1 00:00:00,320 --> 00:00:03,040 Speaker 1: Welcome to the Tutor Dixon Podcast. We have someone with 2 00:00:03,120 --> 00:00:06,440 Speaker 1: us here today that can talk both AI and the 3 00:00:06,480 --> 00:00:09,200 Speaker 1: Federal Reserve. And that's a hard one to choose right 4 00:00:09,240 --> 00:00:11,640 Speaker 1: now because everything going on with the FED but also 5 00:00:11,840 --> 00:00:14,320 Speaker 1: everything going on with AI. So we said we're going 6 00:00:14,400 --> 00:00:16,840 Speaker 1: to start with the FED and talk about what's going 7 00:00:16,880 --> 00:00:19,520 Speaker 1: on there because I've got Todd Sheets with me. He 8 00:00:19,800 --> 00:00:23,640 Speaker 1: is a successful he had a highly successful career in 9 00:00:23,640 --> 00:00:26,600 Speaker 1: investment banking, but he also wrote the book on what 10 00:00:26,800 --> 00:00:29,840 Speaker 1: really happened in the two thousand and eight crisis. So Todd, 11 00:00:29,880 --> 00:00:31,560 Speaker 1: thank you so much for joining me today. 12 00:00:32,040 --> 00:00:34,239 Speaker 2: Tudor, thanks for having me. It's delightful to be with you. 13 00:00:34,880 --> 00:00:38,519 Speaker 1: Absolutely. So we you've talked about the housing crisis in 14 00:00:38,520 --> 00:00:40,440 Speaker 1: two thousand and eight, you actually kind of put that 15 00:00:40,560 --> 00:00:43,320 Speaker 1: back on the FED. Now we're in this situation where 16 00:00:43,360 --> 00:00:46,280 Speaker 1: we're not seeing interest rates come down. Can you for 17 00:00:46,360 --> 00:00:49,839 Speaker 1: the average American, can you kind of explain what exactly 18 00:00:49,880 --> 00:00:51,600 Speaker 1: is going on, what you think should be happening. 19 00:00:52,440 --> 00:00:56,080 Speaker 2: Yeah, So, you know, the Federal Reserve controls short term 20 00:00:56,120 --> 00:01:02,320 Speaker 2: interest rates, which gives them unprecedented an extraordinary ability to 21 00:01:02,520 --> 00:01:05,560 Speaker 2: influence the economy. You know, in a credit driven economy, 22 00:01:05,600 --> 00:01:09,840 Speaker 2: you're basically controlling the cost of borrowing in finance, at 23 00:01:09,920 --> 00:01:12,440 Speaker 2: least at the short term end of the spectrum, which 24 00:01:12,480 --> 00:01:15,640 Speaker 2: basically allows them to influence as I think a quote 25 00:01:15,640 --> 00:01:18,160 Speaker 2: I had from the book was, you know everything from 26 00:01:18,240 --> 00:01:23,760 Speaker 2: stock prices on Wall Street, housing prices in Honolulu, you know, 27 00:01:23,840 --> 00:01:27,800 Speaker 2: everything across the board, to auto finance and Alaska. Even so, 28 00:01:29,240 --> 00:01:31,480 Speaker 2: one of the problems that we've had, and I point 29 00:01:31,480 --> 00:01:33,680 Speaker 2: this out in the book, and it goes it's much 30 00:01:33,720 --> 00:01:36,800 Speaker 2: deeper and goes much longer than this. But starting in 31 00:01:36,840 --> 00:01:41,080 Speaker 2: the nineteen nineties, we had the Federal Reserve stepping in 32 00:01:41,560 --> 00:01:44,960 Speaker 2: to push down interest rates in a number of situations 33 00:01:45,400 --> 00:01:49,240 Speaker 2: to try and keep globalization from having a negative, too 34 00:01:49,680 --> 00:01:53,920 Speaker 2: negative of an impact in the economy. And as this happened, 35 00:01:54,240 --> 00:01:57,520 Speaker 2: we started to become addicted to the idea that the 36 00:01:57,600 --> 00:02:02,120 Speaker 2: Fed could step in push into strates down really low, 37 00:02:02,440 --> 00:02:05,440 Speaker 2: and that that could help us kind of glide through 38 00:02:05,640 --> 00:02:10,080 Speaker 2: any periods of economic transitions or problems we might be having. 39 00:02:10,120 --> 00:02:13,560 Speaker 2: So this happened with the Mexican debt crisis. It happened 40 00:02:13,600 --> 00:02:17,080 Speaker 2: again later in the nineteen nineties with the long term 41 00:02:17,120 --> 00:02:21,200 Speaker 2: capital management situation, which was effectively the Russian debt crisis, 42 00:02:21,560 --> 00:02:23,480 Speaker 2: and so we've had a number of these situations. It 43 00:02:23,560 --> 00:02:26,280 Speaker 2: contributed to the blowoff of this of the tech stock 44 00:02:26,320 --> 00:02:30,680 Speaker 2: bubble in the late nineties, which then when that collapsed 45 00:02:30,680 --> 00:02:33,919 Speaker 2: in two thousand, the FED pushed interest rates down to 46 00:02:34,200 --> 00:02:40,920 Speaker 2: historic lows, which unwittingly came in the midst of boom 47 00:02:40,960 --> 00:02:44,240 Speaker 2: in housing prices that had previously been kicked off by 48 00:02:44,320 --> 00:02:46,320 Speaker 2: Fannie Mae and Freddie Mack. These are the things I 49 00:02:46,400 --> 00:02:50,160 Speaker 2: go through in the book. So whatever benefit we might 50 00:02:50,200 --> 00:02:54,040 Speaker 2: have received from that in the early two thousands was 51 00:02:54,200 --> 00:02:58,520 Speaker 2: more than obliterated by the consequences of the housing bubble, 52 00:02:58,919 --> 00:03:02,320 Speaker 2: and the collapse led us into the financial crisis and 53 00:03:02,360 --> 00:03:06,560 Speaker 2: then the Great Recession. But unfortunately these things have not 54 00:03:06,760 --> 00:03:09,799 Speaker 2: been widely recognized. This is one of the important points 55 00:03:09,800 --> 00:03:12,160 Speaker 2: of the book, or maybe the main point of the book, 56 00:03:12,840 --> 00:03:16,400 Speaker 2: And so we become reliant on this because we failed 57 00:03:16,440 --> 00:03:19,240 Speaker 2: to understand where the real causes were. When we got 58 00:03:19,280 --> 00:03:23,080 Speaker 2: into the twenty tens, under the Obama administration, the FED 59 00:03:23,160 --> 00:03:25,600 Speaker 2: went right back to the same playbook that they had 60 00:03:25,639 --> 00:03:29,360 Speaker 2: been running, which, as I just pointed out, played a 61 00:03:29,440 --> 00:03:32,200 Speaker 2: huge role in the tech stock bubble. Was one of 62 00:03:32,280 --> 00:03:35,040 Speaker 2: the two major causes of the housing bubble, and then 63 00:03:35,080 --> 00:03:37,440 Speaker 2: in the twenty tens they went back to these super 64 00:03:37,480 --> 00:03:41,080 Speaker 2: low interest rates. They also started for the first time 65 00:03:41,880 --> 00:03:44,960 Speaker 2: buying long term debt to try and influence long term 66 00:03:45,000 --> 00:03:48,640 Speaker 2: interest rates, and these things really didn't kick off the 67 00:03:48,680 --> 00:03:51,240 Speaker 2: wave of growth that they had kind of promised or 68 00:03:51,320 --> 00:03:54,040 Speaker 2: expected from it. You know, it just led us through 69 00:03:54,040 --> 00:03:58,680 Speaker 2: another decade of stagnation. And one of the consequences this time, 70 00:03:58,680 --> 00:04:01,680 Speaker 2: we've got very high house prices again, which is