots of different states treat things differently. So, you've got quite an important job to actually educate other senators about this?
Cynthia Lummis: I agree with you, Peter, that there's probably fear among people who do believe in big central governments, that Bitcoin interferes with that sovereignty, so I need to spend time with those people to help them understand how Bitcoin can function alongside a fiat currency, an adjunct store of value, in fact a better store of value than a fiat currency, in the case of US currency.
Inflation is baked into the Federal Reserve's plan for the US dollar, so it's no wonder that our buying power is eroded. And for people my age, who are entering the point in life where they're trying to live off their savings, it's terribly frustrating to have a policy where inflation is baked into the currency, because the buying power of people who are on a fixed income and want to live off their live savings, it's constantly eroded and that will not be the case for Bitcoin.
Bitcoin provides a more stable value to people either who are saving now, to live comfortably in the future, but also people who are on fixed income or approaching fixed income now.
Peter McCormack: So, are you a hodler?
Cynthia Lummis: I am a hodler. I've only bought; I've never sold; and so, I guess I am a hodler.
Peter McCormack: So, you've been excited this week like the rest of us?
Cynthia Lummis: Yes, indeed. It's been fascinating to get up in the morning and get up on my phone and ask Siri, "What is the price of a Bitcoin today?"
Peter McCormack: So, how did you discover Bitcoin and did it click for you straightaway, or did it take a bit of time?
Cynthia Lummis: It took a bit of time. I was introduced to it by my son-in-law, Will Cole, from Austin, Texas.
Peter McCormack: I know Will.
Cynthia Lummis: Oh, do you? Okay, well he was the one who introduced me to it. And, I had been Wyoming State Treasurer. I had invested our permanent funds. Our permanent funds are monies derived from the mining of oil, gas and coal. So, the concept of mining is very familiar to me, as our State of Wyoming has mining as one of the bases of its economy. I had invested the proceeds of mining oil, gas and coal for the state's future.
So, the concept of mining Bitcoin and that analogy, regardless if you're mining something out of the ground, or if you're mining something on a computer, resonated with me, even though I am not by any means internet-savvy; I wasn't a math major; algorithms and code writing is all pretty foreign to me.
Peter McCormack: Me too.
Cynthia Lummis: But, the concept of mining did resonate with me.
Peter McCormack: Brilliant, that's amazing. I know Will. Will, I've hung with in Wyoming and eaten steak with him and I've also hung out with him in Austin and watched football with him. I'm a big fan of Will; Will's a great guy.
Well, that's amazing that you've obviously got into it. I'm guessing the size of the debt, the increasing size of the debt is concerning for you; there is no path to paying it off, there hasn't seemed to be for some time. I guess that is one of your biggest concerns then?
Cynthia Lummis: It is absolutely one of my biggest concerns. I know that there is no strategy, no plan for the United States to begin to retire its debt. When I entered Congress in January 2009, we had just turned over to $10 trillion from $9 trillion in debt. We are now getting around the $27 trillion point. Congress is debating another COVID assistance bill that will probably come in somewhere between $0.5 trillion and $1 trillion, and it is money that we're borrowing from future generations with no plan to repay it.
If interest rates go up, our requirement that we first pay for interest on the national debt will soon exceed the amount of money that we spend on National Defence. That's absolutely unsustainable. So my concern is, one, we don't have a plan to retire our debt, or even begin to retire the debt and so we have to develop that plan; but alongside that, we need an alternative path, just in case we fail.
I see the alternative path as Bitcoin, because you have the ability to invest in something that has stability and a store of value; it is a finite resource. We know that there are only going to be 21 million Bitcoin mined and so its finite scarcity creates value. The integrity of Bitcoin has withstood the last decade or more and I believe it will do the same going forward and so, it's just a matter of helping people in the United States Senate and in the US House of Representatives understand what that second rail of a railroad line can provide for the stability alongside our fiat currency. I really do believe that Bitcoin will provide that going forward.
Peter McCormack: Okay, so how do you feel about some of the regulations regarding Bitcoin? Obviously, Steven Mnuchin has signalled that he wants to bring in newer regulations; one of those specifically with regards to the KYC, the Know Your Customer data, and the AML data of people using specific wallets. Obviously, the bitcoiners are not a big fan of that, because that erodes privacy. How do you personally feel about that kind of legislation?
