Speaker 1: Why from ball Hartland and the Crossroads of America.
Speaker 2: It's Tony Katz today. So the only question is who
Speaker 2: controls the strait? Well, I guess maybe the only question
Speaker 2: is are we actually still at war with Iran?
Speaker 1: If nothing is happening?
Speaker 2: Well, maybe the only question is what is actually happening
Speaker 2: to begin with?
Speaker 1: Who's doing what? When we're why?
Speaker 2: And how can we get at least a straight and
Speaker 2: honest answer. Not what I want, not maybe what you want,
Speaker 2: and we could possibly be in conflicts.
Speaker 1: I love you either way, But what is actually happening?
Speaker 1: What is the goal?
Speaker 2: What is the objective of the United States, of the
Speaker 2: Iranians of the Middle East? And how do we get
Speaker 2: what we want? And does that mean somebody else has
Speaker 2: to get what they want? Tony Katz, Tony Katz today,
Speaker 2: Good to be with you. Stephen Yates joins us right now.
Speaker 2: You know his work over there at the Heritage Foundation.
Speaker 2: Now his focus is China and China policy and China relations.
Speaker 2: But because of that he has had a lifetime of
Speaker 2: understanding world relationships and how this geopolitics works, including from
Speaker 2: his time in the George Bush White House with Vice
Speaker 2: President Cheney. Let's break it down a little bit, Sir.
Speaker 2: I hear from President Trump that we control the Strait
Speaker 2: of ourmus one hundred percent, There's no question about it.
Speaker 1: I hear from the.
Speaker 2: Iranians or whomever it is speaking for the Iranians that
Speaker 2: they control the strait one hundred percent. I have got
Speaker 2: very little in terms of tankers going through the strait,
Speaker 2: and I have got oil that has been back above
Speaker 2: eighty dollars in some places, eighty five dollars a barrel.
Speaker 1: Stephen Yates, who controls what well Tony?
Speaker 3: I think we've got a sort of perfect muddle to
Speaker 3: a degree, both sides telling the truth, especially from their
Speaker 3: point of view. And so the imperfect picture that we
Speaker 3: can put together is that there's more shipping traffic transiting
Speaker 3: the Strait of Hormouse and oil and natural gas coming
Speaker 3: and going from the non Iran destinations than is being
Speaker 3: accounted for by private trackers. That's partly due to signals
Speaker 3: being turned off on those vessels for security purposes and
Speaker 3: being escorted by the US military, and so the US
Speaker 3: government sources have higher numbers of the ships coming and going.
Speaker 3: In fact, over the last weekend, talking about at numbers
Speaker 3: that pre date the war and those the drop off
Speaker 3: that has held for several several months. So on the
Speaker 3: one hand, that's true. Militarily, we definitely have control of
Speaker 3: the Strait, and we definitely have Iran pinned in. On
Speaker 3: the other hand, they are still completely capable of engaging
Speaker 3: in economic terrorism. And what I mean by that is
Speaker 3: all it takes is one off threats here or there,
Speaker 3: occasional attacks here or there, and it completely shapes the
Speaker 3: behavior of your adversary. Those adversary could be the insurance
Speaker 3: companies that jack rates so that ships don't want to move.
Speaker 3: That adversary could be regional actors that recoil and try
Speaker 3: to pressure the administration to engage in concessions and endless
Speaker 3: negotiations that by time for recovery. But this is the
Speaker 3: textbook definition of terrorism. You use the threat and reality
Speaker 3: of occasional force in order to get an outsized political, economic,
Speaker 3: or other strategic reaction out of your targets. And that's
Speaker 3: what leads to this stalemate.
Speaker 2: Let's take a step back in something you said, because
Speaker 2: I don't think people understand and I don't claim this
Speaker 2: is my area of expertise. We have more tankers that
Speaker 2: are going through because they're turning off the trackers walk
Speaker 2: me through how that works well.
Speaker 3: For though, there are apps that you can go to
Speaker 3: on the internet, and there are certainly high priced commercial
Speaker 3: services that will give you very very clear data. And
Speaker 3: that's when everyone's sort of GPS signal is on, and
Speaker 3: then they can sort of like air traffic control, can
Speaker 3: see where every flying object is or seafaring object is.
Speaker 3: In this case, we're looking at the seafaring objects, and
Speaker 3: for both safety and the economics of scale of tracking things,
Speaker 3: they will have signals that you can be able to
Speaker 3: detect where these lumbering objects are that go on the sea.
Speaker 3: They're weighed down so heavily. I don't even understand the
Speaker 3: physics of how they float, much less move, but as
Speaker 3: they go they have signals on. So for security purposes
Speaker 3: of like going stealth, if you're in the air, you
Speaker 3: have all things turned off, and that's dangerous if you
Speaker 3: are at risk of bumping into things. But if you're
Speaker 3: being escorted by a military force, then you have less
Speaker 3: of that safety concern. So those international services are not
Speaker 3: in fact able to track where all of these vessels
Speaker 3: are when they are cloaked, or to have their signals
Speaker 3: turned off, and so some things are moving. Do I
Speaker 3: believe that they are moving at pre war levels? That's
Speaker 3: hard to fathom. You think that more of that would
Speaker 3: be seen and you would see more of that reflected
Speaker 3: in the markets. At the same time, as you noted
Speaker 3: the price of oil being in the eighties, that's way
Speaker 3: down from the one hundred plus of the panic rates.