now 71 00:04:01,720 --> 00:04:04,720 Speaker 2: creating an affordability problem. So I should stop here in 72 00:04:04,720 --> 00:04:07,880 Speaker 2: a second. I know I'm running on, but my perspective 73 00:04:07,960 --> 00:04:10,600 Speaker 2: on this is a little different than the administrations. On 74 00:04:10,680 --> 00:04:14,120 Speaker 2: many things. I'm very aligned with the administration. But my 75 00:04:14,280 --> 00:04:18,159 Speaker 2: perspective is we should not be pushing on the FED 76 00:04:18,800 --> 00:04:23,440 Speaker 2: to lower interest rates again, because that's going back to 77 00:04:23,720 --> 00:04:27,960 Speaker 2: a policy you know, that has had, you know, severely 78 00:04:28,200 --> 00:04:32,960 Speaker 2: underappreciated consequences multiple times, starting in the nineteen nineties and 79 00:04:33,040 --> 00:04:35,360 Speaker 2: running up here recently. So I haven't been a big 80 00:04:35,360 --> 00:04:38,560 Speaker 2: fan of Jerome pal In my opinion, he should not 81 00:04:38,760 --> 00:04:43,120 Speaker 2: have been decreasing interest rates last year during the election. 82 00:04:44,680 --> 00:04:47,240 Speaker 2: But I think at this point in time, especially with 83 00:04:47,320 --> 00:04:49,919 Speaker 2: inflation ticking up a little bit to two point seven 84 00:04:50,000 --> 00:04:53,240 Speaker 2: percent here recently. I think the most important thing is 85 00:04:53,240 --> 00:04:56,919 Speaker 2: that is that the FED remains vigilant and doesn't fall 86 00:04:56,960 --> 00:05:00,080 Speaker 2: back into this pattern that we've you know, seen for 87 00:05:00,200 --> 00:05:01,600 Speaker 2: you know, almost thirty years now. 88 00:05:01,640 --> 00:05:04,520 Speaker 1: Well, so what is the solution then, because obviously we've 89 00:05:04,520 --> 00:05:08,479 Speaker 1: seen that politicians across the country are talking housing crisis, 90 00:05:08,480 --> 00:05:11,840 Speaker 1: housing crazes, housing crisis, and I keep hearing people on 91 00:05:11,920 --> 00:05:14,480 Speaker 1: both sides say, well, we want the government to come 92 00:05:14,480 --> 00:05:16,960 Speaker 1: in and build housing. That also sounds bad to me. 93 00:05:18,279 --> 00:05:20,560 Speaker 2: Yeah, I couldn't agree more. I mean, you know, we 94 00:05:20,680 --> 00:05:24,680 Speaker 2: got into these problems because of government housing policies in 95 00:05:24,720 --> 00:05:27,599 Speaker 2: the first place, enacted through Fanny May and Freddie Mack. 96 00:05:28,080 --> 00:05:32,479 Speaker 2: It was their dramatic increase in trying to push their 97 00:05:32,640 --> 00:05:37,799 Speaker 2: mission of providing financing to load a moderate income home buyers, 98 00:05:38,160 --> 00:05:41,719 Speaker 2: which kicked housing prices up beginning in nineteen ninety eight 99 00:05:41,960 --> 00:05:45,640 Speaker 2: well above historical norms. And that was, you know, the 100 00:05:45,680 --> 00:05:47,720 Speaker 2: beginning or the lift off phase, what I call the 101 00:05:47,880 --> 00:05:51,039 Speaker 2: book of the housing bubble. Everything coordinates just exactly to 102 00:05:51,080 --> 00:05:56,480 Speaker 2: when they started increasing their mission. So I think the 103 00:05:56,520 --> 00:05:59,360 Speaker 2: best thing we could be doing is we could be 104 00:06:00,160 --> 00:06:04,320 Speaker 2: privatizing Fannie May and Freddie Mack, but also taking away 105 00:06:04,400 --> 00:06:07,000 Speaker 2: the government privileges that they have, which I don't think 106 00:06:07,040 --> 00:06:08,840 Speaker 2: is what's going to end up happening right now. But 107 00:06:08,960 --> 00:06:12,799 Speaker 2: that's that's what I would advocate for. I think unfortunately, 108 00:06:13,320 --> 00:06:17,240 Speaker 2: when you go through the significant inflation in housing prices 109 00:06:17,279 --> 00:06:19,840 Speaker 2: that came over the last four to five years and 110 00:06:19,920 --> 00:06:24,919 Speaker 2: coincided with cheap money policies from the FED and the 111 00:06:24,960 --> 00:06:28,599 Speaker 2: Biden administration spending blowout, you know that money has to 112 00:06:28,640 --> 00:06:31,640 Speaker 2: go somewhere, and one of the places that it went 113 00:06:31,839 --> 00:06:36,720 Speaker 2: was into housing prices, which then elevated them significantly and 114 00:06:36,760 --> 00:06:40,279 Speaker 2: created this housing affordability problem. There's a couple of ways 115 00:06:40,320 --> 00:06:43,120 Speaker 2: to resolve this that don't involve the government. You know. 116 00:06:43,200 --> 00:06:46,080 Speaker 2: One is a very tough way, which is housing prices 117 00:06:46,160 --> 00:06:49,320 Speaker 2: collapse again and come back down more to historically. 118 00:06:49,440 --> 00:06:52,000 Speaker 1: You're talking about like a two thousand and eight all 119 00:06:52,040 --> 00:06:52,559 Speaker 1: over again. 120 00:06:53,080 --> 00:06:55,640 Speaker 2: I don't think that's necessarily what's going to happen now. 121 00:06:55,760 --> 00:06:58,039 Speaker 2: I mean, I felt very strongly that it would in 122 00:06:58,080 --> 00:07:00,720 Speaker 2: two thousand and eight, in part because of the lending 123 00:07:00,800 --> 00:07:04,040 Speaker 2: practices that we're going on now. I think what's more 124 00:07:04,279 --> 00:07:07,680 Speaker 2: likely is that we go through a long period of 125 00:07:07,720 --> 00:07:12,080 Speaker 2: time where housing prices just don't appreciate at the kind 126 00:07:12,080 --> 00:07:15,480 Speaker 2: of rates that people, you know, came to expect from housing, 127 00:07:15,520 --> 00:07:16,640 Speaker 2: where it was viewed as this. 128 00:07:16,800 --> 00:07:19,080 Speaker 1: And then if you buy a house now, you probably 129 00:07:19,160 --> 00:07:21,320 Speaker 1: in ten years won't really make a profit on it. 130 00:07:21,360 --> 00:07:22,600 Speaker 1: You're thinking, I. 131 00:07:22,520 --> 00:07:25,720 Speaker 2: Think there's a very high probability that that kind of 132 00:07:25,720 --> 00:07:27,200 Speaker 2: thing will happen. So that's why I was going back there. 