1
00:00:00,080 --> 00:00:02,080
Speaker 1: Welcome to the Truth with Lisa Booth, where we try

2
00:00:02,080 --> 00:00:04,000
Speaker 1: to get to the heart of the issues that matter

3
00:00:04,120 --> 00:00:07,520
Speaker 1: to you. Today is election day in New York City,

4
00:00:08,119 --> 00:00:11,200
Speaker 1: and the city's next mayor could be and will probably be,

5
00:00:11,680 --> 00:00:15,319
Speaker 1: socialist Zoron Mom Donnie. He holds a commanding lead in

6
00:00:15,360 --> 00:00:18,400
Speaker 1: the race right now, and he will oversee eight point

7
00:00:18,440 --> 00:00:22,960
Speaker 1: five million residents as well as a massive economy. So

8
00:00:23,079 --> 00:00:26,239
Speaker 1: we'll talk to EJ and Tony, chief economist at the

9
00:00:26,239 --> 00:00:29,720
Speaker 1: Heritage about how much damage Zoron can do in the

10
00:00:29,760 --> 00:00:34,599
Speaker 1: next four years plus. It's concerning because Axio has recently

11
00:00:34,680 --> 00:00:40,000
Speaker 1: found that sixty seven percent of college students view socialism favorably.

12
00:00:40,680 --> 00:00:44,000
Speaker 1: This also comes as AOC and people like Bernie Sanders

13
00:00:44,400 --> 00:00:47,720
Speaker 1: have now become part of the mainstream and the Democrat Party.

14
00:00:48,320 --> 00:00:51,760
Speaker 1: So where is this all heading. We'll dig into what

15
00:00:51,920 --> 00:00:54,280
Speaker 1: socialism is and the impact it could have in New

16
00:00:54,360 --> 00:00:57,280
Speaker 1: York City and potentially elsewhere in the country with the

17
00:00:57,400 --> 00:01:00,480
Speaker 1: rise of some of these figures on the left. Also,

18
00:01:00,520 --> 00:01:02,880
Speaker 1: we'll get a snapshot on the economy heading into the

19
00:01:02,920 --> 00:01:07,280
Speaker 1: twenty twenty six midterms and get EJ's take on if

20
00:01:07,360 --> 00:01:10,760
Speaker 1: President Trump's tariff strategy is working. So stay tuned for

21
00:01:10,760 --> 00:01:20,560
Speaker 1: EJ and Tony.

22
00:01:17,520 --> 00:01:17,640
Speaker 2: Well.

23
00:01:17,680 --> 00:01:19,640
Speaker 1: EJ. It's great to have you on the show. Appreciate

24
00:01:19,640 --> 00:01:21,000
Speaker 1: you making the time, my friend.

25
00:01:21,360 --> 00:01:23,040
Speaker 3: Oh, Lisa, thank you for having me again.

26
00:01:23,120 --> 00:01:25,120
Speaker 2: It is great to be back with you.

27
00:01:25,120 --> 00:01:27,960
Speaker 1: You always do a great job of explaining some of

28
00:01:28,000 --> 00:01:32,000
Speaker 1: these complicated issues, you know, EJ. I wanted to start.

29
00:01:32,000 --> 00:01:34,839
Speaker 1: I don't know if you saw that Axios poll recently

30
00:01:34,920 --> 00:01:38,640
Speaker 1: that surveyed US college students, but they found that sixty

31
00:01:38,760 --> 00:01:42,240
Speaker 1: seven percent of the respondents hold a positive or neutral

32
00:01:42,240 --> 00:01:46,639
Speaker 1: association with the word socialism, compared to only forty percent

33
00:01:46,720 --> 00:01:51,160
Speaker 1: for the word capitalism. You know, I think we talk

34
00:01:51,200 --> 00:01:54,000
Speaker 1: about capitalism, we talk about socialism, but like, how would

35
00:01:54,080 --> 00:01:57,200
Speaker 1: you describe socialism, Like, how would you define it as

36
00:01:57,240 --> 00:01:57,960
Speaker 1: an economist?

37
00:01:58,880 --> 00:02:04,520
Speaker 2: Well, socialism is is theft. Socialism is forced to certain extent, Lisa,

38
00:02:04,640 --> 00:02:09,200
Speaker 2: it's not even an economic system, right, It's actually a

39
00:02:09,240 --> 00:02:14,800
Speaker 2: way of taking and existing economic system and forgive me,

40
00:02:14,840 --> 00:02:19,400
Speaker 2: but bastardizing it in such a way as to achieve

41
00:02:19,480 --> 00:02:23,919
Speaker 2: political ends. In other words, what socialism does is it

42
00:02:24,040 --> 00:02:28,400
Speaker 2: gives the government rights which properly belong to the people,

43
00:02:28,520 --> 00:02:32,120
Speaker 2: certain property rights. The government gets to dictate to you

44
00:02:32,360 --> 00:02:35,839
Speaker 2: things like where you're going to work, how much you're

45
00:02:35,880 --> 00:02:38,600
Speaker 2: going to work, how much you're going to earn from

46
00:02:38,639 --> 00:02:41,320
Speaker 2: that work, what you can do with your earnings, etc.

47
00:02:42,000 --> 00:02:47,160
Speaker 2: That effectively is socialism. The problem is today education is

48
00:02:47,200 --> 00:02:50,440
Speaker 2: more like indoctrination, and so kids are not taught that

49
00:02:50,639 --> 00:02:54,560
Speaker 2: in high school in college. Instead, they are taught all

50
00:02:54,600 --> 00:02:58,960
Speaker 2: of these fanciful ideas about socialism. They're told the promises.

51
00:02:59,080 --> 00:03:01,960
Speaker 2: I guess I should say socialism and not the actual

52
00:03:02,000 --> 00:03:06,760
Speaker 2: outcomes the promises of socialism, or that everyone is somehow equal,

53
00:03:07,000 --> 00:03:11,280
Speaker 2: that everyone somehow earns the same amount. Doctor Art Laffer

54
00:03:11,320 --> 00:03:15,560
Speaker 2: has done phenomenal work, not just theoretically but even empirically,

55
00:03:15,720 --> 00:03:21,040
Speaker 2: showing that as long as you have these promises in socialism,

56
00:03:21,080 --> 00:03:23,679
Speaker 2: I should say things like everyone is going to work,

57
00:03:23,960 --> 00:03:27,240
Speaker 2: everyone is going to earn the same amount. What happens, well,

58
00:03:27,280 --> 00:03:31,360
Speaker 2: everything devolves backwards until everyone decides they don't want to

59
00:03:31,360 --> 00:03:34,960
Speaker 2: work because if you earn more than what the government

60
00:03:35,000 --> 00:03:36,520
Speaker 2: says you can, what are you going to do?

61
00:03:36,560 --> 00:03:37,520
Speaker 3: Well, you're going to work less.

62
00:03:37,600 --> 00:03:39,480
Speaker 2: Why on earth would you earn more only for the

63
00:03:39,480 --> 00:03:42,600
Speaker 2: government to take it away from you? And if you earn,

64
00:03:42,640 --> 00:03:48,120
Speaker 2: if you currently work less than whatever the guaranteed income

65
00:03:48,240 --> 00:03:51,119
Speaker 2: is right, If you work and earn less than that,

66
00:03:51,320 --> 00:03:54,680
Speaker 2: you know that the government is going to artificially increase

67
00:03:54,720 --> 00:03:59,480
Speaker 2: your income to whatever their predetermined amount is. So why

68
00:03:59,520 --> 00:04:01,920
Speaker 2: on earth would you work that much? You in fact

69
00:04:01,960 --> 00:04:04,880
Speaker 2: would also work less, because again, if you don't make

70
00:04:05,000 --> 00:04:06,640
Speaker 2: enough money, the government is just going to give you

71
00:04:07,120 --> 00:04:10,800
Speaker 2: whatever you need to get your universal basic income or

72
00:04:10,880 --> 00:04:12,560
Speaker 2: whatever else they want to call that scheme.

73
00:04:13,000 --> 00:04:16,400
Speaker 3: So everyone decides to work less and less and less

74
00:04:16,480 --> 00:04:18,440
Speaker 3: and less until nobody works at all.

75
00:04:18,520 --> 00:04:23,240
Speaker 2: And it's a shockingly good illustration of again what we

76
00:04:23,279 --> 00:04:26,800
Speaker 2: see in reality. All the different places socialism has been tried,

77
00:04:26,839 --> 00:04:30,440
Speaker 2: whether it's in Russia, whether it's in South America, you know,

78
00:04:30,520 --> 00:04:33,799
Speaker 2: to a certain extent our neighbors here in North America,

79
00:04:33,920 --> 00:04:37,480
Speaker 2: like in Canada, the more they socialize things, the worse

80
00:04:37,560 --> 00:04:40,520
Speaker 2: it gets. Look a look at Canadian medicine, for example.

81
00:04:40,600 --> 00:04:43,839
Speaker 2: Ask yourself, is it Americans that are having to go

82
00:04:43,920 --> 00:04:47,160
Speaker 2: across the border to Canada to get healthcare treatments in

83
00:04:47,200 --> 00:04:50,640
Speaker 2: their socialized system or is it Canadians who are having

84
00:04:50,720 --> 00:04:54,480
Speaker 2: to come across the border to flee their socialized healthcare

85
00:04:54,520 --> 00:04:58,640
Speaker 2: system and get American private healthcare. It, of course is

86
00:04:58,720 --> 00:05:02,279
Speaker 2: the latter because in Canada, sure, the healthcare is technically

87
00:05:02,400 --> 00:05:06,520
Speaker 2: free quote unquote, except you have to wait literally months

88
00:05:07,040 --> 00:05:09,719
Speaker 2: to get life saving treatment. And so if your choice

89
00:05:09,760 --> 00:05:12,400
Speaker 2: is either dying or coming across the border to American

90
00:05:12,520 --> 00:05:15,040
Speaker 2: paying cash, a lot of people decide to.

91
00:05:15,000 --> 00:05:15,560
Speaker 3: Do the latter.

