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Speaker 1: Hi, I'm Molly John Fast and this is Fast Politics,

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Speaker 1: where we discussed the top political headlines with some of

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Speaker 1: today's best minds, and a majority of US companies say

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Speaker 1: they need to raise prices because of tariffs. We have

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Speaker 1: such a great show for you today. MSNBC's own Laurence

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Speaker 1: O'Donnell stops by to talk about Trump's need to exaggerate everything.

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Speaker 1: Then we'll talk to the economists Mike Byrd about how

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Speaker 1: the tariffs are going to affect the economy.

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Speaker 2: But first the news, Molly.

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Speaker 3: As we know, Democratic Representative Shreith thatt Adar was trying

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Speaker 3: to introduce seven articles of impeachment. But you'll be shocked,

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Speaker 3: mister Trump, who often talks about how aggrieved he is

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Speaker 3: about his previous impeachments, he's shutting the whole thing down.

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Speaker 1: Yes, I am completely shocked. So let's just talk about this.

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Speaker 1: There aren't the votes for Trump to be impeached because

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Speaker 1: Democrats don't control the House. So not only are there

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Speaker 1: not the votes to impeach him, the votes to bring

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Speaker 1: the impeachment of for a vote, right because Republicans control

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Speaker 1: the House. So this was a guy who wanted to

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Speaker 1: bring it up anyway. Part of this is because voters,

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Speaker 1: I know you're going to be shocked to hear this,

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Speaker 1: but voters mostly want Democrats to run a check on

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Speaker 1: Trump and not to relitigate Biden's age.

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Speaker 2: I know you're going to be shocked.

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Speaker 1: They actually think the twenty twenty four election happened already

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Speaker 1: and now they want you to move on and to

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Speaker 1: try to prevent the sliding autocracy which we are seeing

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Speaker 1: before our very eyes. I think that when Democrats do things,

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Speaker 1: it matters. Think back to Corey Booker, I think back

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Speaker 1: to all of the videos that Chris Murphy has been doing.

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Speaker 1: They've actually broken through the noise. So I actually think

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Speaker 1: this was good. You know, in Tromp's first term, we

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Speaker 1: had Al Green from Texas and he did this and

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Speaker 1: Pelosi was sort of not pleased with him because he

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Speaker 1: didn't have the vote. So it's a stunt and not

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Speaker 1: necessarily something that you can bring to fruition. But honestly,

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Speaker 1: I think this is good. I think it's good to

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Speaker 1: just try. And I don't you know, I might. I

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Speaker 1: was at one point more cynical, and now I'm just like, actually,

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Speaker 1: trying is good. Good to try, try, try, that's not

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Speaker 1: bad also, you know, I think that there will be

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Speaker 1: many opportunities to impeach Donald Trump over the next thousand

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Speaker 1: plus days.

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Speaker 3: So speaking of reasons to impeach Trump, Homeland Security Secretary

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Speaker 3: Christy nom was again testifying, which is another thing Democrats

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Speaker 3: could do every day if they want to make themselves

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Speaker 3: look good.

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Speaker 2: They really could.

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Speaker 3: Yeah, because we have a saying in the business not

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Speaker 3: ready for primetime. This doesn't seem like she's ready for

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Speaker 3: three o'clock at the boarding with no one's watching. Right

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Speaker 3: here because these answers, I.

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Speaker 2: Sort of love her. What I love about her?

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Speaker 3: Tell me, what do you love about her? Is it

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Speaker 3: the dog killing Baly?

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Speaker 2: It's the dog killing the makeup.

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Speaker 3: The listeners might have just heard by dog growed as

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Speaker 3: I said that, right.

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Speaker 1: The injectibles and crazy injectibles, all of the makeup, the

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Speaker 1: enormous expensive watch. No listen, nobody likes Christy Nome. Let's

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Speaker 1: be honest here. But what is incredible is that she

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Speaker 1: doesn't know what habeas corpus is.

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Speaker 2: And I think that what Maggie.

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Speaker 1: Hassen, Democrat from New Hampshire did here is she really

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Speaker 1: did point out an important thing, which is it's much

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Speaker 1: more effective in these Senate hearings just to ask these

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Speaker 1: people questions which they clearly cannot answer, than to grand

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Speaker 1: stand for twenty minutes. So a lot of Senate hearings

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Speaker 1: and House hearings, any number of hearings, you'll have a

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Speaker 1: member grandstand and then they'll be a question sort of

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Speaker 1: and then the person will yell.

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Speaker 2: Back at them.

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Speaker 1: But this simple idea of asking a member of Trump's

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Speaker 1: at second administration what a phrase means, in this case,

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Speaker 1: habeas corpus, it's pretty clarifying. So she asks, She says,

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Speaker 1: what does habeas corpus mean? And Christy Noms says, habeas

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Speaker 1: corpus is a constitutional right that the president has to

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Speaker 1: be able to remove people from this country.

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Speaker 2: It's not that's not what it is.

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Speaker 1: It's nice that she thinks it's a right, by the way,

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Speaker 1: So habeas corpus is the legal principle that requires the

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Speaker 1: government to provide a public reason right for detaining and

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Speaker 1: imprisoning people. It's a pretty serious protection.

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Speaker 3: And it does not what made say, one of the

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Speaker 3: things that makes America great, right.

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Speaker 1: Well, I don't know, it would argue maybe, but anyway,

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Speaker 1: it's sort of exact with the opposite of what Christy

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Speaker 1: Gnomes said. It really shows like I just wonder if

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Speaker 1: you sat down and you just asked these people to

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Speaker 1: define things, if you would do better during some of

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Speaker 1: these hearings, you know, what does this mean?

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Speaker 2: What does that mean? What do you do in here?

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Speaker 2: What are you doing there?

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Speaker 1: But the point is either way, Christy Noom, while having

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Speaker 1: a lot of make up, quite a bit of injectibles

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Speaker 1: and very expensive watches, is a moron SAMAI.

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Speaker 3: Elon Musk says he'll do a lot less political spending

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Speaker 3: moving forward ed. Some people are saying, oh, look, STOs

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Speaker 3: was a failure. Other people are saying, kind of feels

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Speaker 3: like he accomplished his mission. If we look back to

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Speaker 3: when he said to Tucker Carl said that Trump had

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Speaker 3: to win or else who's going to go to jail?

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Speaker 3: That he was kind of hitting at that, what are

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Speaker 3: you thinking?

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Speaker 1: We don't know, right, This is like with so many

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Speaker 1: of these things from Trump world. We don't really know

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Speaker 1: what's true, right. We don't know if Elon is doing

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Speaker 1: this or if Elon is saying he's doing this. We

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Speaker 1: know that Elon polls about as well as the bubonic

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Speaker 1: plague that we know, right, You know, we just don't

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Speaker 1: know any more than that. So as much as I

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Speaker 1: certainly would like to see less Elon and American politics

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Speaker 1: for any number of reasons, but.

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Speaker 2: I wonder if it's true or not.

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Speaker 1: And and I'm very suspicious of anything Elon says because

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Speaker 1: there's no reason to trust Elon.

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Speaker 3: You know, he does often say we're going to do

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Speaker 3: this in two years, and then quite the opposite happens. Yeah,

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Speaker 3: so my in more grim news. After President Biden's advanced

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Speaker 3: cancer remarks, you'll be shocked at the right responded with

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Speaker 3: kindness and empathy and just really well done, decorum, You're hilarious. Yes, yes,

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Speaker 3: we have a despicable tweet and remarks from both Donald

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Speaker 3: Trump Junior and JD Vans here.

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Speaker 1: Okay, So the thinking here is that the pundit world

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Speaker 1: wants Democrats to talk about Joe Biden's age. They want

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Speaker 1: a discussion of Joe Biden's age, they want a reckoning

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Speaker 1: about Joe Biden's age. But I'm gonna give you guys

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Speaker 1: a hot take. Voters told us what they thought about

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Speaker 1: Joe Biden's age. They thought he was too old, and

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Speaker 1: the polling showed that, and that's why he dropped out

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Speaker 1: of the election. So is he too old because he's

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Speaker 1: too old? Or is he too old because he's too old?

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Speaker 1: He's too old to being old is the best case

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Speaker 1: scenario in case you're wondering, because there are a lot

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Speaker 1: of other things that can happen that are less good

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Speaker 1: than being old.

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Speaker 2: You know, I don't know. I mean, I.

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Speaker 1: Understand that Tapper has a book he wants to sell

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Speaker 1: and God bless him, but it doesn't make any sense

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Speaker 1: to me why we have to engage in this story.

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Speaker 1: He lost, he's old, he's got cancer. Now this is

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Speaker 1: all really dark and sad, and I don't.

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Speaker 2: Know that it matters. Look, we thought he was old.

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Speaker 2: He had good days and bad days.

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Speaker 1: It's just you know, I was talking behind the scenes

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Speaker 1: with some people I work with in TV Land, and

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Speaker 1: we're talking about it was like he had good days

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Speaker 1: and he had bad days, and sometimes he was good

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Speaker 1: and sometimes he was less good, like all eighty one

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Speaker 1: year olds. That's not a conspiracy. That's just getting old.

