1 00:00:00,560 --> 00:00:02,960 Speaker 1: Yeah, I think we've been wildly successful. 2 00:00:03,920 --> 00:00:07,840 Speaker 2: That's Jameson Greer, Donald Trump's trade representative, appearing on The 3 00:00:07,920 --> 00:00:10,799 Speaker 2: Daily the New York Times podcast, and it's worth listening 4 00:00:10,800 --> 00:00:14,400 Speaker 2: to because Greer isn't some random spokesperson that they tried 5 00:00:14,440 --> 00:00:17,360 Speaker 2: out to read a talking point. He is, by all accounts, 6 00:00:17,400 --> 00:00:21,640 Speaker 2: one of the central architects of Trump's tariff agenda, maybe 7 00:00:21,720 --> 00:00:25,880 Speaker 2: the central architect. So I want to use his interview 8 00:00:26,120 --> 00:00:28,600 Speaker 2: with The Daily for what it is genuinely good for 9 00:00:28,960 --> 00:00:32,159 Speaker 2: to try to understand the person who's at the center 10 00:00:32,240 --> 00:00:36,800 Speaker 2: of America's trade war, and more importantly, the worldview that 11 00:00:36,920 --> 00:00:45,960 Speaker 2: informs it. And I'm going to tell you as I listened, 12 00:00:46,360 --> 00:00:49,200 Speaker 2: I came to understand both of them a lot better. 13 00:00:49,800 --> 00:00:54,160 Speaker 2: Here's what struck me. Jamison Greer is a lawyer, not 14 00:00:54,240 --> 00:00:57,440 Speaker 2: an economist. Now I mean that as a description, not 15 00:00:57,760 --> 00:01:03,440 Speaker 2: really as an insult a coherent worldview. He can argue it, 16 00:01:03,480 --> 00:01:06,440 Speaker 2: and you can argue it hard, but time after time 17 00:01:06,480 --> 00:01:09,320 Speaker 2: through that interview, I just go that worldview rests on 18 00:01:09,520 --> 00:01:12,560 Speaker 2: muddled thinking about what trade is about, who benefits and 19 00:01:13,000 --> 00:01:16,520 Speaker 2: what problem the policies that he's pushing, what problems are 20 00:01:16,600 --> 00:01:19,920 Speaker 2: even trying to solve. You see Jamison Greer, the US 21 00:01:20,000 --> 00:01:22,880 Speaker 2: trade representative. He sees the world the way a trade 22 00:01:22,920 --> 00:01:26,840 Speaker 2: litigator sees it. There are clients, there are injuries, there 23 00:01:26,880 --> 00:01:30,440 Speaker 2: are bad actors, there are grievances, and there are remedies. 24 00:01:31,200 --> 00:01:35,160 Speaker 2: And look that lends. I bet it's useful for some questions. 25 00:01:35,680 --> 00:01:39,040 Speaker 2: If another country, for instance, is subsidizing an industry or 26 00:01:39,120 --> 00:01:42,399 Speaker 2: dumping its product below cost, breaking the rules, then yeah, 27 00:01:42,680 --> 00:01:45,880 Speaker 2: I reckon A loyal in mind would help you prosecute 28 00:01:46,080 --> 00:01:49,440 Speaker 2: the case. If foreign government is cheating, you might need 29 00:01:49,480 --> 00:01:52,320 Speaker 2: a legal response, so you might want to call Jamison Grier. 30 00:01:53,640 --> 00:01:56,880 Speaker 2: But when you make that approach your whole theory of trade, 31 00:01:57,760 --> 00:02:01,600 Speaker 2: something happens. You see, every starts to look like an injury, 32 00:02:02,360 --> 00:02:06,280 Speaker 2: every deficit starts to look like evans, Every foreign gain 33 00:02:07,040 --> 00:02:11,160 Speaker 2: starts to look like a domestic loss. That's how lawyers seek. Now, 34 00:02:11,200 --> 00:02:14,679 Speaker 2: we economists, we start somewhere else. We don't start by 35 00:02:14,720 --> 00:02:18,280 Speaker 2: asking who hurt whom. Instead, we step back a level 36 00:02:18,320 --> 00:02:21,640 Speaker 2: and we ask why do people trade in the first place, 37 00:02:22,440 --> 00:02:25,720 Speaker 2: and when does that exchange between them make them better off. 38 00:02:26,240 --> 00:02:30,400 Speaker 2: Look the lawyer's narrow approach, it's not unique to Jameson greer. 39 00:02:30,720 --> 00:02:32,880 Speaker 2: You hear it everywhere. You hear it from the President, 40 00:02:32,960 --> 00:02:37,240 Speaker 2: from politicians, from your uncle at Thanksgiving, from anyone really 41 00:02:37,280 --> 00:02:40,000 Speaker 2: who has a gut feeling that if another country or 42 00:02:40,040 --> 00:02:43,760 Speaker 2: other people are gaining America and Americans must be losing. 