133 00:07:27,240 --> 00:07:29,520 Speaker 2: It's kind of two ways these things can get resolved 134 00:07:29,520 --> 00:07:33,360 Speaker 2: when you get prices that are significantly out of whack 135 00:07:34,000 --> 00:07:39,280 Speaker 2: with market based fundamentals, and market based fundamentals in housing 136 00:07:39,840 --> 00:07:42,000 Speaker 2: have to do with two critical things. One it's the 137 00:07:42,040 --> 00:07:44,680 Speaker 2: cost of building a new home, and second it's the 138 00:07:44,760 --> 00:07:47,600 Speaker 2: incomes that people have, you know, to be able to 139 00:07:47,640 --> 00:07:50,160 Speaker 2: take on a mortgage and afford home payments and that 140 00:07:50,280 --> 00:07:54,880 Speaker 2: kind of thing. And when the FED interjects and plays 141 00:07:54,920 --> 00:08:00,160 Speaker 2: these monetary games to try and boost economic activity, you 142 00:08:00,160 --> 00:08:03,800 Speaker 2: get these dislocations that happen. And the dislocation we're seeing now, 143 00:08:03,920 --> 00:08:08,360 Speaker 2: or one of them, is these high housing prices which 144 00:08:08,400 --> 00:08:11,080 Speaker 2: have created an affordability problem. And so one way that 145 00:08:11,080 --> 00:08:16,000 Speaker 2: can get resolved is prices stay constant while hopefully we 146 00:08:16,040 --> 00:08:19,000 Speaker 2: can get the economy growing again. And I think the 147 00:08:19,040 --> 00:08:23,360 Speaker 2: administration through AI for example, is taking exactly the right 148 00:08:23,400 --> 00:08:26,000 Speaker 2: approach in that area. And if we can get the 149 00:08:26,000 --> 00:08:30,040 Speaker 2: economy growing and we get people's incomes growing and they 150 00:08:30,080 --> 00:08:35,640 Speaker 2: start compounding upward and prices stay relatively flat, let's say, 151 00:08:36,120 --> 00:08:40,160 Speaker 2: then the affordability problem gets taken care of through expanding 152 00:08:40,200 --> 00:08:44,120 Speaker 2: incomes as opposed through collapsing housing prices, which would probably 153 00:08:44,160 --> 00:08:44,400 Speaker 2: we have. 154 00:08:45,320 --> 00:08:47,960 Speaker 1: We have this situation here in town or there's a 155 00:08:48,120 --> 00:08:52,959 Speaker 1: local neighborhood and it was a one of the high 156 00:08:53,040 --> 00:08:55,559 Speaker 1: end builders had this neighborhood and they were building these 157 00:08:55,640 --> 00:09:01,280 Speaker 1: high end kind of single family condos, like separated condos, 158 00:09:01,679 --> 00:09:04,679 Speaker 1: self standing condos, and they were beautiful and they were 159 00:09:04,800 --> 00:09:07,640 Speaker 1: very they were you know, great finishes on the inside, 160 00:09:07,840 --> 00:09:10,480 Speaker 1: but expensive. I mean they were in the six to 161 00:09:10,679 --> 00:09:16,040 Speaker 1: seven hundred thousand range. And that builder, I guess left 162 00:09:16,040 --> 00:09:19,400 Speaker 1: the neighborhood. They knew builder got a government grant. They 163 00:09:19,440 --> 00:09:24,560 Speaker 1: came in and they started building also individual self standing condos. 164 00:09:24,640 --> 00:09:27,200 Speaker 1: But they and their two stories because they have walk 165 00:09:27,200 --> 00:09:31,079 Speaker 1: out basements, but the front of them is just a garage, 166 00:09:31,559 --> 00:09:35,520 Speaker 1: no upstairs, no windows, no front door, nothing. So you 167 00:09:35,559 --> 00:09:39,720 Speaker 1: have these beautiful, like tiny homes that have front porches 168 00:09:39,800 --> 00:09:43,400 Speaker 1: and doors, and then you have government housing that came 169 00:09:43,440 --> 00:09:46,440 Speaker 1: in in the same neighborhood just to garage. I mean, 170 00:09:46,559 --> 00:09:50,000 Speaker 1: and I look at this and I go, it's affordable, 171 00:09:50,720 --> 00:09:53,600 Speaker 1: but the other people in the neighborhood are obviously, I rate. 172 00:09:53,840 --> 00:09:56,040 Speaker 1: How did this happen? How did a government grant come 173 00:09:56,040 --> 00:09:59,439 Speaker 1: in and suddenly our neighborhood is building these these it 174 00:09:59,480 --> 00:10:02,680 Speaker 1: looks like units, they don't look like homes. I mean, 175 00:10:02,760 --> 00:10:05,000 Speaker 1: is that the future? Is that what's going to happen? 176 00:10:05,040 --> 00:10:07,920 Speaker 1: And if that's the case, what do local people get 177 00:10:07,920 --> 00:10:10,440 Speaker 1: to say about their communities being changed in that way? 178 00:10:10,960 --> 00:10:12,720 Speaker 2: Well, you know, I think this is a point where 179 00:10:12,800 --> 00:10:15,080 Speaker 2: you know, things like zoning laws and that kind of 180 00:10:15,080 --> 00:10:18,560 Speaker 2: thing are important, and it's also another point where the 181 00:10:18,640 --> 00:10:22,239 Speaker 2: idea of you know, government can help fix the problem 182 00:10:22,640 --> 00:10:27,760 Speaker 2: by one, you know, helping make housing construction more affordable, 183 00:10:27,840 --> 00:10:31,120 Speaker 2: maybe making permitting easier, you know, doing some of these 184 00:10:31,240 --> 00:10:33,680 Speaker 2: kinds of things that you know, fighting against the things 185 00:10:33,679 --> 00:10:36,320 Speaker 2: that have caused so many problems out in California, which 186 00:10:36,320 --> 00:10:39,240 Speaker 2: have also happened maybe to a lesser extent in other markets. 187 00:10:39,559 --> 00:10:43,800 Speaker 2: But there's still room for local zoning and efforts to 188 00:10:43,880 --> 00:10:46,880 Speaker 2: make sure that what is getting built within a neighborhood 189 00:10:47,000 --> 00:10:49,880 Speaker 2: or an area of town is consistent with what's already there, 190 00:10:49,920 --> 00:10:52,680 Speaker 2: so that you don't see property values dropping for reasons 191 00:10:52,760 --> 00:10:56,960 Speaker 2: like that. But I think, unfortunately, when you go through 192 00:10:56,960 --> 00:11:03,320 Speaker 2: a period where FED policy and the Biden administration's policies, 193 00:11:03,360 --> 00:11:06,160 Speaker 2: where there was all of this deficit spending, which again 194 00:11:06,360 --> 00:11:11,040 Speaker 2: was supposed to ignite growth, that money goes somewhere, and 195 00:11:11,160 --> 00:11:14,640 Speaker 2: where one of the places it went was into housing, 196 00:11:15,160 --> 00:11:19,120 Speaker 2: and it pushed up housing prices significantly in a four 197 00:11:19,200 --> 00:11:21,400 Speaker 2: or five year period of time, on top of what 198 00:11:22,200 --> 00:11:24,960 Speaker 2: already was bubbling under the surface because of the fed's 199 00:11:25,040 --> 00:11:28,640 Speaker 2: cheap money policies before that. And we just have to 200 00:11:28,720 --> 00:11:32,560 Speaker 2: let those things unwand and hopefully it won't be through 201 00:11:32,559 --> 00:11:35,280 Speaker 2: a housing price crash like we went through the last 202 00:11:35,280 --> 00:11:40,720 Speaker 2: time when it unwound, and maybe it'll be through more 203 00:11:40,800 --> 00:11:43,920 Speaker 2: stable prices for a longer period while we get the 204 00:11:43,920 --> 00:11:48,440 Speaker 2: rest of the economy growing and people's incomes grow and 205 00:11:48,480 --> 00:11:50,319 Speaker 2: they can get up to the point where they can 206 00:11:50,360 --> 00:11:53,400 Speaker 2: afford these housing prices because their incomes grow so much. 207 00:11:53,440 --> 00:11:55,560 Speaker 2: Over the next five to ten years. 