Speaker 3: It's not down to sort of the fifty to seventy
Speaker 3: range that was sort of pre war, but it's ticklishly
Speaker 3: close to that, which tells me some things are moving.
Speaker 3: Whether it's the diverted fuels or whether it's the escorted ships.
Speaker 3: Some things are moving. So we're not seeing the picture,
Speaker 3: which fails the first rule of politics in my book,
Speaker 3: which I learned from TV. So it has to be true.
Speaker 3: It's not enough to do good. You have to be
Speaker 3: seen doing good. And it's hard for the war everyday
Speaker 3: Americans and even market analysts to see the good that's happening.
Speaker 2: You know how heavy that statement is, right, because you're
Speaker 2: talking perception versus reality. And this is where people who
Speaker 2: want to be all Trump all the time and people
Speaker 2: who want to be all against Trump all the time
Speaker 2: fail in the conversation talking to Stephen Yates to the
Speaker 2: Heritage Foundation. Because perception is reality. You're not wrong when
Speaker 2: you discuss where the oil prices are. We're not at
Speaker 2: one hundred and ten dollars a barrel, but when you
Speaker 2: tell me oil's got to be at seventy five dollars
Speaker 2: a barrel in order to be like, hey, look how
Speaker 2: oil prices are down. Gas prices are down. Everything's good,
Speaker 2: and we're at eighty five dollars a barrel. And we
Speaker 2: saw it go up because Iran is saying to the
Speaker 2: United States, forget you, We're going to do whatever we want.
Speaker 1: That is seen.
Speaker 2: That puts the president in a position I view of weakness,
Speaker 2: of perceived weakness. Never mind the idea of this back
Speaker 2: and forth. We control the straight, No, we control the straight.
Speaker 2: But go back again for a moment. You talk about
Speaker 2: it in insurance rates, and you talk about escorts. On
Speaker 2: the idea of escorts. This is I think where a
Speaker 2: lot of people have been. How is it possible that
Speaker 2: we don't have a series of destroyers just lined up
Speaker 2: on both sides of the strait. How have we not
Speaker 2: gotten the Saudis and others to line up some forces
Speaker 2: on both sides of the strait, and we just make
Speaker 2: sure that nothing gets through. We make sure that the
Speaker 2: tankers get through, that the Iranians can't do nothing. They're finished,
Speaker 2: they're complete. We do it by force. So when you
Speaker 2: talk about escort, this is what.
Speaker 1: People are asking, how is this not happening already?
Speaker 3: And mass It's a painfully clear and appropriate question for
Speaker 3: which I don't have a good answer, because it's exactly
Speaker 3: what I would have done months ago, and I think
Speaker 3: we have the capability to do so. I think we
Speaker 3: have been clear that our governing ethos is to press
Speaker 3: the free riders of the world that you are going
Speaker 3: to have skin in the game. You are going to
Speaker 3: put fuel in the tank. You are going to this.
Speaker 3: We are helping you, and you are going to pay
Speaker 3: for us helping you. And part of that is you're
Speaker 3: going to share some of the risk. We're not going
Speaker 3: to stand out here as the only targets. You're going
Speaker 3: to stand shoulder to shoulder in doing something that ensures
Speaker 3: freedom of navigation for you to thrive and your people
Speaker 3: to be safe. That is the way I understood that
Speaker 3: Trump Great Realignment was meant to be. It's something I
Speaker 3: am million percent agree with and strongly support. I think
Speaker 3: we have done some of those things, but we aren't
Speaker 3: doing enough of those things, and we aren't being seen
Speaker 3: doing enough of those things, and that, I think is
Speaker 3: the challenge. We have to move in that direction for
Speaker 3: this to be sustained. And I think that there is
Speaker 3: a way to not just spin a win, but for
Speaker 3: there to be a real transformation that people can be
Speaker 3: proud of and can hold and is worth it. But
Speaker 3: we aren't doing enough of what you just said that
Speaker 3: I completely agree with. Things should have been done long ago.
Speaker 2: Talking to Stephen Yates the Heritage Foundation Heritage dot org.
Speaker 2: His focus is China policy, but his history is that
Speaker 2: of full geopolitics in the region, whether it be the
Speaker 2: Far East or the Middle East. I am somebody who
Speaker 2: believes that we should have taken out the regime. And
Speaker 2: when this first took place back in February, you were
Speaker 2: the first person I was texting with.
Speaker 1: You were the person I was reaching out to. I
Speaker 1: was preparing for a live.