43 00:02:44,160 --> 00:02:47,839 Speaker 2: International tradees a complicated topic, which is why I want 44 00:02:47,880 --> 00:02:51,800 Speaker 2: as us to listen carefully. So this is going to 45 00:02:51,800 --> 00:02:55,400 Speaker 2: be a story in five parts. First, I'll make the 46 00:02:55,440 --> 00:02:59,720 Speaker 2: case that trade enlarges the pie. Second, there's going to 47 00:02:59,720 --> 00:03:02,800 Speaker 2: be a reminder consumers count to and I want jameson 48 00:03:02,840 --> 00:03:06,200 Speaker 2: Greed to remember that. Third, there's one word that shows 49 00:03:06,280 --> 00:03:09,520 Speaker 2: up a lot in rhetoric from Jameson Greed jd Vance 50 00:03:09,560 --> 00:03:12,920 Speaker 2: in the entire Trump group. That word's cheap. We're going 51 00:03:12,919 --> 00:03:17,840 Speaker 2: to talk about how to use that word carefully. Fourth, manufacturing, Yes, 52 00:03:18,120 --> 00:03:21,680 Speaker 2: it matters, but nostalgia isn't policy in the past, isn't 53 00:03:21,680 --> 00:03:27,080 Speaker 2: the future. And Fifth deficits trade deficits. They're not scoreboards. 54 00:03:27,440 --> 00:03:31,119 Speaker 2: I'm just amorphus, and I'm here to help you understand 55 00:03:31,120 --> 00:03:34,400 Speaker 2: the world around you today. It's the world economy. So 56 00:03:34,680 --> 00:03:38,160 Speaker 2: let's begin. The first thing that I want you to 57 00:03:38,280 --> 00:03:40,680 Speaker 2: notice in this interview, and I'm going to play some 58 00:03:40,760 --> 00:03:44,360 Speaker 2: of it is the language Greed talks about trade the 59 00:03:44,400 --> 00:03:45,960 Speaker 2: way other people talk about war. 60 00:03:47,040 --> 00:03:48,840 Speaker 1: You know, if China is not going to change its 61 00:03:48,880 --> 00:03:51,320 Speaker 1: practices that we believe are harmful, then we have to 62 00:03:51,360 --> 00:03:53,760 Speaker 1: take you to lateral measures. We have to be policymakers. 63 00:03:53,880 --> 00:03:57,040 Speaker 1: Otherwise we just have to accept all these giant surpluses 64 00:03:57,080 --> 00:03:59,440 Speaker 1: that they're developing through their own policies. And I'm not 65 00:03:59,480 --> 00:04:01,480 Speaker 1: going to take that. The President doesn't want to take that, 66 00:04:01,600 --> 00:04:04,280 Speaker 1: because he's not just going to take other countries' policies 67 00:04:04,280 --> 00:04:07,120 Speaker 1: and say, oh, well, okay, I guess we'll just hand 68 00:04:07,160 --> 00:04:09,720 Speaker 1: over our industrial base to everybody else. I guess everyone 69 00:04:09,760 --> 00:04:11,720 Speaker 1: else will just have subsidies and will lay down and 70 00:04:11,760 --> 00:04:12,800 Speaker 1: take it on the chin. Again. 71 00:04:13,480 --> 00:04:15,640 Speaker 2: Listen closely to all of that, and you start to 72 00:04:15,680 --> 00:04:18,240 Speaker 2: see the worldview come into focus. I get where this 73 00:04:18,279 --> 00:04:21,360 Speaker 2: one lands. China really does subsidize some of its industries. 74 00:04:21,760 --> 00:04:24,200 Speaker 2: Some governments really do try to tilt the playing field. 75 00:04:24,720 --> 00:04:28,360 Speaker 2: Supply chain dependencies can be a national security problem. There 76 00:04:28,400 --> 00:04:31,120 Speaker 2: are real concerns for trade lawyers to worry about. But 77 00:04:31,400 --> 00:04:34,279 Speaker 2: Greer takes those partial truths and turns them into a 78 00:04:34,360 --> 00:04:38,160 Speaker 2: universal frame for how he thinks about all of international trade. 79 00:04:38,320 --> 00:04:40,280 Speaker 2: You can hear in the background. If they make more, 80 00:04:40,400 --> 00:04:42,960 Speaker 2: we must be making less. If they export more, we 81 00:04:43,040 --> 00:04:46,320 Speaker 2: must be losing. If we import more, we must be surrendering. 82 00:04:46,760 --> 00:04:50,400 Speaker 2: Notice throughout all of that the zero some thinking if 83 00:04:50,440 --> 00:04:54,159 Speaker 2: they gain, we lose. But that's not how economists, or 84 00:04:54,160 --> 00:04:57,279 Speaker 2: in fact people think about trade. We think about it 85 00:04:57,279 --> 00:05:00,520 Speaker 2: as enlarging the pie. Look, the easiest way to see 86 00:05:00,520 --> 00:05:04,160 Speaker 2: this isn't to start with China. That triggers too many 87 00:05:04,200 --> 00:05:07,480 Speaker 2: of our biases. Let's start at home instead. Let's start 88 00:05:07,520 --> 00:05:10,520 Speaker 2: in my home. See my better half an eye. We 89 00:05:10,560 --> 00:05:12,880 Speaker 2: do a lot of international trade with each other. She's American, 90 00:05:12,960 --> 00:05:17,200 Speaker 2: I'm Australian. We trade chores, and I promise you I'm 91 00:05:17,200 --> 00:05:19,280 Speaker 2: not doing more of the dishes so that she ends 92 00:05:19,360 --> 00:05:21,680 Speaker 2: up worse off. We do it because she can do 93 00:05:21,720 --> 00:05:24,280 Speaker 2: the stuff she's relatively better at, and I do the 94 00:05:24,320 --> 00:05:27,240 Speaker 2: stuff I'm relatively better at. And our whole household, even 95 00:05:27,240 --> 00:05:30,440 Speaker 2: though it's an Australian American, it runs better as a 96 00:05:30,480 --> 00:05:34,440 Speaker 2: result of trading chores. That is, our household pie gets bigger, 97 00:05:34,600 --> 00:05:37,280 Speaker 2: and when the pie gets bigger, we both get more pie. 98 00:05:37,360 --> 00:05:41,320 Speaker 2: She's American, I'm Australian, and yet somehow we manage to 99 00:05:41,440 --> 00:05:45,000 Speaker 2: structure trade to make us better off. Want Jameson grew 100 00:05:45,040 --> 00:05:47,440 Speaker 2: to understand that. Look, you might find it easier. Maybe 101 00:05:47,440 --> 00:05:49,360 Speaker 2: you'll find it easier if we think about this instead 102 00:05:49,360 --> 00:05:53,160 Speaker 2: as thinking about trade between American states. Look, nobody talks 103 00:05:53,200 --> 00:05:55,440 Speaker 2: as if New York could get richer by refusing to 104 00:05:55,480 --> 00:05:58,440 Speaker 2: trade with Pennsylvania. Even just saying it out loud makes 105 00:05:58,440 --> 00:06:02,359 Speaker 2: it sound ridiculous. To put an ocean between those two parties. 106 00:06:02,360 --> 00:06:06,640 Speaker 2: Suddenly it stops sounding ridiculous. The water doesn't change the economics. 107 00:06:07,200 --> 00:06:10,440 Speaker 2: It just makes it easier to blame the other side. Look, 108 00:06:10,480 --> 00:06:12,480 Speaker 2: I want to put it this way. If trading between 109 00:06:12,560 --> 00:06:16,040 Speaker 2: states is a good idea, then I reckonsose trading between countries. 110 00:06:17,000 --> 00:06:19,960 Speaker 2: That's the whole difference here. The lawyer's view is it's 111 00:06:20,040 --> 00:06:27,640 Speaker 2: country versus country, a zero some fight, and it denies 112 00:06:27,680 --> 00:06:31,040 Speaker 2: the possibility that the pie can get bigger. The economists view, 113 00:06:31,440 --> 00:06:34,479 Speaker 2: we're a yes and bunch. It's country and country. It 114 00:06:34,560 --> 00:06:40,279 Speaker 2: starts by recognizing trades. Fundamentally, like my relationship about corporation, 115 00:06:40,640 --> 00:06:42,719 Speaker 2: it sees that we can make more together than we 116 00:06:42,760 --> 00:06:46,080 Speaker 2: can apart. You make the thing where you're relatively good 117 00:06:46,080 --> 00:06:48,919 Speaker 2: at whether you're in China or Pennsylvania, I'll make the 118 00:06:48,920 --> 00:06:51,560 Speaker 2: thing I'm relatively good at, and both of us can 119 00:06:51,560 --> 00:06:54,920 Speaker 2: come out ahead. Now, I don't want to romanticize or 120 00:06:54,960 --> 00:06:59,200 Speaker 2: overly simplify this. Trade doesn't only create winners. The claim 121 00:06:59,279 --> 00:07:03,479 Speaker 2: instead is when Americans trade across the country, Americans come 122 00:07:03,560 --> 00:07:06,880 Speaker 2: out ahead across the country. Chinese people come out ahead. 123 00:07:07,160 --> 00:07:09,760 Speaker 2: So here's the more honest way of putting it. Trade 124 00:07:09,800 --> 00:07:13,440 Speaker 2: makes the pie bigger in both countries. Along the way, though, 125 00:07:13,600 --> 00:07:16,400 Speaker 2: and this is where it gets difficult. It redistributes the 126 00:07:16,440 --> 00:07:20,680 Speaker 2: slices within each country. So there's redistribution, and that redistribution 127 00:07:21,040 --> 00:07:23,120 Speaker 2: it can be brutal. If you've ever talked, for instance, 128 00:07:23,120 --> 00:07:27,360 Speaker 2: to an American factory worker, some towns get hammered, Some 129 00:07:27,440 --> 00:07:30,920 Speaker 2: workers are going to lose stable jobs, some industries get squeezed. 130 00:07:31,200 --> 00:07:34,760 Speaker 2: Those costs are real, They matter, They matter morally and 131 00:07:34,800 --> 00:07:38,600 Speaker 2: politically and economically, and honestly, economists haven't always been good 132 00:07:38,720 --> 00:07:43,720 Speaker 2: enough at admitting that. But the gains are real. Two, 133 00:07:44,480 --> 00:07:47,640 Speaker 2: that's what Jamison Grea is missing. The pie is bigger. 