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Speaker 1: If only it were a conspiracy. You know, just like

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Speaker 1: the administration, they did a lot of good stuff, they

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Speaker 1: couldn't message it. They did some bad stuff, like they

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Speaker 1: couldn't settle the war in Gazo or in Ukraine, or

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Speaker 1: protect Taiwan. I mean, there were a lot of failures there,

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Speaker 1: but there were also a lot of really good things, reshoring, manufacturing,

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Speaker 1: chips and sciences. So again I don't get what the

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Speaker 1: goal here is except to sell books about the election,

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Speaker 1: which was really fucking horrible election and really dark and

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Speaker 1: ultimately Harris was set up for a glass cliff. This

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Speaker 1: is the end of the biden Age discourse. In this podcast.

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Speaker 1: We will no longer be speaking of it because my

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Speaker 1: man was old and now he has cancer and I

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Speaker 1: feel really badly for him, and quite frankly, you know,

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Speaker 1: that's it from it. Lawrence O'Donnell is the host of

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Speaker 1: the Lawrence O'Donnell Show on MSNBC.

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Speaker 2: Welcome to Fast Politics, Lawrence.

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Speaker 4: It's so great to be here, and I'm so out

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Speaker 4: of shape a podcasting because I forgot my headphones and

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Speaker 4: luckily you reminded me, so here we are.

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Speaker 1: You know, it's not so different than you know, television,

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Speaker 1: all things just longer and slower.

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Speaker 4: I think you get clearer thinking in podcasts because you

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Speaker 4: don't have control rooms screaming about getting to a commercial

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Speaker 4: in the next You know forty seconds, and so I

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Speaker 4: like it a lot.

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Speaker 1: You don't find someone screaming in your ears, rap rap rap,

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Speaker 1: not soothing.

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Speaker 4: Well by the way they I mean, they've they've learned, uh,

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Speaker 4: And I learned to ignore that. So they've learned not

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Speaker 4: to do that for many, many years now. And so

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Speaker 4: that's why I never interrupt guests. And the control room

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Speaker 4: used to be screaming at me to interrupt the guest

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Speaker 4: and in the segment and I and the first time

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Speaker 4: I didn't do it, I noticed that they figured out

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Speaker 4: how to do the show. Even though even though I

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Speaker 4: didn't do the really ugly, messy interrupting thing and throwing

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Speaker 4: to a commercial. The only time that becomes incredibly tense

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Speaker 4: is when you're really coming up to the last second

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Speaker 4: of your show. Then you really have to stop. But

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Speaker 4: I pretty much design it so that we never have

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Speaker 4: anybody in that space where where they're going to get

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Speaker 4: jammed that way and I'm going to get jammed that

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Speaker 4: way as a host, I just I hated it. It looks

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Speaker 4: so rough and it's just hard. It's hard for the

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Speaker 4: audience to understand what this urgency of interruption is about.

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Speaker 1: So let speaking of the urgency of interruption. I feel

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Speaker 1: like you and I we have lived through Trump one

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Speaker 1: point Oh, we have lived through Biden. You know, it's

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Speaker 1: four years now we are in Trump two point zero.

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Speaker 2: Has America learned anything?

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Speaker 4: Not that I can tell no, Because, for example, Trump

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Speaker 4: has been wrong about pretty much every declarative sentence he's

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Speaker 4: ever spoken as a politician or as a present or act.

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Speaker 4: And he's certainly wrong about every single number he mentions,

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Speaker 4: every number of any kind. I mean, let me just

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Speaker 4: throw out one from the present. He talks about the

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Speaker 4: current Air Force one planes. There's two of them as

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Speaker 4: being forty two years old. They are thirty five and

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Speaker 4: thirty four. Now, that's the smallest exaggeration he's ever done

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Speaker 4: with a number ever. But it's just the proof that

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Speaker 4: there's not a single number he can say that he

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Speaker 4: won't lie about in a direction that he thinks helps

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Speaker 4: to make his point about whatever he's talking about. And

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Speaker 4: there is not a single person in the White House

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Speaker 4: Press Corps who has ever figured out how to deal

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Speaker 4: with that. And there is not a single interviewer of

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Speaker 4: you know, Trump team people who have ever figured out

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Speaker 4: how to deal with that. They accept, you know, at

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Speaker 4: their best the people who do the best interviews of

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Speaker 4: Trump team players, and I think they're all bad interviews

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Speaker 4: by conception, by definition, they're not going to be good interviews.

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Speaker 4: But within that group of bad interviews, the best ones

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Speaker 4: can test a very tiny percentage of the falsehoods, a

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Speaker 4: very tiny percentage of the falsehoods that are said right

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Speaker 4: to them to their face. And you know, most of

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Speaker 4: us don't have data available on every single subject that

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Speaker 4: Trump or a Trump team player is going to lie about.

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Speaker 4: So how many people are sitting around knowing how old

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Speaker 4: the Air Force one planes are? Brett Bear certainly isn't

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Speaker 4: one of them, because when Donald Trump told him they're

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Speaker 4: forty years old, Brett Bear goes, oh, you know, I

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Speaker 4: didn't think the audio the uniist knows they're forty years old. Yeah, no, kidding, Brett,

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Speaker 4: because they're not. And I didn't know how old they

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Speaker 4: were either, so I looked it up before I ever

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Speaker 4: said anything about it. So this is unbelievable flood of falsehood.

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Speaker 4: And what's interesting about it is those same reporters retain

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Speaker 4: all the muscle memory of the kind of reaction you

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Speaker 4: would have to something like that, only and exclusively to

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Speaker 4: be applied to Joe Biden or other Democrats. If Chuck

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Speaker 4: Schumer gets a number wrong, he's going to be really pressed.

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Speaker 4: And if Joe Biden gets a name wrong, we might

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Speaker 4: just have to write a book about that. It's a

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Speaker 4: disastrous non learning curve, zero none, and voters, you know,

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Speaker 4: have learned as far as we can tell, the worst

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Speaker 4: possible lesson from the era, which is that character doesn't

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Speaker 4: matter at all, and the number of criminal convictions you

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Speaker 4: have between presidencies doesn't matter, and the number of criminal

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Speaker 4: indictments that have been landed on you don't matter. And

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Speaker 4: that's that is not the news media's fault, you know,

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Speaker 4: I think the news media across the board did their

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Speaker 4: best to stress that this matters. I think, you know,

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Speaker 4: everybody other than the right wing news media did their

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Speaker 4: absolute best. But you know, it's like, you know, it's

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Speaker 4: it's like being in a classroom with kids, you know,

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Speaker 4: who here two plus two and is four and they

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Speaker 4: just can't they just can't retain it. They just can't

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Speaker 4: do it. And so that's that's an unsolvable thing, is

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Speaker 4: that you have. It's not a small number of voters, right,

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Speaker 4: you have this, you have this possibly controlling number of

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Speaker 4: voters who have completely eliminated the issue of character, which

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Speaker 4: means they've eliminated the issue of fidelity to oath, which

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Speaker 4: means they've eliminated the issue to fidelity to the purpose

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Speaker 4: that the founders initiated in the creation of this government.

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Speaker 1: So we now can talk about something I've been thinking about,

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Speaker 1: which is this idea. So I was on TV yesterday

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Speaker 1: with an abundon who I like, and he said, the

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Speaker 1: mainstream media has to reckon with and the Democratic Party

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Speaker 1: has to reckon with publicizing Jake Tapper's book. Basically it

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Speaker 1: was what it was. And I thought to myself, No,

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Speaker 1: they fucking don't. They knew he was old. They told

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Speaker 1: us he was old, that he pulled poorly because they

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Speaker 1: felt he was old.

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Speaker 2: Reckon what they reckoned it happened. I mean, can you

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Speaker 2: explain this to me?

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Speaker 4: Yeah, of course they reckoned. And this is the most

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Speaker 4: ludicrous political challenge that the news media, and the news

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Speaker 4: media alone has decided to pose to one side of

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Speaker 4: our politics and never posed anything like it to the

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Speaker 4: other side of our politics. About the convicted felon who

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Speaker 4: that side of our politics fully embraced every day so

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Speaker 4: much so that they would compete to get in the

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Speaker 4: front row of his criminal trial to show how much

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Speaker 4: they personally supported paying off porn stars for their silence. Okay,

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Speaker 4: there's never been any kind of similar media demand, and

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Speaker 4: you know, book publishing demand. You know that the Republicans

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Speaker 4: deal with They to put it mildly, range of infirmities

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Speaker 4: moral to intellectual in Donald Trump. And no, I think

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Speaker 4: any Democrat who feels like they have to explain, you know,

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Speaker 4: why they didn't think it was a good idea, or

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Speaker 4: they didn't jump up and down as soon as they

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Speaker 4: read their first up ed piece saying Biden should drop

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Speaker 4: out in the middle of a presidential campaign. Why they

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Speaker 4: didn't embrace that, Why they didn't embrace the thing that

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Speaker 4: has never happened before in history. And let me define

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Speaker 4: for a moment, And this is the this is this

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Speaker 4: is the section of the puzzle that every one of

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Speaker 4: these you know, theories of the case decidedly avoids. The

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Speaker 4: definition of the middle of a presidential campaign. The middle

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Speaker 4: is two years in to a presidential term. Because the

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Speaker 4: puzzle parts that are left out every time the subject

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Speaker 4: comes up, is that a presidential campaign is not two

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Speaker 4: years long or one year long. It is four years long, okay,

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Speaker 4: four years long. And so the day after inauguration day,

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Speaker 4: actually usually before that, the next presidential campaign is being planned.