92
00:05:15,640 --> 00:05:19,679
Speaker 2: These are the fruits of socialism. It's not a matter

93
00:05:19,800 --> 00:05:23,560
Speaker 2: of it sounds good on paper. The promises are very

94
00:05:23,680 --> 00:05:26,320
Speaker 2: very nice. Everyone is equal, everyone gets what they need,

95
00:05:26,400 --> 00:05:30,080
Speaker 2: nobody goes hungry. Those are great promises. Who could be

96
00:05:30,120 --> 00:05:33,719
Speaker 2: against things like that, right, Lisa. They always sound great

97
00:05:33,800 --> 00:05:37,800
Speaker 2: on paper. It's only the implementation that always goes sideways.

98
00:05:38,560 --> 00:05:40,440
Speaker 1: Well, and we see too in a lot of these places,

99
00:05:40,440 --> 00:05:43,600
Speaker 1: like you know, Venezuela. Like the irony is these people

100
00:05:43,680 --> 00:05:46,800
Speaker 1: push social zone because they want like quote unquote equity,

101
00:05:47,480 --> 00:05:50,800
Speaker 1: but then in reality you're just empowering like the government,

102
00:05:50,960 --> 00:05:54,000
Speaker 1: the people in charge, right, and then everyone else suffers.

103
00:05:54,120 --> 00:05:57,719
Speaker 1: So it's like it's actually like the end result is

104
00:05:57,720 --> 00:06:00,680
Speaker 1: the opposite of what they're saying they're trying to accomplished.

105
00:06:01,200 --> 00:06:01,400
Speaker 3: Right.

106
00:06:01,440 --> 00:06:04,120
Speaker 2: And you make such a great point, Lisa, that you

107
00:06:04,279 --> 00:06:07,680
Speaker 2: always in socialism end up having this upper class, this

108
00:06:07,880 --> 00:06:12,400
Speaker 2: ruling class. If you will and everyone else. Their situation

109
00:06:12,680 --> 00:06:16,200
Speaker 2: just gets worse and worse. They fall into into poverty, right,

110
00:06:16,200 --> 00:06:19,640
Speaker 2: as they said, an animal farm, as George Orwell said, rather,

111
00:06:20,640 --> 00:06:22,880
Speaker 2: what was the phrase he used? All animals are equal,

112
00:06:22,920 --> 00:06:25,680
Speaker 2: but some are more equal than others. Uh, you know,

113
00:06:26,400 --> 00:06:30,640
Speaker 2: especially if you want the government to have the power

114
00:06:31,080 --> 00:06:33,520
Speaker 2: to be able to make everyone equal, they have to

115
00:06:33,560 --> 00:06:36,640
Speaker 2: have the power to take things away from you. And

116
00:06:36,760 --> 00:06:38,960
Speaker 2: that means there are certain individuals who are going to

117
00:06:39,000 --> 00:06:41,960
Speaker 2: have to occupy those seats of power. And isn't it

118
00:06:42,000 --> 00:06:45,720
Speaker 2: amazing human nature being what it is that those individuals

119
00:06:45,839 --> 00:06:48,520
Speaker 2: always manage to scrape a little bit off the top

120
00:06:48,680 --> 00:06:51,200
Speaker 2: as they take from a and give to b.

121
00:06:52,200 --> 00:06:55,479
Speaker 1: Well, and we're even saying that with you know, like

122
00:06:55,560 --> 00:06:59,080
Speaker 1: AOC and Bernie Sanders, for instance, Like AOC went to

123
00:06:59,200 --> 00:07:02,640
Speaker 1: the Mecala and like, you know, we're a really expensive dress.

124
00:07:02,680 --> 00:07:04,320
Speaker 1: That said, I think it was like tax the rich.

125
00:07:04,560 --> 00:07:07,680
Speaker 1: Or you know, Bernie Sanders flies private and stays in

126
00:07:07,839 --> 00:07:10,280
Speaker 1: very fancy hotels and like they both have managed to

127
00:07:10,280 --> 00:07:13,200
Speaker 1: make a lot of money, or Bernie Sanders become a millionaire. Right,

128
00:07:13,240 --> 00:07:15,360
Speaker 1: so they were already kind of seeing it in practice,

129
00:07:15,440 --> 00:07:19,280
Speaker 1: how they you know, spouse you know, equity and all

130
00:07:19,320 --> 00:07:21,600
Speaker 1: these you know, different terms, and you know, try to

131
00:07:21,640 --> 00:07:25,200
Speaker 1: pretend they're populous, but then inevitably like they're just enriching

132
00:07:25,280 --> 00:07:27,880
Speaker 1: themselves in the process, which is like sort of seeing

133
00:07:27,880 --> 00:07:32,880
Speaker 1: how socialism plays out, you know, when enacted, right, oh,

134
00:07:32,920 --> 00:07:33,800
Speaker 1: one hundred percent.

135
00:07:34,040 --> 00:07:35,480
Speaker 3: It's another really great point, Lias.

136
00:07:35,520 --> 00:07:37,880
Speaker 2: And how many of these people in Congress do you

137
00:07:37,960 --> 00:07:40,200
Speaker 2: see where they're making I don't know what it is,

138
00:07:40,240 --> 00:07:42,760
Speaker 2: Like it's like two hundred thousand dollars or something like that,

139
00:07:42,800 --> 00:07:44,800
Speaker 2: I think they make, which you know, that's a good income,

140
00:07:45,240 --> 00:07:48,320
Speaker 2: but that's not enough to go from a net worth

141
00:07:48,320 --> 00:07:51,200
Speaker 2: of a few hundred thousand dollars, which is where several

142
00:07:51,240 --> 00:07:54,440
Speaker 2: of them have entered, and within five six years they

143
00:07:54,440 --> 00:07:57,880
Speaker 2: have net worths in the tens of millions of dollars.

144
00:07:58,000 --> 00:08:01,080
Speaker 2: I'm sorry, that doesn't pass the smell test. Even if

145
00:08:01,080 --> 00:08:04,560
Speaker 2: you are a Nancy Pelosi or a Dan Crenshaw kind

146
00:08:04,560 --> 00:08:07,880
Speaker 2: of investor, you know, that is still that still does

147
00:08:07,920 --> 00:08:11,640
Speaker 2: not explain those ridiculous increases in net wealth because they're

148
00:08:11,640 --> 00:08:15,360
Speaker 2: selling their power, they're selling their influence, which again, you

149
00:08:15,520 --> 00:08:17,920
Speaker 2: only have that kind of power, and you only have

150
00:08:18,040 --> 00:08:21,400
Speaker 2: that kind of influence to sell if the government is

151
00:08:21,480 --> 00:08:24,640
Speaker 2: using it for nefarious purposes like socialism.

152
00:08:25,040 --> 00:08:27,600
Speaker 1: Narry, Look, how like Maduro has all this money and

153
00:08:27,640 --> 00:08:32,800
Speaker 1: everyone else, you know, can barely afford to eat. You know,

154
00:08:33,200 --> 00:08:37,520
Speaker 1: Zoron will likely become New York City's mayor, overseeing a

155
00:08:37,520 --> 00:08:41,240
Speaker 1: massive economy, a city of eight point five million people.

156
00:08:41,840 --> 00:08:44,920
Speaker 1: He's a member of the Democratic Socialist of America. What

157
00:08:44,920 --> 00:08:49,240
Speaker 1: do you think his policies, like government run grocery stores

158
00:08:49,280 --> 00:08:51,600
Speaker 1: will do to New York City And how much damage

159
00:08:51,640 --> 00:08:53,520
Speaker 1: do you think can be done in a four year period.

160
00:08:54,360 --> 00:08:55,480
Speaker 3: Well, I think they will do.

161
00:08:55,679 --> 00:08:58,800
Speaker 2: Those policies will do exactly what they have done elsewhere

162
00:08:59,080 --> 00:09:02,480
Speaker 2: that they've been trying, and even where they've already been

163
00:09:02,520 --> 00:09:04,200
Speaker 2: tried in New York. You know, when he talks about

164
00:09:04,200 --> 00:09:06,160
Speaker 2: things like rent control, I mean they already have that

165
00:09:06,640 --> 00:09:10,720
Speaker 2: right in one form or another. So some of these policies, really,

166
00:09:10,720 --> 00:09:12,839
Speaker 2: I should say, all these policies least, so we can

167
00:09:12,920 --> 00:09:15,720
Speaker 2: just look at New York or other places in America

168
00:09:15,760 --> 00:09:17,719
Speaker 2: where they have been tried, or other places around the

169
00:09:17,720 --> 00:09:20,120
Speaker 2: world where they've been tried, and sure enough, it is

170
00:09:20,200 --> 00:09:24,000
Speaker 2: the exact same result every single time, which is none

171
00:09:24,040 --> 00:09:26,880
Speaker 2: of them actually achieve their intended ends, and all of

172
00:09:26,920 --> 00:09:30,360
Speaker 2: them make the situation worse. When you do things like

173
00:09:30,400 --> 00:09:33,239
Speaker 2: you say, you know what, we're gonna make it illegal

174
00:09:33,559 --> 00:09:36,600
Speaker 2: for you to sell groceries or to sell utilities, whether

175
00:09:36,640 --> 00:09:40,080
Speaker 2: that's gas, electric water, you name it above a certain price.

176
00:09:40,360 --> 00:09:44,040
Speaker 2: What happens? Will you end up creating shortages because a

177
00:09:44,200 --> 00:09:47,120
Speaker 2: grocer is not going to say, oh goodness, you know,

178
00:09:47,480 --> 00:09:50,280
Speaker 2: I can't sell this apple profitably, so I guess I'm

179
00:09:50,320 --> 00:09:51,720
Speaker 2: just gonna have to sell it at a loss.

180
00:09:51,960 --> 00:09:53,760
Speaker 3: No, I'm not going to sell it at all. That's

181
00:09:53,800 --> 00:09:55,600
Speaker 3: what I'm gonna do. And you know what, people are

182
00:09:55,640 --> 00:09:57,160
Speaker 3: gonna have to go without. They're gonna have to look,

183
00:09:57,160 --> 00:10:01,000
Speaker 3: e's gonna have to sale.