134 00:07:48,120 --> 00:07:52,560 Speaker 2: That is why people trade. Okay, the next thing I 135 00:07:52,600 --> 00:07:54,640 Speaker 2: want you to notice is who gets to be a 136 00:07:54,760 --> 00:08:00,040 Speaker 2: character in Jamison Grea's story of international trade. Early on, 137 00:08:00,200 --> 00:08:03,720 Speaker 2: he frames the whole project like this, we. 138 00:08:03,720 --> 00:08:06,960 Speaker 1: Have to take measures to protect our economy, to protect 139 00:08:07,200 --> 00:08:10,560 Speaker 1: our industrial base, to protect our agricultural production, to protect 140 00:08:10,600 --> 00:08:13,040 Speaker 1: our factories and farms and families and the people who 141 00:08:13,040 --> 00:08:13,560 Speaker 1: work there. 142 00:08:14,040 --> 00:08:16,880 Speaker 2: And later he talks about the businesses that are hurt 143 00:08:16,960 --> 00:08:18,680 Speaker 2: by his tariffs. 144 00:08:19,040 --> 00:08:22,480 Speaker 1: So for every small business person that says, well, my 145 00:08:22,560 --> 00:08:25,520 Speaker 1: business model is to import from China a finished good 146 00:08:25,680 --> 00:08:28,520 Speaker 1: market up and resell it to an American, could that 147 00:08:28,560 --> 00:08:30,320 Speaker 1: impact their business? Yeah, of course it could. 148 00:08:30,440 --> 00:08:32,480 Speaker 2: Later on and the piece the reporter sums up his 149 00:08:32,640 --> 00:08:35,080 Speaker 2: view that is Jameson Greer's view that he doesn't really 150 00:08:35,080 --> 00:08:38,080 Speaker 2: feel bad for firms who structured their business models around 151 00:08:38,080 --> 00:08:40,840 Speaker 2: importing cheap stuff from China and other countries. But here's 152 00:08:40,880 --> 00:08:42,480 Speaker 2: what I want you to notice. I want you to 153 00:08:42,520 --> 00:08:46,640 Speaker 2: notice whose story is being told. Who's highlighted, Jameson green 154 00:08:46,760 --> 00:08:49,960 Speaker 2: notice is the steel company and the small manufacturer, the 155 00:08:50,000 --> 00:08:52,319 Speaker 2: worker in a hard hat, the factory owner fighting off 156 00:08:52,360 --> 00:08:55,040 Speaker 2: the imports. Those people are real, their problems are real, 157 00:08:55,120 --> 00:08:57,320 Speaker 2: fair enough, glad you see them. But they're not the 158 00:08:57,360 --> 00:09:00,160 Speaker 2: whole story. There are at least three other groups who 159 00:09:00,160 --> 00:09:04,359 Speaker 2: should matter in any honest discussion of trade policy. First, consumers, 160 00:09:04,800 --> 00:09:08,880 Speaker 2: families buying shoes and toys and appliances and groceries and 161 00:09:08,880 --> 00:09:12,640 Speaker 2: school supplies, in car parts, folks like you and me 162 00:09:12,840 --> 00:09:16,040 Speaker 2: for that matter. Second, there are those American firms who 163 00:09:16,160 --> 00:09:20,000 Speaker 2: use imported inputs. Maybe you're assembling something in Ohio, but 164 00:09:20,080 --> 00:09:23,160 Speaker 2: you need parts from Taiwan or Mexico or Germany. Tariffs 165 00:09:23,200 --> 00:09:26,280 Speaker 2: raise the cost to American producers of getting those inputs, 166 00:09:26,280 --> 00:09:30,280 Speaker 2: but they don't raise the cost for their foreign competitors. Hate. 167 00:09:30,280 --> 00:09:32,400 Speaker 2: The third group that's missing is the workers who work 168 00:09:32,400 --> 00:09:35,680 Speaker 2: at those firms. They're no less American, They're no less 169 00:09:35,720 --> 00:09:38,560 Speaker 2: deserving of concern than the workers standing next to the 170 00:09:38,559 --> 00:09:42,079 Speaker 2: blast furnace. Hey, I want to see you some data 171 00:09:42,120 --> 00:09:44,400 Speaker 2: on this, because this part really matters. I'm going to 172 00:09:44,400 --> 00:09:46,040 Speaker 2: pull it from the folks at the New York Fed. 173 00:09:46,040 --> 00:09:49,000 Speaker 2: In a recent Federal Reserve study, the New York Fed 174 00:09:49,040 --> 00:09:52,120 Speaker 2: says that the Trump tariffs have been overwhelmingly born by 175 00:09:52,200 --> 00:09:56,559 Speaker 2: domestic businesses and American customers. Another estimate puts it at 176 00:09:56,559 --> 00:09:59,000 Speaker 2: nearly ninety percent of the burden falling on US firms 177 00:09:59,000 --> 00:10:02,120 Speaker 2: and businesses, and re and study actually finds