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Speaker 4: The minute Hillary Clinton lost, the minute she lost to

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Speaker 4: Donald Trump, Democrats the next day were planning deciding who

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Speaker 4: among them would run for president. They were thinking about

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Speaker 4: it within the latest, by the weekend. By the weekend.

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Speaker 4: I mean, I can assure you Kamala Harris was thinking

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Speaker 4: about running for president by the weekend. Joe Biden was

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Speaker 4: thinking about running for president by that weekend. And they started,

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Speaker 4: they all did. And so you have to accept with

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Speaker 4: this idea that what the real menu choice was. And

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Speaker 4: the real menu choice was Joe Biden, you know, saying

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Speaker 4: to Ron Klain day after inauguration, Okay, I'm not going

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Speaker 4: to run for reelection, So what do we want to

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Speaker 4: accomplish in our four years? And Ron Klan would have

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Speaker 4: to say what Joe Biden would already know, which is, well,

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Speaker 4: I guess we're going to accomplish nothing because you will

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Speaker 4: be a lane duck instantly, and we have a fifty

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Speaker 4: one seat you know majority in the United States. Senate

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Speaker 4: Joe Manchin won't vote for a single thing We do

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Speaker 4: And next week Joe Manchin will be running for president

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Speaker 4: and he'll be running against your do nothing presidency. And

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Speaker 4: he'll be and we'll have a large primary field, and

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Speaker 4: Kamala will probably be in it being attacked for your

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Speaker 4: do nothing presidency. And that's what the primary will be about.

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Speaker 4: And from that primary, we'll get a nominee, and that

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Speaker 4: nominee will go against Trump and wish us luck. That's

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Speaker 4: your real menu choice. It's that versus what happened. It's

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Speaker 4: that versus what actually happened, which is Biden's decides. What

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Speaker 4: we're going to do is we're going to govern. We're

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Speaker 4: going to do our best at governing. We're going to

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Speaker 4: accomplish everything we can possibly accomplish, and we're going to

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Speaker 4: present that to voters. And he accomplishes more than any

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Speaker 4: president with a fifty one seat majority in the United

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Speaker 4: States Senate, than any president in history. Like, there's no

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Speaker 4: legislative accomplishment package even close to that, given the tiny, tiny,

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Speaker 4: tiny majorities that he had. And so that's the real

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Speaker 4: menu choice. And if someone wants to embrace every piece

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Speaker 4: of that puzzle and then make a menu choice, that's

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Speaker 4: okay with me. But I have never once heard a

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Speaker 4: single person who was a champion of the get rid

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Speaker 4: of Biden as a nominee at any point on the calendar,

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Speaker 4: including after the debate. I've never heard them include every

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Speaker 4: single piece of the puzzle that has brought us to

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Speaker 4: that decision point. And they still never do.

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Speaker 1: Yeah, it's true and that, but I also think that

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Speaker 1: you know, there, it's a news cycle that has a

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Speaker 1: lot of purpose, right, it obfuscates for Trump. I think

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Speaker 1: what is the most interesting too, is that you see Trump.

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Speaker 1: There's so many enablers in Trump world, right from the people.

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Speaker 2: Who I mean, just at every point. The man is

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Speaker 2: so enabled.

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Speaker 1: And the criticism of Democrats is really that they enabled

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Speaker 1: Biden right ultimately, and I just think that's a bit ironic.

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Speaker 4: The thing that this approach has to ignore is that

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Speaker 4: Joe Biden, the oldest president in history. On March seventh,

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Speaker 4: I think it is of twenty twenty four, March seventh

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Speaker 4: delivers the best State of the Union address ever delivered ever, ever,

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Speaker 4: you know, like not even like not just of the

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Speaker 4: time television age, but ever, Okay, better than any of

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Speaker 4: FDR's State of the Union addresses. And it includes ad libbing,

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Speaker 4: which no State of the Union dress had ever included before.

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Speaker 4: And it is both comedic ad libbing and policy ad

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Speaker 4: libbing at the same time. And he tricks the idiots,

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Speaker 4: the Marjorie Taylor Green idiots in the audience into forcing

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Speaker 4: a public agreement with Republicans on policy that they will

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Speaker 4: not try to cut Social Security, cut Medicare, cut Medicaid.

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Speaker 4: He does that in the room. He governs in the

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Speaker 4: room with the clowns in the back of the room,

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Speaker 4: and the agility of that was something we've never seen before.

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Speaker 4: When Barack Obama became the first president to be heckled

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Speaker 4: in a State of the Union address, Barack Obama is

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Speaker 4: the most deft stand up comedian in the history of

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Speaker 4: the presidency. Barack Obama said nothing. He stood there and

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Speaker 4: he looked, and he couldn't, for the life of him,

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Speaker 4: think of a single thing to say after being heckled

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Speaker 4: in his State of the Union address. That's and that's

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Speaker 4: not a criticism of Barack Obama. I understand that it

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Speaker 4: was the first time. But what the whole concept of

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Speaker 4: Biden was unfit to run and was obviously unfit to run,

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Speaker 4: must studiously ignore is that the entire section every section

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Speaker 4: of the news media that's saying, not now granted that

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Speaker 4: that State of the Union address was the best State

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Speaker 4: of the Union address that they had covered. They've never

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Speaker 4: covered a better State of the Union dress ever, And

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Speaker 4: so what the one hundred and ten days later, Biden

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Speaker 4: goes into that debate and Biden does what we all

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Speaker 4: saw Biden do, and the idea that oh, we knew

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Speaker 4: this all along, No we didn't, because one hundred and

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Speaker 4: ten days ago we saw the opposite. We saw the opposite,

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Speaker 4: So we were shocked and surprised. And anyone who's pretending

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Speaker 4: that they weren't shocked and surprised is lying about their

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Speaker 4: own exposure to Joe Biden, including public disposure in the

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Speaker 4: State of the Union address.

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Speaker 2: I had completely forgotten.

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Speaker 4: One hundred and ten days. It's one hundred and ten days.

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Speaker 5: You know.

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Speaker 4: You got to go back and look look at CNN's

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Speaker 4: coverage of the State of the Union address. Try to

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Speaker 4: find any one of those anchors saying Biden did a

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Speaker 4: really bad job tonight because he's old and he can't think,

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Speaker 4: he's and he got really wiped out by the hecklers

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Speaker 4: because he was just lost. Did you see how lost

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Speaker 4: he was no, that doesn't exist, does not exist, you know,

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Speaker 4: And so listen, I find it incredibly challenging. And I

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Speaker 4: think the ultimate question there is, you know, did something

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Speaker 4: happen in those one hundred and ten days, you know,

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Speaker 4: did something happen you know in the in the age curved?

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Speaker 4: You know, what was it? I mean, Joe Biden had said,

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Speaker 4: you know, he was he was feeling really sick. He said,

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Speaker 4: you know, he was feeling really sick with a cold.

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Speaker 4: He has also said in private, he has also said

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Speaker 4: I fucked up that debate. Those are words he has

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Speaker 4: used in private, Okay. And there's a difference between the

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Speaker 4: way politicians talk in private the way they talk in

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Speaker 4: the view. And there's always going there's always going to be,

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Speaker 4: you know. And so it's an approach, this idea that

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Speaker 4: it's so obvious, you know, what the Democrats should have

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Speaker 4: done in a situation that has never existed in campaign

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Speaker 4: history before. It's never obvious what you do when something

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Speaker 4: happens for the first time. And by the way, one

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Speaker 4: of the tiny proofs of that is it's never obvious

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Speaker 4: what a president should do if he suddenly, for the

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Speaker 4: first time in history, gets heckled in a State of

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Speaker 4: the Union address and Barack Obama chose silence, which I

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Speaker 4: think was a noble choice, but it wasn't obvious what

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Speaker 4: to do because it had never happened before.

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Speaker 2: Yeah, it's a really good point.

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Speaker 1: And I also think that, you know, as we're talking

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Speaker 1: about this and talking about this, sort of the way

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Speaker 1: in which the confidence with which these people are looking

435
00:24:53,080 --> 00:24:54,680
Speaker 1: back on what happened.

436
00:24:54,640 --> 00:24:55,439
Speaker 2: It's really interesting.

437
00:24:55,520 --> 00:24:57,480
Speaker 1: And I also want to bring up you know, John

438
00:24:57,520 --> 00:25:02,440
Speaker 1: Allen and Amy wrote this book about the election and

439
00:25:02,680 --> 00:25:06,040
Speaker 1: they talked about how Biden had flown back and forth

440
00:25:06,080 --> 00:25:08,000
Speaker 1: to Europe numerous.

441
00:25:07,680 --> 00:25:08,840
Speaker 2: Times, you know twice.

442
00:25:09,000 --> 00:25:12,120
Speaker 1: That's right back and forth right before the debate, And

443
00:25:12,200 --> 00:25:15,200
Speaker 1: you and I both do a lot of performing, etc.

444
00:25:15,640 --> 00:25:19,359
Speaker 1: And it's not so easy, and then debates are ten

445
00:25:19,400 --> 00:25:22,920
Speaker 1: times harder. I mean, obviously, whatever we're going to have,

446
00:25:23,560 --> 00:25:26,359
Speaker 1: I think we're cursed for another week of this discourse.

447
00:25:26,440 --> 00:25:30,199
Speaker 1: But it does strike me that I could see a

448
00:25:30,240 --> 00:25:32,359
Speaker 1: world in which is it's just hard.