184
00:10:01,679 --> 00:10:05,000
Speaker 2: That's what's going to happen. It is what has happened,

185
00:10:05,320 --> 00:10:07,320
Speaker 2: not just in places again like New York City, but

186
00:10:07,400 --> 00:10:10,120
Speaker 2: elsewhere around the country. Look at what they've done in

187
00:10:10,280 --> 00:10:12,560
Speaker 2: places like the state of Minnesota, where they've tried to

188
00:10:12,559 --> 00:10:16,960
Speaker 2: have state run grocery stores. It's been the exact same thing.

189
00:10:17,120 --> 00:10:21,200
Speaker 2: There's no food because they're all those stores are losing money.

190
00:10:21,679 --> 00:10:24,480
Speaker 2: Anytime you do have some food that comes in below

191
00:10:24,600 --> 00:10:28,280
Speaker 2: market prices, everyone flocks to those stores quickly buys it

192
00:10:28,320 --> 00:10:31,560
Speaker 2: out and they can't keep it stocked because again it's

193
00:10:31,600 --> 00:10:34,800
Speaker 2: not profitable to do, so you are losing money on it.

194
00:10:35,360 --> 00:10:38,240
Speaker 2: And when you have programs like rent control, that's a

195
00:10:38,280 --> 00:10:41,880
Speaker 2: really funny one because even far left so called economists

196
00:10:42,440 --> 00:10:45,599
Speaker 2: will say rent control doesn't work. It produces exactly the

197
00:10:45,640 --> 00:10:48,400
Speaker 2: opposite of the kinds of results that you want. What

198
00:10:48,440 --> 00:10:53,360
Speaker 2: we see with rent control is absentee landlordism. Again, you

199
00:10:53,400 --> 00:10:56,959
Speaker 2: can't force somebody to provide a product to the marketplace

200
00:10:57,440 --> 00:11:00,280
Speaker 2: that on which they're going to lose money. And I'm

201
00:11:00,280 --> 00:11:03,400
Speaker 2: not talking about things like lost leaders, where businesses will

202
00:11:03,440 --> 00:11:06,200
Speaker 2: purposely sell something at a loss to get you into

203
00:11:06,240 --> 00:11:08,200
Speaker 2: the store to buy something else. No, No, we're talking

204
00:11:08,240 --> 00:11:11,880
Speaker 2: about doing this en mass. What happens when we get

205
00:11:12,000 --> 00:11:16,120
Speaker 2: things like rent control is landlords say, well, I'm just

206
00:11:16,240 --> 00:11:18,240
Speaker 2: not going to provide all the different things that I

207
00:11:18,320 --> 00:11:20,800
Speaker 2: used to in order to cut costs, and that's how

208
00:11:20,840 --> 00:11:22,760
Speaker 2: I'm going to be able to still make money on

209
00:11:22,800 --> 00:11:27,480
Speaker 2: this property. So landlords don't repair things, landlords don't follow

210
00:11:27,559 --> 00:11:30,200
Speaker 2: up on the complaints.

211
00:11:29,720 --> 00:11:30,600
Speaker 3: Of leases, etc.

212
00:11:31,480 --> 00:11:34,360
Speaker 2: And you end up with these rundown slums. You also

213
00:11:34,400 --> 00:11:38,400
Speaker 2: get this very weird kind of barbell distribution. This bifurcation.

214
00:11:38,520 --> 00:11:42,400
Speaker 2: I guess you could call it of residences, where you

215
00:11:42,559 --> 00:11:45,240
Speaker 2: end up with landlords who say, all right, I either

216
00:11:45,320 --> 00:11:49,120
Speaker 2: can run a slum profitably, I can't run any kind

217
00:11:49,120 --> 00:11:52,800
Speaker 2: of middle income housing profitably. I'll lose money on that.

218
00:11:53,200 --> 00:11:57,600
Speaker 2: But if I do luxury homes that's exempt from rent control,

219
00:11:57,960 --> 00:12:00,800
Speaker 2: so I can make a profit there. So the only

220
00:12:01,000 --> 00:12:03,480
Speaker 2: kinds of homes that you end up getting in those

221
00:12:03,520 --> 00:12:07,360
Speaker 2: markets again are the rundown slums that nobody wants to

222
00:12:07,400 --> 00:12:09,719
Speaker 2: live in but people have to because it's now their

223
00:12:09,720 --> 00:12:13,240
Speaker 2: only option. The middle income homes went away, and then

224
00:12:13,280 --> 00:12:17,760
Speaker 2: you get the protected rich who still get their luxury condos,

225
00:12:17,800 --> 00:12:22,040
Speaker 2: their luxury town homes, the luxury high rise buildings.

226
00:12:21,200 --> 00:12:21,720
Speaker 3: Et cetera.

227
00:12:22,280 --> 00:12:26,640
Speaker 2: So instead of creating this kind of one class utopia

228
00:12:26,679 --> 00:12:29,480
Speaker 2: that socialism always tries to sell us on, you end

229
00:12:29,559 --> 00:12:32,760
Speaker 2: up creating this two class not even a class system,

230
00:12:32,760 --> 00:12:35,920
Speaker 2: but a cast system where you have the highs and

231
00:12:35,960 --> 00:12:38,160
Speaker 2: the lows, you have the haves and the have nots,

232
00:12:38,520 --> 00:12:40,559
Speaker 2: and that's it, and there's never any way to get

233
00:12:40,640 --> 00:12:44,160
Speaker 2: from one to the other. You end up driving a

234
00:12:44,200 --> 00:12:47,360
Speaker 2: wedge between these groups instead of bridging the divide.

235
00:12:47,480 --> 00:12:49,520
Speaker 1: Got to take a quick Commercial break more with ej

236
00:12:49,600 --> 00:12:55,240
Speaker 1: Antoni on the other side. You know, what kind of

237
00:12:55,240 --> 00:12:57,199
Speaker 1: well flight do you think we'll see from New York

238
00:12:57,240 --> 00:12:59,760
Speaker 1: City in terms of, you know, businesses and high on

239
00:13:00,040 --> 00:13:02,840
Speaker 1: high income earners deciding to leave.

240
00:13:03,080 --> 00:13:05,200
Speaker 3: Oh, it'll be extreme. You know.

241
00:13:05,360 --> 00:13:08,400
Speaker 2: I wrote a paper with Steve Moore back in I

242
00:13:08,440 --> 00:13:10,640
Speaker 2: want to say it was the summer of twenty twenty one, Lisa,

243
00:13:10,679 --> 00:13:13,800
Speaker 2: if memory serves, and what we were analyzing in that

244
00:13:14,000 --> 00:13:18,240
Speaker 2: was New York's latest big tax increase, and we explained

245
00:13:18,320 --> 00:13:20,520
Speaker 2: how you know, if you do the math and you

246
00:13:20,559 --> 00:13:24,120
Speaker 2: do some regression analysis, you look at other states, and

247
00:13:24,240 --> 00:13:26,040
Speaker 2: you know, doctor Art Laugher's done a lot of good

248
00:13:26,040 --> 00:13:28,480
Speaker 2: work on this, as have a lot of other good

249
00:13:28,880 --> 00:13:33,280
Speaker 2: data scientists, and what you just time after time, what

250
00:13:33,320 --> 00:13:36,440
Speaker 2: you keep finding, Lisa, is that as you keep driving

251
00:13:36,480 --> 00:13:39,280
Speaker 2: up these top marginal tax rates, you end up driving

252
00:13:39,440 --> 00:13:42,439
Speaker 2: high income earners out of those places. That's a big

253
00:13:42,480 --> 00:13:44,880
Speaker 2: part of the reason why we've seen so many people

254
00:13:45,400 --> 00:13:47,480
Speaker 2: and they take their jobs and their incomes with them.

255
00:13:47,840 --> 00:13:50,920
Speaker 2: We've seen so many people leaving the state of New York.

256
00:13:51,000 --> 00:13:54,679
Speaker 2: We've seen them leaving Illinois, California, et cetera. Right, And

257
00:13:54,720 --> 00:13:57,160
Speaker 2: where are they going they're going to Texas, they're going

258
00:13:57,240 --> 00:14:01,360
Speaker 2: to Tennessee, they're going to our favorite far right. And

259
00:14:01,640 --> 00:14:05,520
Speaker 2: what has happened is they've basically protected they've shielded their

260
00:14:05,520 --> 00:14:09,600
Speaker 2: incomes from state income taxes by doing so. Now there's

261
00:14:09,640 --> 00:14:12,319
Speaker 2: other there's other parts of the tax equation to consider, right,

262
00:14:12,360 --> 00:14:15,440
Speaker 2: sales taxes, property taxes, et cetera. But at the end

263
00:14:15,480 --> 00:14:18,040
Speaker 2: of the day, they're still choosing to move from those

264
00:14:18,080 --> 00:14:20,400
Speaker 2: states with a high tax burden to a low tax

265
00:14:20,400 --> 00:14:23,000
Speaker 2: burden because they're saving themselves a whole heck of a

266
00:14:23,000 --> 00:14:24,360
Speaker 2: lot of money and doing so.

267
00:14:24,360 --> 00:14:26,480
Speaker 3: So we when we did this paper, we you.

268
00:14:26,400 --> 00:14:29,160
Speaker 2: Know, we got out our calculators, we did the math,

269
00:14:29,480 --> 00:14:31,480
Speaker 2: and we found that over the course of a decade,

270
00:14:31,840 --> 00:14:35,440
Speaker 2: in extra one million people, almost all high income earners

271
00:14:35,480 --> 00:14:38,520
Speaker 2: were going to leave the state of New York. Now

272
00:14:38,600 --> 00:14:41,160
Speaker 2: as they do that, it's not all high income earners

273
00:14:41,200 --> 00:14:44,280
Speaker 2: because there's a trickle down effect. Right when when a

274
00:14:44,320 --> 00:14:47,440
Speaker 2: high income earner is no longer no longer living in

275
00:14:47,480 --> 00:14:49,640
Speaker 2: New York City, for example, he's not going to the

276
00:14:49,640 --> 00:14:52,240
Speaker 2: grocery store, he's not buying food. So maybe you lose

277
00:14:52,280 --> 00:14:55,320
Speaker 2: a job for a you know, a guy stocking the shelves.

