WEBVTT - Justin Wolfers & Dr. Abdul El-Sayed 0:00:00.640 --> 0:00:04.160 Hi, I'm Molly John Fast and this is Fast Politics, 0:00:04.360 --> 0:00:07.120 where we discussed the top political headlines with some of 0:00:07.160 --> 0:00:12.120 today's best minds, and billionaire Ray Dallio says the US 0:00:12.200 --> 0:00:16.439 is turning into an autocratic state. We have such a 0:00:16.440 --> 0:00:20.720 great show for you today, Think like an economist. Justin 0:00:20.800 --> 0:00:25.360 Wolfer stops by to talk about the latest in Trump's tarafors. 0:00:25.560 --> 0:00:28.720 Then we'll talk to doctor Abdul l said about his 0:00:28.960 --> 0:00:31.520 run for the Senate in Michigan. But first, here are 0:00:31.560 --> 0:00:32.920 the stories the media is missing. 0:00:33.080 --> 0:00:33.519 Savali. 0:00:33.680 --> 0:00:38.040 There was hundreds of workers over billionaires Labor Day rallies, 0:00:38.080 --> 0:00:40.000 and you know what, that is music to my ears 0:00:40.040 --> 0:00:42.599 because that's what I think the movement should be built on. 0:00:42.840 --> 0:00:47.320 Again another case of massive protests not covered by the 0:00:47.360 --> 0:00:51.760 mainstream media. We keep seeing this again and again, massive protests, 0:00:52.320 --> 0:00:57.000 town halls, filled with angry people, horrible polling for Donald Trump, 0:00:57.400 --> 0:01:00.400 and we don't see it in the mainstream media. We 0:01:00.440 --> 0:01:03.240 don't see any of those stories reflect in the mainstream media. 0:01:03.400 --> 0:01:07.760 Now there's a question whether or not there's some anxiety 0:01:08.440 --> 0:01:13.040 about reporting some of this stuff, like maybe it's hard 0:01:13.080 --> 0:01:16.320 to track down, but like people standing in the middle 0:01:16.360 --> 0:01:19.800 of their towns waving signs that should not be so 0:01:19.959 --> 0:01:24.160 hard to cover Labor Day's day about labor or in 0:01:24.680 --> 0:01:28.200 and what better place to focus on during that day 0:01:28.240 --> 0:01:32.600 than Chicago Mayor Brandon Johnson, who has been really catapulted 0:01:32.640 --> 0:01:36.000 into the national spotlight because of Trump's use of ice 0:01:36.200 --> 0:01:38.959 in the city and now the city again is in 0:01:39.040 --> 0:01:42.959 Trump's crosshairs because he wants to federalize it. He denounced 0:01:43.160 --> 0:01:46.600 Trump's threat to deploy federal troops to the city as 0:01:46.640 --> 0:01:49.639 part of an immigration crepdown. He said, no federal troops 0:01:49.640 --> 0:01:52.840 in the city of Chicago. At the workers over Billionaire's 0:01:53.000 --> 0:01:56.279 demonstration in Chicago's Westloop, Johnson added, We're going to defend 0:01:56.280 --> 0:01:58.680 our democracy. We're going to protect the humanity of every 0:01:58.720 --> 0:02:01.240 single person in the city of Chicago. Go Over the weekend, 0:02:01.480 --> 0:02:05.440 I interviewed kat Abba Guzala, and she's running for a 0:02:05.480 --> 0:02:09.200 seat in Chicago, and she talked about just how aggressive 0:02:09.240 --> 0:02:12.840 ice has gotten in their city. As someone who lives 0:02:12.840 --> 0:02:16.360 in a city New York City, haven't seen that but 0:02:17.639 --> 0:02:21.079 in New York, and so my hope is that he's 0:02:21.120 --> 0:02:23.760 not doing it in New York. But I do have 0:02:23.800 --> 0:02:26.280 a sense that they're trying to do it in all 0:02:26.320 --> 0:02:28.799 of the Blue cities to make us all really scared 0:02:28.840 --> 0:02:32.160 and uncomfortable, and also to her people, and also to 0:02:32.240 --> 0:02:34.919 deport people who've been in this country for years and 0:02:35.000 --> 0:02:36.760 years and years. Look, this is going to be the 0:02:36.800 --> 0:02:39.480 beginning of a lot of protests. People are not happy. 0:02:39.800 --> 0:02:44.280 And these demonstrations took place in New York, Houston, Washington, 0:02:44.320 --> 0:02:49.560 Los Angeles, Cleveland, Ohio, Greensboro. When people are mad, they protest. 