449
00:25:32,680 --> 00:25:35,800
Speaker 4: It's going to disappear. I mean that's my prediction, but

450
00:25:35,880 --> 00:25:38,720
Speaker 4: I think predictions are worthless. But it's inconceivable to me.

451
00:25:38,840 --> 00:25:42,520
Speaker 4: I mean, look, I think there are absolutely, relentlessly goofy

452
00:25:43,119 --> 00:25:46,040
Speaker 4: Washington reporters who will be on the campaign trail in

453
00:25:46,080 --> 00:25:50,040
Speaker 4: Iowa and they will be sticking their very stupid microphones

454
00:25:50,400 --> 00:25:54,439
Speaker 4: in front of Democratic candidates and saying, why didn't you

455
00:25:54,560 --> 00:25:56,960
Speaker 4: turn on Biden? Did you lie? Were you part of

456
00:25:56,960 --> 00:25:59,600
Speaker 4: the conspiracy? They will do that. In fact, I've seen

457
00:25:59,640 --> 00:26:04,160
Speaker 4: one on CNN promising to do that four years from now.

458
00:26:04,400 --> 00:26:08,639
Speaker 4: That's how crazy they are. That crazy child who's a

459
00:26:08,760 --> 00:26:13,240
Speaker 4: veteran campaign reporter, not a CNN employee, but a panelist.

460
00:26:13,280 --> 00:26:17,879
Speaker 4: That crazy child believes that he knows what the most

461
00:26:17,920 --> 00:26:21,520
Speaker 4: important question will be in Iowa, New Hampshire, and South

462
00:26:21,600 --> 00:26:25,239
Speaker 4: Carolina in twenty twenty eight. He's convinced he knows what

463
00:26:25,280 --> 00:26:28,240
Speaker 4: it is, and it'll be about Joe Biden. That's what

464
00:26:28,320 --> 00:26:32,439
Speaker 4: it'll be about. I mean, that is the proof of

465
00:26:32,560 --> 00:26:37,280
Speaker 4: the just rank mental incompetence of the people who are

466
00:26:37,560 --> 00:26:42,160
Speaker 4: herded into this herd mentality that they so desperately embrace

467
00:26:42,240 --> 00:26:45,800
Speaker 4: because they don't have any higher intellectual framework to use

468
00:26:46,040 --> 00:26:51,600
Speaker 4: in campaign coverage. Don't get me started about this, Okay,

469
00:26:51,720 --> 00:26:53,440
Speaker 4: I have strong feelings about this.

470
00:26:53,520 --> 00:26:57,320
Speaker 2: Tell us what you really think. Thank you, thank you,

471
00:26:57,400 --> 00:26:58,040
Speaker 2: thank you.

472
00:26:57,960 --> 00:27:00,000
Speaker 4: Lawrence, thank you, thank you.

473
00:27:02,119 --> 00:27:06,480
Speaker 1: Mike Bird is the economist Wall Street editor. Welcome to

474
00:27:06,640 --> 00:27:07,680
Speaker 1: Fast Politics.

475
00:27:07,720 --> 00:27:09,040
Speaker 5: Mike, glad to be here.

476
00:27:09,200 --> 00:27:10,520
Speaker 2: Talk to me about the tariffs.

477
00:27:10,840 --> 00:27:13,400
Speaker 1: What I think is so interesting about this tariff situation

478
00:27:13,520 --> 00:27:15,960
Speaker 1: is Trump was like, we're gonna have one hundred million

479
00:27:16,080 --> 00:27:18,000
Speaker 1: trillion dollar tariffs on China.

480
00:27:18,200 --> 00:27:18,760
Speaker 2: No we're not.

481
00:27:19,480 --> 00:27:22,840
Speaker 1: Now nobody's talking about it anymore. But they are still

482
00:27:22,960 --> 00:27:26,560
Speaker 1: the largest tariffs at least on China since when.

483
00:27:27,000 --> 00:27:30,679
Speaker 5: Yeah, I mean since since ever essentially, Right, it's the

484
00:27:30,680 --> 00:27:35,479
Speaker 5: biggest single increase even still in tariffs at least in

485
00:27:35,800 --> 00:27:38,880
Speaker 5: you know, a century. I think the best example I've

486
00:27:38,880 --> 00:27:41,760
Speaker 5: heard of this someone talked about anchoring. It's like a

487
00:27:41,800 --> 00:27:45,719
Speaker 5: salesperson tactic, you know, and once you get someone's mindset

488
00:27:45,800 --> 00:27:48,719
Speaker 5: towards a certain level, you know, anything belower above that

489
00:27:48,800 --> 00:27:51,960
Speaker 5: seems like anything below that seems like an improvement. And

490
00:27:52,200 --> 00:27:54,960
Speaker 5: that's clearly what's happened with the tariffs. Right. You come

491
00:27:55,000 --> 00:27:56,879
Speaker 5: in thinking you're going to get one hundred and forty

492
00:27:56,880 --> 00:28:00,479
Speaker 5: five percent on China, which is like functionally in bargo,

493
00:28:00,840 --> 00:28:03,800
Speaker 5: right that that means more or less no trade. You

494
00:28:03,840 --> 00:28:05,760
Speaker 5: get them down to thirty and it sounds like a

495
00:28:05,760 --> 00:28:08,280
Speaker 5: big win. But coming up from from nothing on a

496
00:28:08,320 --> 00:28:11,520
Speaker 5: lot of these product lines. That's it's an absolutely huge increase.

497
00:28:12,080 --> 00:28:17,440
Speaker 1: Yeah, so let's talk about all of this, the China tariffs.

498
00:28:17,800 --> 00:28:20,280
Speaker 1: We had somebody on this podcast recently was talking about

499
00:28:20,320 --> 00:28:24,160
Speaker 1: the shipping right that there were these ports, the big

500
00:28:24,240 --> 00:28:26,639
Speaker 1: China ports, which are the Port of Los Angeles, the

501
00:28:26,680 --> 00:28:29,240
Speaker 1: Port of Long Beach, you know, just weren't having ships come.

502
00:28:29,480 --> 00:28:32,520
Speaker 2: Now is the shipping back on? What does the supply

503
00:28:32,640 --> 00:28:33,280
Speaker 2: chain look like?

504
00:28:33,680 --> 00:28:36,240
Speaker 5: Yeah, my understanding is that there has been a sort

505
00:28:36,280 --> 00:28:38,960
Speaker 5: of bull whip effect that a lot of things are

506
00:28:39,040 --> 00:28:42,280
Speaker 5: coming back. Basically, i'd say to thirty percent, it's no

507
00:28:42,320 --> 00:28:45,640
Speaker 5: longer essentially an embargo, right, one hundred and forty five

508
00:28:45,640 --> 00:28:48,239
Speaker 5: percent tariffs means that just a huge number of these

509
00:28:48,240 --> 00:28:50,400
Speaker 5: product lines, people just won't buy these products. Right. It's

510
00:28:50,440 --> 00:28:52,560
Speaker 5: it's not even that they'll be produced somewhere else, it's

511
00:28:52,600 --> 00:28:55,479
Speaker 5: that they just won't exist. They won't be purchased. At

512
00:28:55,520 --> 00:28:58,120
Speaker 5: thirty percent, that's a huge increase. But for a lot

513
00:28:58,160 --> 00:29:01,400
Speaker 5: of product lines, in the short at least you still

514
00:29:01,400 --> 00:29:04,040
Speaker 5: need these items. And yeah, so there's been there's been

515
00:29:04,040 --> 00:29:07,200
Speaker 5: a bounce back. What you will see because of this

516
00:29:07,640 --> 00:29:10,280
Speaker 5: is that unlike before where one hundred and forty five

517
00:29:10,280 --> 00:29:13,280
Speaker 5: percent is so steep that the nobody ends up paying

518
00:29:13,440 --> 00:29:16,520
Speaker 5: the tariffs. What you will see now is the huge

519
00:29:16,560 --> 00:29:19,960
Speaker 5: sort of ripple effect of the price increases going into

520
00:29:20,120 --> 00:29:22,680
Speaker 5: US consumer goods. And that's sort of because of the

521
00:29:22,720 --> 00:29:25,240
Speaker 5: shipping effect, sort of ripples out from the west coast

522
00:29:25,440 --> 00:29:28,840
Speaker 5: travels east, and as the inventoryes decline and decline and

523
00:29:28,880 --> 00:29:32,400
Speaker 5: decline across the country, you see the price increases come through.

524
00:29:32,520 --> 00:29:34,040
Speaker 5: You might not see it on day one. You might

525
00:29:34,080 --> 00:29:36,760
Speaker 5: wake up in six months and not understand why your

526
00:29:36,760 --> 00:29:39,560
Speaker 5: air conditioning unit replacement seems to cost twice as much

527
00:29:39,560 --> 00:29:41,960
Speaker 5: as it did before, But that that's what will happen.

528
00:29:42,200 --> 00:29:44,520
Speaker 1: So Amazon said they were going to put in the

529
00:29:44,560 --> 00:29:48,600
Speaker 1: tariff increase. So would say, like this ink well because

530
00:29:48,720 --> 00:29:52,920
Speaker 1: we all use inkwells, is five bucks. Now with tariffs,

531
00:29:52,960 --> 00:29:55,920
Speaker 1: it's going to be fifteen. You know, one be fifteen?

532
00:29:55,960 --> 00:29:58,760
Speaker 1: It would be eight, okay or seven?

533
00:29:59,080 --> 00:29:59,360
Speaker 5: Sure?