278
00:14:55,520 --> 00:14:58,040
Speaker 2: He's no longer getting his suit strike clean there. So

279
00:14:58,440 --> 00:15:00,400
Speaker 2: maybe now there you lose a job one of the

280
00:15:00,440 --> 00:15:03,280
Speaker 2: city's many dry cleaners, and so on and so on. Right,

281
00:15:03,280 --> 00:15:06,240
Speaker 2: there's just this kind of cascade effect. You're going to

282
00:15:06,280 --> 00:15:11,040
Speaker 2: lose jobs in restaurants, right, waitresses and bartenders and so on,

283
00:15:11,200 --> 00:15:12,960
Speaker 2: and at the end of the day, again it's a

284
00:15:13,160 --> 00:15:16,440
Speaker 2: million people who leave the state over the course of

285
00:15:16,480 --> 00:15:20,080
Speaker 2: a decade. That effect is only going to be exacerbated

286
00:15:20,320 --> 00:15:23,440
Speaker 2: if you get the kinds of big spending and big

287
00:15:23,520 --> 00:15:28,400
Speaker 2: taxing policies that this guy, this literal communist has been

288
00:15:28,440 --> 00:15:29,920
Speaker 2: advocating for in the city.

289
00:15:30,800 --> 00:15:33,920
Speaker 1: You know, I think the challenges you know, obviously we're

290
00:15:33,920 --> 00:15:37,240
Speaker 1: seeing sort of uh, you know, people like AOC and

291
00:15:37,240 --> 00:15:41,280
Speaker 1: Bernie Sanders become more mainstream in their party, and Zorn

292
00:15:41,360 --> 00:15:43,360
Speaker 1: might as well too, and we've seen some reluctance to

293
00:15:43,360 --> 00:15:46,480
Speaker 1: embrace them from party leaders, but you know, that'll probably

294
00:15:46,640 --> 00:15:52,160
Speaker 1: change after the election, I guess. You know, they were

295
00:15:52,160 --> 00:15:55,760
Speaker 1: talking about equity and things like that, which obviously you know,

296
00:15:56,000 --> 00:15:58,800
Speaker 1: are an affordability and you know, things like that obviously

297
00:15:58,840 --> 00:16:01,120
Speaker 1: concerns and a lot of these cities like New York

298
00:16:01,120 --> 00:16:03,160
Speaker 1: City where it's so expensive to live. I guess how

299
00:16:03,200 --> 00:16:05,440
Speaker 1: to Republicans, I mean, this might be more of a

300
00:16:05,480 --> 00:16:09,000
Speaker 1: messaging question, But I guess what should our response.

301
00:16:08,600 --> 00:16:12,000
Speaker 2: Be to just this kind of spread of commoc.

302
00:16:11,360 --> 00:16:13,080
Speaker 1: And Bernie Sanders are making because you know, I think

303
00:16:13,120 --> 00:16:15,440
Speaker 1: to young people, yeah, I mean, like, you know, what

304
00:16:15,440 --> 00:16:17,360
Speaker 1: should our response be? I guess because I mean the

305
00:16:17,440 --> 00:16:19,800
Speaker 1: challenge is I guess it's more of a messaging thing,

306
00:16:21,000 --> 00:16:22,880
Speaker 1: you know, because you talk about giving away free things

307
00:16:22,880 --> 00:16:25,480
Speaker 1: to people who are concerned about affordability. That sounds a

308
00:16:25,520 --> 00:16:27,560
Speaker 1: little bit better than talking about like reducing tach you

309
00:16:27,600 --> 00:16:29,040
Speaker 1: know what I mean, Like, it's a little bit of

310
00:16:29,040 --> 00:16:29,680
Speaker 1: a challenge.

311
00:16:30,160 --> 00:16:33,520
Speaker 2: I think part of it least is that we are

312
00:16:33,840 --> 00:16:36,280
Speaker 2: and this is what this is what old generals tend

313
00:16:36,280 --> 00:16:40,360
Speaker 2: to do. Uh, we've been fighting new battles with the

314
00:16:40,400 --> 00:16:44,000
Speaker 2: same old tactics. We're kind of reliving, uh, you know,

315
00:16:44,160 --> 00:16:47,840
Speaker 2: historical moments instead of living in the present. So I

316
00:16:47,880 --> 00:16:49,760
Speaker 2: find when I talk to young people, when I like

317
00:16:49,880 --> 00:16:52,760
Speaker 2: visit colleges and give speeches, a lot of them are

318
00:16:52,840 --> 00:16:57,120
Speaker 2: increasingly unimpressed with empirical analysis. If I if I tell

319
00:16:57,120 --> 00:16:59,080
Speaker 2: them what I just told you in the audience about

320
00:16:59,200 --> 00:17:00,960
Speaker 2: how a million peopleeople are going to leave the state

321
00:17:01,000 --> 00:17:02,640
Speaker 2: of New York, and they're going to take their jobs

322
00:17:02,640 --> 00:17:04,840
Speaker 2: and their incomes with them, and everyone left in New

323
00:17:04,920 --> 00:17:07,760
Speaker 2: York is worse off as a result. If I put

324
00:17:07,800 --> 00:17:09,760
Speaker 2: it in those terms, they don't really seem to care

325
00:17:09,800 --> 00:17:13,320
Speaker 2: that much. It doesn't really speak to them because they

326
00:17:13,359 --> 00:17:15,560
Speaker 2: haven't you know, they don't. Frankly, they don't have a

327
00:17:15,600 --> 00:17:17,919
Speaker 2: lot of those critical thinking skills. They don't have the

328
00:17:17,920 --> 00:17:22,600
Speaker 2: ability to do empirical analyses. And so the only way

329
00:17:22,680 --> 00:17:24,280
Speaker 2: I think that we can speak to a lot of

330
00:17:24,280 --> 00:17:26,919
Speaker 2: these folks now is just by putting everything in moral terms.

331
00:17:27,119 --> 00:17:28,760
Speaker 2: And it's not to say it, but you know that

332
00:17:28,960 --> 00:17:32,560
Speaker 2: that morality is somehow below mathematics. That's not the point

333
00:17:32,600 --> 00:17:36,720
Speaker 2: at all. It's just that I think basic laws of

334
00:17:36,760 --> 00:17:40,320
Speaker 2: morality to some extent, are written on every human heart.

335
00:17:40,600 --> 00:17:43,760
Speaker 3: Right. We have a certain sense of justice that's just kind.

336
00:17:43,640 --> 00:17:46,359
Speaker 2: Of ingrained in our DNA, where we can kind of

337
00:17:46,400 --> 00:17:51,240
Speaker 2: intrinsically notice when something is fair or not. Now, obviously,

338
00:17:51,320 --> 00:17:54,480
Speaker 2: you know, concupiscence condull that part of your conscience over time,

339
00:17:55,000 --> 00:17:56,560
Speaker 2: so you don't see it as much, and so that

340
00:17:56,600 --> 00:17:59,000
Speaker 2: you think the government taking from someone and giving it

341
00:17:59,000 --> 00:18:02,080
Speaker 2: to me, Well, that's fair, right. But again I think

342
00:18:02,119 --> 00:18:04,040
Speaker 2: that's where we kind of have to make an appeal.

343
00:18:04,280 --> 00:18:07,280
Speaker 2: So when I talk about socialism a lot of times,

344
00:18:07,320 --> 00:18:10,800
Speaker 2: again mostly to young people, I almost exclusively put it

345
00:18:10,840 --> 00:18:15,399
Speaker 2: in moral terms, and I explain to them socialism is theft.

346
00:18:15,880 --> 00:18:19,520
Speaker 2: Socialism says that someone else has a right to what

347
00:18:19,640 --> 00:18:24,680
Speaker 2: you have earned. Socialism says that fit that I literally

348
00:18:24,720 --> 00:18:27,760
Speaker 2: have a fair share of what you worked hard for.

349
00:18:28,920 --> 00:18:32,440
Speaker 2: And look, is it fair for me, as a professor

350
00:18:33,080 --> 00:18:36,960
Speaker 2: to take some of your grade that you have earned

351
00:18:37,040 --> 00:18:39,840
Speaker 2: and give it to someone else? In other words, this

352
00:18:39,880 --> 00:18:42,640
Speaker 2: person over here they got an F and you got

353
00:18:42,680 --> 00:18:45,960
Speaker 2: an A. But if I redistribute some of your correct

354
00:18:46,000 --> 00:18:48,280
Speaker 2: answers to them, now you both get a C.

355
00:18:48,680 --> 00:18:50,840
Speaker 3: And that's equal. That's fair right.

356
00:18:51,359 --> 00:18:53,960
Speaker 2: And of course then immediately there's an uproar from the crowd.

357
00:18:53,960 --> 00:18:56,439
Speaker 3: No, No, that wouldn't be fair. No, please don't do that.

358
00:18:57,000 --> 00:18:59,680
Speaker 2: So again that's think those I think are the kinds

359
00:18:59,680 --> 00:19:02,600
Speaker 2: of thing that we need to say to young people

360
00:19:02,680 --> 00:19:06,879
Speaker 2: because they're just not ready for maybe the more robust

361
00:19:07,400 --> 00:19:11,760
Speaker 2: intellectual arguments that were made in yesteryear, the kinds of

362
00:19:11,840 --> 00:19:14,720
Speaker 2: things that I think helped convince young people in the eighties,

363
00:19:15,080 --> 00:19:18,359
Speaker 2: in the nineties, maybe even the early two thousands. That

364
00:19:18,520 --> 00:19:23,440
Speaker 2: just doesn't work anymore, unfortunately, because we've robbed kids again.

365
00:19:23,480 --> 00:19:26,000
Speaker 3: We indoctrinated them instead of educating them.