Speaker 2: Event, and I was trying to get data from you
Speaker 2: to understand exactly what it was that I was seeing here.
Speaker 2: And I certainly believe then that taking out the regime
Speaker 2: is I think job number one. And when I talk
Speaker 2: about how the president is viewed here, and I know
Speaker 2: that the president does not like to be viewed as
Speaker 2: weak at any level in any.
Speaker 1: Place, there is a view here that he is.
Speaker 2: Because you can only talk about Iran can't get a
Speaker 2: nuclear weapons so much. In the end, you have to
Speaker 2: end the regime that is trying to achieve this goal,
Speaker 2: and they may still be working at it if everything's possible.
Speaker 2: You know, right now, you can't say they can't have
Speaker 2: a nuclear weapon then leave and all of a sudden
Speaker 2: a centrifuge starts spinning up. Legacy is shattered. And this
Speaker 2: brought up a conversation that I had with Leland Vidder
Speaker 2: of News Nation about the idea of will the IRGC
Speaker 2: the Iranians have the will to hold out and the
Speaker 2: United States doesn't have the will. I don't believe that
Speaker 2: in Toto, because I haven't seen whether or not the
Speaker 2: president will or won't. All I know is he's not
Speaker 2: doing the bombings, but he's still around, and he's still there,
Speaker 2: keeping to an extent his powder dry and waiting to
Speaker 2: see what happens. Is this a willpower fight? Is this
Speaker 2: about political wills? Is this about whether or not the
Speaker 2: president has the stomach for this, whether this.
Speaker 1: Is really in his desire in his wheelhouse.
Speaker 2: Where do you think the real battle is in terms
Speaker 2: of ideology between the GC and where President Trump is well.
Speaker 3: I think first there's a caveat for how to even
Speaker 3: talk about this. I think we have to be careful
Speaker 3: to fall into the traps of all or nothing kinds
Speaker 3: of lenses, because it's just not the way the world is.
Speaker 3: It's not the way warfare is, and it's not the
Speaker 3: way this mix of forces and pressures and other kinds
Speaker 3: of activities is going to play out. The war is
Speaker 3: always a bit about will and capability, and sometimes patients
Speaker 3: and patients can often be mistaken for weakness. It can
Speaker 3: be weakness, it can be appeasement. But it depends on
Speaker 3: what the ultimate aim is and are there measurable results
Speaker 3: in a reasonable period of time, And what is reasonable
Speaker 3: is subjective. That comes down to politics, domestic and international.
Speaker 3: So what I mean by all this gobbledegook I just
Speaker 3: sort of spewed out here is that the president has
Speaker 3: some very powerful things in place that we're not in
Speaker 3: place for the decade plus from the Bogus Iran deal
Speaker 3: to the present, we have maximum financial pressure in place.
Speaker 3: We've gone after bank accounts that matter in very serious,
Speaker 3: real and impactful ways. We have a blockade in place
Speaker 3: that has having a real and meaningful impact on the
Speaker 3: coffers of the theocratic regime in Tehran, and there is
Speaker 3: no indication any of that is coming off anytime soon.
Speaker 3: And so that form of maximum pressure is greater than
Speaker 3: has ever been applied to this regime in the near
Speaker 3: half century of its existence. And there is there resolve
Speaker 3: to keep it in place indefinitely if necessary, to starve
Speaker 3: the regime of the resources and wait for them to
Speaker 3: be cannibalized by their people or among the power centers
Speaker 3: of themselves. That is not the timeline that we were
Speaker 3: led to believe at the beginning of this operation. But
Speaker 3: it is not appeasement, it is not weakness, it is
Speaker 3: not failure. It's just different and longer, and ultimately it
Speaker 3: might be what works. It isn't what I would have
Speaker 3: chosen in terms of the option set going forward. But
Speaker 3: it is not the sort of all or nothing kind
Speaker 3: of fork in the road that we instinctively go to
Speaker 3: when thinking about these things. There is more than one
Speaker 3: way to change this regime. There's more than one timeline
Speaker 3: on which to change this regime. The question is can
Speaker 3: we hold allies, can we hold markets, can we hold
Speaker 3: our domestic politics? Do we have the resolve and the
Speaker 3: strategy to do those things to allow this longer, more
Speaker 3: patient path to work.
Speaker 2: And I would only argue that one of the things
Speaker 2: that the administration didn't do and should have done was
Speaker 2: explained why in much greater detail, made the full on
Speaker 2: appeal to America and said let's be in this together.
Speaker 2: But that is a political consideration I agree with, and
Speaker 2: I just they didn't do this because the president believes
Speaker 2: I'm doing this and everyone's gonna go with me, and
Speaker 2: it'll get explained.
Speaker 1: As we go.
Speaker 2: And that's just not how this works. But to the
Speaker 2: idea of the political cans. Talking to Stephen Yates to
Speaker 2: the Heritage Foundation this story over at Fox News that
Speaker 2: you have Pakistan, Saudi Arabia, and Turkey considering a pact
Speaker 2: to work together. Now, I have argued that the one
Speaker 2: thing that the president has done is he's rethought Middle
Speaker 2: East policy. He has forced the Middle East to rethink
Speaker 2: Middle East policy.