534
00:29:59,400 --> 00:30:02,400
Speaker 1: And you can tell I can barely do math, right,

535
00:30:02,440 --> 00:30:05,320
Speaker 1: I think we can all be clear here that but okay,

536
00:30:05,400 --> 00:30:08,760
Speaker 1: so there was certain transparency. Trump got furious because then

537
00:30:08,880 --> 00:30:11,800
Speaker 1: people will know what he's done, and he pushed back.

538
00:30:11,840 --> 00:30:15,160
Speaker 1: And since Jeff Bezos has all these rockets he wants

539
00:30:15,200 --> 00:30:18,640
Speaker 1: to put up in the sky. He said, fine, okay, fine,

540
00:30:18,720 --> 00:30:21,640
Speaker 1: so you won against Amazon. The prices are just going

541
00:30:21,640 --> 00:30:23,760
Speaker 1: to be raised. No one's going to know why they're

542
00:30:23,800 --> 00:30:26,680
Speaker 1: more expensive. But I think people may be able to

543
00:30:26,680 --> 00:30:29,760
Speaker 1: figure it out. Now we see Walmart says we're going

544
00:30:29,840 --> 00:30:33,000
Speaker 1: to have to raise prices. Trump goes after them, says

545
00:30:33,440 --> 00:30:36,240
Speaker 1: you should eat the tariffs because you make so much money.

546
00:30:36,280 --> 00:30:39,760
Speaker 1: And also I've never liked the Waltons basically, And then

547
00:30:39,920 --> 00:30:42,600
Speaker 1: now and we saw this again. Now Daily Mail has

548
00:30:42,600 --> 00:30:48,240
Speaker 1: an article about Target employees totally flamoxed by how much

549
00:30:48,400 --> 00:30:53,560
Speaker 1: the tariffs are affecting prices. So, but the equity markets

550
00:30:54,080 --> 00:30:55,040
Speaker 1: have recovered.

551
00:30:55,480 --> 00:30:56,400
Speaker 2: Make it make sense.

552
00:30:56,840 --> 00:30:59,240
Speaker 5: Yeah, it's a great question. I think the most important

553
00:30:59,240 --> 00:31:01,880
Speaker 5: thing to think of about when it comes to businesses

554
00:31:02,000 --> 00:31:05,400
Speaker 5: like Target, like Walmart, even to a lot of Amazon,

555
00:31:05,800 --> 00:31:08,800
Speaker 5: is that these are massive businesses. But go go and

556
00:31:08,840 --> 00:31:10,680
Speaker 5: look at the profit margins, Go and look at the

557
00:31:10,720 --> 00:31:16,400
Speaker 5: operating margins for these companies. These are extremely competitive markets

558
00:31:16,760 --> 00:31:20,640
Speaker 5: with pretty tight margins, and you are basically just blowing

559
00:31:20,680 --> 00:31:24,200
Speaker 5: them out with these tariffs, right, You are completely erasing

560
00:31:24,560 --> 00:31:27,600
Speaker 5: the margins. So the idea of Walmart eating a lot

561
00:31:27,640 --> 00:31:31,360
Speaker 5: of these increases is just wildly implausible. There were always

562
00:31:31,440 --> 00:31:33,520
Speaker 5: going to be price increases because of this, you know, yeah,

563
00:31:33,520 --> 00:31:35,760
Speaker 5: I mean you could argue with like a five percent tariff,

564
00:31:35,920 --> 00:31:38,440
Speaker 5: maybe maybe some of the retails can can eat that,

565
00:31:38,520 --> 00:31:40,920
Speaker 5: but at the levels we're talking about, it's not even

566
00:31:41,040 --> 00:31:44,040
Speaker 5: sort of remotely plausible. The equity market recovering, I think

567
00:31:44,040 --> 00:31:46,080
Speaker 5: there's a bit of anchoring going on there as well.

568
00:31:46,360 --> 00:31:49,040
Speaker 2: So explain that to ask what that means anchoring.

569
00:31:49,400 --> 00:31:52,520
Speaker 5: It's basically people got very upset about the tariffs, and

570
00:31:52,560 --> 00:31:54,520
Speaker 5: then when the announcement came out that there'd be a

571
00:31:54,600 --> 00:31:56,880
Speaker 5: ninety day pause, they were like, oh wow, so that's

572
00:31:56,960 --> 00:31:59,320
Speaker 5: one piece of good news and one piece of bad news,

573
00:31:59,320 --> 00:32:01,280
Speaker 5: and these two effect actively wash each other out. Now,

574
00:32:01,280 --> 00:32:04,080
Speaker 5: the reality is that it doesn't anything like wash itself out.

575
00:32:04,160 --> 00:32:06,240
Speaker 5: You know, you've see these sort of the content of

576
00:32:06,280 --> 00:32:09,120
Speaker 5: these deals, the one of the UK and the subject

577
00:32:09,200 --> 00:32:12,640
Speaker 5: of the negotiations going on between the US and China.

578
00:32:12,760 --> 00:32:15,600
Speaker 5: There's not much in them, right. The tariff levels are

579
00:32:15,600 --> 00:32:19,760
Speaker 5: going to remain high relative to what they'd otherwise have been.

580
00:32:20,160 --> 00:32:22,720
Speaker 5: So I do find the recovery of the equity market

581
00:32:22,720 --> 00:32:25,040
Speaker 5: a little bit perplexing. One thing that I will say

582
00:32:25,280 --> 00:32:29,560
Speaker 5: is definitely happening is retail buyers of stocks, really sort

583
00:32:29,560 --> 00:32:33,320
Speaker 5: of ordinary Americans and certainly not big institutions, have been

584
00:32:33,840 --> 00:32:39,000
Speaker 5: relentless buyers of declines in stock prices. This is like

585
00:32:39,040 --> 00:32:41,360
Speaker 5: the opposite of how you would expect this to work.

586
00:32:41,280 --> 00:32:42,800
Speaker 2: Right, They're buying the depth.

587
00:32:42,800 --> 00:32:46,760
Speaker 5: Absolutely, and it's a fascinating thing because it's almost like

588
00:32:47,160 --> 00:32:51,200
Speaker 5: a form of really strongly engendered behavior. Now, and I

589
00:32:51,200 --> 00:32:53,760
Speaker 5: think this partly comes out of twenty twenty, where you

590
00:32:53,800 --> 00:32:57,600
Speaker 5: sort of sort of massive pandemic slump that then immediately rebounded.

591
00:32:57,760 --> 00:32:59,640
Speaker 5: I think there's maybe a little bit of sort of

592
00:32:59,640 --> 00:33:02,840
Speaker 5: the c SO world leaking into what is happening in

593
00:33:02,880 --> 00:33:05,880
Speaker 5: the equity market here. But yeah, this has been relentless behavior.

594
00:33:05,880 --> 00:33:09,160
Speaker 5: You see big institutions, big investors selling, and you see

595
00:33:09,200 --> 00:33:11,680
Speaker 5: retail buying the dip, and they're still doing that.

596
00:33:12,040 --> 00:33:16,280
Speaker 1: So the equity markets whatever, they're high on their own supply.

597
00:33:16,560 --> 00:33:19,280
Speaker 1: The bond markets are not high on their own supply.

598
00:33:19,480 --> 00:33:22,840
Speaker 1: If anything, they're panicked like the rest of us. So

599
00:33:23,360 --> 00:33:26,520
Speaker 1: explain to us what's happening with the bond markets and

600
00:33:26,600 --> 00:33:29,600
Speaker 1: also the fact that they become such an indicator.

601
00:33:29,640 --> 00:33:30,920
Speaker 2: I think it's pretty interesting.

602
00:33:31,320 --> 00:33:33,800
Speaker 5: Yeah, totally. So, I guess put this in context that

603
00:33:33,880 --> 00:33:37,880
Speaker 5: the two markets where you still can see significant tariff

604
00:33:37,960 --> 00:33:41,040
Speaker 5: related effects. The bond market, as you say, you know,

605
00:33:41,160 --> 00:33:43,800
Speaker 5: the tenure treasury yield is still about four and a

606
00:33:43,840 --> 00:33:47,520
Speaker 5: half percent, that's you know, above where it was when

607
00:33:47,720 --> 00:33:50,960
Speaker 5: all of this started at the beginning of April. And

608
00:33:51,000 --> 00:33:53,560
Speaker 5: the other one you can see is in the currency markets,

609
00:33:53,560 --> 00:33:55,840
Speaker 5: where the dollar is still down quite a bit, right,

610
00:33:55,880 --> 00:33:58,880
Speaker 5: So it's not everyone sort of going insane over this.