208 00:11:55,600 --> 00:11:58,320 Speaker 1: Let's take a quick commercial break. We'll continue next on 209 00:11:58,360 --> 00:12:05,120 Speaker 1: a Tutor Dixon podcast. So I want to just extend 210 00:12:05,360 --> 00:12:08,120 Speaker 1: this discussion a little bit longer because you talked about 211 00:12:08,520 --> 00:12:12,040 Speaker 1: infrastructure and the money that the Biden administration was putting 212 00:12:12,040 --> 00:12:15,600 Speaker 1: into housing. Well that was also supposedly going into internet 213 00:12:15,600 --> 00:12:19,160 Speaker 1: infrastructure and roads and bridges. And when you hear the 214 00:12:19,520 --> 00:12:23,040 Speaker 1: Democrats talk about what's going what the future is, they 215 00:12:23,080 --> 00:12:27,000 Speaker 1: talk a lot about we're investing in infrastructure, in roads, 216 00:12:27,120 --> 00:12:31,520 Speaker 1: in railroads and that kind of thing, and the Republicans 217 00:12:31,679 --> 00:12:34,440 Speaker 1: don't want to invest in that. And when I hear that, well, gosh, 218 00:12:34,480 --> 00:12:37,720 Speaker 1: it sounds great. You know, high speed internet and you're 219 00:12:37,720 --> 00:12:39,400 Speaker 1: going to have better bridges and you're going to have 220 00:12:39,440 --> 00:12:42,440 Speaker 1: better roads. Now, I will say, in the state of Michigan, 221 00:12:42,720 --> 00:12:45,760 Speaker 1: the high speed Internet was supposed to go into areas 222 00:12:45,880 --> 00:12:48,120 Speaker 1: where they didn't have internet at all, or they were 223 00:12:48,760 --> 00:12:51,800 Speaker 1: they were struggling to connect. And my neighborhood, where I 224 00:12:51,840 --> 00:12:54,240 Speaker 1: already had high speed internet, got a new form of 225 00:12:54,320 --> 00:12:57,400 Speaker 1: high speed internet rather than it going to the up 226 00:12:57,760 --> 00:13:01,080 Speaker 1: or into areas of Detroit that needed it. So I 227 00:13:01,120 --> 00:13:03,559 Speaker 1: think that it's a little bit of a mystery as 228 00:13:03,559 --> 00:13:05,600 Speaker 1: to whether or not the money that they say is 229 00:13:05,640 --> 00:13:08,240 Speaker 1: going into these things, is going into the right places, 230 00:13:08,360 --> 00:13:10,200 Speaker 1: or if it's just like, hey, now we have this 231 00:13:10,240 --> 00:13:13,400 Speaker 1: play money to put wherever, and we're going to get 232 00:13:13,440 --> 00:13:17,360 Speaker 1: the best contract that ultimately is kicking back into these campaigns. 233 00:13:17,760 --> 00:13:19,880 Speaker 1: Because we've seen that too. So how do we know 234 00:13:20,320 --> 00:13:24,560 Speaker 1: when they talk about investing in infrastructure that you don't 235 00:13:24,679 --> 00:13:27,400 Speaker 1: end up with a bunch of storage unit looking houses 236 00:13:27,520 --> 00:13:30,640 Speaker 1: in high speed internet in a neighborhood that already has 237 00:13:30,720 --> 00:13:31,559 Speaker 1: high speed internet. 238 00:13:32,559 --> 00:13:35,560 Speaker 2: These are great questions. Probably the best thing you can 239 00:13:35,600 --> 00:13:38,560 Speaker 2: do is you focus on the deficit. And one of 240 00:13:38,600 --> 00:13:42,720 Speaker 2: the things that has happened is that we have been 241 00:13:42,960 --> 00:13:46,120 Speaker 2: living in this country for a long time and under 242 00:13:46,200 --> 00:13:50,840 Speaker 2: an enormous level of miseducation about what really caused the 243 00:13:50,880 --> 00:13:54,400 Speaker 2: Great Depression, and because of that, we came out of 244 00:13:54,440 --> 00:13:58,559 Speaker 2: the Great Depression with these so called Canesian ideas. That 245 00:13:58,760 --> 00:14:02,840 Speaker 2: deficit spending, which is presented as you're saying, as the 246 00:14:02,880 --> 00:14:05,480 Speaker 2: idea that the government will invest in the country and 247 00:14:05,520 --> 00:14:08,079 Speaker 2: get the economy growing again, the idea that it can 248 00:14:08,120 --> 00:14:14,440 Speaker 2: help government spending, deficit spending can stimulate our way out 249 00:14:14,520 --> 00:14:19,520 Speaker 2: of either a depressed economy like we had in the thirties, 250 00:14:20,200 --> 00:14:23,600 Speaker 2: or a stagnant economy like we had in the two 251 00:14:23,680 --> 00:14:26,880 Speaker 2: thousands coming out of the housing bubble collapse. Well, what 252 00:14:26,920 --> 00:14:31,280 Speaker 2: we've seen now is the massive failure of that thinking 253 00:14:31,840 --> 00:14:36,560 Speaker 2: three different times. It failed during the depression. It failed 254 00:14:36,720 --> 00:14:39,960 Speaker 2: probably four different times, let's say, failed during the depression. 255 00:14:40,880 --> 00:14:44,880 Speaker 2: It failed with LBJ during the Great during the nineteen sixties, 256 00:14:44,920 --> 00:14:48,400 Speaker 2: with the so called Great Society programs, which led to 257 00:14:48,480 --> 00:14:55,720 Speaker 2: big deficits. It led to the Federal Reserve monetizing those deficits, 258 00:14:55,760 --> 00:14:57,600 Speaker 2: which meant that they were buying a lot of the 259 00:14:57,680 --> 00:15:00,840 Speaker 2: debt or pushing down interest rates to try and support 260 00:15:01,320 --> 00:15:04,840 Speaker 2: the deficit spending that resulted from the Great Society programs 261 00:15:05,480 --> 00:15:09,200 Speaker 2: that led us into the Great Inflation of the nineteen seventies, 262 00:15:09,600 --> 00:15:13,920 Speaker 2: which wasn't resolved until Ronald Reagan finally gave Paul Volker 263 00:15:14,280 --> 00:15:17,000 Speaker 2: the political support needed to push interest rates up to 264 00:15:17,720 --> 00:15:20,280 Speaker 2: the high teens or almost twenty percent to try and 265 00:15:20,280 --> 00:15:23,120 Speaker 2: get it under control. And then it happened to agin 266 00:15:23,240 --> 00:15:28,080 Speaker 2: with Obama coming out of the Great Financial Crisis, where 267 00:15:28,120 --> 00:15:31,080 Speaker 2: he had the idea that if we pushed deficit spending 268 00:15:31,160 --> 00:15:36,080 Speaker 2: up and invest in infrastructure, that will recharge economic growth, 269 00:15:36,640 --> 00:15:42,360 Speaker 2: and so the Obama administration. They pushed peacetime deficit spending 270 00:15:42,800 --> 00:15:45,960 Speaker 2: up to an all time record eight and a half 271 00:15:46,040 --> 00:15:48,760 Speaker 2: percent of GDP for the first four years of the 272 00:15:48,800 --> 00:15:52,400 Speaker 2: Obama administration. What did we get for it. We did 273 00:15:52,440 --> 00:15:56,240 Speaker 2: not get economic growth. What we got was a near 274 00:15:56,440 --> 00:16:00,600 Speaker 2: doubling of the level of federal debt. That's what pushed 275 00:16:00,600 --> 00:16:03,920 Speaker 2: the federal debt up from just below forty percent to 276 00:16:04,400 --> 00:16:08,600 Speaker 2: about seventy five seventy six percent. So it didn't again 277 00:16:09,200 --> 00:16:14,320 Speaker 2: reinvigorate growth, It just created dangerous debts. Biden came along. 