0:02:49.720 --> 0:02:52.000 We saw this in Trump's first administration. We're going to 0:02:52.040 --> 0:02:52.560 see this again. 0:02:52.800 --> 0:02:56.560 So by Trump is really really losing a court this week. 0:02:56.720 --> 0:02:59.560 A judge ruled this morning that Trump illegally deployed National 0:02:59.639 --> 0:03:01.280 guardens to Los Angeles. 0:03:01.600 --> 0:03:06.399 Yeah, Posse comma Tatis Act. Look is this was always 0:03:06.919 --> 0:03:10.079 the thing. The law, like with so many things Trump 0:03:10.120 --> 0:03:12.720 is trying to do, the law says you can't do 0:03:12.760 --> 0:03:17.160 this stuff. And here we have a US District Court 0:03:17.280 --> 0:03:21.800 Judge Charles Bryer in San Francisco, fifty two page filing. 0:03:22.080 --> 0:03:27.480 So not lightly. In short, defendants violated the Posse Commatatis Act. 0:03:27.560 --> 0:03:31.400 And by the way, all of the Supreme Court experts 0:03:31.440 --> 0:03:34.760 we talked to said the very same thing. Sending troops 0:03:34.960 --> 0:03:38.320 on the ground is a violation of an act which 0:03:38.320 --> 0:03:41.200 says we don't use troops on our people. This is 0:03:41.240 --> 0:03:46.000 the difference between a free country and a military dictatorship. 0:03:46.240 --> 0:03:49.240 Now again we get to a moment, as with many 0:03:49.280 --> 0:03:53.840 moments in this political moment, where Trump now it's illegal, 0:03:54.320 --> 0:03:57.880 they can't do it. That doesn't mean they won't. And 0:03:58.280 --> 0:04:00.840 that is where we are right now. Again, in a 0:04:01.280 --> 0:04:05.080 world with a Supreme Court that wasn't completely in the tank, 0:04:05.720 --> 0:04:08.200 you would say, well, the Supreme Court is not going 0:04:08.240 --> 0:04:11.040 to allow this. But because they made Donald Trump mango 0:04:11.160 --> 0:04:14.560 god king with the immunity ruling, we really don't know 0:04:14.600 --> 0:04:17.440 what's going to happen. But we do know, and I 0:04:17.480 --> 0:04:20.600 think it's important for us to remember that there is 0:04:20.640 --> 0:04:23.840 the law and this administration pretty much breaks it on 0:04:23.920 --> 0:04:27.440 the regular And maybe that's okay for now, but at 0:04:27.480 --> 0:04:30.279 some point the bill will come to and the American 0:04:30.279 --> 0:04:33.159 people will decide are we a lawless country where we 0:04:33.240 --> 0:04:36.080 allow people to break the law or are we not? 0:04:36.520 --> 0:04:39.359 And I think ultimately, and I don't know when this happens, 0:04:39.400 --> 0:04:42.440 if it's two years or five years, or fifteen years 0:04:42.520 --> 0:04:46.159 or twenty years, but at some point, it's a big country. 0:04:46.240 --> 0:04:48.400 It's been a democracy for a long time, and at 0:04:48.440 --> 0:04:51.919 some point we're going to have to have a reconciliation 0:04:52.120 --> 0:04:54.960 here about what it means to follow the law. I 0:04:55.000 --> 0:04:57.919 don't know when that happens. So this is more legal 0:04:58.040 --> 0:05:00.839 challenges I'm sure the Trump administration, and we'll run it 0:05:00.880 --> 0:05:03.599 up to the Supreme Court. And again, at some point 0:05:04.160 --> 0:05:07.159 the Supreme Court is going to stop rubber stamping things. 0:05:07.279 --> 0:05:10.359 Or maybe they're not, and maybe you know, they just 0:05:10.560 --> 0:05:14.039 like the Republicans in Congress, become completely irrelevant. 0:05:14.360 --> 0:05:17.960 Yeah, that sounds right. So Trump also, many people missed this. 0:05:18.320 --> 0:05:22.280 On Friday, right before the holiday weekend, court struck down 0:05:22.520 --> 0:05:26.159 his tariffs and boy they are as the kids say, 0:05:26.240 --> 0:05:26.719 big Matt. 0:05:27.080 --> 0:05:29.320 So the tariffs are allowed to be in place for 0:05:29.320 --> 0:05:36.640 forty five more days. But there's a great Peter Navarro quote, America. 