611
00:33:59,200 --> 00:34:01,880
Speaker 5: I think in a the bond market, the important thing

612
00:34:02,120 --> 00:34:04,959
Speaker 5: to know, I guess in terms of the basics of

613
00:34:04,960 --> 00:34:08,319
Speaker 5: how it works. If you expect US economic growth to

614
00:34:08,360 --> 00:34:12,040
Speaker 5: be lower going forward, you would think, oh, the Federal

615
00:34:12,040 --> 00:34:14,240
Speaker 5: Reserve will come in and cut interest rates. The Federal

616
00:34:14,280 --> 00:34:16,759
Speaker 5: Reserve cuts interest rates, and bond yields go down. But

617
00:34:17,000 --> 00:34:19,480
Speaker 5: the last few years have made the Federal Reserve panicked

618
00:34:19,640 --> 00:34:23,200
Speaker 5: about inflation and their right to be relatively panicked. Inflation

619
00:34:23,320 --> 00:34:26,160
Speaker 5: expectations are higher than they have been. You saw that big,

620
00:34:26,200 --> 00:34:28,880
Speaker 5: big burst of inflation that really took them by surprise

621
00:34:29,200 --> 00:34:33,040
Speaker 5: in twenty twenty two in particular. So basically the concern

622
00:34:33,200 --> 00:34:36,720
Speaker 5: is the US economy slows, inflation remains high, interest rates

623
00:34:36,760 --> 00:34:40,160
Speaker 5: remain high, and you have this sort of prolonged nasty

624
00:34:40,200 --> 00:34:43,560
Speaker 5: effect in the bond market where yields stay high, which

625
00:34:43,640 --> 00:34:46,799
Speaker 5: ultimately means that the US government spends a lot more

626
00:34:46,800 --> 00:34:50,000
Speaker 5: on debt interest payments than it previously would have done.

627
00:34:50,040 --> 00:34:53,040
Speaker 5: And with the current sort of deficit discussions going on,

628
00:34:53,080 --> 00:34:55,759
Speaker 5: the current budget discussions going on in DC, this is

629
00:34:55,800 --> 00:34:58,000
Speaker 5: all the more worrying because the sort of yeah, there

630
00:34:58,000 --> 00:35:01,520
Speaker 5: seems to be very little seriousness frankly on either side

631
00:35:01,560 --> 00:35:03,680
Speaker 5: of the aisle, especially from the Republicans, but on either

632
00:35:03,719 --> 00:35:06,439
Speaker 5: side of the aisle about the long term projections here,

633
00:35:06,480 --> 00:35:09,520
Speaker 5: which look increasingly dicey four and a half percent on

634
00:35:09,560 --> 00:35:12,719
Speaker 5: tenure borrowing is loads. That's pretty high. We had a

635
00:35:12,840 --> 00:35:15,799
Speaker 5: very very long period where ten year yields were much

636
00:35:15,920 --> 00:35:18,800
Speaker 5: much lower than that during the pandemic and before the pandemic,

637
00:35:18,800 --> 00:35:21,480
Speaker 5: after global financial crisis, long periods of time when it

638
00:35:21,480 --> 00:35:23,920
Speaker 5: was below two percent. So you know, over time, you're

639
00:35:23,920 --> 00:35:26,800
Speaker 5: more than doubling the debt interest on those ten years

640
00:35:26,800 --> 00:35:30,080
Speaker 5: as they mature and they have to be refinanced. So yeah,

641
00:35:30,160 --> 00:35:32,960
Speaker 5: and that's not fixed at all. The bomb markets certainly

642
00:35:32,960 --> 00:35:35,120
Speaker 5: not back to where it is. Foreign buyers of the

643
00:35:35,200 --> 00:35:37,880
Speaker 5: US government bonds, those that I speak to, they're a

644
00:35:37,920 --> 00:35:41,680
Speaker 5: lot more worried about buying US government assets in general,

645
00:35:41,960 --> 00:35:45,480
Speaker 5: just because for sort of implicit trust, the implicit safety

646
00:35:45,719 --> 00:35:49,759
Speaker 5: that they have regarded the US government with for decades.

647
00:35:49,960 --> 00:35:52,399
Speaker 5: It's not gone, but it's certainly shaken relative to where

648
00:35:52,440 --> 00:35:52,759
Speaker 5: it was.

649
00:35:53,160 --> 00:35:54,720
Speaker 2: So let's talk about Moody.

650
00:35:54,840 --> 00:35:58,280
Speaker 1: Is this downgrading of credit not the first time credit

651
00:35:58,320 --> 00:36:02,280
Speaker 1: has been downgraded during OBI During the credit crisis, credit

652
00:36:02,360 --> 00:36:05,399
Speaker 1: was downgraded to an AA. But all of this again,

653
00:36:05,480 --> 00:36:08,440
Speaker 1: the anxiety with the bond market is that there's going

654
00:36:08,800 --> 00:36:10,880
Speaker 1: I mean, there are a number of anxieties, but dollar

655
00:36:10,920 --> 00:36:13,680
Speaker 1: flight is a big one, right, the idea that somehow

656
00:36:13,719 --> 00:36:18,239
Speaker 1: the dollar will no longer be the currency that everybody

657
00:36:18,400 --> 00:36:21,200
Speaker 1: has made it, and that will mean servicing our debt

658
00:36:21,200 --> 00:36:23,239
Speaker 1: will be more expensive, and it'll be a cascade of

659
00:36:23,280 --> 00:36:26,120
Speaker 1: other things that will happen. But the thing that I

660
00:36:26,360 --> 00:36:31,279
Speaker 1: keep thinking about that was all of Biden's administration was

661
00:36:31,640 --> 00:36:34,719
Speaker 1: really his financial policy, among other things, and I think

662
00:36:34,719 --> 00:36:37,920
Speaker 1: it was the best part of that administration actually, because

663
00:36:38,040 --> 00:36:39,880
Speaker 1: it got us this soft landing. I mean, there were

664
00:36:39,880 --> 00:36:41,759
Speaker 1: a lot of things that were not that where they

665
00:36:41,800 --> 00:36:43,440
Speaker 1: didn't do a great job. But this I think they

666
00:36:43,480 --> 00:36:45,360
Speaker 1: really did do a great job. And one of the

667
00:36:45,360 --> 00:36:48,640
Speaker 1: things they did a great job with was they avoided statflation.

668
00:36:49,120 --> 00:36:54,000
Speaker 1: It strikes me because of the tariffs, because they're so inflationary,

669
00:36:54,480 --> 00:36:58,320
Speaker 1: because they also slow the economy, because we're having every

670
00:36:59,120 --> 00:37:03,439
Speaker 1: month questions are we not in a recession? It does

671
00:37:03,480 --> 00:37:06,479
Speaker 1: seem like, And then you have consumer confidence way way

672
00:37:06,520 --> 00:37:10,080
Speaker 1: down right. We're seeing these crazy consumer confidence numbers. As

673
00:37:10,080 --> 00:37:13,759
Speaker 1: soon as we get one quarter that chose we're in

674
00:37:13,760 --> 00:37:17,640
Speaker 1: a recession or one month that so we're in recession,

675
00:37:17,880 --> 00:37:20,560
Speaker 1: it's hard for me to imagine we don't dip into stagflation.

676
00:37:21,160 --> 00:37:25,279
Speaker 1: So talk about stagflation, which is when things get more

677
00:37:25,320 --> 00:37:29,840
Speaker 1: expensive and also in a recession, and then explain to

678
00:37:29,920 --> 00:37:32,080
Speaker 1: us what you think is going to happen, and also

679
00:37:32,400 --> 00:37:34,520
Speaker 1: what we could do to get out of it or

680
00:37:34,680 --> 00:37:36,600
Speaker 1: are we going to get stuck in it.

681
00:37:36,600 --> 00:37:38,880
Speaker 5: It's a great question, and I think the basic building

682
00:37:38,920 --> 00:37:43,439
Speaker 5: blocks of it stagflation, portmanteau, stagnation, and inflation. You've had

683
00:37:43,480 --> 00:37:47,000
Speaker 5: periods of US history where you've seen this. You know,

684
00:37:47,040 --> 00:37:49,280
Speaker 5: there's lots of countries that they've got lots more experience

685
00:37:49,320 --> 00:37:51,400
Speaker 5: of this. The UK has had it for various periods.

686
00:37:51,680 --> 00:37:55,240
Speaker 5: Lots of countries in Europe, basically portions of the nineteen

687
00:37:55,239 --> 00:37:58,239
Speaker 5: seventies nearly nineteen eighties, you had this phenomenon, very high

688
00:37:58,280 --> 00:38:02,000
Speaker 5: inflation paired with a economy that they looked pretty rubbish.

689
00:38:02,000 --> 00:38:05,480
Speaker 5: We usually think of inflation as a phenomenon, you know,

690
00:38:05,520 --> 00:38:08,880
Speaker 5: amount of economists that comes at a time when the

691
00:38:08,960 --> 00:38:13,120
Speaker 5: economy is running hot. Right, Unemployment is low, Employers have

692
00:38:13,200 --> 00:38:16,440
Speaker 5: got to compete to pay higher wages. They've got to

693
00:38:16,440 --> 00:38:18,000
Speaker 5: pay more and more for the goods that they need.