278 00:16:14,400 --> 00:16:17,640 Speaker 2: This is the fourth episode. Biden came along with the 279 00:16:17,680 --> 00:16:19,920 Speaker 2: same kind of promise. You know, we're going to have 280 00:16:19,960 --> 00:16:23,280 Speaker 2: the Green New Deal, invest in all these future technologies, 281 00:16:23,320 --> 00:16:25,880 Speaker 2: and this will create so many jobs and all these 282 00:16:25,960 --> 00:16:30,840 Speaker 2: kinds of things. He spent additional money even though the 283 00:16:30,960 --> 00:16:35,640 Speaker 2: COVID related downturn had ended the year before Bamba, or 284 00:16:35,640 --> 00:16:39,960 Speaker 2: excuse me, before Biden came into the administration and took office. 285 00:16:40,120 --> 00:16:42,520 Speaker 2: You know, they had a spending blowout that was supposed 286 00:16:42,520 --> 00:16:46,720 Speaker 2: to rejuvenate the economy, even for none of it worked. 287 00:16:46,760 --> 00:16:51,480 Speaker 2: For the last twenty five years, we have barely grown 288 00:16:51,680 --> 00:16:56,200 Speaker 2: at more than two percent a year, and so I think, 289 00:16:56,360 --> 00:16:59,640 Speaker 2: to come back to your question, it doesn't work. We've 290 00:16:59,680 --> 00:17:02,400 Speaker 2: seen this time and again. The government is not a 291 00:17:02,400 --> 00:17:06,280 Speaker 2: good allocator of resources. The private sector is a phenomenal 292 00:17:06,320 --> 00:17:09,760 Speaker 2: allocator of resources. And when we get the government trying 293 00:17:09,800 --> 00:17:13,280 Speaker 2: to allocate too much of the nation's resources, we end 294 00:17:13,359 --> 00:17:17,800 Speaker 2: up in stagnant growth, rising high deficits and rising debts 295 00:17:17,800 --> 00:17:19,399 Speaker 2: and that kind of thing. So I. 296 00:17:21,080 --> 00:17:24,320 Speaker 1: Agree, I mean, I think that it sounds really good though, 297 00:17:24,359 --> 00:17:27,720 Speaker 1: when you're campaigning, it sounds delightful to say. I mean, 298 00:17:28,040 --> 00:17:30,960 Speaker 1: look at New York what we're seeing with mom Donnie saying, 299 00:17:31,000 --> 00:17:33,160 Speaker 1: you know what, we're going to have the government take 300 00:17:33,200 --> 00:17:35,520 Speaker 1: care of this for you. When you hear that, oh 301 00:17:35,760 --> 00:17:39,080 Speaker 1: this is fantastic. We're paying these taxes anyway. The government's 302 00:17:39,119 --> 00:17:41,399 Speaker 1: going to get our grocery prices down, the government's going 303 00:17:41,440 --> 00:17:44,320 Speaker 1: to rejuvenate our neighborhoods. We're going to have better housing. 304 00:17:44,560 --> 00:17:47,480 Speaker 1: It's a human right. These all of this type of 305 00:17:47,560 --> 00:17:51,040 Speaker 1: language sounds very good. And then the I think the 306 00:17:51,119 --> 00:17:54,680 Speaker 1: debt has become a situation where everybody is, well, there's 307 00:17:54,680 --> 00:17:57,360 Speaker 1: always debt, you know, so why do we care anymore? 308 00:17:58,600 --> 00:18:01,160 Speaker 2: Yeah, Well, so what has your exactly right? What tends 309 00:18:01,160 --> 00:18:05,359 Speaker 2: to happen in these situations is you know, people start 310 00:18:05,359 --> 00:18:07,600 Speaker 2: talking about, oh, the death's a problem. Well, this might 311 00:18:07,640 --> 00:18:10,240 Speaker 2: be when it's sixty percent of GDP, and then it 312 00:18:10,280 --> 00:18:12,439 Speaker 2: gets to seventy five percent and people are saying, oh, 313 00:18:12,480 --> 00:18:15,480 Speaker 2: the death's a problem, but we don't have a collapse. 314 00:18:15,800 --> 00:18:18,480 Speaker 2: And now it's at almost one hundred percent, and it 315 00:18:18,600 --> 00:18:21,560 Speaker 2: starts to feel like, okay, well, this is like you know, 316 00:18:21,600 --> 00:18:24,080 Speaker 2: the little boy crying wolf or whatever it's. You know, 317 00:18:24,119 --> 00:18:27,119 Speaker 2: it's not a real problem out there, but these things 318 00:18:27,200 --> 00:18:32,400 Speaker 2: are significant problems. They can show up in significant collapses, 319 00:18:32,440 --> 00:18:34,760 Speaker 2: like we saw with the housing bubble. We heard the 320 00:18:34,800 --> 00:18:36,760 Speaker 2: same thing for a while with the housing bubble. Oh 321 00:18:36,800 --> 00:18:39,600 Speaker 2: this isn't a problem. Housing prices keep going up, you know, 322 00:18:39,680 --> 00:18:44,000 Speaker 2: until they don't. But we it can also show up 323 00:18:44,000 --> 00:18:46,960 Speaker 2: in other ways, and I do think the electorate has 324 00:18:47,040 --> 00:18:50,800 Speaker 2: gotten that message this time, which it can show up 325 00:18:50,960 --> 00:18:54,359 Speaker 2: in substandard rates of growth. You know, when the Reagan 326 00:18:54,400 --> 00:18:58,960 Speaker 2: administration came in and try to turn us back towards 327 00:18:59,040 --> 00:19:02,600 Speaker 2: a free market kind of agenda, which they did in 328 00:19:02,640 --> 00:19:06,720 Speaker 2: the early nineteen eighties, we went through almost twenty years 329 00:19:07,200 --> 00:19:11,800 Speaker 2: of accelerated growth again, but all of this started turning around. 330 00:19:11,840 --> 00:19:14,440 Speaker 2: All of that started turning around in the early two 331 00:19:14,560 --> 00:19:18,840 Speaker 2: thousands when Bush started pushing deficits bending up, and then 332 00:19:18,880 --> 00:19:22,639 Speaker 2: Obama started pushing it up even faster and expanding the 333 00:19:22,680 --> 00:19:25,119 Speaker 2: dead even faster. And so I think instead of a 334 00:19:25,200 --> 00:19:30,080 Speaker 2: full bone collapse, what we've seen is just this stagnant 335 00:19:30,200 --> 00:19:33,080 Speaker 2: level of growth, you know, two percent kind of growth 336 00:19:33,119 --> 00:19:35,600 Speaker 2: instead of three and a half percent in those kinds 337 00:19:35,600 --> 00:19:38,119 Speaker 2: of things. And so it's showing up in that way. 338 00:19:38,520 --> 00:19:42,040 Speaker 2: I think that's at the core of the electric frustration. 339 00:19:42,800 --> 00:19:45,680 Speaker 2: You know, that opened them up to the to Trump's 340 00:19:45,720 --> 00:19:48,240 Speaker 2: message the first time and again this last time, and 341 00:19:48,359 --> 00:19:50,840 Speaker 2: I think, you know, I think they have seen it 342 00:19:51,200 --> 00:19:52,480 Speaker 2: from that perspective. 