Speaker 1: Everything is now different.
Speaker 2: The Abraham Accords a huge part of this and getting
Speaker 2: rid of this regime. Getting rid of this Iranian threat
Speaker 2: allows the Middle East to have a much more stable future.
Speaker 2: But if Turkey, Pakistan and Saudi Arabia are getting together,
Speaker 2: you could argue this is about trade and creating a
Speaker 2: world without an Iranian regime, or this is about creating
Speaker 2: a new power base to be able to deal with
Speaker 2: the fact that the United States might be the hegemonic
Speaker 2: power now in the Middle East once the Iranian regime
Speaker 2: is gone.
Speaker 1: What is your take on this alleged relationship.
Speaker 3: Well, Tony, if you'll allow a shameless plug, I encourage
Speaker 3: people to listen to the latest Nation States with Yates
Speaker 3: and talks to about how the map of the Middle
Speaker 3: East was rewritten. We go into some of the deeper
Speaker 3: things that are behind the question. I think it's an
Speaker 3: important question. We get at this, specifically this coalition Saudi Arabia, Turkey, Pakistan.
Speaker 3: Part of this is the peril of when you empower
Speaker 3: intermediaries to operate on your behalf, to try to come
Speaker 3: to what might be priest terms, whatever the status quo,
Speaker 3: after major military operations are over, and we always have
Speaker 3: to be careful. It's one thing to allow the good
Speaker 3: offices to convene conversations that otherwise wouldn't happen. But when
Speaker 3: you allow the intermediaries to drag your strategy, then I
Speaker 3: think you're putting a little bit of American strategy and
Speaker 3: interests at risk. And I think the administration is pulled
Speaker 3: back some from whether it was Oman, Pakistan or others.
Speaker 3: But they've been empowered and emboldened in some ways in
Speaker 3: recent months in ways they haven't for a long time.
Speaker 3: And of course American interests aren't going to be the
Speaker 3: same as Saudi Arabian interests, but Saudi has a big
Speaker 3: footprint in the Middle East, and we have to continue
Speaker 3: to kind of mind that garden, I think a longer
Speaker 3: term and it's better than putting our bets on the
Speaker 3: theocratic empire coming out of Tehran if that isn't stopped
Speaker 3: in the near future. So there is this mix. I
Speaker 3: don't like this alternative out there that they're floating. I
Speaker 3: think it is not a happy or friendly signal to Washington,
Speaker 3: which has reached out in good faith with all three
Speaker 3: of these governments, yes in the not too distant past,
Speaker 3: and has done some strategic things that very much benefit
Speaker 3: each of them, and to sort of float this idea
Speaker 3: that they are somehow the condominium that's going to shape
Speaker 3: the future of the Middle East that gets away from
Speaker 3: the Abraham Accords architecture and reason for being. And so
Speaker 3: I think some work needs to be, you know, to
Speaker 3: encourage some of these to put their horses back in
Speaker 3: the stable a little bit and let's finish what's right
Speaker 3: in front of us. And until that is resolved, then
Speaker 3: there's there's no point in you talking about these things.
Speaker 3: And we'd have to pull back on some of the
Speaker 3: friendly things we've offered to you if you're proving not
Speaker 3: to be helpful into doing something that matters to the
Speaker 3: United States.
Speaker 2: And I do absolutely believe that when we talk about
Speaker 2: a deal that has to be made, the deal doesn't
Speaker 2: have to be made with a RAN, It has to
Speaker 2: be made with Saudi Arabia, Bakra and the UAE that
Speaker 2: they are going to be active participants in bringing an
Speaker 2: end to this regime and remembering who their friends are,
Speaker 2: they got to get some skin in the game. This
Speaker 2: is like the United States discussing how NATO nations have
Speaker 2: to pay for their own security against the Russians. Stephen
Speaker 2: Yates find them at Heritage Dot Oregon, of course, Nation
Speaker 2: States with the Yates. The podcast available on your favorite
Speaker 2: podcast platform. Good to see us, sir, we'll talk soon.
Speaker 2: Keep it here. This is Tony Katz today. I thought
Speaker 2: this was some of the best audio of the day.
Speaker 2: It's Rocanna, the progressive from California, the congressman who backed
Speaker 2: Nazi Graham Platners actual abuser, alleged Graham Platter and.
Speaker 1: Now he's coming out to say, you know, I didn't
Speaker 1: see the signs. You also endorsed Graham Planter, another left
Speaker 1: candidate who flamed out in the end, to say the
Speaker 1: least amid scandals. What did you learn from that experience?
Speaker 4: I should have listened to my wife. She's almost never
Speaker 4: made me do an interview. She said, you make it
Speaker 4: clear on the record that I was opposed to you
Speaker 4: endorsing him, But on a deeper level, there were signs
Speaker 4: of toxicity that other groups had picked up and I
Speaker 4: needed to be more sensitive to it.