0:05:37.120 --> 0:05:40.320 It's the end of America. So we have the highest 0:05:40.360 --> 0:05:45.839 tariffs of any developed nation. We are alienating China, Russia, 0:05:46.920 --> 0:05:48.760 those would be the ones that you kind of want 0:05:48.800 --> 0:05:54.760 to alienate, but driving into their arms India and Canada 0:05:54.800 --> 0:05:59.560 and Mexico and Europe, and basically we are becoming parias 0:05:59.600 --> 0:06:02.480 in the world. And this may not even be legal. 0:06:02.520 --> 0:06:06.200 In fact, it probably isn't legal. In fact, the Emergency 0:06:06.279 --> 0:06:09.200 Powers Act that Trump is using does not once use 0:06:09.360 --> 0:06:13.800 the word tariffs, which is kind of something to think about. 0:06:14.160 --> 0:06:17.120 So look this again, like with all of these other 0:06:17.160 --> 0:06:20.200 court cases, will likely go to the Supreme Court. I 0:06:20.320 --> 0:06:24.000 just want to specify one thing about this, and I 0:06:24.000 --> 0:06:26.560 think I've talked about it before, but the other side 0:06:26.680 --> 0:06:30.840 of this case, simplify, is the Koch brother I think 0:06:30.839 --> 0:06:32.839 we talked this about this on the last episode. Actually 0:06:32.880 --> 0:06:37.160 the Koch brother and a lot of really evil Republican donors. 0:06:37.360 --> 0:06:40.920 So this is a case where if the Supreme Court 0:06:40.960 --> 0:06:42.919 will have to decide whether or not they're going to 0:06:42.960 --> 0:06:45.920 go against Leonard Leo. I think Leonard Leo is involved 0:06:45.960 --> 0:06:48.480 in this. Are they going to go against their donors 0:06:48.760 --> 0:06:51.440 or their god king. You know, it's a very difficult 0:06:51.480 --> 0:06:54.760 decision for them, and I personally look forward to them 0:06:55.040 --> 0:06:59.320 really struggling with this. But you know, the rich Republican 0:06:59.400 --> 0:07:05.120 donors don't want tariffs and rich insane president does. So 0:07:05.920 --> 0:07:09.560 you know, it's anybody's guess how this goes. By the way, 0:07:09.640 --> 0:07:12.360 I just want to play the tape for a minute. 0:07:12.600 --> 0:07:15.000 Say the Supreme Court is like, no, you have no 0:07:15.120 --> 0:07:17.920 legal powers for tariffs. They have to come off Okay, 0:07:18.160 --> 0:07:20.320 say that happens, which I think is the best case 0:07:20.320 --> 0:07:23.000 scenario for all of us. Even if they do that, 0:07:23.240 --> 0:07:26.000 even if they're like, okay, the Supreme Court, and then 0:07:26.080 --> 0:07:28.000 you have to assume that the Trump administration is going 0:07:28.040 --> 0:07:29.640 to be like, oh guy, the Supreme Court is right, 0:07:29.720 --> 0:07:32.679 let's not do the tariffs, which again we have never 0:07:32.760 --> 0:07:35.600 seen Trump world ever. I mean, they might back down, 0:07:35.680 --> 0:07:37.640 but it's hard for me to imagine they back down 0:07:37.680 --> 0:07:40.680 on this. But even if those two things happened, which 0:07:40.720 --> 0:07:44.480 would be kind of extraordinary, you would still have the 0:07:44.600 --> 0:07:48.480 question of lowering the rates of things. And I'm not convinced, 0:07:48.840 --> 0:07:51.200 like this is the problem with trade wars. Things get 0:07:51.200 --> 0:07:53.880 more and more expensive. I'm not convinced that things get 0:07:53.960 --> 0:07:55.440 cheaper when the trade war is over. 0:07:55.800 --> 0:07:59.280 I've not heard a single person say how that. 0:07:59.240 --> 0:08:02.400 Could happen, And in fact, we've interviewed people who have 0:08:02.600 --> 0:08:06.400 said that it's very hard to get prices down after 0:08:06.440 --> 0:08:09.640 a trade war. So I do see a real world 0:08:09.680 --> 0:08:12.360 in which Trump cooks us up into something real bad, 0:08:12.520 --> 0:08:14.840 changes his mind at the last minute because he sees 0:08:15.160 --> 0:08:18.560 the wreckage that it's caused, and then is unable to reverse. 0:08:19.040 --> 0:08:21.120 It always makes me think of that meme that's like 0:08:21.200 --> 0:08:24.880 the I do something stupid, I convince my followers it's good. 0:08:25.000 --> 0:08:26.240 I reverse my decision. 