Cynthia Lummis: I do believe that that erodes privacy and I believe it would be detrimental to the ability of Bitcoin to advance on its own path in a way that helps governments understand its capabilities, as well as individuals understand its capabilities. So, I would rather spend my time educating people in Congress about what it can do, if it's allowed to run free, so to speak, without the kind of regulation that Secretary Mnuchin has proposed.
Peter McCormack: Do you feel Bitcoin is more of a Republican idea or a Democrat idea, or do you think it's not either?
Cynthia Lummis: I think it's not either. I think it's more libertarian, if you're looking for a political home, or peg to hang your hat on for Bitcoin; I think it's more libertarian because it transcends a political party. Generally, progressives, democrats, are thought of as people who are more quick to embrace innovation but quite frankly, I've seen a lot of libertarian-leaning republicans embrace Bitcoin in a way that makes some progressives uncomfortable because again, progressives also believe in a large, central government and Bitcoin is not compatible, I believe, with regulation by a strong, central government.
So, it doesn't fit well in either category, which is yet another one of its virtues. You can't put it on a peg.
Peter McCormack: So, yeah, we just need you down there is Washington now, lobbying, creating a bit of noise, ensuring that people understand what Bitcoin is. Do you have to spend a lot of time in Washington now as part of this?
Cynthia Lummis: Leading up to being sworn in on 3 January, I have spent most of my time still in Wyoming. I went back to Senator school and so I have a temporary office in one of the Senate office buildings. We have two staffers that we're allowed to have on the Senate payroll before we even take office. Their salaries then are deducted from the amount of money that we're authorised to spend when we are sworn in. But, I probably won't spend much time there between now and January.
I do plan to go to Georgia to help campaign for Kelly Loeffler and Senator Perdue. Their elections will determine who control the US Senate, whether it will be the Democrats or the Republicans. If both of those seats go to Democrats, then it will be a 50/50 tie between Democrat and Republican Senators, but in the United States, the Vice President of the United States acts as the President of the Senate, breaks ties, and therefore the majority would go to the Democrats.
That creates, in my opinion, a really dangerous situation. I would rather see a Republican Senate to be a check on the Democrat House and incoming Biden administration.
Peter McCormack: Yeah, so it's been a really crazy 2020, obviously with regard to politics as much as anything else; a lot of division. How do you feel about that, and do you think there's a chance, following my expectations that Joe Biden will be sworn in as well in early January, do you feel like there is something that can be done to bring politicians closer together?
Cynthia Lummis: I do, and I think that the public has shown that they appreciate divided government. I see that because at the same time some people voted for Joe Biden, they also voted for Republicans in the House and the Senate. So, I think that the American public are smarter than sometimes they're given credit for; that they appreciate that government's stability comes when you have a divided government providing checks and balances, which is exactly what the Founders of the United States proposed. And so, this is it playing out.
Now, if we do get divided government where the Senate is in the hands of the Republicans, the House and the White House are in the hands of the Democrats, it will be necessary for people to reach across the aisle to make good policy. If the Democrat wins the Senate, the Democrats will not have to reach across the aisle and they will be able to impose more radical departures from what was proposed by the Founders, and I think very detrimental to the long-term future of our country, which is one of the reasons I'm going to Georgia to campaign for the Republicans. I like the idea of a check and balance on the other party.
Peter McCormack: And, what else are you looking to; what are important policies for you? I know conservation is; is that a primary issue for you?
Cynthia Lummis: Well, my State, Peter, as you will have seen, is the epitome, I believe, of people managing resources well; and that, when we have healthy forests, clean water, clean air, we can still utilise resources in a way that creates a solid foundation of stewardship for those resources. So, use of resources and stewardship of resources go hand-in-hand; they are not exclusive. And, it is important to me that we be able to utilise these resources while we maintain an extremely healthy environment, and that comes through conservation.
So, I'm a believer in, for example, having conversation easements on the ground, but to have that ground managed by individuals, rather than government employees; I think that's the preferable arrangement to ensure rock-solid stewardship.