Speaker 3: I said, I got that call wrong.
Speaker 4: I made a mistake, and it means being more reflective.
Speaker 1: Is that what it means?
Speaker 2: You made a mistake and you learned, and now everything
Speaker 2: is fine and dandy. Come now, oh stop it. No
Speaker 2: one's buying that this guy was your ideological kin folk,
Speaker 2: and you didn't care what he did as long as
Speaker 2: you won the Senate and got power. That's the only
Speaker 2: thing that mattered. Congressman. Sometimes we get things wrong. I agree,
Speaker 2: and I could be a guy of total grace and say,
Speaker 2: you know what, I'm so glad you finally see this
Speaker 2: and understand that that's great.
Speaker 1: You're late to the party, but I'm glad that you're here. No, no, no,
Speaker 1: no no.
Speaker 2: The kind of party you wanted to have was super weird.
Speaker 2: It was like a degree or two away from a
Speaker 2: Sean Diddy Combs freak cough. You and I party different.
Speaker 2: My friend and I have no interest in partying with you.
Speaker 1: You wanted the bad guy.
Speaker 2: That's the story. This is Tony Katz today. What is
Speaker 2: the effects of this economy on small business? GDP one
Speaker 2: point five percent? But we had doctor Matt Will, the
Speaker 2: economist at the University of Indianapolis, say that number is
Speaker 2: very misleading because government's spending was down. In government spending
Speaker 2: is part of GDP, It's a false number. The underneath
Speaker 2: is a far far better look. We have inflation that
Speaker 2: you look at. It was point one for the month.
Speaker 2: My gosh, that's terrific and wonderful, but still three point
Speaker 2: four percent overall. That doesn't get us to the target
Speaker 2: rate of the FED. Tony, Kat's good to be with you.
Speaker 2: The Small Business Administrator, Kelly Leffler joins.
Speaker 1: Me right now.
Speaker 2: She is actually the administrator of the Small Business Administration.
Speaker 1: We need a better name for that. Man, We really
Speaker 1: and truly do.
Speaker 2: Visiting the Indiana State Fair today with Senator Todd Young,
Speaker 2: make sure he holds the umbrella for you, right, He's
Speaker 2: got to do that like a marine holding umbrella for
Speaker 2: Barack Obama. He's got to call you wherever you go. Man,
Speaker 2: make sure that happens.
Speaker 5: Well, good morning, Tony, and I'll just throw on a
Speaker 5: baseball hat. We'll be good to go walking around that fair.
Speaker 1: I mean it's Indianapolis Indians Day. Will we will get
Speaker 1: you one. That is an easy one.
Speaker 6: Love that.
Speaker 3: Thank you.
Speaker 6: Just don't tell my brave friends back home.
Speaker 1: No, no, we don't tell Atlanta people anything. That's part of
Speaker 1: our code here. Let us let us start where we start,
Speaker 1: which is.
Speaker 2: How is small business doing in the overall sense in
Speaker 2: an economy that has some solid fundamentals A tremendous amount
Speaker 2: of AI investing. Things still do move along, but it
Speaker 2: isn't as easy as people want it to be.
Speaker 5: Well, Tony, I am glad you asked, because small business
Speaker 5: is in growth mode, and you mentioned some economic data
Speaker 5: at the top, and look, the data does point to
Speaker 5: tremendous growth, but I also get to see it on.
Speaker 1: The ground every day.
Speaker 5: So when you hear that we have all time record
Speaker 5: business formation in America every single month of twenty twenty
Speaker 5: six new businesses starting at a clip of about a
Speaker 5: half million.
Speaker 6: New businesses, I can back that up on the.
Speaker 5: Ground and say factories or expanding or adding jobs and
Speaker 5: manufacturing and connstruction. And that's because we have certainty now
Speaker 5: around working family tax cuts, one.
Speaker 6: Hundred percent accelerated expensing. So the impetus to build in.
Speaker 5: This country is already driving our manufacturing data.
Speaker 3: Through the roof.
Speaker 5: We have all time record exports in America.
Speaker 6: Because President Trump said We're going to.
Speaker 5: Have fair trade, not free trade, and so I'm going
Speaker 5: to be visiting manufacturers right here in Indianapolis, small manufacturers
Speaker 5: which make up the vast majority of all American producers,
Speaker 5: and they're telling us every single day we can grow
Speaker 5: and higher because we have fair trade, like we're not
Speaker 5: getting Chinese imports dumped on our heads. And that story
Speaker 5: is building across this country.
Speaker 1: The idea of where what builds the growth?
Speaker 2: You mentioned the taxes and certainty in the tax code.
Speaker 2: Is it lower taxes that brings people to the table
Speaker 2: to be small business owners to try or is it
Speaker 2: regulatory reduction making it easier to open a business that
Speaker 2: brings people to the table.
Speaker 5: Well, you're right, it's both of it. Because you think
Speaker 5: about the cost of regulation, which under the Biden administration
Speaker 5: went up.