that higher 178 00:10:02,160 --> 00:10:06,120 Speaker 2: tariff exposure raised prices and cut household spending, and low 179 00:10:06,160 --> 00:10:10,560 Speaker 2: income households bear a disproportionate share of the pain. So 180 00:10:11,480 --> 00:10:13,559 Speaker 2: the thing I want you to notice is the protected 181 00:10:13,600 --> 00:10:17,000 Speaker 2: producer is always the hero in Jameson Grier's story. The 182 00:10:17,040 --> 00:10:20,600 Speaker 2: consumer who's paying more, who can't make their paycheck stretch 183 00:10:20,679 --> 00:10:23,560 Speaker 2: far enough for their family, just doesn't rate a mention 184 00:10:24,120 --> 00:10:26,720 Speaker 2: in his narrative. That's the habit I want you to break. 185 00:10:27,160 --> 00:10:30,200 Speaker 2: Let's write the consumer back into the trade story. You 186 00:10:30,280 --> 00:10:32,120 Speaker 2: and I have to ride them in because unlike the 187 00:10:32,160 --> 00:10:35,640 Speaker 2: businesses who have lobbyists who are pounding the pavement in 188 00:10:35,800 --> 00:10:39,080 Speaker 2: Washington beating the drum for their interests, consumers don't have 189 00:10:39,160 --> 00:10:43,280 Speaker 2: a powerful lobby marching on Washington demanding that someone pays 190 00:10:43,320 --> 00:10:48,160 Speaker 2: attention to them. That's our job. A quick word from 191 00:10:48,160 --> 00:10:51,680 Speaker 2: our sponsor. 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Now, 220 00:12:30,880 --> 00:12:33,240 Speaker 2: I want to move on and talk about one little 221 00:12:33,240 --> 00:12:36,559 Speaker 2: word that shows up again and again in this interview. 222 00:12:36,559 --> 00:12:38,079 Speaker 2: And by the way, it's a word that you hear 223 00:12:38,160 --> 00:12:41,160 Speaker 2: jd Vance use a lot too cheap. 224 00:12:41,679 --> 00:12:45,360 Speaker 1: Thirty years we had a bipartisan failed consensus that we 225 00:12:45,400 --> 00:12:48,360 Speaker 1: ought to let cheap plastic garbage come into our country. 226 00:12:48,920 --> 00:12:52,240 Speaker 2: See cheap here. It being used in a funny way, 227 00:12:52,559 --> 00:12:55,000 Speaker 2: not just to mean low priced. It seems to sound 228 00:12:55,040 --> 00:12:59,560 Speaker 2: like it means suspect, illegitimate, tainted, maybe unfair, maybe dangerous, 229 00:12:59,559 --> 00:13:04,439 Speaker 2: but not something you're supposed to like. And look, it's true. 230 00:13:04,559 --> 00:13:07,520 Speaker 2: Sometimes goods really are cheap for bad reasons, because of 231 00:13:07,520 --> 00:13:11,400 Speaker 2: an unfair subsidy or dumping or distorted competitions. Sometimes that's true, 232 00:13:11,440 --> 00:13:16,000 Speaker 2: but actually pretty rarely. Here's the thing. Another word, a 233 00:13:16,040 --> 00:13:19,840 Speaker 2: better word for cheap is more. You're going to have 234 00:13:19,880 --> 00:13:22,480 Speaker 2: more left in your wallet, more breathing room at at 235 00:13:22,480 --> 00:13:24,960 Speaker 2: the end of the month, more living standards out of 236 00:13:24,960 --> 00:13:27,720 Speaker 2: the same paycheck. Cheap sneakers for the kids means more 237 00:13:27,720 --> 00:13:30,560 Speaker 2: money for pants. A cheaper microave when the old one 238 00:13:30,600 --> 00:13:32,880 Speaker 2: dies means more is left in your rainy day fund. 239 00:13:33,320 --> 00:13:36,240 Speaker 2: Lower cost inputs for a small business translates to being 240 00:13:36,240 --> 00:13:41,080 Speaker 2: more competitive more. I like that word low prices. They're 241 00:13:41,080 --> 00:13:44,360 Speaker 2: not a dirty word. Low prices help consumers, they help 242 00:13:44,440 --> 00:13:48,800 Speaker 2: you get more. And here's the problem. Once low prices 243 00:13:48,840 --> 00:13:52,719 Speaker 2: are treated as morally suspect, making things sound more expensive, 244 00:13:52,960 --> 00:13:56,320 Speaker 2: which is what the Trump tariffs has done, it somehow 245 00:13:56,400 --> 00:14:00,000 Speaker 2: ends up sounding like patriotism. I reckon, it's the exacty. 246 00:14:00,679 --> 00:14:03,640 Speaker 2: Now there's one more idea. I don't want Jamison Greer 247 00:14:03,760 --> 00:14:07,040 Speaker 2: or the Trump administration to let slip by. And that's 248 00:14:07,040 --> 00:14:10,960 Speaker 2: the special reverence that folks seem to have for manufacturing. Look, 249 00:14:11,000 --> 00:14:13,880 Speaker 2: Democrats are guilty of this too, they say, both Democrats 250 00:14:13,920 --> 00:14:17,240 Speaker 2: and Republicans say manufacturing matters. And I agree, it matters 251 00:14:17,280 --> 00:14:20,080 Speaker 2: for some communities, and it matters for some strategic sectors. 