Peter McCormack: And, are there any other particular issues that are really important to you; I know you're going to have a very busy few years, but other key issues that are particularly important for you?
Cynthia Lummis: The debt and the deficit are of huge importance to me, as we've discussed earlier. During the time when I was out of the House, from the beginning of 2017 until now, I had served on something called, The Committee for a Responsible Federal Budget, which is a bipartisan group trying to find ways to protect our fiat currency by reducing spending, or having a better match between spending and collection of taxes so we're not accruing debt every year.
The more I've learned about the path we're on, the more dangerous I think that path is. So, I'd like to find ways, for example, that we could have triggers where if we get, say, $35 trillion in debt, that that would automatically trigger Medicaid to be a block granted to states; it would trigger ways to protect social security with reforms that are necessary for it to be self-funding; and the same with Medicare, because those three programs are what are helping drive our debt and our deficit.
I also believe right-sizing what is called "discretionary spending", which is the remainder of the spending that occurs in the United States, that other spending I've just named, Medicare, Medicaid, social security and a few other things, constitute entitlement spending. We need to make sure that those are self-sustaining, at the time that we manage the discretionary portion of our budgets in a responsible manner.
Peter McCormack: The level of spend is quite insane. Our spend here in the UK is going up a lot as well, especially with Coronavirus, and our government debt-to-GDP ratio is over 100% now; I have similar concerns here. Why do you think it has got so out of hand in the US?
Cynthia Lummis: Well, I think it started when, during the war in Iraq, we took our eye off making sure we had enough money to cover what we were spending in the war. That was when we started running deficits and debt and then it took off from there. We became comfortable with the notion that we could decouple the amount of money we were spending from the amount of money we were taking in, because there was this crisis, this post-9/11 necessity, that we spend more than we take in.
Then we got complacent and comfortable with that, because then came the financial crisis of 2008, 2009, "Oh, another crisis. Well, let's overspend because if we invest in infrastructure, we can get through this". And then, it just became institutionalised to spend more than we take in.
So, during the end of the Clinton presidency and the early years of the Bush administration, we had reached a point where things were getting really aligned; our spending and our revenue. Now, there's a complete departure. I'm over-simplifying this, but Democrats want to tax and spend; Republicans want to borrow and spend. The only thing they have in common is spending and so what do we do? We spend too much.
Peter McCormack: That's why we need Bitcoin, right. All right, I'm conscious you've got a hard stop soon. Hopefully, at some point, we can do this again, hopefully in person when the planes are flying. Just as a closing point and for a message you would want to give to all other senators out there regarding Bitcoin?
Cynthia Lummis: Well, I would ask the other senators to spend some time with me and people who have expertise about Bitcoin. I think it will increase their comfort level with Bitcoin; it will increase their comfort level with allowing it to develop unabated by government restrictions; and take its rightful place as a store of value that's available to everyone in the world.
And, that its existence actually provides a stabilising mechanism for worldwide exchanges of goods and services, as well as a great store of value, and that we then can -- it actually frees us up. It's kind of something that frees governments up to say, there is a backstop, if we reach the point where we have overspent so much that things start crashing down.
The Black Swan event occurs with regard to any fiat currency, whether it's ours or yours or China's or Japan's; there is a backstop available to every government in the world, and that backstop is Bitcoin.
Peter McCormack: Well, I think as a Bitcoin community, we're very lucky to have you as a senator in Washington at some point fighting for us. Thank you for speaking to me today. I wish you the best and I hope we can do this again sometime?
Cynthia Lummis: Let's do. It's been my pleasure and I look forward to learning more about Bitcoin from you and what you see as its future. Is it going to become a world reserve currency? Which countries will provide it the best avenue to grow to its full potential? These are the kinds of things that I think people like you can advise me about, and that would be a helpful discussion for me as well; so, keep that in mind, Peter.
Peter McCormack: I'll keep that in mind and I'll have a chat with Will as well, and perhaps the three of us can get together and have a steak and chat about it! Well, take care, lovely to meet you and I hope to see you soon.
Cynthia Lummis: Thank you, Peter.