694
00:38:18,040 --> 00:38:20,360
Speaker 5: Consumers are doing the same. Prices go up because the

695
00:38:20,840 --> 00:38:25,360
Speaker 5: basic supply in the economy is outstripped by this rapacious demount. Now,

696
00:38:25,560 --> 00:38:28,560
Speaker 5: what you get in a stagflation scenario is that often

697
00:38:28,600 --> 00:38:32,319
Speaker 5: you'll have unemployment that seems far too high for the

698
00:38:32,400 --> 00:38:36,120
Speaker 5: economy to be running hot. So you've got low growth,

699
00:38:36,400 --> 00:38:41,160
Speaker 5: you've got falling real terms incomes because inflation is so high. Yeah,

700
00:38:41,239 --> 00:38:43,480
Speaker 5: so it's a pretty it's a pretty bad scenario. And

701
00:38:43,520 --> 00:38:46,640
Speaker 5: it puts the Federal Reserve in this awful position because

702
00:38:46,640 --> 00:38:50,720
Speaker 5: they have these two dual mandate, right, these two competing goals,

703
00:38:51,000 --> 00:38:53,920
Speaker 5: one of which is to keep unemployment low as low

704
00:38:53,960 --> 00:38:57,080
Speaker 5: as possible within the context of its inflation mandate, which

705
00:38:57,120 --> 00:38:59,799
Speaker 5: is to keep inflation at around two percent. Now, if

706
00:38:59,840 --> 00:39:03,640
Speaker 5: in running at three, four, whatever percent, it's very, very

707
00:39:03,640 --> 00:39:05,640
Speaker 5: difficult for them to cut interest rates and try and

708
00:39:05,680 --> 00:39:10,440
Speaker 5: stimulate the economy to reduce unemployment. And historically, historically the

709
00:39:10,520 --> 00:39:13,160
Speaker 5: FED has tended to lean on the side of if

710
00:39:13,200 --> 00:39:16,400
Speaker 5: both of its mandates are being missed, it would rather

711
00:39:16,600 --> 00:39:19,480
Speaker 5: take the inflation side more seriously, So interest rates will

712
00:39:19,520 --> 00:39:22,279
Speaker 5: be higher than you'd otherwise. Like I think, in terms

713
00:39:22,280 --> 00:39:26,200
Speaker 5: of what I expect, basically, I can't see any scenario

714
00:39:26,280 --> 00:39:28,880
Speaker 5: where this isn't bad for US growth. I feel like

715
00:39:28,920 --> 00:39:32,160
Speaker 5: people sometimes get hung up on the recession stuff, and

716
00:39:32,320 --> 00:39:36,320
Speaker 5: my concern is that you don't see a recession this year,

717
00:39:36,880 --> 00:39:39,759
Speaker 5: and that people who wanted the tariffs and who like

718
00:39:39,800 --> 00:39:42,320
Speaker 5: the tariffs say, oh, well, look at all those people.

719
00:39:42,440 --> 00:39:45,719
Speaker 5: They went crazy. They were screeching and screaming about a recession.

720
00:39:46,120 --> 00:39:49,000
Speaker 5: We avoided a recession. It was all fine, right, Even

721
00:39:49,000 --> 00:39:51,520
Speaker 5: if we avoid a recession, it's not fine. Growth will

722
00:39:51,560 --> 00:39:54,840
Speaker 5: be lower, living standards will be lower, Economic opportunity for

723
00:39:54,880 --> 00:39:57,839
Speaker 5: Americans will be lower or be worse. There's also no

724
00:39:57,960 --> 00:40:01,480
Speaker 5: scenario where this isn't bad for prices, right, the prices

725
00:40:01,480 --> 00:40:03,400
Speaker 5: aren't going to go up. The real risk with the

726
00:40:03,440 --> 00:40:06,120
Speaker 5: price increases, I think, is that you see this sort

727
00:40:06,120 --> 00:40:09,399
Speaker 5: of self fulfilling thing. Right, So people have gotten used

728
00:40:09,400 --> 00:40:12,200
Speaker 5: to prices rising more quickly in the last few years,

729
00:40:12,200 --> 00:40:14,360
Speaker 5: and they've previously been used to, and you get what

730
00:40:14,719 --> 00:40:18,800
Speaker 5: economists refer to as unanchored inflation expectations, where people start

731
00:40:18,840 --> 00:40:20,880
Speaker 5: to think, oh, well, I used to think inflation was

732
00:40:20,920 --> 00:40:22,759
Speaker 5: sort of running at two percent a year, but now

733
00:40:22,840 --> 00:40:24,880
Speaker 5: I think, based on this experience, is probably going to

734
00:40:24,960 --> 00:40:27,319
Speaker 5: run at more like four or five or whatever it is.

735
00:40:27,520 --> 00:40:30,600
Speaker 5: And you get all of these behavioral things where you know,

736
00:40:30,680 --> 00:40:33,520
Speaker 5: an individual business will start raising the price of its

737
00:40:33,520 --> 00:40:35,960
Speaker 5: own goods more rapidly because it thinks that its input

738
00:40:36,040 --> 00:40:38,640
Speaker 5: prices are going to go up. These things tend to snowball,

739
00:40:38,719 --> 00:40:40,839
Speaker 5: and that's how you get into a situation that's really

740
00:40:40,880 --> 00:40:43,960
Speaker 5: really difficult in control, like it was in the nineteen seventies,

741
00:40:44,040 --> 00:40:46,719
Speaker 5: like it was in the nineteen eighties. Yeah, so I

742
00:40:46,719 --> 00:40:48,759
Speaker 5: think that's a meaningful risk, and that's one of the

743
00:40:48,760 --> 00:40:50,520
Speaker 5: reasons that I think you're not going to see a

744
00:40:50,560 --> 00:40:53,160
Speaker 5: sort of big sudden ride to the rescue from the

745
00:40:53,160 --> 00:40:56,200
Speaker 5: Federal Reserve, slashing interest rates and trying to rescue things,

746
00:40:56,280 --> 00:40:59,279
Speaker 5: even if the economy does look pretty pretty dismal by

747
00:40:59,280 --> 00:40:59,960
Speaker 5: the end of the year.

748
00:41:00,280 --> 00:41:04,279
Speaker 1: Yeah, and it's hard to imagine a world where they

749
00:41:04,320 --> 00:41:08,840
Speaker 1: cut interest rates, especially when cutting interest rates is inflationary.

750
00:41:09,120 --> 00:41:12,760
Speaker 1: There's a world in which Donald Trump backs off the tariffs,

751
00:41:12,880 --> 00:41:14,440
Speaker 1: like really backs off the tariffs.

752
00:41:14,440 --> 00:41:15,720
Speaker 2: We've already seen it back off.

753
00:41:15,560 --> 00:41:18,239
Speaker 1: It a little bit, but it seems likely to me

754
00:41:18,760 --> 00:41:22,759
Speaker 1: that as we get more economic pain, Trump will back

755
00:41:22,840 --> 00:41:23,440
Speaker 1: off the tariffs.

756
00:41:23,520 --> 00:41:23,640
Speaker 4: Right.

757
00:41:23,719 --> 00:41:27,720
Speaker 1: The idea of entering manufacturing was an idea he had,

758
00:41:28,080 --> 00:41:32,040
Speaker 1: but clearly you can't ontour manufacturing by making everything more expensive.

759
00:41:32,400 --> 00:41:35,840
Speaker 1: And even if he is unable to learn, I think

760
00:41:36,000 --> 00:41:38,719
Speaker 1: someone will explain this to him sooner or later. So

761
00:41:38,840 --> 00:41:43,640
Speaker 1: the question is, say tomorrow, he's like, tariffs were bad,

762
00:41:44,040 --> 00:41:46,640
Speaker 1: that was stupid. Let's not do this anymore, and he

763
00:41:46,680 --> 00:41:49,600
Speaker 1: takes all the tariffs down to zero. Why can you

764
00:41:49,719 --> 00:41:53,000
Speaker 1: not undo this and explain to me because it's it's

765
00:41:53,040 --> 00:41:53,840
Speaker 1: pretty interesting.

766
00:41:54,200 --> 00:41:57,200
Speaker 5: Yeah, I think you can undo the full effect. I mean,

767
00:41:57,280 --> 00:41:59,160
Speaker 5: I put it this way. I didn't think that's going

768
00:41:59,239 --> 00:42:01,520
Speaker 5: to happen. I think if it did happen, the equity

769
00:42:01,560 --> 00:42:04,279
Speaker 5: market would be up like ten to fifteen percent. I

770
00:42:04,320 --> 00:42:07,160
Speaker 5: think everything would explode. But I was talking before about

771
00:42:07,400 --> 00:42:09,240
Speaker 5: foreign investors, which would.

772
00:42:09,080 --> 00:42:11,600
Speaker 2: Be actually inflationary, right.

773
00:42:11,760 --> 00:42:14,759
Speaker 5: It would depend. It could be because you see there's

774
00:42:14,800 --> 00:42:17,360
Speaker 5: like the wealth effect. People get excited when the stocks

775
00:42:17,440 --> 00:42:19,759
Speaker 5: go up, and now you know, they spend more. It

776
00:42:19,800 --> 00:42:20,160
Speaker 5: could be.

777
00:42:20,320 --> 00:42:22,600
Speaker 2: Yeah, talk about the foreign investors.