252 00:14:20,560 --> 00:14:22,640 Speaker 2: And a plant closure can wreck a town. And if 253 00:14:22,680 --> 00:14:24,760 Speaker 2: you've ever lived through one, you don't need an economist 254 00:14:24,880 --> 00:14:27,800 Speaker 2: like me explaining that to you. But Jamison Greer and 255 00:14:27,840 --> 00:14:31,680 Speaker 2: the whole Trump administration, they keep treating manufacturing is the 256 00:14:31,720 --> 00:14:34,200 Speaker 2: moral center of the economy. You hear it in the 257 00:14:34,240 --> 00:14:37,200 Speaker 2: talk of factories and farms and families I played earlier. 258 00:14:37,480 --> 00:14:40,280 Speaker 2: You hear it in the nostalgia for steel meals. You 259 00:14:40,320 --> 00:14:42,760 Speaker 2: hear it in the sense that making physical stuff is 260 00:14:42,760 --> 00:14:46,480 Speaker 2: somehow more real than everything else. I'm not so sure. 261 00:14:47,280 --> 00:14:50,320 Speaker 2: Let me show you one really simple fact. Average hourly 262 00:14:50,360 --> 00:14:53,680 Speaker 2: earnings in manufacturing the most recent data was thirty six 263 00:14:53,720 --> 00:14:56,800 Speaker 2: dollars and seventy one cents across the whole private sector. 264 00:14:56,800 --> 00:14:58,960 Speaker 2: It was actually a little higher, at thirty seven dollars 265 00:14:59,000 --> 00:15:03,720 Speaker 2: and sixty four cents. So in fact, manufacturing pays a 266 00:15:03,760 --> 00:15:10,080 Speaker 2: little worse than the average job. Increasingly, manufacturing jobs aren't unionized, 267 00:15:10,080 --> 00:15:12,440 Speaker 2: they're not high paying, and they're not the road to 268 00:15:12,480 --> 00:15:15,240 Speaker 2: long term security they once were. The point is, there 269 00:15:15,400 --> 00:15:18,840 Speaker 2: was a time the president's youth, when factory job was 270 00:15:18,880 --> 00:15:22,400 Speaker 2: basically a shorthand for a middle class wage. But that's 271 00:15:22,440 --> 00:15:25,680 Speaker 2: no longer reliably true. There's something a little worse here. 272 00:15:25,720 --> 00:15:28,360 Speaker 2: I think manufacturing jobs are what a lot of rich 273 00:15:28,400 --> 00:15:31,560 Speaker 2: people seem to think that poor people want. But if 274 00:15:31,600 --> 00:15:33,680 Speaker 2: you talk to a worker who's busting their back on 275 00:15:33,720 --> 00:15:35,640 Speaker 2: the factory floor and you ask them what do they 276 00:15:35,680 --> 00:15:39,280 Speaker 2: want for their kids, they're usually pointing somewhere else, something 277 00:15:39,360 --> 00:15:42,600 Speaker 2: easier on the body, more stable, maybe a bit more schooling, 278 00:15:42,640 --> 00:15:44,560 Speaker 2: maybe not, but something with a bit more dignity and 279 00:15:44,560 --> 00:15:47,120 Speaker 2: a bit less wear and tear. So yes, I'm going 280 00:15:47,160 --> 00:15:50,000 Speaker 2: to agree manufacturing still matters. But a job doesn't become 281 00:15:50,040 --> 00:15:55,640 Speaker 2: a good job just because it's loud, doesn't become dignified 282 00:15:55,680 --> 00:15:59,200 Speaker 2: just because it's dirty. That's nostalgia. We don't need loud, 283 00:15:59,240 --> 00:16:02,600 Speaker 2: we don't need dirt. America's economic future is further up 284 00:16:02,600 --> 00:16:06,720 Speaker 2: the value chain, and honestly, I'm looking forward to it. Okay, Now, 285 00:16:06,760 --> 00:16:12,320 Speaker 2: the part that economists like me find especially maddening. Jamison Greer, 286 00:16:12,880 --> 00:16:16,160 Speaker 2: along with President Trump, talks about the trade deficit as 287 00:16:16,160 --> 00:16:19,400 Speaker 2: though it's a scoreboard for whether America is beating other countries. 288 00:16:20,040 --> 00:16:23,640 Speaker 1: Here, he is, our trade deficit exploded by forty percent 289 00:16:23,720 --> 00:16:26,560 Speaker 1: in the five years before President Trump's second term. It 290 00:16:26,640 --> 00:16:29,040 Speaker 1: was one point two trillion dollars at the end of 291 00:16:29,040 --> 00:16:30,640 Speaker 1: twenty twenty four. This is crazy. 292 00:16:31,320 --> 00:16:34,320 Speaker 2: So later on he goes on and he continues. 