343 00:19:53,200 --> 00:19:55,879 Speaker 1: So looking at the president's policies, how do you see 344 00:19:56,040 --> 00:19:59,040 Speaker 1: the economy growing out of that? And how does AI 345 00:19:59,200 --> 00:19:59,760 Speaker 1: affect that? 346 00:20:00,880 --> 00:20:03,520 Speaker 2: Yeah, a perfect question. I mean, especially with what's happened 347 00:20:03,560 --> 00:20:08,800 Speaker 2: here recently, I think AI has the potential to be 348 00:20:09,640 --> 00:20:14,199 Speaker 2: the next version of the Industrial Revolution. And many of 349 00:20:14,280 --> 00:20:17,800 Speaker 2: us have been miseducated about the Industrial Revolution. People talk 350 00:20:17,800 --> 00:20:20,480 Speaker 2: about robber barons and the need of the progressives to 351 00:20:20,480 --> 00:20:22,560 Speaker 2: step in and protect the little guy and all these 352 00:20:22,600 --> 00:20:25,679 Speaker 2: things and nothing. It's not to say that some of 353 00:20:25,720 --> 00:20:29,720 Speaker 2: that isn't didn't happen, or wasn't valid, at least in 354 00:20:29,840 --> 00:20:35,080 Speaker 2: anecdotal cases. But from a big picture perspective, the Industrial 355 00:20:35,160 --> 00:20:41,359 Speaker 2: Revolution took us through the most extraordinary economic changes and 356 00:20:41,440 --> 00:20:44,520 Speaker 2: transformation in the history of the world. I mean, at 357 00:20:44,560 --> 00:20:47,840 Speaker 2: the beginning of this, we were riding in horses and buggies, 358 00:20:48,240 --> 00:20:51,600 Speaker 2: and we were reading at night by candlelight, and we 359 00:20:51,640 --> 00:20:54,920 Speaker 2: had no electricity in our homes. And by the end 360 00:20:54,960 --> 00:20:58,720 Speaker 2: of it, in the nineteen twenties, you know, cars had 361 00:20:58,720 --> 00:21:03,760 Speaker 2: not only invented but become like an everyday necessity for 362 00:21:03,840 --> 00:21:07,800 Speaker 2: a thriving middle class who was going home to electrified 363 00:21:07,840 --> 00:21:10,880 Speaker 2: homes and reading by light bulbs in the evening. They 364 00:21:10,880 --> 00:21:13,280 Speaker 2: were on the verge of flying by airplanes. I mean, 365 00:21:13,280 --> 00:21:17,560 Speaker 2: in terms of transforming the economy, the social structure, everything, 366 00:21:17,600 --> 00:21:21,480 Speaker 2: nothing like it has ever happened. And that all happened 367 00:21:21,560 --> 00:21:26,280 Speaker 2: under a very limited government model. Government spending at that time, 368 00:21:26,560 --> 00:21:29,640 Speaker 2: throughout the eighteen hundreds and into the early nineteen hundreds 369 00:21:30,440 --> 00:21:35,400 Speaker 2: during peace times, averaged three percent of GDP. Today it's 370 00:21:35,440 --> 00:21:40,840 Speaker 2: almost twenty five percent. I agree, three percent, and we 371 00:21:40,920 --> 00:21:46,080 Speaker 2: ran budget surpluses, not deficits through all of that government 372 00:21:46,200 --> 00:21:50,879 Speaker 2: debt was consistently held below five percent of GDP, so 373 00:21:50,920 --> 00:21:53,560 Speaker 2: that if we got into a tough time like the 374 00:21:53,600 --> 00:21:56,760 Speaker 2: Civil War, World War One, you know, we had the 375 00:21:56,800 --> 00:21:59,879 Speaker 2: borrowing capacity so that we could borrow without pushing our 376 00:22:00,400 --> 00:22:03,440 Speaker 2: into the danger zone. And in spite of all of that, 377 00:22:05,160 --> 00:22:11,040 Speaker 2: you know, conservative finance, maintaining budget surpluses, government not trying 378 00:22:11,119 --> 00:22:14,680 Speaker 2: to invest in big ways in infrastructure and do all 379 00:22:14,680 --> 00:22:17,520 Speaker 2: these things. You know, we had the greatest growth over 380 00:22:17,560 --> 00:22:19,320 Speaker 2: a sustained period we've ever had. 381 00:22:19,760 --> 00:22:22,920 Speaker 1: Is that because when you talk about the Industrial Revolution, 382 00:22:23,040 --> 00:22:25,560 Speaker 1: that wasn't the government doing that. That was the private 383 00:22:25,600 --> 00:22:28,720 Speaker 1: sector saying we're going to create and suddenly, you know, 384 00:22:28,880 --> 00:22:30,919 Speaker 1: like you said, we've got light bulbs and into our 385 00:22:30,960 --> 00:22:34,600 Speaker 1: plumbing and vehicles. But that wasn't the government that created that. 386 00:22:34,840 --> 00:22:37,920 Speaker 1: And I think that's something that is hard for this 387 00:22:38,040 --> 00:22:40,720 Speaker 1: generation to look at and say, well, the government needs 388 00:22:40,760 --> 00:22:44,040 Speaker 1: to invest in AI. But this has always been the 389 00:22:44,080 --> 00:22:47,840 Speaker 1: private sector that invests in technology absolutely. 390 00:22:48,320 --> 00:22:51,199 Speaker 2: You know, you know, we're going back to you know, 391 00:22:51,240 --> 00:22:56,560 Speaker 2: the telegraph that was invented by Samuel Morris, Alexander Graham Bell, 392 00:22:56,640 --> 00:23:00,960 Speaker 2: and the telephone Thomas Edison, and electricity in the light bulb, 393 00:23:01,680 --> 00:23:06,280 Speaker 2: and so Henry Ford and the uh, you know, the 394 00:23:06,640 --> 00:23:10,920 Speaker 2: assembly line, which then took automobiles from being a rich 395 00:23:10,960 --> 00:23:15,520 Speaker 2: person's toys to being something that was for everybody. And 396 00:23:15,560 --> 00:23:17,919 Speaker 2: you know, he drove and if you kind of go 397 00:23:18,000 --> 00:23:21,000 Speaker 2: back at the early part of the nineteen hundreds when 398 00:23:21,040 --> 00:23:24,200 Speaker 2: Ford was starting to tinker around with these ideas, before 399 00:23:24,240 --> 00:23:28,200 Speaker 2: he had really implemented the assembly line, automobile, like I said, 400 00:23:28,240 --> 00:23:30,439 Speaker 2: was a rich person's toy. You know, there were a 401 00:23:30,440 --> 00:23:33,399 Speaker 2: small number of people working in the industry. If you said, 402 00:23:33,440 --> 00:23:37,040 Speaker 2: somebody's going to come along and create this way to 403 00:23:37,160 --> 00:23:40,520 Speaker 2: make this so much more efficient, you know that a 404 00:23:40,640 --> 00:23:45,400 Speaker 2: single person, you know, can can produce more cars than 405 00:23:45,440 --> 00:23:48,720 Speaker 2: maybe fifty people could earlier. You thought, oh, this will 406 00:23:48,720 --> 00:23:52,240 Speaker 2: be a disaster for the auto sector's employment. But what 407 00:23:52,480 --> 00:23:57,800 Speaker 2: happened was this incredible level of efficiency was also translated 408 00:23:57,840 --> 00:24:01,080 Speaker 2: through lower prices. So the cost of model t over 409 00:24:01,080 --> 00:24:02,879 Speaker 2: about a seven or eight year period and went from 410 00:24:03,000 --> 00:24:06,359 Speaker 2: over two thousand down to like two hundred and fifty dollars. 411 00:24:06,800 --> 00:24:11,639 Speaker 2: And as that happened, demand exploded, and auto industry employment 412 00:24:11,800 --> 00:24:15,560 Speaker 2: actually exploded along with that as demand was created. And 413 00:24:15,680 --> 00:24:19,560 Speaker 2: so the point of all of this is this is 414 00:24:19,600 --> 00:24:22,720 Speaker 2: the kind of thing that can happen with artificial intelligence 415 00:24:23,440 --> 00:24:26,680 Speaker 2: if we take the right approach to it. And I'm extreme. 