0:08:26.360 --> 0:08:29.960 I convince my followers that everything is solved, and then 0:08:30.000 --> 0:08:31.640 it just repeats over. 0:08:31.520 --> 0:08:33.080 Yeah and over and over. 0:08:33.160 --> 0:08:33.760 Probably fine. 0:08:34.120 --> 0:08:36.080 Yeah, that saysn't sound like decline to me. 0:08:36.360 --> 0:08:38.800 No, In case you're wondering, decline is a choice. 0:08:38.480 --> 0:08:40.199 And a woke construct anyway. 0:08:40.320 --> 0:08:43.880 Okay, so, speaking of woke constructs, the Energy Department has 0:08:43.920 --> 0:08:46.160 a climate report and you'll be shocked to hear it 0:08:46.200 --> 0:08:49.760 has nothing but errors. It is totally just done very lazily, 0:08:49.840 --> 0:08:53.559 probably in between jokes about really really stupid things that 0:08:53.640 --> 0:08:55.520 are the Republicans discuss. 0:08:55.880 --> 0:08:59.800 Yeah, so you're going to be shocked to hear that 0:09:00.559 --> 0:09:05.720 this crew is bad at things pretty much everything. So 0:09:05.880 --> 0:09:08.760 this is not our best and our brightest. This is 0:09:08.880 --> 0:09:13.080 our dumbest and our worst. And they are publishing things 0:09:13.160 --> 0:09:17.200 like they had a climate report and it is filled 0:09:17.240 --> 0:09:21.679 with errors, and you know, look, this is all you know, 0:09:22.120 --> 0:09:25.880 these people don't understand science, and they are making a 0:09:25.920 --> 0:09:30.440 gamble that climate change won't create that it's some kind 0:09:30.480 --> 0:09:33.760 of liberal fallacy, and that's not how it is, and 0:09:34.840 --> 0:09:37.880 there are lots and lots of scientists who know the truth. 0:09:37.960 --> 0:09:40.679 I think it's worth realizing, like, this is a war 0:09:40.760 --> 0:09:43.760 on elites, this is a war on expertise, This is 0:09:43.760 --> 0:09:47.079 a war on science, This is a war on education 0:09:47.679 --> 0:09:50.920 and all of the kind of things that we hold dearest. 0:09:51.440 --> 0:09:55.360 That's why they are against science and against progress and 0:09:55.440 --> 0:09:58.520 against all the things you know that we cherish and 0:09:58.600 --> 0:10:01.280 believe to be true. This is going to all end 0:10:01.360 --> 0:10:10.680 in tears, all right. Justin Wolfers is the host of 0:10:10.720 --> 0:10:13.760 The Thing Like an Economist podcast and a professor at 0:10:13.760 --> 0:10:19.120 the University of Michigan. Justin Wolfers, Welcome to Fast Politics. 0:10:19.080 --> 0:10:20.600 And Fast Economics malade. 0:10:22.200 --> 0:10:25.320 So I want you to talk us through tariffs. I 0:10:25.360 --> 0:10:28.160 was told that trade wars are good and easy to win. 0:10:28.360 --> 0:10:33.040 We now have the highest tariffs of any developed country 0:10:33.280 --> 0:10:35.160 right in the world. 0:10:35.240 --> 0:10:39.040 And it's not even close. And so, Molly, your question 0:10:39.200 --> 0:10:42.960 actually gets to the foundational mistake at the base of 0:10:43.000 --> 0:10:46.040 all of this. When Trump was growing up, other countries 0:10:46.040 --> 0:10:49.840 had high tariffs. So when Trump was growing up, he 0:10:49.960 --> 0:10:53.280 felt we were being screwed, and in some sense we were. 0:10:53.520 --> 0:10:56.840 When other countries divert their trade away from US, that 0:10:56.960 --> 0:11:00.920 hurts them, but it also hurts American exporters. Subsequently, happened 0:11:01.040 --> 0:11:05.800 was many decades, and during those decades, basically the entire 0:11:05.880 --> 0:11:10.160 industrialized world got rid of tariffs. Now, when I say 0:11:10.240 --> 0:11:13.400 got rid of tariffs, I should say there's politics and everything. 0:11:13.600 --> 0:11:19.280 And so there's an intellectual sense shared by shared never 0:11:19.320 --> 0:11:23.120 industrialized country that openness to trade is a good thing. 