366
00:19:26,280 --> 00:19:29,280
Speaker 2: We robbed them of the opportunity to learn these kinds

367
00:19:29,320 --> 00:19:31,960
Speaker 2: of critical thinking skills that would have given them the

368
00:19:32,000 --> 00:19:37,120
Speaker 2: framework with which to understand socialism.

369
00:19:37,200 --> 00:19:38,760
Speaker 1: Well, so, I think my question to you took like

370
00:19:38,840 --> 00:19:44,040
Speaker 1: five minutes to as ask. So, you know, the economy

371
00:19:44,240 --> 00:19:46,880
Speaker 1: is likely going to be the top issue heading into

372
00:19:46,880 --> 00:19:49,120
Speaker 1: the midterms as it was heading into the twenty twenty

373
00:19:49,160 --> 00:19:53,480
Speaker 1: four presidential election. How would you gauge today's economy.

374
00:19:55,160 --> 00:19:58,439
Speaker 2: It's definitely a moment of transition, I think is the

375
00:19:58,440 --> 00:20:02,320
Speaker 2: best way to phrase, at least so, because we're basically

376
00:20:02,400 --> 00:20:06,040
Speaker 2: having to undo a lot of the stuff that the

377
00:20:06,080 --> 00:20:10,400
Speaker 2: Biden administration did, and that means the economy is sobering up.

378
00:20:10,480 --> 00:20:12,800
Speaker 3: Maybe that's another good analogy is alcoholism.

379
00:20:12,840 --> 00:20:15,159
Speaker 2: We've and I know we've kind of used that, you

380
00:20:15,200 --> 00:20:18,040
Speaker 2: know a few times on your show before. But if

381
00:20:18,040 --> 00:20:20,720
Speaker 2: you want to think of it as the Biden administration

382
00:20:21,280 --> 00:20:25,600
Speaker 2: was a government spending and hiring binge, Right, the government

383
00:20:25,640 --> 00:20:27,840
Speaker 2: spent all this money and that made GDP look good.

384
00:20:28,040 --> 00:20:30,320
Speaker 2: They hired all these people that made the jobs numbers

385
00:20:30,359 --> 00:20:32,760
Speaker 2: look good, but all of the government spending and all

386
00:20:32,800 --> 00:20:36,320
Speaker 2: of those government bureaucrats, they weren't actually doing anything productive.

387
00:20:36,760 --> 00:20:38,640
Speaker 2: It's like if we go back to World War two.

388
00:20:39,359 --> 00:20:42,520
Speaker 2: You know, GDP went through the roof after the depression

389
00:20:42,560 --> 00:20:44,760
Speaker 2: and once we got into World War two, but people

390
00:20:44,760 --> 00:20:47,240
Speaker 2: weren't any better off if you look at the actual

391
00:20:47,280 --> 00:20:50,840
Speaker 2: part of the economy that was spent on or that consumers,

392
00:20:50,960 --> 00:20:53,320
Speaker 2: you know, where it was consumer spending, it was business

393
00:20:53,359 --> 00:20:56,840
Speaker 2: investment in the private sector, not the public sector, but

394
00:20:56,960 --> 00:20:59,840
Speaker 2: just the private sector. Those things were going down during

395
00:20:59,880 --> 00:21:02,840
Speaker 2: the war, not up. You had price controls, you had

396
00:21:02,960 --> 00:21:06,680
Speaker 2: rationing people's standard of living, the consumer goods that they

397
00:21:06,680 --> 00:21:09,280
Speaker 2: had available to them. All those things got worse, not

398
00:21:09,440 --> 00:21:14,520
Speaker 2: better during the war. And so the explosion in GDP

399
00:21:14,680 --> 00:21:17,879
Speaker 2: would make you think that the standard of living had

400
00:21:17,920 --> 00:21:20,760
Speaker 2: gone through the roof. It didn't not at all. And

401
00:21:20,840 --> 00:21:24,200
Speaker 2: in fact that the private again private GDP, if you will,

402
00:21:24,400 --> 00:21:27,159
Speaker 2: not stuff that was going towards the war effort, but

403
00:21:27,240 --> 00:21:30,320
Speaker 2: that was actually like available for people to consume that

404
00:21:30,640 --> 00:21:33,440
Speaker 2: especially on a per capita basis and adjusted for inflation.

405
00:21:33,560 --> 00:21:37,199
Speaker 2: Again it didn't go up, it went down. So what

406
00:21:37,359 --> 00:21:40,200
Speaker 2: happened though, was the fact that literally half of GDP

407
00:21:40,880 --> 00:21:43,320
Speaker 2: was getting blown up in the European theater and in

408
00:21:43,359 --> 00:21:46,680
Speaker 2: the Pacific. But it made the numbers look really good.

409
00:21:46,760 --> 00:21:48,879
Speaker 2: That was the story, in a nutshell, of the Biden

410
00:21:48,920 --> 00:21:52,919
Speaker 2: administration making the numbers look good, not actually making people's

411
00:21:53,000 --> 00:21:57,119
Speaker 2: lives better. And so as you undo all of that, well,

412
00:21:57,160 --> 00:21:59,360
Speaker 2: it's going to cause a lot of economic disruptions. There's

413
00:21:59,400 --> 00:22:00,320
Speaker 2: no doubt about that.

414
00:22:01,119 --> 00:22:01,800
Speaker 3: You're going to see.

415
00:22:01,840 --> 00:22:05,879
Speaker 2: For example, we've let go now well over one hundred

416
00:22:05,960 --> 00:22:09,200
Speaker 2: thousand bureaucrats, federal bureaucrats this year. That's going to weigh

417
00:22:09,240 --> 00:22:13,679
Speaker 2: down your job's numbers, right, the portion of GDP. And

418
00:22:13,720 --> 00:22:15,760
Speaker 2: we only have the first two quarters of the year

419
00:22:15,800 --> 00:22:17,560
Speaker 2: to look at. We don't have the third quarter because

420
00:22:17,600 --> 00:22:20,359
Speaker 2: the government shut down. But in the first two quarters, Lisa,

421
00:22:20,400 --> 00:22:22,679
Speaker 2: in each of those quarters, the percent the part of

422
00:22:22,760 --> 00:22:26,439
Speaker 2: GDP that measures government purchases again, that didn't go up.

423
00:22:26,560 --> 00:22:31,120
Speaker 2: It actually went down. And so the result of that

424
00:22:32,000 --> 00:22:35,480
Speaker 2: has been to drag down the headline numbers. And we're

425
00:22:35,640 --> 00:22:39,480
Speaker 2: reorienting the economy away from the unproductive public sector and

426
00:22:39,520 --> 00:22:42,560
Speaker 2: to the productive private sector. And that's going to cause

427
00:22:42,640 --> 00:22:46,000
Speaker 2: some short term pain, some short term disruptions. Biden was

428
00:22:46,040 --> 00:22:50,240
Speaker 2: basically just one nightly drinking binge after the next, but

429
00:22:50,440 --> 00:22:52,440
Speaker 2: each one was followed up the next morning. Oh I

430
00:22:52,440 --> 00:22:54,760
Speaker 2: don't feel so good. Hair of the dog, right, I'm

431
00:22:54,800 --> 00:22:56,920
Speaker 2: just gonna have another drink so I don't feel as bad.

432
00:22:57,520 --> 00:23:01,080
Speaker 2: That was the economic history. I guess you could say, uh,

433
00:23:01,560 --> 00:23:04,159
Speaker 2: you know of the Biden administration and what has it

434
00:23:04,240 --> 00:23:07,720
Speaker 2: been under Trump. We're putting the bottle away, We're ordering

435
00:23:07,720 --> 00:23:11,320
Speaker 2: a black coffee. It's gonna be painful sobering up, but

436
00:23:11,400 --> 00:23:15,600
Speaker 2: it's necessary and more importantly, more importantly, it's the path

437
00:23:15,960 --> 00:23:20,120
Speaker 2: to long run health. This is how you get sustainable

438
00:23:21,200 --> 00:23:22,199
Speaker 2: economic growth.

439
00:23:22,400 --> 00:23:23,800
Speaker 3: That's you know, that's a.

440
00:23:23,720 --> 00:23:26,080
Speaker 2: Good clip, not like the two percent we saw under

441
00:23:26,080 --> 00:23:29,320
Speaker 2: Obama where people weren't happy with it, but a robust

442
00:23:29,400 --> 00:23:33,080
Speaker 2: three or four percent. And again we're talking private sector

443
00:23:33,119 --> 00:23:35,960
Speaker 2: growth here, not just growth in government.

444
00:23:36,800 --> 00:23:39,560
Speaker 1: Do you think we'll see that before the mid terms,

445
00:23:39,640 --> 00:23:43,479
Speaker 1: because obviously the challenge politically is that Americans need to

446
00:23:43,520 --> 00:23:48,320
Speaker 1: feel the relief in order to you know, vote for

447
00:23:48,400 --> 00:23:50,359
Speaker 1: Republicans heading into the mid terms.

448
00:23:51,040 --> 00:23:53,760
Speaker 2: Well, I think we're we're definitely already seeing some of

449
00:23:53,800 --> 00:23:56,360
Speaker 2: the relief. But the problem is, you know, we have

450
00:23:56,440 --> 00:24:00,280
Speaker 2: to appreciate the starting point. And I talked to, you know,

451
00:24:00,320 --> 00:24:04,280
Speaker 2: some people in Republican circles who you know, they're just look,

452
00:24:04,400 --> 00:24:08,840
Speaker 2: they're good people, Lisa, but they're very disconnected from the

453
00:24:08,920 --> 00:24:12,000
Speaker 2: common man. You know, they do very very well for themselves,

454
00:24:12,080 --> 00:24:14,600
Speaker 2: and I don't begrudge them for that, but these are

455
00:24:14,600 --> 00:24:19,080
Speaker 2: not folks who ever do their own food shopping, let's say.