Speaker 6: Accumulated five trillion dollars.
Speaker 5: That meant every small business owner had to spend hundreds
Speaker 5: of hours extra every single year to comply with regulation.
Speaker 5: That's a tax, and the Trump administration is rolling it back,
Speaker 5: including at the SBA. One of our key jobs is
Speaker 5: not just helping small businesses access capital through lending, but
Speaker 5: it's also deregulation. And we've rolled back about one hundred billion,
Speaker 5: whether it's in the agriculture sector working with EPA to
Speaker 5: roll back death or USPA and other things.
Speaker 1: And so we are.
Speaker 6: Deregulating at a really steady clip. They've got to have
Speaker 6: that certainty that they have an.
Speaker 5: Environment that creates the conditions for their success.
Speaker 1: But if they.
Speaker 5: See a socialist regime coming in and saying you're going
Speaker 5: to pay high taxes, you're going to do what the
Speaker 5: government tells you to do, that's going to kill small business.
Speaker 5: You cannot have socialism and small business coexist.
Speaker 2: Talking to Kelly Leffler, she runs a small business administration,
Speaker 2: the administrator of the Small Business Administration.
Speaker 1: One of the things that you've been talking.
Speaker 2: About Forbes with the story that you want to raise
Speaker 2: the five million dollar SBA lending cap. Now, I've been
Speaker 2: a small business owner for a good part of my life.
Speaker 2: I know zero about these rules. What are the rules
Speaker 2: right now? And what does the lifting of the cap?
Speaker 2: What do you hope that achieves.
Speaker 5: Yeah, well, if you think about the five million dollar cap,
Speaker 5: that's the limit on what you could borrow under an
Speaker 5: SBA guaranteed loan. SBA loans are put out through local lenders,
Speaker 5: and then we simply provide a government guarantee to that
Speaker 5: bank that gives it more confidence to make that loan.
Speaker 5: That cap hasn't been raised since about twenty ten, so
Speaker 5: in today's dollars, that loan size is actually much smaller.
Speaker 5: And then we see the manufacturing boom. This really SBA's
Speaker 5: roots is in small manufacturers. We came out of the
Speaker 5: Small Defense Plants Administration when President Eisenhower came home from
Speaker 5: World War Two as General Eisenhower, he said, we've got
Speaker 5: to keep our industrial base strong, and so in peacetime
Speaker 5: he created the SBA. And you know, to build a factory,
Speaker 5: a small manufacturer like i'll see today with fewer than
Speaker 5: one hundred employees. If you're going to buy a robotic
Speaker 5: welder that your welder is going to be working with,
Speaker 5: you're going to got by CNC machines or planing.
Speaker 6: Those are very extensive pieces of equipment in addition to the.
Speaker 5: Land and the building and all that.
Speaker 6: So we want to double the loan size to ten million.
Speaker 2: A weird question which involves whether or not this is
Speaker 2: the proper role of government to begin with. I believe
Speaker 2: in support of small business. I'm certainly a believer in
Speaker 2: no income tax. I've been very very clear on these subjects.
Speaker 2: I can walk down this road, but on the idea
Speaker 2: of backing a loan, is that the proper role of
Speaker 2: government to begin with?
Speaker 5: I am so glad you asked there are no weird
Speaker 5: questions because this is one of the most misunderstood effects
Speaker 5: of the SBA lending, which is all we do is
Speaker 5: provide the government guarantee and who pays for that guarantee
Speaker 5: the lender, and we operate at zero subsidy, which means
Speaker 5: we're cost neutral to the taxpayer, so the banks are
Speaker 5: just subsidizing any of the default rates. The banks take
Speaker 5: the first loss, and so our program by law has
Speaker 5: to operate at no cost to taxpayer, which is funded
Speaker 5: through banks paying servicing and guarantee fees over the long haul.
Speaker 1: And then what it actually does.
Speaker 5: If you look at Indiana, almost six hundred thousand small
Speaker 5: businesses in the state, they make up ninety nine percent
Speaker 5: of all businesses. Here, you get the benefit of expanding
Speaker 5: the tax base, creating jobs. Small businesses create two out
Speaker 5: of every three new jobs in our economy. And then
Speaker 5: you don't have one small business subsidizing another. And we
Speaker 5: work really hard to make sure the underwriting guidelines are
Speaker 5: stringent and people who aren't supposed to get a loan
Speaker 5: aren't getting loans. So we were restoring that because the
Speaker 5: Biden administration have blown that up too.
Speaker 1: Who are the people who aren't supposed to be getting
Speaker 1: the loans.
Speaker 5: Well, quite simply, if you don't meet the underwriting standards
Speaker 5: that make sure that you can pay back the loan
Speaker 5: to tax you know that has a taxpayer guarantee, that
Speaker 5: you're not getting it. And so you think about you've
Speaker 5: got to have a certain debt coverage ratio, You've got
Speaker 5: your business has to bring in the income to cover
Speaker 5: the debt service. Small business loans require you to pledge collateral.