0:11:23.280 --> 0:11:25.640 If you can help me and I can help you, 0:11:26.120 --> 0:11:28.040 well you can both be better off. Simple as that. 0:11:28.400 --> 0:11:32.160 So we had a general agreement on trade and tariffs, 0:11:32.440 --> 0:11:35.439 and then we had a World Trade Organization. We had 0:11:36.200 --> 0:11:39.680 Europe become a trading block, we had North America become 0:11:39.679 --> 0:11:43.680 a trading block. We had countries individually just decide that 0:11:44.520 --> 0:11:48.680 charging Americans more to support dying industries is not a 0:11:48.679 --> 0:11:50.640 good idea, and they did that in other countries too, 0:11:51.360 --> 0:11:55.480 And so what happened was we basically had universal agreement 0:11:56.200 --> 0:12:00.680 that tariffs should be low and close to zero. And 0:12:00.720 --> 0:12:02.680 then there was an asterisk, which is what happens is 0:12:02.679 --> 0:12:05.040 when you get in the room with someone with another 0:12:05.080 --> 0:12:06.840 foreign leader and say, hey, I want to cut my 0:12:06.880 --> 0:12:08.760 tariffs that it'll be even better if you do yours too, 0:12:09.760 --> 0:12:12.000 They'll say I agree, but I got a couple of 0:12:12.080 --> 0:12:15.960 politically difficult industries in my home country. So let's like 0:12:16.040 --> 0:12:18.680 eliminate tariffs everywhere we can, but there'll be a small 0:12:18.760 --> 0:12:22.400 number of industries like the Canadian dairy industry, the American farmers, 0:12:23.040 --> 0:12:27.360 the European mountains of butter where the politics are just 0:12:27.400 --> 0:12:29.880 too hard. So let's agree we'll get tariffs down to 0:12:30.120 --> 0:12:32.120 as close to zero as we can everywhere. But I'll 0:12:32.120 --> 0:12:33.880 give you a bunch of political carve outs so you 0:12:33.880 --> 0:12:35.600 can get re elected, and you'll give me a bunch 0:12:35.640 --> 0:12:37.680 so I can get re elected. What that means is, 0:12:37.720 --> 0:12:40.199 on the eve of the Trump trade war, the average 0:12:40.200 --> 0:12:42.920 tariff right for every industrialized nation was between one and 0:12:42.960 --> 0:12:45.560 two percent. And there are a few crazy countries that 0:12:45.720 --> 0:12:50.480 have poorer countries that are small and run by idiosyncratic leaders. 0:12:51.120 --> 0:12:53.839 There's some euphemism there. Autocrats tend to like tariffs, so 0:12:53.840 --> 0:12:55.560 there are a few countries that do have tariffs. But 0:12:55.640 --> 0:13:00.520 even outside of the industrialized countries, tariffs had their day thereover. 0:13:00.760 --> 0:13:03.160 The reason this is central is it the most we 0:13:03.200 --> 0:13:05.199 could ever have won out of the trade will if 0:13:05.200 --> 0:13:07.920 initially tariffs were two percent and the lowest they can 0:13:07.960 --> 0:13:10.200 go as zero percent. The most we could ever win 0:13:10.880 --> 0:13:13.000 is very very little, and in fact, getting that very 0:13:13.080 --> 0:13:15.160 very little, he's going to be hotted in it's worth 0:13:15.200 --> 0:13:18.960 because these the industries where other countries have strong political interests, 0:13:19.040 --> 0:13:21.320 it doesn't really matter we fight a trade. When we lose, 0:13:21.559 --> 0:13:25.680 American consumers are screwed or we win, are not much changes. 0:13:26.000 --> 0:13:28.800 It was asymmetric from the very beginning. 0:13:29.000 --> 0:13:31.760 So that I think is a really good point. And 0:13:31.840 --> 0:13:34.160 let's talk about asymmetric from the really big from the 0:13:34.240 --> 0:13:36.720 very beginning. I would love you to talk about because 0:13:36.760 --> 0:13:38.600 I feel like I haven't seen a ton of reporting. 0:13:38.679 --> 0:13:40.600 I mean, I've seen some reporting on this, but it 0:13:40.600 --> 0:13:42.960 hasn't I feel like it hasn't captured those guys the 0:13:42.960 --> 0:13:46.680 way it needs to, probably, which is what is happening 0:13:46.679 --> 0:13:52.440 with India and tariffs, because it strikes me that what 0:13:52.720 --> 0:13:56.040 happened here is that Trump got mad at India. The 0:13:56.480 --> 0:13:59.520 excuse we heard was that they were buying Russian oil. 0:13:59.720 --> 0:14:01.640 I did know there was a sort of scam going 0:14:01.679 --> 0:14:04.559 where they were buying Russian oil, processing it and then 0:14:04.679 --> 0:14:08.640 selling it so that Russia could get around some of 0:14:08.679 --> 0:14:13.800 the terraffing, etc. But whatever happened now the net net 0:14:13.960 --> 0:14:19.240 is we had pictures of Mody with g and also putin, 0:14:19.640 --> 0:14:23.520 which strikes me as probably not the ideal situation. 