456
00:24:19,600 --> 00:24:22,280
Speaker 2: And because they make a very good income, they are

457
00:24:22,320 --> 00:24:27,359
Speaker 2: relatively insulated from problems like the cost of living. And

458
00:24:27,400 --> 00:24:29,280
Speaker 2: so they look at the official numbers like I do,

459
00:24:29,320 --> 00:24:34,119
Speaker 2: and they say, oh wow, people's inflation adjusted paychecks rose,

460
00:24:34,359 --> 00:24:37,960
Speaker 2: you know, rose about one percent in just like the

461
00:24:38,000 --> 00:24:41,359
Speaker 2: first six, seven, maybe eight months of the Trump administration.

462
00:24:41,840 --> 00:24:43,960
Speaker 2: I mean, that's great news. So it's not just that

463
00:24:44,000 --> 00:24:46,320
Speaker 2: your paycheck's gotten bigger, but it's what your paycheck can

464
00:24:46,359 --> 00:24:50,600
Speaker 2: actually buy. Okay, that's great news, but what's the context.

465
00:24:51,119 --> 00:24:53,960
Speaker 2: The context is, for the previous four years under the

466
00:24:53,960 --> 00:24:59,480
Speaker 2: Biden administration, the total change in people's weekly paychecks adjusted

467
00:24:59,480 --> 00:25:02,560
Speaker 2: for inflation was negative four percent. So at the end

468
00:25:02,640 --> 00:25:06,240
Speaker 2: of his term, what your paycheck could actually buy bought

469
00:25:06,359 --> 00:25:09,640
Speaker 2: four percent less on average than what it could when

470
00:25:09,680 --> 00:25:12,720
Speaker 2: he took office. That's why we have a cost of

471
00:25:12,800 --> 00:25:15,800
Speaker 2: living crisis still in this country, because now, over the

472
00:25:15,800 --> 00:25:18,479
Speaker 2: course of roughly five years, it's not that you're up

473
00:25:18,520 --> 00:25:21,360
Speaker 2: one percent, it's that you're down a net three percent.

474
00:25:22,240 --> 00:25:24,240
Speaker 2: And on top of that, you have to consider that

475
00:25:24,640 --> 00:25:27,119
Speaker 2: people have racked up well over a trillion dollars in

476
00:25:27,160 --> 00:25:29,800
Speaker 2: credit card debt. Right the interest rate on those credit

477
00:25:29,880 --> 00:25:32,080
Speaker 2: cards is near a record high. So there are a

478
00:25:32,080 --> 00:25:35,240
Speaker 2: lot of other aspects that aren't captured in that statistic

479
00:25:35,320 --> 00:25:38,359
Speaker 2: that tell us the cost of living today is much

480
00:25:38,680 --> 00:25:42,320
Speaker 2: much worse than it was in twenty nineteen. So this

481
00:25:42,400 --> 00:25:44,840
Speaker 2: is like if you have I don't know, you have

482
00:25:45,200 --> 00:25:48,480
Speaker 2: Usain Bolt, the fastest man in the world running a race,

483
00:25:48,960 --> 00:25:53,399
Speaker 2: except he is starting a whole lap behind everybody else. Yes,

484
00:25:53,440 --> 00:25:57,000
Speaker 2: he has made incredible progress in his first his first

485
00:25:57,000 --> 00:25:59,760
Speaker 2: go around the track, but he still hasn't caught up

486
00:25:59,760 --> 00:26:01,920
Speaker 2: to all the other runners that are slower than him.

487
00:26:02,280 --> 00:26:05,440
Speaker 2: That's the way a lot of Americans feel right now. Yes,

488
00:26:05,520 --> 00:26:07,919
Speaker 2: things have gotten a little better this year. They're not

489
00:26:08,040 --> 00:26:10,639
Speaker 2: as bad as they were last year, but they're still

490
00:26:10,920 --> 00:26:14,880
Speaker 2: significantly worse than they were in twenty nineteen quick break.

491
00:26:14,920 --> 00:26:16,639
Speaker 1: If you like what you're hearing, please share on social

492
00:26:16,680 --> 00:26:22,240
Speaker 1: media or send it to your family and friends. President

493
00:26:22,240 --> 00:26:25,520
Speaker 1: Trump will build a pick a new FED chair come

494
00:26:25,640 --> 00:26:28,920
Speaker 1: this spring. What impact do you think that would have

495
00:26:29,119 --> 00:26:31,119
Speaker 1: or will have heading into the midterms.

496
00:26:31,920 --> 00:26:35,840
Speaker 2: I think a tremendous impact for a couple of reasons.

497
00:26:35,880 --> 00:26:38,680
Speaker 2: One is going to be market confidence. Markets just don't

498
00:26:38,680 --> 00:26:40,840
Speaker 2: have any confidence in power right now. They have much

499
00:26:40,840 --> 00:26:45,520
Speaker 2: more confidence, interestingly in Scott Bessen and I would love

500
00:26:45,600 --> 00:26:47,280
Speaker 2: him as FED chair, except I don't think we can

501
00:26:47,320 --> 00:26:50,040
Speaker 2: spare him at Treasury. We need him so that when

502
00:26:50,119 --> 00:26:52,600
Speaker 2: rates finally come down, he can be there to refinance

503
00:26:52,640 --> 00:26:55,240
Speaker 2: the debt he is, you know, he is an absolute

504
00:26:55,920 --> 00:27:00,320
Speaker 2: master of sovereign debt markets, including US treasuries, and he

505
00:27:00,520 --> 00:27:02,120
Speaker 2: is the world's best bond salesman.

506
00:27:02,200 --> 00:27:03,400
Speaker 3: So again, we just need him.

507
00:27:03,520 --> 00:27:07,280
Speaker 2: We need him there unfortunately or unfortunately, But in terms

508
00:27:07,320 --> 00:27:10,840
Speaker 2: of Palell, why don't markets trust him? It's because he

509
00:27:11,040 --> 00:27:14,440
Speaker 2: says he's data dependent, except even though we have all

510
00:27:14,480 --> 00:27:16,040
Speaker 2: the data, we never know what he's going to do

511
00:27:16,080 --> 00:27:18,760
Speaker 2: with it. Well, then you're not data dependent, mister Powell.

512
00:27:18,920 --> 00:27:20,879
Speaker 2: No one knows what you're going to do with the

513
00:27:20,960 --> 00:27:24,119
Speaker 2: same data from one month to the next. So he

514
00:27:24,200 --> 00:27:28,960
Speaker 2: is neither data dependent nor politically independent. He is neither

515
00:27:29,040 --> 00:27:32,080
Speaker 2: of those. He is clearly a political animal. There was

516
00:27:32,200 --> 00:27:35,680
Speaker 2: no empirical justification for cutting rates last year, right before

517
00:27:35,720 --> 00:27:38,240
Speaker 2: the election, and yet he gave us an emergency fifty

518
00:27:38,880 --> 00:27:42,240
Speaker 2: basis point cut to try to goose the stock market

519
00:27:42,280 --> 00:27:44,600
Speaker 2: and get their preferred candidate across the finish line.

520
00:27:45,000 --> 00:27:45,399
Speaker 3: The FED.

521
00:27:45,600 --> 00:27:49,240
Speaker 2: The people at the FED overwhelmingly donate to and support

522
00:27:49,320 --> 00:27:53,640
Speaker 2: Democrats exclusively. You can't tell me it's an independent institution. Please,

523
00:27:53,720 --> 00:27:57,080
Speaker 2: let's dispense with that garbage. So markets have never have

524
00:27:57,119 --> 00:28:00,399
Speaker 2: any idea what Pale's going to do. Right, if you

525
00:28:00,480 --> 00:28:03,840
Speaker 2: have somebody in there who is actually data dependent and

526
00:28:04,040 --> 00:28:07,640
Speaker 2: is dead on reliable, what happens. Markets as soon as

527
00:28:08,040 --> 00:28:11,960
Speaker 2: economic data is released basically move before they even wait

528
00:28:12,000 --> 00:28:13,440
Speaker 2: for the Fed to move, because.

529
00:28:13,160 --> 00:28:15,199
Speaker 3: They know what the Fed's going to do. And to

530
00:28:15,240 --> 00:28:16,160
Speaker 3: a certain extent, this.

531
00:28:16,200 --> 00:28:18,720
Speaker 2: Was true for I think for Alan Greenspan at least

532
00:28:18,720 --> 00:28:21,119
Speaker 2: for part of his career, and that was very helpful

533
00:28:21,119 --> 00:28:24,240
Speaker 2: to markets. So if you get somebody in there who

534
00:28:24,600 --> 00:28:27,840
Speaker 2: is much less politically biased, I think that's a huge

535
00:28:27,880 --> 00:28:31,439
Speaker 2: help The other big thing is that the entire monetary

536
00:28:31,480 --> 00:28:35,479
Speaker 2: framework that he has built LISA since COVID has been

537
00:28:35,520 --> 00:28:38,080
Speaker 2: an absolute disaster. And this is something we've talked about

538
00:28:38,160 --> 00:28:40,880
Speaker 2: a few times before as well, is how they are

539
00:28:40,920 --> 00:28:44,920
Speaker 2: paying banks not to lend money. They literally are paying banks.

540
00:28:44,920 --> 00:28:48,360
Speaker 2: It's something like four hundred million dollars a day in

541
00:28:48,360 --> 00:28:51,239
Speaker 2: interest for the banks to keep the money parked at

542
00:28:51,240 --> 00:28:53,400
Speaker 2: the FED. In other words, the FED is saying to

543
00:28:53,440 --> 00:28:57,000
Speaker 2: these banks and these other financial institutions, Hey, instead of

544
00:28:57,080 --> 00:28:59,680
Speaker 2: lending money to the private sector so that somebody can

545
00:28:59,680 --> 00:29:02,840
Speaker 2: get the mortgage or student loan, auto loan, credit card,

546
00:29:02,880 --> 00:29:06,600
Speaker 2: you name it, instead of lending money to the treasury

547
00:29:07,120 --> 00:29:11,160
Speaker 2: for the deficit, or refinancing the debt, instead of doing

548
00:29:11,160 --> 00:29:12,520
Speaker 2: any of those things, lend.

549
00:29:12,360 --> 00:29:14,480
Speaker 3: It to us. It's risk free.