293 00:16:34,320 --> 00:16:36,600 Speaker 1: We want the trade deficit in goods to go down. 294 00:16:36,960 --> 00:16:40,760 Speaker 2: But a trade deficit is not the same thing as 295 00:16:40,880 --> 00:16:43,760 Speaker 2: being ripped off. Sorry, I had to shout that it's 296 00:16:43,800 --> 00:16:46,640 Speaker 2: in the economics textbook. Let me explain it in the 297 00:16:46,680 --> 00:16:50,080 Speaker 2: calmer voice. I have a trade deficit. We traded Joe's. 298 00:16:50,120 --> 00:16:52,000 Speaker 2: I go there all the time. I'll buy a ton 299 00:16:52,040 --> 00:16:54,360 Speaker 2: of stuff from Trade to Joe's. It has never bought 300 00:16:54,400 --> 00:16:57,280 Speaker 2: a single thing from platypus economics. That means I have 301 00:16:57,320 --> 00:16:59,800 Speaker 2: a trade deficit with them. You probably have a trade 302 00:16:59,800 --> 00:17:03,720 Speaker 2: deaf with Traded Joe's too, unless you're an employee. And 303 00:17:03,800 --> 00:17:06,639 Speaker 2: if someone saw your shopping card as you left Traded 304 00:17:06,720 --> 00:17:09,760 Speaker 2: Joe's and they told you that Traded Joe's was winning 305 00:17:10,200 --> 00:17:13,080 Speaker 2: and you were losing, and it's an emergency that you 306 00:17:13,160 --> 00:17:15,840 Speaker 2: fix it, you'd probably take a long look at the 307 00:17:15,840 --> 00:17:20,520 Speaker 2: frozen fertile and tell them to reconsider. Let me be clear, 308 00:17:20,560 --> 00:17:25,480 Speaker 2: Traded Joe's isn't exploiting me. It's nourishing me. It's feeding me. 309 00:17:25,920 --> 00:17:28,240 Speaker 2: And so yes, this whole idea of a trade deficit 310 00:17:28,280 --> 00:17:32,560 Speaker 2: with traded Joe's sounds silly, but that's the point. Anytime 311 00:17:32,560 --> 00:17:37,160 Speaker 2: you're talking about bilateral, two party trade deficits, the logic's 312 00:17:37,240 --> 00:17:40,920 Speaker 2: always silly. At the macro level, the aggregate trade deficit 313 00:17:41,000 --> 00:17:45,199 Speaker 2: reflects a broader gap between national savings an investment. You 314 00:17:45,200 --> 00:17:47,600 Speaker 2: can actually take this idea a trade deficit. It sounds 315 00:17:47,600 --> 00:17:49,960 Speaker 2: bad because we've all been taught the word deficit is bad, 316 00:17:50,680 --> 00:17:53,520 Speaker 2: but you can in fact describe the exact same phenomenon 317 00:17:53,560 --> 00:17:56,560 Speaker 2: instead in terms that sound rosy as an investment surplus. 318 00:17:57,160 --> 00:17:59,119 Speaker 2: Call Jamison Greer and ask him if he wants an 319 00:17:59,160 --> 00:18:01,600 Speaker 2: investment surplus. It sounds so good, I bet he's into it. 320 00:18:03,040 --> 00:18:06,199 Speaker 2: Our trade deficit is also the same thing as an 321 00:18:06,200 --> 00:18:08,640 Speaker 2: investment surplus. What we have is folks from all around 322 00:18:08,640 --> 00:18:10,320 Speaker 2: the world who want to invest their money in the 323 00:18:10,400 --> 00:18:13,159 Speaker 2: United States. They send their dollars from abroad, either so 324 00:18:13,240 --> 00:18:15,560 Speaker 2: they can invest directly in our businesses or lend to 325 00:18:15,600 --> 00:18:18,080 Speaker 2: Americans who think they've got a better use for those 326 00:18:18,080 --> 00:18:20,800 Speaker 2: dollars than foreigners do. This is literally the same idea, 327 00:18:20,800 --> 00:18:22,639 Speaker 2: but when you describe it from this other side of 328 00:18:22,680 --> 00:18:27,040 Speaker 2: the accounting ledger, it just hits different. And even on 329 00:18:27,200 --> 00:18:31,040 Speaker 2: Jamison Grea's own terms, these bilateral deficit numbers don't prove 330 00:18:31,119 --> 00:18:34,000 Speaker 2: what he wants them to prove. Look, let's dive into 331 00:18:34,000 --> 00:18:36,600 Speaker 2: Stata to check out the numbers. I'm going to plump 332 00:18:36,760 --> 00:18:40,160 Speaker 2: us import data from the Census Bureau, focusing on total 333 00:18:40,280 --> 00:18:44,760 Speaker 2: trade over the past twelve months. Take a look and 334 00:18:44,800 --> 00:18:48,440 Speaker 2: you'll see the US inports from China fell sharply after 335 00:18:48,440 --> 00:18:52,440 Speaker 2: Trump started his trade war. But look, here's one more thing. 336 00:18:53,000 --> 00:18:55,760 Speaker 2: Let's look at imports from other countries in the region. 