0:14:23.880 --> 0:14:26.720 I mean, one thing is men don't hug in public enough. 0:14:27.960 --> 0:14:33.760 And I thought they were showing tremendous leadership, tremendous and 0:14:34.440 --> 0:14:35.960 just a whole new masculinity. 0:14:36.200 --> 0:14:40.760 And if we mention we want our autocrats soft and fuzzy. 0:14:40.680 --> 0:14:44.600 We want all our men to be comfortable cuddling in public. 0:14:44.680 --> 0:14:46.360 What I would like is, if we get a foreign 0:14:46.400 --> 0:14:50.000 policy right, I want our cuddler over there, I would love. 0:14:50.680 --> 0:14:53.280 I think President Trump doesn't cuddle enough in public either. 0:14:53.600 --> 0:14:57.320 He does a whole lot of extraordinarily camp things, right, 0:14:57.400 --> 0:15:01.400 but not Hugen dancing to Ymca. I'm just talking about camp. 0:15:01.440 --> 0:15:04.960 I'm talking about just a modern, comfortable masculinity. 0:15:05.920 --> 0:15:08.880 So our tariffs suppose, here's my question. Our tariff supposed 0:15:08.920 --> 0:15:13.520 to drive business to other countries in a way that 0:15:13.680 --> 0:15:16.800 cuts us out of the international world order? Is that 0:15:16.840 --> 0:15:17.840 how it's supposed. 0:15:17.520 --> 0:15:20.000 To go on? Now, Well, if you were asking me, 0:15:20.280 --> 0:15:23.360 if America disengaged from the rest of the world, would 0:15:23.400 --> 0:15:26.440 other people go looking for friends elsewhere? It seems blindingly 0:15:26.480 --> 0:15:27.760 obvious the answer is yes. 0:15:27.960 --> 0:15:28.920 Does, doesn't it. 0:15:29.200 --> 0:15:33.880 And so as a matter of foreign policy, maybe our 0:15:33.920 --> 0:15:38.440 tariffs on China hurt the Chinese people. But the fact 0:15:38.440 --> 0:15:44.560 that we have punitive tariffs, without direction, without predictability, that 0:15:45.400 --> 0:15:48.880 not only are they punitive, I think people really really 0:15:48.960 --> 0:15:53.240 misunderstand or fail to see the president comedy and he's 0:15:53.240 --> 0:15:57.000 a very funny man, actually has very real consequences. Yeah, 0:15:57.080 --> 0:16:00.640 my brother lives in Canada. They hate us. 0:16:00.680 --> 0:16:03.160 Just talking about my brother, I mean no, no, they 0:16:03.320 --> 0:16:07.760 hate us. They hate us, and we have really really 0:16:07.800 --> 0:16:14.160 alienated Canada and Mexico, like real these shocking and also 0:16:14.240 --> 0:16:17.000 their economy is already suffering. This gets me to this 0:16:17.080 --> 0:16:19.320 next question I have for you, which is, we have 0:16:19.440 --> 0:16:24.040 these tariffs, right, and we have this situation where the 0:16:24.080 --> 0:16:27.840 market seems to not have priced in tariffs because they 0:16:27.880 --> 0:16:30.480 think they're getting a rate cut and the rate cut 0:16:30.960 --> 0:16:34.640 is enough to boost the market, and so who cares 0:16:34.640 --> 0:16:40.840 about tariffs? But it strikes me that all is still 0:16:40.880 --> 0:16:45.600 not fine in the American economy, and that the fact 0:16:45.640 --> 0:16:49.760 that stocks are going up while all these other indicators 0:16:49.840 --> 0:16:53.000 are not and are in fact going in the other direction. 0:16:53.320 --> 0:16:55.520 And then we have this and I'd love you to 0:16:55.560 --> 0:16:58.080 explain to us what is happening with the bond market too, 0:16:58.080 --> 0:17:01.800 because that seems a bit scary and important. 