550
00:29:15,000 --> 00:29:18,480
Speaker 2: It's literally an overnight loan, so there's no term premium

551
00:29:18,480 --> 00:29:20,160
Speaker 2: you might call it. In other words, the bank doesn't

552
00:29:20,200 --> 00:29:23,000
Speaker 2: have to worry about a thirty year mortgage where their

553
00:29:23,000 --> 00:29:26,160
Speaker 2: money is now tied up for three decades, and the

554
00:29:26,160 --> 00:29:28,480
Speaker 2: Fed's going to pay you interest on it. It's a completely

555
00:29:28,560 --> 00:29:30,840
Speaker 2: risk free rate of return. Why would you not do that?

556
00:29:31,440 --> 00:29:33,480
Speaker 2: It's a no brainer. And so the FED has been

557
00:29:33,720 --> 00:29:36,600
Speaker 2: sterilizing trillions of dollars that way to try to keep

558
00:29:36,760 --> 00:29:38,920
Speaker 2: bank reserves at this magical.

559
00:29:38,600 --> 00:29:39,360
Speaker 3: Ratio they have.

560
00:29:39,840 --> 00:29:42,840
Speaker 2: Well, there's a couple problems with that. One is the

561
00:29:42,880 --> 00:29:45,960
Speaker 2: fact that it is robbing the private market of capital.

562
00:29:46,400 --> 00:29:48,480
Speaker 2: It is making it much more difficult for you and

563
00:29:48,520 --> 00:29:50,320
Speaker 2: I to get a mortgage, or to open up a

564
00:29:50,320 --> 00:29:52,760
Speaker 2: credit card, or to get lower interest rates on any

565
00:29:52,800 --> 00:29:56,080
Speaker 2: of those things. A big reason why interest rates on

566
00:29:56,160 --> 00:29:59,600
Speaker 2: mortgages are so high today is that you are literally

567
00:29:59,640 --> 00:30:04,480
Speaker 2: having compete with Jerome Poal for loanable funds. The Treasury

568
00:30:04,520 --> 00:30:08,320
Speaker 2: is also having to compete with Jerome pal for loanable funds,

569
00:30:08,640 --> 00:30:11,440
Speaker 2: and the result of that is the interest rate on

570
00:30:11,760 --> 00:30:16,480
Speaker 2: refinancing the debt this year is artificially high, even though

571
00:30:16,520 --> 00:30:18,920
Speaker 2: the deficit is coming down, even though we are making

572
00:30:18,960 --> 00:30:22,120
Speaker 2: remarkable progress both in cutting spending and in bringing in

573
00:30:22,160 --> 00:30:26,480
Speaker 2: more revenue, and markets have rewarded the Treasury by putting

574
00:30:26,560 --> 00:30:29,600
Speaker 2: in the new lows for the year on benchmark treasuries.

575
00:30:30,040 --> 00:30:33,600
Speaker 2: Despite all of that, those yields can't really drop any further,

576
00:30:34,080 --> 00:30:37,160
Speaker 2: because if they do, you're now bumping up against the

577
00:30:37,240 --> 00:30:40,720
Speaker 2: point where banks would rather just lend to Powell at

578
00:30:40,760 --> 00:30:43,600
Speaker 2: the FED, because why on earth would I get a

579
00:30:43,600 --> 00:30:47,040
Speaker 2: lower rate of return somewhere else. It's what we call

580
00:30:47,080 --> 00:30:51,800
Speaker 2: a floor on interest rates. And all of this has

581
00:30:51,880 --> 00:30:58,080
Speaker 2: again resulted in this bizarre framework where because Powell is

582
00:30:58,120 --> 00:31:02,640
Speaker 2: now trying to maintain this artificial framework, the market is

583
00:31:02,720 --> 00:31:06,600
Speaker 2: forcing his hand. We just stopped quantity, or we're about

584
00:31:06,600 --> 00:31:09,360
Speaker 2: to stop, I should say, what we call quantitative easing,

585
00:31:09,400 --> 00:31:12,080
Speaker 2: which is the FED selling off its balance sheet, and

586
00:31:12,200 --> 00:31:14,920
Speaker 2: instead they're going to start adding to the balance sheet

587
00:31:15,000 --> 00:31:17,520
Speaker 2: in the coming months. Why because the market is forcing

588
00:31:17,560 --> 00:31:21,000
Speaker 2: their hand. That's going to actually create inflationary pressures in

589
00:31:21,040 --> 00:31:25,280
Speaker 2: the economy. But pal is obsessed with the financial plumbing,

590
00:31:25,600 --> 00:31:29,160
Speaker 2: not with inflation, not with the job market. What you

591
00:31:29,280 --> 00:31:32,880
Speaker 2: need in Palell's replacement, I really think is going to

592
00:31:32,880 --> 00:31:36,600
Speaker 2: be somebody, if not Kevin Walsh, then someone likes him,

593
00:31:36,640 --> 00:31:39,760
Speaker 2: and someone like him, and someone who understands the market

594
00:31:40,080 --> 00:31:41,200
Speaker 2: as well as he does.

595
00:31:42,080 --> 00:31:44,200
Speaker 3: What you need to do is basically exactly.

596
00:31:43,800 --> 00:31:46,280
Speaker 2: The opposite of what Pale has been doing. You need

597
00:31:46,320 --> 00:31:49,960
Speaker 2: to stop paying banks to lend, not to lend, I

598
00:31:49,960 --> 00:31:52,720
Speaker 2: should say, and what is that going to do?

599
00:31:52,760 --> 00:31:52,920
Speaker 3: Well?

600
00:31:52,960 --> 00:31:55,440
Speaker 2: Banks are going to take several trillion dollars out of

601
00:31:55,480 --> 00:31:58,680
Speaker 2: the FED and start lending it normally, that would expand

602
00:31:58,680 --> 00:32:01,440
Speaker 2: the money supply and be inflationtionary. But at the same time,

603
00:32:01,520 --> 00:32:04,160
Speaker 2: the FED can very quickly sell off its balance sheet

604
00:32:04,600 --> 00:32:07,480
Speaker 2: countering that. So what you do is you have now

605
00:32:07,680 --> 00:32:12,080
Speaker 2: greatly increased the amount of capital available for the market.

606
00:32:12,440 --> 00:32:15,880
Speaker 2: You have put tremendous downward pressure on interest rates, which

607
00:32:15,880 --> 00:32:18,920
Speaker 2: is going to provide relief for American families and federal

608
00:32:18,960 --> 00:32:24,040
Speaker 2: finances alike. The only loser in this whole change would

609
00:32:24,040 --> 00:32:26,720
Speaker 2: be Wall Street, because the big banks are no longer

610
00:32:26,720 --> 00:32:28,080
Speaker 2: going to have going to be able to ride the

611
00:32:28,080 --> 00:32:31,920
Speaker 2: gravy train of getting this you know, getting these insurance handouts,

612
00:32:32,360 --> 00:32:36,360
Speaker 2: excuse me, this interest handout. So that those are the

613
00:32:36,440 --> 00:32:39,080
Speaker 2: kinds of changes that need to be made. And if

614
00:32:39,160 --> 00:32:41,040
Speaker 2: you do all that, sorry to make a long story

615
00:32:41,120 --> 00:32:42,920
Speaker 2: endless here, if you do all that, I think it

616
00:32:42,960 --> 00:32:46,880
Speaker 2: would provide a tremendous boost to the private economy. And

617
00:32:47,000 --> 00:32:49,640
Speaker 2: even if these changes aren't made until May, when the

618
00:32:49,680 --> 00:32:52,600
Speaker 2: next FED share comes in, I think you could literally

619
00:32:52,640 --> 00:32:56,040
Speaker 2: see significant change in the economy in just a few months.

620
00:32:56,480 --> 00:32:59,240
Speaker 2: And that would put us right before right before.

621
00:32:58,960 --> 00:33:01,800
Speaker 1: The midterms, you know, and then before we go the

622
00:33:01,800 --> 00:33:05,479
Speaker 1: Supreme Corps is considering the legality of Trump's tariffs, so

623
00:33:05,680 --> 00:33:07,280
Speaker 1: you know, we'll see what happens with that. But we've

624
00:33:07,320 --> 00:33:10,000
Speaker 1: seen some movement, at least on China with rare earth minerals.

625
00:33:11,360 --> 00:33:14,720
Speaker 1: You know, how would you assess his tariff strategy to

626
00:33:14,880 --> 00:33:17,760
Speaker 1: date and sort of where do you what are you

627
00:33:17,800 --> 00:33:19,960
Speaker 1: keeping your eye on right now in terms of where

628
00:33:19,960 --> 00:33:20,440
Speaker 1: it's heading.

629
00:33:21,960 --> 00:33:23,360
Speaker 3: Well, the tariff.

630
00:33:23,080 --> 00:33:27,080
Speaker 2: Strategy has definitely been multifaceted. And one of the reasons

631
00:33:27,080 --> 00:33:29,840
Speaker 2: why it's so difficult to assess it, Lisa, is because

632
00:33:30,400 --> 00:33:34,920
Speaker 2: some of those some of those goals are contradictory. In

633
00:33:34,960 --> 00:33:38,360
Speaker 2: other words, if you have if you have an instance

634
00:33:38,360 --> 00:33:41,640
Speaker 2: where you say, all right, we want to increase revenue, right,

635
00:33:41,680 --> 00:33:45,680
Speaker 2: we want to increase customs duties from these tariffs, because

636
00:33:45,680 --> 00:33:47,200
Speaker 2: that's what that's what a tariff is, right, it's a

637
00:33:47,360 --> 00:33:48,200
Speaker 2: tax on imports.

638
00:33:48,600 --> 00:33:50,680
Speaker 3: Well, then you're going to.

639
00:33:50,880 --> 00:33:52,720
Speaker 2: End up selling less or excuse me, you're going to

640
00:33:52,760 --> 00:33:54,720
Speaker 2: end up buying less of those imports because if you

641
00:33:54,840 --> 00:33:55,880
Speaker 2: tax something more, you get.