416 00:24:26,680 --> 00:24:29,760 Speaker 2: I've been writing about this in my substack pieces here recently, 417 00:24:30,600 --> 00:24:33,080 Speaker 2: and then the administration just came out with their plan, 418 00:24:33,160 --> 00:24:36,800 Speaker 2: their AI Action Plan this week, which is exactly following 419 00:24:36,840 --> 00:24:43,080 Speaker 2: this model. It's the idea of creating deregulations and giving 420 00:24:43,200 --> 00:24:46,600 Speaker 2: the industry. You know, we are fortunate to have what 421 00:24:46,640 --> 00:24:50,959 Speaker 2: I've called the pole position in the AI race, so 422 00:24:51,000 --> 00:24:54,200 Speaker 2: that you know, because we've led the world through technology 423 00:24:54,240 --> 00:24:57,520 Speaker 2: development and through the development of the Internet, We've got 424 00:24:57,680 --> 00:25:02,920 Speaker 2: the venture capital community and these big tech companies who 425 00:25:02,960 --> 00:25:07,280 Speaker 2: are leading the world into artificial intelligence. And the approach 426 00:25:07,320 --> 00:25:10,440 Speaker 2: that Trump administration is taking is we've got to make 427 00:25:10,520 --> 00:25:16,600 Speaker 2: sure that government doesn't throw up unnecessary roadblocks that in 428 00:25:16,640 --> 00:25:19,320 Speaker 2: a way that keeps us from winning this race, which 429 00:25:19,359 --> 00:25:23,240 Speaker 2: is absolutely critical not only for the economy and creating 430 00:25:23,359 --> 00:25:27,240 Speaker 2: high paying jobs and having them here in the United States, 431 00:25:27,960 --> 00:25:32,520 Speaker 2: but also so that you know, we can continue to 432 00:25:32,640 --> 00:25:36,160 Speaker 2: lead the world in this perspective, and from a defense perspective, 433 00:25:36,200 --> 00:25:38,440 Speaker 2: it's incredibly important. You know, the last thing in the 434 00:25:38,480 --> 00:25:40,679 Speaker 2: world we want is for these jobs to be in China, 435 00:25:41,200 --> 00:25:43,879 Speaker 2: and for China to be the one that's leading in 436 00:25:43,920 --> 00:25:45,840 Speaker 2: the defense applications of all these. 437 00:25:45,840 --> 00:25:47,879 Speaker 1: I think there's a lot of fear around AI for 438 00:25:48,000 --> 00:25:50,840 Speaker 1: multiple reasons. I mean, obviously the reason of what can 439 00:25:50,920 --> 00:25:54,320 Speaker 1: it create, but also, as you said, people are concerned 440 00:25:54,359 --> 00:25:57,680 Speaker 1: that AI will take over well, just as they were 441 00:25:57,720 --> 00:26:01,359 Speaker 1: concerned that the Industrial revolution would takeover blue collar jobs. 442 00:26:01,400 --> 00:26:03,440 Speaker 1: Now it's AI is going to take over all of 443 00:26:03,480 --> 00:26:07,320 Speaker 1: the white collar jobs. But as you see states like 444 00:26:07,480 --> 00:26:11,360 Speaker 1: my state of Michigan, we we're losing jobs all across 445 00:26:11,400 --> 00:26:14,600 Speaker 1: the board. AI is an opportunity to say, boy, that 446 00:26:14,640 --> 00:26:17,160 Speaker 1: can be managed from anywhere. There can be these data 447 00:26:17,200 --> 00:26:22,399 Speaker 1: centers anywhere, but there is an energy cost or an 448 00:26:22,720 --> 00:26:25,840 Speaker 1: energy supply concern, and that is where I do think 449 00:26:25,840 --> 00:26:28,280 Speaker 1: that the government needs to make sure that we are 450 00:26:29,359 --> 00:26:32,240 Speaker 1: or an energy dominant country. And that's what Donald Trump 451 00:26:32,320 --> 00:26:34,240 Speaker 1: is trying to do. How do you see that plane 452 00:26:34,280 --> 00:26:35,520 Speaker 1: into this AI race. 453 00:26:36,119 --> 00:26:38,840 Speaker 2: Yeah, that's a perfect point, and it's a big part 454 00:26:38,960 --> 00:26:42,520 Speaker 2: of their new agenda. This AI action Plan is not 455 00:26:42,680 --> 00:26:47,399 Speaker 2: only to you unleash innovation among the companies so that 456 00:26:47,440 --> 00:26:50,520 Speaker 2: we can continue to lead the race and have those 457 00:26:50,600 --> 00:26:54,560 Speaker 2: companies and those jobs predominantly happening here in America, but 458 00:26:54,800 --> 00:27:00,040 Speaker 2: also continuing with the approach of you know, leading in 459 00:27:01,080 --> 00:27:05,800 Speaker 2: energy development and realizing our energy potential so that we 460 00:27:06,000 --> 00:27:08,960 Speaker 2: have the energy that is needed to power this AI 461 00:27:09,080 --> 00:27:11,400 Speaker 2: boom and it doesn't have to get off short again. 462 00:27:11,640 --> 00:27:14,680 Speaker 2: So yeah, I think that that's a critical, critical part 463 00:27:14,680 --> 00:27:17,440 Speaker 2: of it. It's a big part of you know, developing 464 00:27:17,480 --> 00:27:22,400 Speaker 2: the energy infrastructure, which I think they mean importantly enabling 465 00:27:22,440 --> 00:27:26,520 Speaker 2: the private sector to develop the energy intersector, you know, 466 00:27:26,560 --> 00:27:29,080 Speaker 2: not trying to energy sector, not trying to have the 467 00:27:29,119 --> 00:27:31,639 Speaker 2: government step in and do the private sector's job. 468 00:27:32,040 --> 00:27:34,800 Speaker 1: Let's take a quick commercial break. We'll continue next on 469 00:27:34,840 --> 00:27:40,840 Speaker 1: the Tutor Dixon Podcast. It's been kind of a hindrance 470 00:27:40,880 --> 00:27:44,360 Speaker 1: for AI in this in the United States because there 471 00:27:44,400 --> 00:27:46,760 Speaker 1: has been a question for so long will energy be 472 00:27:46,840 --> 00:27:49,640 Speaker 1: available with the climate and then that was a big 473 00:27:49,680 --> 00:27:53,560 Speaker 1: part of Biden's administration was you know, climate change and 474 00:27:53,600 --> 00:27:57,719 Speaker 1: climate control and control energy and change energy over. And 475 00:27:57,760 --> 00:28:01,120 Speaker 1: then as you're changing energy over to on reliable sources, 476 00:28:01,560 --> 00:28:05,000 Speaker 1: there are companies who are creating AI and companies who 477 00:28:05,000 --> 00:28:07,359 Speaker 1: are developing AI, and they say, well, what if this 478 00:28:07,480 --> 00:28:10,240 Speaker 1: is not stable in these states that are saying we're 479 00:28:10,240 --> 00:28:13,440 Speaker 1: getting rid of traditional forms of energy before we have 480 00:28:13,920 --> 00:28:16,239 Speaker 1: new forms of energy that are reliable, and I think 481 00:28:16,320 --> 00:28:19,760 Speaker 1: that's been a concern that that's going to drive it overseas, 482 00:28:19,760 --> 00:28:23,560 Speaker 1: and it seems as though the Trump administration is saying, 483 00:28:23,600 --> 00:28:25,320 Speaker 1: you know, we're done with all of that. We're going 484 00:28:25,359 --> 00:28:28,120 Speaker 1: to ensure that energy is here to stay. But there 485 00:28:28,160 --> 00:28:30,720 Speaker 1: have to be some concerns in the private sector that 486 00:28:30,840 --> 00:28:33,959 Speaker 1: if Democrats get back into control, they're going to do 487 00:28:34,000 --> 00:28:36,280 Speaker 1: that same thing, and then we're going to have questions 488 00:28:36,320 --> 00:28:38,320 Speaker 1: about whether or not the energy will be there to 489 00:28:38,400 --> 00:28:41,000 Speaker 1: support this and if we can continue to lead in 490 00:28:41,040 --> 00:28:41,760 Speaker 1: this industry. 