Speaker 5: In some cases you're home.
Speaker 6: And we don't want to put people in that position.
Speaker 6: If you lend to a small business, you want them
Speaker 6: to succeed, not to struggle.
Speaker 5: And so we are trying to make sure that we're
Speaker 5: lending to healthy small businesses.
Speaker 6: And I'm going to be visiting a couple of days
Speaker 6: that I've used SBA services.
Speaker 5: I was at a groundbreaking last week in Georgia. They're
Speaker 5: now on adding five hundred more employees. They started with
Speaker 5: an SBA loan. They're going to be up to one
Speaker 5: thousand employees within ten years of their founding. And that's
Speaker 5: really powerful when you think about bringing back our industrial
Speaker 5: know how, our job creation. And he did it in
Speaker 5: small part with.
Speaker 6: An SBA loan.
Speaker 2: Talking to you, Kelly Leffler, a small business administration administrator,
Speaker 2: And I should correct you on one thing, the idea
Speaker 2: that there are no weird questions. You've been in politics
Speaker 2: long enough. I've been in radio long enough. There are
Speaker 2: very often very weird questions. But you're at the Indiana
Speaker 2: State Fair and you're going to be talking to business
Speaker 2: owners there, and we're going to get you in Indianapolis.
Speaker 1: Indians Hat or our minor league team. Somebody make that happen.
Speaker 2: Or if one of the usays can run over a
Speaker 2: colts Hat to the administrator, that.
Speaker 1: Would be great.
Speaker 2: The story over at CBS News was that you're being
Speaker 2: dispatched to Iowa to campaign for Republicans.
Speaker 1: It was the first I had read of the story.
Speaker 2: I didn't know why anybody is being dispatched to Iowa.
Speaker 2: They also have a lovely state fair, not as good
Speaker 2: as ours, but still very very good.
Speaker 1: Are you on your way to Iowa or who are
Speaker 1: you campaigning for? Well?
Speaker 5: I am going over to Iowa to do the same thing,
Speaker 5: which is to go to the Iowa State Fair and
Speaker 5: meet with farmers, meet with small businesses.
Speaker 6: Be over there with some of our.
Speaker 5: Great senators and congressional representatives, just as I am here
Speaker 5: in Indiana. I'm a Midwestern kid. I grew up showing
Speaker 5: cattle at the state fair, so this is like pure
Speaker 5: joy for me to be out doing this. But I
Speaker 5: also will be at the Field of Dreams baseball game
Speaker 5: tonight representing the administration. So my favorite place to be
Speaker 5: is on the ground with our small businesses, listening to
Speaker 5: their feedback, taking it back to Washington. So I spend
Speaker 5: my weeks traveling the country. I've been in over forty
Speaker 5: states now, and that's what I do. It's what I love.
Speaker 5: And I'm a small business kid. I grew up in
Speaker 5: farming and.
Speaker 6: Trucking business, and I just want.
Speaker 5: To make sure that we give more people the chance
Speaker 5: to live the American dream.
Speaker 2: So none of this is on the political tip. We're
Speaker 2: not campaigning for people because we see an issue in
Speaker 2: the polling or anything else.
Speaker 5: Look, I've been in red shakes, blue states everywhere out
Speaker 5: with our great.
Speaker 6: Members of Congress, and no I was at.
Speaker 5: The Iowa State for last year, and so I was
Speaker 5: hoping to get back and get another milkshake over there again.
Speaker 1: Oh no, no, no, no, I'll do you. Book are at
Speaker 1: farmers and ranchers administrator.
Speaker 2: Somewhere if you're at the fair, the dairy bar sometimes
Speaker 2: called the dairy Barn, is right around the corner. They've
Speaker 2: got the blue Raspberry milkshake this year, and they have
Speaker 2: the big deal grilled cheese with the pickle in it.
Speaker 2: Tell Senator Young to put his hand in his pocket
Speaker 2: and pay for these things and handle it like the
Speaker 2: man that he is.
Speaker 1: Try that, enjoy it. You will never leave.
Speaker 2: Kelly Lefler, a small business administration administrator. I appreciate you
Speaker 2: taking the time to be with us.
Speaker 5: Thank you, Tony.
Speaker 2: I like Kelly Lefler. This is not the first time
Speaker 2: we've had a chance to talk. That was from my
Speaker 2: morning show earlier today, and I wanted to bring it
Speaker 2: to you. I have a weird odd habit in that
Speaker 2: I want to hear what people say, and then I
Speaker 2: want to be able to go back and discuss. And
Speaker 2: there's certainly times where I push back or I asked
Speaker 2: the follow up question, as you heard me, do there
Speaker 2: the fundamentals that we keep hearing about in this economy
Speaker 2: and how things are working? I do think that that
Speaker 2: is true. There is a real success that it's happening.