642
00:33:55,840 --> 00:33:56,280
Speaker 3: Less of it.

643
00:33:56,840 --> 00:34:00,560
Speaker 2: But then at the same time, you have and I

644
00:34:00,560 --> 00:34:03,480
Speaker 2: should say that goes hand in glove with this idea

645
00:34:03,680 --> 00:34:06,440
Speaker 2: of you know, we want to decrease imports. We want

646
00:34:06,440 --> 00:34:11,680
Speaker 2: to increase what we call net exports. But those things

647
00:34:11,800 --> 00:34:15,840
Speaker 2: run run contradictory in the long run. In other words,

648
00:34:16,200 --> 00:34:18,279
Speaker 2: over time, what's going to happen. You are going to

649
00:34:18,480 --> 00:34:21,600
Speaker 2: reshore manufacturing. People are going to say it's not worth

650
00:34:21,640 --> 00:34:24,120
Speaker 2: it to make stuff overseas and import it into the US.

651
00:34:24,400 --> 00:34:26,000
Speaker 3: We're going to make a factory into the US.

652
00:34:26,040 --> 00:34:28,400
Speaker 2: And that's great because now you've now you've increased the

653
00:34:28,480 --> 00:34:32,640
Speaker 2: number of US manufacturing jobs and you have reshored supply chains.

654
00:34:32,640 --> 00:34:35,839
Speaker 2: That's good for national security reasons. But what does that

655
00:34:35,920 --> 00:34:38,840
Speaker 2: do now to your your customs duties?

656
00:34:39,000 --> 00:34:40,560
Speaker 3: Well, now they're going to fall off a cliff.

657
00:34:41,320 --> 00:34:44,120
Speaker 2: So one of the things you have to understand with

658
00:34:44,120 --> 00:34:47,160
Speaker 2: with this whole tariff strategy, with the whole game that's

659
00:34:47,200 --> 00:34:50,400
Speaker 2: being played here, is that they are trying to achieve

660
00:34:50,520 --> 00:34:53,400
Speaker 2: more than one goal. They're just not trying to achieve

661
00:34:53,520 --> 00:34:56,759
Speaker 2: all of them at exactly the same time, and they're

662
00:34:56,800 --> 00:35:00,439
Speaker 2: not all trying to be achieved in the same market words.

663
00:35:00,480 --> 00:35:03,919
Speaker 2: There might be one area like steel where we say

664
00:35:03,960 --> 00:35:07,120
Speaker 2: that that's more of a national security interest, and so

665
00:35:07,239 --> 00:35:10,640
Speaker 2: the primary goal there is not increasing revenue to the treasury.

666
00:35:10,640 --> 00:35:13,560
Speaker 2: The primary goal there is getting the facilities and the

667
00:35:13,640 --> 00:35:14,880
Speaker 2: jobs back here.

668
00:35:14,760 --> 00:35:16,560
Speaker 3: At home somewhere else.

669
00:35:16,800 --> 00:35:19,680
Speaker 2: The real goal might be not even economic at all.

670
00:35:19,880 --> 00:35:23,399
Speaker 2: It might be a non economic issue like fentanyl. Look

671
00:35:23,440 --> 00:35:27,200
Speaker 2: at the amazing progress the president has made with the

672
00:35:27,360 --> 00:35:30,040
Speaker 2: huge tariffs that they had put on and threatened to

673
00:35:30,080 --> 00:35:33,160
Speaker 2: go even higher on China. What happened, China back down

674
00:35:33,440 --> 00:35:35,520
Speaker 2: on pretty much all of their demands and said, all right,

675
00:35:35,520 --> 00:35:37,960
Speaker 2: we're going to make sure that we're policing, and we

676
00:35:38,040 --> 00:35:40,200
Speaker 2: got to make sure they're actually going to fall through

677
00:35:40,200 --> 00:35:43,040
Speaker 2: on this. But China has said they've promised that they're

678
00:35:43,080 --> 00:35:45,600
Speaker 2: going to, you know, police the amount of fentanyl and

679
00:35:45,640 --> 00:35:49,080
Speaker 2: fentanyl precursors that are coming into the country. You know,

680
00:35:49,120 --> 00:35:51,799
Speaker 2: that's really great news, but it has nothing it doesn't

681
00:35:51,800 --> 00:35:54,080
Speaker 2: even have anything to do with with economic issues. So,

682
00:35:54,719 --> 00:35:57,399
Speaker 2: you know, getting back to the Treasury Secretary, he has

683
00:35:57,480 --> 00:36:02,000
Speaker 2: called this strategic ambiguity. In other words, other nations don't

684
00:36:02,040 --> 00:36:06,280
Speaker 2: really know beyond the simple demands that the president makes,

685
00:36:06,520 --> 00:36:09,799
Speaker 2: what his actual goals are, especially not in all instances.

686
00:36:10,239 --> 00:36:13,160
Speaker 2: And the result of that has been all these countries

687
00:36:13,239 --> 00:36:15,839
Speaker 2: know is that, look, if we want to avoid some

688
00:36:16,000 --> 00:36:18,920
Speaker 2: really really damaging economic effects, we just have to do

689
00:36:18,960 --> 00:36:22,560
Speaker 2: what the president says. And sure enough, look at Canada.

690
00:36:23,160 --> 00:36:25,680
Speaker 2: Canada decided they were not going to play ball. They

691
00:36:25,719 --> 00:36:27,600
Speaker 2: decided they were not going to do what the President

692
00:36:27,719 --> 00:36:31,120
Speaker 2: was asking, which were relatively simple things. Right, let us

693
00:36:31,160 --> 00:36:33,840
Speaker 2: sell our dairy in your country. Well, they have a

694
00:36:33,960 --> 00:36:37,160
Speaker 2: very small but very powerful dairy lobby in Canada. I

695
00:36:37,160 --> 00:36:40,080
Speaker 2: think it's concentrated in Ontario if I remember correctly, but

696
00:36:40,080 --> 00:36:42,920
Speaker 2: I'm not positive. But wherever it is, maybe it's Montreal.

697
00:36:43,040 --> 00:36:45,719
Speaker 2: They essentially said, no, no, we're not going to give

698
00:36:45,719 --> 00:36:48,000
Speaker 2: into that. We're going to keep all these dairy restrictions

699
00:36:48,000 --> 00:36:50,520
Speaker 2: in place, and so the President slapped a bunch of

700
00:36:50,560 --> 00:36:52,759
Speaker 2: tariffs on them. Now, there were other reasons to it, right,

701
00:36:52,760 --> 00:36:56,520
Speaker 2: It wasn't just dairy Canada. Canada really hoses a lot

702
00:36:56,520 --> 00:36:59,880
Speaker 2: of our manufacturing base in different ways. But whatever the case,

703
00:37:00,760 --> 00:37:04,600
Speaker 2: the Canadian economy, the last economic report I saw, they're

704
00:37:04,640 --> 00:37:07,279
Speaker 2: in contraction right now. In other words, they're basically headed

705
00:37:07,320 --> 00:37:10,520
Speaker 2: towards the recession. Their unemployment rate is not looking good.

706
00:37:10,560 --> 00:37:13,040
Speaker 2: I think it's like seven or eight percent. There are

707
00:37:13,080 --> 00:37:16,520
Speaker 2: a whole host of economic indicators that are flashing red

708
00:37:16,520 --> 00:37:19,440
Speaker 2: for Canada right now. Why because they need US a

709
00:37:19,440 --> 00:37:20,759
Speaker 2: lot more than we need them.

710
00:37:21,000 --> 00:37:22,959
Speaker 3: At the end of the day, if you look at.

711
00:37:22,840 --> 00:37:25,719
Speaker 2: The size of our economy, we obviously have the upper

712
00:37:25,719 --> 00:37:28,279
Speaker 2: hand in a trade war. If you look at exports,

713
00:37:28,640 --> 00:37:31,359
Speaker 2: their economy is much more dependent on exports than we are.

714
00:37:31,440 --> 00:37:33,160
Speaker 2: So again we have the upper hand. And if you

715
00:37:33,200 --> 00:37:36,759
Speaker 2: want to really drill down within exports, almost all of

716
00:37:36,800 --> 00:37:40,080
Speaker 2: their exports come here to the United States, and so

717
00:37:40,160 --> 00:37:44,320
Speaker 2: if we shut off trade, that is a huge, huge

718
00:37:44,400 --> 00:37:47,319
Speaker 2: drag on their economy. It is an anchor around the neck.

719
00:37:47,880 --> 00:37:52,160
Speaker 2: But in the US, very few of our exports actually

720
00:37:52,200 --> 00:37:55,759
Speaker 2: go to Canada. I think it's single digits per percentage wise.

721
00:37:55,760 --> 00:37:58,320
Speaker 2: I mean I don't even think it's ten percent. So yes,

722
00:37:58,360 --> 00:38:02,160
Speaker 2: that a trade war hurts the United States too, it hurts.

723
00:38:01,920 --> 00:38:03,560
Speaker 3: Canada a whole heck of a lot more.

724
00:38:03,600 --> 00:38:05,920
Speaker 2: You know, there are no winners in trade wars, but

725
00:38:06,000 --> 00:38:07,399
Speaker 2: not everyone loses the same.

726
00:38:07,840 --> 00:38:10,000
Speaker 1: Ejntoni, appreciate you making the time, my friend.

727
00:38:10,040 --> 00:38:12,280
Speaker 2: Thank you so much, Lisa, my pleasure.

728
00:38:12,320 --> 00:38:13,239
Speaker 3: Thank you for having me.

729
00:38:13,440 --> 00:38:15,840
Speaker 1: That was Ejntoni. Appreciate him for making the time to

730
00:38:15,880 --> 00:38:17,520
Speaker 1: come on the show. Appreciate you guys at home for

731
00:38:17,640 --> 00:38:20,120
Speaker 1: listening every Tuesday and Thursday, but you can listen throughout

732
00:38:20,120 --> 00:38:21,960
Speaker 1: the week. I want to think John Cassio and my

733
00:38:22,000 --> 00:38:24,200
Speaker 1: producer for putting the show together. Until next time,