778
00:42:22,880 --> 00:42:25,799
Speaker 5: Yeah, the difficulty of sort of putting this properly back

779
00:42:25,840 --> 00:42:28,319
Speaker 5: in the jar and sealing it off again is in

780
00:42:28,320 --> 00:42:30,920
Speaker 5: those sort of foreign investors. Right now. I've likened this

781
00:42:30,960 --> 00:42:36,080
Speaker 5: before to asking an investor internationally or in America or

782
00:42:36,080 --> 00:42:39,200
Speaker 5: basically anywhere in the world, anyone in finance what it

783
00:42:39,239 --> 00:42:41,600
Speaker 5: would be like to live without the dollar as the

784
00:42:41,600 --> 00:42:44,520
Speaker 5: dominant currency is like asking fish what it's like to

785
00:42:44,560 --> 00:42:47,279
Speaker 5: live without water. Right, None of us for any benchmark

786
00:42:47,320 --> 00:42:49,040
Speaker 5: for any of this, Right, It's not a world we've

787
00:42:49,080 --> 00:42:52,719
Speaker 5: ever lived in that sort of the basic metric by

788
00:42:52,760 --> 00:42:56,160
Speaker 5: which you live by is dollar denominated, right. So it's very,

789
00:42:56,200 --> 00:42:59,440
Speaker 5: very tough to imagine. But I think there's a problem

790
00:42:59,520 --> 00:43:06,120
Speaker 5: here that it demonstrates a sort of fundamental unseeriousness, lack

791
00:43:06,160 --> 00:43:09,320
Speaker 5: of competence at the highest levels of the US government,

792
00:43:09,800 --> 00:43:13,239
Speaker 5: and I think it's really difficult to address that. I

793
00:43:13,760 --> 00:43:16,839
Speaker 5: think that even in the instance that the Republicans lose

794
00:43:16,880 --> 00:43:19,920
Speaker 5: the next election and you get another Democrat administration, what

795
00:43:20,200 --> 00:43:22,680
Speaker 5: you have Among the people I spoke to that they

796
00:43:22,680 --> 00:43:26,320
Speaker 5: were basically, to some degree, a lot of them willing

797
00:43:26,360 --> 00:43:28,759
Speaker 5: to consider that the first Trump administration is a bit

798
00:43:28,760 --> 00:43:32,200
Speaker 5: of an aberration. Right, it's like, you know, an oddity.

799
00:43:32,560 --> 00:43:37,120
Speaker 5: You got that, but then it went away like Brexit, Yeah, exactly, exactly,

800
00:43:37,120 --> 00:43:39,560
Speaker 5: you know, I mean more temporary than Brexit. Right, it's

801
00:43:39,560 --> 00:43:42,240
Speaker 5: not locked in forever. People say, Okay, that was crazy,

802
00:43:42,280 --> 00:43:44,799
Speaker 5: but whatever, you know, back to normal now. I think

803
00:43:44,840 --> 00:43:48,319
Speaker 5: the second time has made people think, no, okay, this

804
00:43:48,440 --> 00:43:53,000
Speaker 5: is something fundamentally different going on. There's something in American

805
00:43:53,040 --> 00:43:55,839
Speaker 5: politics now that I as a foreign investor, and you know,

806
00:43:56,200 --> 00:43:59,880
Speaker 5: American politics isn't set up to satisfy foreign investors. But

807
00:44:00,080 --> 00:44:02,880
Speaker 5: they say, no, okay, this isn't for me anymore. I

808
00:44:03,000 --> 00:44:05,959
Speaker 5: need to reduce my exposure to the US by five

809
00:44:06,000 --> 00:44:08,600
Speaker 5: to ten percentage points. And I'm talking about over decades. Right.

810
00:44:08,719 --> 00:44:11,840
Speaker 5: These people have really really large portfolios, and they're thinking

811
00:44:11,880 --> 00:44:14,839
Speaker 5: over really really long time horizons. But that's a lot

812
00:44:14,840 --> 00:44:16,880
Speaker 5: of money. That's a lot of money in the long term,

813
00:44:16,920 --> 00:44:18,960
Speaker 5: and I think it's really really difficult to put the

814
00:44:19,000 --> 00:44:19,879
Speaker 5: cat back in there.

815
00:44:20,200 --> 00:44:24,520
Speaker 1: And that really is actually dollar flight, Yeah it is.

816
00:44:24,760 --> 00:44:26,720
Speaker 5: It's not going to be like flight from an emerging

817
00:44:26,760 --> 00:44:30,399
Speaker 5: market currency where you get these crazy outflows. What it's

818
00:44:30,400 --> 00:44:34,920
Speaker 5: going to mean is lower American asset prices, higher American

819
00:44:34,960 --> 00:44:38,440
Speaker 5: bond yields, higher American borrowing costs. You look at the

820
00:44:38,480 --> 00:44:42,320
Speaker 5: federal deficit. We're talking about six seven percent of GDP

821
00:44:42,600 --> 00:44:45,120
Speaker 5: and it's forecast to grow, and nobody has any thoughts

822
00:44:45,160 --> 00:44:49,520
Speaker 5: about about seriously reducing it. And if everyone wants dollar assets,

823
00:44:49,640 --> 00:44:52,320
Speaker 5: that's fine to some degree. You know, it's maybe not fine,

824
00:44:52,400 --> 00:44:56,359
Speaker 5: but it's the most affordable currency to borrow in by

825
00:44:56,360 --> 00:44:59,200
Speaker 5: the most trusted government in the world. The international demand

826
00:44:59,280 --> 00:45:01,960
Speaker 5: is always there. I don't know what that looks like

827
00:45:02,040 --> 00:45:05,600
Speaker 5: when the international bidders just stop showing up. Right, they're

828
00:45:05,600 --> 00:45:09,160
Speaker 5: not fire sailing everything they have, but they're saying, actually,

829
00:45:09,280 --> 00:45:11,440
Speaker 5: we don't want to fund all this, right, we don't

830
00:45:11,480 --> 00:45:13,759
Speaker 5: want that many treasury bills. We don't want that many

831
00:45:13,760 --> 00:45:16,759
Speaker 5: treasury bonds. It could get ugly and you haven't really

832
00:45:16,840 --> 00:45:21,120
Speaker 5: seen those dynamics before, precisely because the US dollar is

833
00:45:21,160 --> 00:45:23,799
Speaker 5: the only reserve currency, there's nothing to compete with it.

834
00:45:23,880 --> 00:45:28,480
Speaker 5: But even people choosing a little bit of extra everywhere else, right,

835
00:45:28,600 --> 00:45:31,959
Speaker 5: they'll raise my allocation to euros a bit. I'll raise

836
00:45:31,960 --> 00:45:35,520
Speaker 5: my allocations to any number of smaller currencies British pound,

837
00:45:35,560 --> 00:45:39,200
Speaker 5: Canadian dollar, Australian dollar. There's all sorts that you could navigate.

838
00:45:39,239 --> 00:45:41,720
Speaker 5: You know, a few billion dollars into tens of billions

839
00:45:41,719 --> 00:45:44,160
Speaker 5: of dollars whatever. It is, tiny percentage points of an

840
00:45:44,280 --> 00:45:47,600
Speaker 5: enormous international portfolio. You get rid of that in dollars,

841
00:45:47,600 --> 00:45:49,439
Speaker 5: and things can get quite ugly over time.

842
00:45:49,560 --> 00:45:54,720
Speaker 2: Definitely quite ugly over time. Thank you, Mike Bird.

843
00:45:54,640 --> 00:45:55,479
Speaker 5: Thank you very much.

844
00:45:57,600 --> 00:46:01,719
Speaker 2: Nor Jesse Cannon.

845
00:46:02,280 --> 00:46:05,920
Speaker 6: So I am always hearing from the Tim Dillons and

846
00:46:06,000 --> 00:46:09,360
Speaker 6: all these people who love to say that democrats hate democracy.

847
00:46:09,560 --> 00:46:11,279
Speaker 6: But it's kind of funny because when the will of

848
00:46:11,440 --> 00:46:15,200
Speaker 6: people is expressed in these ballot initiatives, there's one party

849
00:46:15,239 --> 00:46:20,000
Speaker 6: that constantly overturns them, even when they're overwhelmingly voted for,

850
00:46:20,360 --> 00:46:21,919
Speaker 6: like we're seeing in Missouri right now.

851
00:46:22,120 --> 00:46:25,440
Speaker 1: Yeah, they don't really like democracy. The Republican Party Missouri

852
00:46:25,560 --> 00:46:30,440
Speaker 1: Republicans vote to repeal state's new paid sick leave law. Again,

853
00:46:30,560 --> 00:46:35,640
Speaker 1: Republicans have decided that the way to cut government spending

854
00:46:35,960 --> 00:46:41,160
Speaker 1: is to cut healthcare, cut sick leave, cut the things

855
00:46:41,640 --> 00:46:46,080
Speaker 1: that people desperately need and at this point really rely on.

856
00:46:46,719 --> 00:46:48,640
Speaker 1: They're just doing it because they don't want to cut.

857
00:46:48,480 --> 00:46:50,160
Speaker 2: Taxes for very wealthy people.

858
00:46:50,640 --> 00:46:54,359
Speaker 1: It's going to be terrible, and it's also again punishing

859
00:46:54,440 --> 00:46:58,799
Speaker 1: the people who put Donald Trump in office. So just

860
00:46:58,880 --> 00:47:02,560
Speaker 1: like the tariffs punish the people who put Donald Trump

861
00:47:02,640 --> 00:47:07,760
Speaker 1: in office, these cuts to the social safety net also

862
00:47:08,200 --> 00:47:11,839
Speaker 1: punish the people who put Donald Trump in office. Make

863
00:47:11,880 --> 00:47:14,279
Speaker 1: it make sense, I can make it make sense, but

864
00:47:14,760 --> 00:47:18,400
Speaker 1: at all points this is just incredibly fucked up and bad.

865
00:47:19,480 --> 00:47:20,399
Speaker 2: That's it for.

866
00:47:20,400 --> 00:47:27,120
Speaker 1: This episode of Fast Politics. Tune in every Monday, Wednesday, Thursday,

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Speaker 1: and Saturday to hear the best minds and politics make.

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Speaker 2: Sense of all this chaos.

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Speaker 1: If you enjoy this podcast, please send it to a

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Speaker 1: friend and keep the conversation going.

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Speaker 2: Thanks for listening.