0:17:02.120 --> 0:17:02.360 Yeah. 0:17:02.880 --> 0:17:06.560 So it's actually, I think, a very complicated story, but 0:17:06.680 --> 0:17:08.879 I think you're right to raise it because at one level, frankly, 0:17:08.920 --> 0:17:11.560 it is embarrassing for liberals. We say the sky is falling, 0:17:11.680 --> 0:17:13.800 this is very bad economic policy, yet people want to 0:17:13.800 --> 0:17:15.800 buy more of American stocks. So I just want to 0:17:15.800 --> 0:17:18.119 sort of slow down and work our way through it 0:17:18.119 --> 0:17:22.520 a little. The first thing is, you know, I'm not 0:17:22.520 --> 0:17:25.160 going to go all the stock markets, not the economy 0:17:25.200 --> 0:17:29.840 on you. I am, but actually what we should read 0:17:29.960 --> 0:17:34.000 from stocks is interesting and subtle. So I'm not going 0:17:34.000 --> 0:17:35.600 to be one of these people that says ignore the market. 0:17:35.600 --> 0:17:37.359 What I'm going to say is listen, but didn't do 0:17:37.440 --> 0:17:39.400 so in a sophisticated way. So the one thing that's 0:17:39.480 --> 0:17:42.679 utterly absolutely true, we are on an unbeaten run that 0:17:42.840 --> 0:17:47.200 every time Trump leans into trump Ism, imposing more tariffs, 0:17:47.240 --> 0:17:50.400 firing the BLS Commission, and putting fed independence at risk. 0:17:50.720 --> 0:17:53.880 Every time he leans into trump Ism, stocks fall. It's 0:17:54.040 --> 0:17:57.280 literally unbeaten. Since January twentieth, there's not a single day 0:17:57.400 --> 0:17:59.960 where it's gone the other way. Every time Trump backs 0:18:00.119 --> 0:18:04.800 off from trump Ism, stocks rise when he suspends tariffs, 0:18:05.280 --> 0:18:07.439 when he tells the Chinese that we don't need to 0:18:07.480 --> 0:18:10.000 cut off all trade, and on and on it goes 0:18:10.080 --> 0:18:14.199 when the courts rule Trump's tariffs to be illegal every 0:18:14.280 --> 0:18:17.720 single time. So what that tells you is the market's 0:18:17.800 --> 0:18:20.720 judgment is the value of American businesses are lower when 0:18:20.760 --> 0:18:23.400 the president's instincts are followed. I think the market's worth 0:18:23.440 --> 0:18:25.720 following on this. Why is that Because we're talking about 0:18:25.760 --> 0:18:29.080 something like tariff's. If there are benefits for the American economy, 0:18:29.480 --> 0:18:32.239 they're all downstream of helping American business, and so if 0:18:32.240 --> 0:18:34.520 they don't even help American business, there's no way we 0:18:34.560 --> 0:18:36.840 get any of the benefits. And that happens before we 0:18:36.880 --> 0:18:39.080 even get to the argument to the benefits to American 0:18:39.119 --> 0:18:41.520 business exceed the cost to American consumers, and so what 0:18:41.560 --> 0:18:43.639 we do it's a very very shortcut argument. Normally in 0:18:43.680 --> 0:18:45.280 economics we have to think about all the benefits and 0:18:45.320 --> 0:18:47.040 all the costs, and here I can just say, hey, look, 0:18:47.119 --> 0:18:49.400 the market seems to think the guys who are meant 0:18:49.400 --> 0:18:52.879 to benefit actually have the opposite effect. That's an unbeaten run. Okay, 0:18:53.040 --> 0:18:56.399 But how do we then sort out. So that's true. 0:18:56.720 --> 0:18:59.240 Yet at the same time stocks have continued to rise. 0:19:00.400 --> 0:19:02.879 What's going on here? A little bit of it is, 0:19:02.920 --> 0:19:06.600 there's two Americas. There's an AI boom, which is seven 0:19:06.640 --> 0:19:10.159 big companies that are worth an enormous share of the 0:19:10.240 --> 0:19:12.320 S and P five hundred, and if you look at 0:19:12.320 --> 0:19:15.600 the rest of the companies, you're seeing less optimism. That 0:19:15.600 --> 0:19:18.160 are you still seeing some The other thing worth noting 0:19:18.359 --> 0:19:20.840 is that Trump passed an enormous corporate tax code. Now 0:19:21.080 --> 0:19:24.600 that corporate tax cup means any money big American businesses 0:19:24.640 --> 0:19:26.919 get make, they get to keep more of it, a 0:19:26.920 --> 0:19:30.159 lot more of it. That should have sent stocks to 0:19:30.200 --> 0:19:32.520 the moon. It didn't. Actually, the amount it should have 0:19:32.520 --> 0:19:34.760 boosted stocks is much larger than the amount of stocks 0:19:34.760 --> 0:19:37.320 have risen. Basically, the federal government's just given them a 0:19:37.320 --> 0:19:40.000 whole bunch more money back. Of course they're worth more. 0:19:40.560 --> 0:19:42.560 We can try and think about in a fairly careful 0:19:42.600 --> 0:19:45.440 way how much more, And it turns out their value 0:19:45.480 --> 0:19:47.560 hasn't even risen that much. 0:19:47.760 --> 0:19:50.320 So talk to us about the bond market. What's happening there. 