Speaker 2: There The problem is is that people who want to
Speaker 2: tut that are denying the actual cost of things. So
Speaker 2: you can argue some fundamentals and it will work in
Speaker 2: your favor, but you can't argue it well on Midwest
Speaker 2: main Street when you see the other things happening, when
Speaker 2: you see the price of beef, when you see insurances, etc.
Speaker 2: Where we are with gas prices, you have to accept
Speaker 2: that these things are in conflict.
Speaker 1: And I go back to.
Speaker 2: Something that Kevin O'Leary was talking about that we've discussed
Speaker 2: on the show with Doctor Will repeatedly, if I take
Speaker 2: the AI spend the crazy amount of money going into AI,
Speaker 2: if I take that out of the equation, tariffs are
Speaker 2: kicking the living crap out of this economy, morning, noon
Speaker 2: and night. But there is Kelly Leffler talking fair trade
Speaker 2: over free trade, and I realized in that moment, I've
Speaker 2: never really had that conversation with everybody. I've never gotten
Speaker 2: into where I am on free trade versus fair trade.
Speaker 1: And what that means.
Speaker 2: So I figured I would start with just a just
Speaker 2: a little bit of a hey, just you know, here's
Speaker 2: where I'm at. Free trade is about prioritizing market efficiency,
Speaker 2: removing government barriers allowing prices to be set by supplying demand.
Speaker 2: Fair trade is focused on allowing for these kinds of things,
Speaker 2: the labor standards, certain minimums, applying of tariffs, etc. So
Speaker 2: fair trade is about the concept of leveling versus free trade,
Speaker 2: which is about allowing the market to decide.
Speaker 1: I am a free trade guy. I think that's obvious
Speaker 1: in my presentations.
Speaker 2: But don't think I've ever used the words before, because
Speaker 2: it just I guess it hasn't come up like that,
Speaker 2: and I thought, here's Kelly Loveler bringing it up.
Speaker 1: I should comment. Do I believe that there is no
Speaker 1: place for tariffs?
Speaker 3: No?
Speaker 2: Do I believe that tariffs as an overall blanket policy
Speaker 2: is a good idea? No?
Speaker 1: I think tariffs is an overall blanket idea is terrible.
Speaker 2: Do I believe that there are nations that involve in
Speaker 2: abuses of our system and the manipulation of their currencies.
Speaker 1: In order to get advantage on US? I do.
Speaker 2: Do I believe there are nations that steal from US
Speaker 2: in order to be able to gain our technologies to
Speaker 2: use against us and sell against US.
Speaker 1: Yes, but that's enough about China.
Speaker 2: China is where I absolutely concur that we must have
Speaker 2: a lot of a aggression, whether that be tariffs or
Speaker 2: something else, in order to make them suffer for their theft.
Speaker 2: I also believe we should eliminate the debt we owe China.
Speaker 2: We've already paid it, and what they've stolen in giving
Speaker 2: us COVID, we've paid it.
Speaker 1: Now.
Speaker 2: Someone may say to me, l Tony, isn't that a contradiction?
Speaker 2: I don't think so. And we will get into this,
Speaker 2: this free trade versus fair trade conversation and what it
Speaker 2: actually means. What does it mean to our daily lives,
Speaker 2: What would it mean to our level of spend? What
Speaker 2: does it mean to our economy? Does it somehow affect
Speaker 2: what we view as capitalism? And maybe part of our
Speaker 2: issue is that definition as well. So in going over
Speaker 2: my conversation with Kelly Leffler, I get into this place here,
Speaker 2: and we're going to dig in in the weeks ahead.
Speaker 2: I hope you'll be there.
Speaker 1: Keep it here.
Speaker 2: It's Tony Katz today, the former CFO of the Southern
Speaker 2: Poverty Law Center arrested for federal fraud. Couldn't happen to
Speaker 2: a worse organization, Huh, Tony Katz? Tony Katz today, Good
Speaker 2: to be with you. Oh, I'm not saying that the
Speaker 2: Southern Poverty Law Center engaged in unny fraud. Oh No,
Speaker 2: I would never say anything like that, because there are lawyers.
Speaker 2: I would say that it seems clear that they funded
Speaker 2: white supremacist groups so they could scream, hey, look there's
Speaker 2: white supremacy and then ask donors for more money. That's
Speaker 2: that is what it looks like. Allegedly possibly, you know,
Speaker 2: again the lawyers. But in this story, the encapsulated version,
Speaker 2: this woman had a boyfriend who was part of a
Speaker 2: hate group, and the Southern Poverty Law Center was paying
Speaker 2: the informant. She oversaw the financial arrangements, was living with
Speaker 2: the guy, and some of the money ended up in
Speaker 2: a joint checking account. Guys, I don't spend my time
Speaker 2: thinking about criminal enterprises.
Speaker 1: But if I did, I could never have thought.
Speaker 2: Of doing that that. I just could not have come
Speaker 2: to that possibility. So bravo and the creativity joy Jail.
Speaker 2: Find everything at Tony Kats dot com tomorrow. Everyone take
Speaker 2: care