491 00:28:42,640 --> 00:28:45,600 Speaker 2: Yeah, I think that, you know, those are reasonable concerns. 492 00:28:45,920 --> 00:28:49,080 Speaker 2: Hopefully what will happen here is that we can free 493 00:28:49,160 --> 00:28:52,440 Speaker 2: up the energy that starts creating these jobs, and that 494 00:28:52,520 --> 00:28:55,720 Speaker 2: allows AI to get started and we can get the 495 00:28:55,840 --> 00:28:59,360 Speaker 2: kind of growth going again that this country has been 496 00:28:59,400 --> 00:29:03,040 Speaker 2: waiting for for you know, almost thirty years now twenty 497 00:29:03,080 --> 00:29:06,680 Speaker 2: five years. And if that happens, it makes it much 498 00:29:06,720 --> 00:29:09,680 Speaker 2: more difficult to come back with these other messages, which 499 00:29:09,720 --> 00:29:11,960 Speaker 2: I think lead us down the wrong path as we 500 00:29:11,960 --> 00:29:14,520 Speaker 2: were on for such a long period of time there. 501 00:29:14,560 --> 00:29:16,920 Speaker 2: So the real key is to get this growth going. 502 00:29:17,280 --> 00:29:20,760 Speaker 2: The fears about it are very understandable, you know, any 503 00:29:20,840 --> 00:29:23,400 Speaker 2: of us, You know, we like to operate with a 504 00:29:23,440 --> 00:29:25,640 Speaker 2: feeling that like we've got a sense of how things 505 00:29:25,760 --> 00:29:28,280 Speaker 2: work and that they work well for us, and you 506 00:29:28,320 --> 00:29:32,000 Speaker 2: know that things we depend on will be there. But 507 00:29:32,080 --> 00:29:34,560 Speaker 2: there are these times that we just have to have faith, 508 00:29:35,160 --> 00:29:38,840 Speaker 2: you know that that that the growth of the system, 509 00:29:39,000 --> 00:29:42,320 Speaker 2: if we unleash it will take care of things. As 510 00:29:42,320 --> 00:29:44,400 Speaker 2: I made a point in one of my pieces, the 511 00:29:44,480 --> 00:29:47,560 Speaker 2: AI genie is out of the bottle, whether we want 512 00:29:47,600 --> 00:29:50,160 Speaker 2: it to be or not. It can be developed here, 513 00:29:50,240 --> 00:29:53,160 Speaker 2: it can be developed in China, but it's out of 514 00:29:53,200 --> 00:29:55,800 Speaker 2: the bottle. And the best thing for us to do 515 00:29:56,360 --> 00:29:58,480 Speaker 2: is to is to kind of follow the model of 516 00:29:58,520 --> 00:30:03,520 Speaker 2: the Industrial Revolution, which is to let this development and 517 00:30:03,600 --> 00:30:08,200 Speaker 2: expansion have And I believe it will create far more 518 00:30:08,360 --> 00:30:12,560 Speaker 2: jobs than it replaces. And there's already stories out there 519 00:30:12,600 --> 00:30:15,840 Speaker 2: about how much more efficient it can make people. And 520 00:30:15,880 --> 00:30:20,000 Speaker 2: if we're leading that efficiency curve, then that will make 521 00:30:20,080 --> 00:30:25,240 Speaker 2: us more competitive with low wage labor markets like China 522 00:30:25,400 --> 00:30:27,320 Speaker 2: or Vietnam and those kinds of things. So if we 523 00:30:27,360 --> 00:30:31,400 Speaker 2: have American manufacturing workers who are benefiting from AI and 524 00:30:31,440 --> 00:30:34,880 Speaker 2: I'm already hearing stories about these kinds of things all 525 00:30:34,920 --> 00:30:37,560 Speaker 2: of a sudden. If we're on the leading edge of that, 526 00:30:38,080 --> 00:30:41,880 Speaker 2: they can get pay to higher wage because AI is 527 00:30:41,920 --> 00:30:44,800 Speaker 2: helping make them so much more efficient than workers who 528 00:30:44,840 --> 00:30:47,440 Speaker 2: aren't on the leading edge of that, and that helps 529 00:30:47,520 --> 00:30:51,560 Speaker 2: move those jobs back here as well. So I'm very 530 00:30:51,600 --> 00:30:54,800 Speaker 2: optimistic about where all this is going, and especially given 531 00:30:54,840 --> 00:30:57,760 Speaker 2: the approach that the Trump is administration is taken. 532 00:30:58,520 --> 00:31:00,640 Speaker 1: Well, this is all very interesting. I know you are, 533 00:31:00,800 --> 00:31:02,960 Speaker 1: like you said, you're writing about this. You've got this 534 00:31:03,080 --> 00:31:06,239 Speaker 1: on your substack page. Tell people where they can find that, 535 00:31:06,280 --> 00:31:08,960 Speaker 1: because I think we're all kind of going, Okay, what 536 00:31:08,960 --> 00:31:11,000 Speaker 1: does this mean? This is something new. I'm sure it 537 00:31:11,080 --> 00:31:13,840 Speaker 1: was the same in the Industrial Revolution. This is all new. 538 00:31:13,920 --> 00:31:16,320 Speaker 1: What should we expect? So how can people follow you? 539 00:31:17,120 --> 00:31:20,280 Speaker 2: Yeah? So substack is a place My newsletter is free there. 540 00:31:20,320 --> 00:31:22,320 Speaker 2: It's called on Wealth and Progress. So if you go 541 00:31:22,360 --> 00:31:25,760 Speaker 2: to substack dot com and search for Toddsheets on Wealth 542 00:31:25,760 --> 00:31:28,960 Speaker 2: and Progress, that's one place. I'm also putting out kind 543 00:31:28,960 --> 00:31:32,959 Speaker 2: of short mini podcasts each week, so you know, if 544 00:31:33,000 --> 00:31:36,000 Speaker 2: you go to Spotify or YouTube, you know there's like 545 00:31:36,040 --> 00:31:39,120 Speaker 2: a fifteen minute little version of the substack pieces that 546 00:31:39,160 --> 00:31:41,320 Speaker 2: are there for people that would rather listen to it 547 00:31:41,760 --> 00:31:45,400 Speaker 2: audio on a you know, audio format. And then, as 548 00:31:45,440 --> 00:31:47,760 Speaker 2: you mentioned, my book two thousand and eight, What Really 549 00:31:47,760 --> 00:31:51,480 Speaker 2: Happened is out there also available Amazon or Barnsannoble dot com. 550 00:31:51,480 --> 00:31:54,160 Speaker 1: Thank you for coming on today, Todd Sheets, thanks so much. 551 00:31:54,560 --> 00:31:56,080 Speaker 2: Tutor, Thank you. I appreciate it so. 552 00:31:56,080 --> 00:31:59,200 Speaker 1: Much, absolutely, and thank you all for joining the Tutor 553 00:31:59,240 --> 00:32:02,880 Speaker 1: Dixon podcast. For this episode and others, go to tutordisonpodcast 554 00:32:02,960 --> 00:32:06,120 Speaker 1: dot com. You can subscribe there or the iHeartRadio app, 555 00:32:06,160 --> 00:32:09,400 Speaker 1: Apple Podcasts, or wherever you get your podcasts, and check 556 00:32:09,440 --> 00:32:12,280 Speaker 1: out the whole video on Rumble or YouTube at Tutor 557 00:32:12,320 --> 00:32:14,800 Speaker 1: Dixon and join us next time. Have a blessed day.