0:19:50.400 --> 0:19:52.280 I'm going to do one more thing on the stock market, 0:19:52.520 --> 0:19:54.040 partly because I'm not sure what's going on in the 0:19:54.040 --> 0:19:56.040 bond market. I'm not sure what's on your main money. 0:19:56.520 --> 0:20:00.480 Here's because of the difference between the law term and 0:20:00.520 --> 0:20:02.360 the short I understand. 0:20:02.520 --> 0:20:03.800 Yeah. I want to say one more thing on the 0:20:03.800 --> 0:20:06.879 stock market. Okay, stock market is big American companies. So 0:20:06.920 --> 0:20:09.479 it's not small companies. It's not cart ups, it's not 0:20:09.560 --> 0:20:12.800 you and I, it's not the government sector, it's not 0:20:12.920 --> 0:20:17.480 lots of things. As we move to a trumpest form 0:20:17.520 --> 0:20:22.199 of statism or crony capitalism or interventionist, whatever it is 0:20:22.200 --> 0:20:24.160 you want to call it, the folks who can look 0:20:24.160 --> 0:20:27.800 for carveouts, Tim Apple can call the White House and 0:20:28.040 --> 0:20:30.960 say I want tariffs to be different. Now, it turns 0:20:30.960 --> 0:20:34.400 out Apple was founded in the garage by two guys 0:20:34.440 --> 0:20:36.679 in Silicon Valley. Right now, there are two guys in 0:20:36.680 --> 0:20:38.920 a garage in Silicon Valley trying to start the next 0:20:39.000 --> 0:20:42.440 multi trillion dollar business. Those guys can't call the White House. 0:20:43.440 --> 0:20:46.040 So what this is is an enormous preference for existing 0:20:46.119 --> 0:20:50.040 large companies over smaller startups. Now the cost of crony 0:20:50.080 --> 0:20:52.879 capital So the thing is who gains from crony capitalism, 0:20:53.000 --> 0:20:58.560 the cronies, who loses everyone else, particularly entrepreneurs are the cronies. 0:20:58.560 --> 0:21:01.320 They're the big ones who are in Trump's rolyodics. He 0:21:01.400 --> 0:21:05.080 knows how to call and they'll pony up. It's CBS, 0:21:05.119 --> 0:21:07.679 for instance, it's it is Apple, and on and on 0:21:07.760 --> 0:21:12.880 it goes. So as we shift towards this form of capitalism, 0:21:13.040 --> 0:21:15.159 the value of big companies can rise even as the 0:21:15.200 --> 0:21:17.040 value of the rest of the economy falls. The stock 0:21:17.040 --> 0:21:18.040 market only reflects the. 0:21:18.040 --> 0:21:21.800 Former yields yond yields, right, So. 0:21:21.760 --> 0:21:24.360 What's going on with bond yields? So here's the problem. 0:21:24.480 --> 0:21:26.560 When you attack the FED and you say, what I 0:21:26.600 --> 0:21:29.439 want to do is put a lunatic in, and I 0:21:29.480 --> 0:21:32.640 want the lunatic to always and everywhere move interest rates 0:21:32.640 --> 0:21:34.440 to be low. And I want to do that because 0:21:34.480 --> 0:21:36.640 I'm a property developer, or because they want to move 0:21:36.640 --> 0:21:39.400 to what's called fiscal dominance. That's the word for the day, 0:21:39.760 --> 0:21:43.080 fiscal dominance. Fiscal dominance is when monetary policy is set 0:21:43.600 --> 0:21:47.560 not in trying to smooth the ups and down to 0:21:47.600 --> 0:21:50.840 the economy, but instead to keep interest rates low so 0:21:50.920 --> 0:21:53.480 that the government interest payments will be lower. It works, 0:21:53.960 --> 0:21:56.240 we pay less, but if you keep interstrates too low 0:21:56.280 --> 0:21:58.760 for too long, you get high inflation. So if you want, 0:21:58.800 --> 0:21:59.480