337 00:18:55,960 --> 00:18:59,199 Speaker 2: We'll focus on ASI. Aren't a club of eleven Southeast 338 00:18:59,280 --> 00:19:03,000 Speaker 2: nations that does and include China. By Jingo, you can 339 00:19:03,080 --> 00:19:06,879 Speaker 2: see it. The fallen imports from China, it coincides almost 340 00:19:06,960 --> 00:19:09,440 Speaker 2: one for one with the rise from these other neighbors. 341 00:19:10,160 --> 00:19:12,760 Speaker 2: Here's one more way to see it. We're taking but 342 00:19:13,080 --> 00:19:16,640 Speaker 2: the data back to two thousand. The left panel shows 343 00:19:16,640 --> 00:19:19,919 Speaker 2: that typically when the US imports more from China, it 344 00:19:19,960 --> 00:19:22,840 Speaker 2: imports more from the rest of the region. That's basically 345 00:19:22,840 --> 00:19:27,399 Speaker 2: a pattern of tidy US integration. But also notice what's 346 00:19:27,560 --> 00:19:31,399 Speaker 2: changed since the start of the second Trump administration. Now 347 00:19:31,640 --> 00:19:35,320 Speaker 2: fewer imports from China is associated with more imports from 348 00:19:35,359 --> 00:19:39,360 Speaker 2: the rest of the region. So, yeah, jameson Greer can say, 349 00:19:39,359 --> 00:19:41,640 Speaker 2: and he does say, and he boasts the bilateral trade 350 00:19:41,680 --> 00:19:45,160 Speaker 2: deficit with China. Fel that's a fact. Does that prove 351 00:19:45,200 --> 00:19:49,760 Speaker 2: that tariff's worked? No, that's an interpretation. But what was 352 00:19:49,800 --> 00:19:51,720 Speaker 2: really happening here was that a lot of that trade 353 00:19:51,800 --> 00:19:54,800 Speaker 2: just changed to dresses. And if all that's happening is 354 00:19:55,160 --> 00:19:58,280 Speaker 2: you're still trade in the same amounts but with different addresses, 355 00:19:59,000 --> 00:20:01,520 Speaker 2: the claim that somehow that's a win or a deep 356 00:20:01,600 --> 00:20:05,120 Speaker 2: change it's not a very good interpretation. Hey, look, let's 357 00:20:05,200 --> 00:20:08,239 Speaker 2: try and pull the threads together here. You might want 358 00:20:08,280 --> 00:20:10,080 Speaker 2: to listen to the whole interview see what you think 359 00:20:10,119 --> 00:20:13,120 Speaker 2: of it, But hopefully you get something from this, which 360 00:20:13,160 --> 00:20:17,840 Speaker 2: is a sense of that there is an animating, coherent 361 00:20:17,960 --> 00:20:22,920 Speaker 2: worldview behind the Trump trade agenda. It's just not right. 362 00:20:23,000 --> 00:20:25,959 Speaker 2: And look, trade is complicated, and I get it, and 363 00:20:26,000 --> 00:20:28,439 Speaker 2: that's why there is this sort of muddled thinking just 364 00:20:28,480 --> 00:20:31,760 Speaker 2: about everywhere. So my task today it's not to argue 365 00:20:31,760 --> 00:20:34,720 Speaker 2: with Jamison Gear or the broader set of ideas animating 366 00:20:34,760 --> 00:20:37,639 Speaker 2: Trump's trade policy. Instead, what I want to do is 367 00:20:37,680 --> 00:20:40,280 Speaker 2: I want to equip you with a few ways to 368 00:20:40,359 --> 00:20:43,880 Speaker 2: sort out good trade policy arguments from bad ones. It's 369 00:20:43,920 --> 00:20:47,200 Speaker 2: a skill that's going to be usedful well beyond this administration. 370 00:20:47,680 --> 00:20:50,560 Speaker 2: So the next time you hear someone, whether it's Trump, 371 00:20:50,920 --> 00:20:55,719 Speaker 2: vance Jamison Gear, or the guy next door, talking about trade, 372 00:20:55,880 --> 00:20:58,560 Speaker 2: listen for the tells. Are they treating it like a 373 00:20:58,640 --> 00:21:04,320 Speaker 2: war instead of operation. A consumer's disappearing from the story. 374 00:21:05,119 --> 00:21:08,119 Speaker 2: Is cheap being used as a slur, a word that 375 00:21:08,160 --> 00:21:11,280 Speaker 2: takes a benefit and rebrands it as a shame. Is 376 00:21:11,359 --> 00:21:15,360 Speaker 2: manufacturing being treated like somehow it's magic. Is a deficit 377 00:21:15,480 --> 00:21:20,320 Speaker 2: being waved around like a scoreboard at halftime. Those are 378 00:21:20,359 --> 00:21:24,800 Speaker 2: the tells, and once you hear them, you can't unhear them. Yet, 379 00:21:24,840 --> 00:21:28,280 Speaker 2: despite all of that, here's Grier's own grade for his 380 00:21:28,359 --> 00:21:29,120 Speaker 2: trade policy. 381 00:21:30,040 --> 00:21:31,000 Speaker 1: I would give us an air 382 00:21:32,400 --> 00:21:43,720 Speaker 2: Not in my class, Jennison, not in my class.