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Speaker 1: Hello there, I'm Chuck Todd. Welcome to another episode of

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Speaker 1: the Chuck Podcast. Hey, just a quick little housekeeping note

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Speaker 1: if you will, particularly if you listen to the Check

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Speaker 1: podcast versus watching it on YouTube, although we'd love for

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Speaker 1: you to go to the YouTube channel, subscribe, like and subscribe.

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Speaker 1: You know all of these you know, you know my

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Speaker 1: whining about algorithms. You know, I can whine all I want,

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Speaker 1: but this is the system that we have. You know,

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Speaker 1: as I joke, I cover politics as it is well

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Speaker 1: in the information ecosystem. Just because I think it sucks

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Speaker 1: doesn't mean I'm not going to participate in it as

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Speaker 1: best I can. So would love that. But we're making

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Speaker 1: a slight tweak on the audio front, really based on

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Speaker 1: sort of our own sort of consumer demands, if you will,

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Speaker 1: We're going to break the We're going to offer the

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Speaker 1: podcast now in sort of two different ways. You can

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Speaker 1: get the entire thing as one every episode and that

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Speaker 1: regularly is somewhere two hours or less. Or we will

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Speaker 1: also offer it so if you just do the audio feed,

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Speaker 1: you may see one episode, you may get three beads.

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Speaker 1: One is the entire thing.

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Speaker 2: Soup to nuts.

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Speaker 1: One is just are just the feature interview for that episode.

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Speaker 1: So today, for instance, it's Mark Zandi, the chief economist

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Speaker 1: at Moody's, and then one is just my thoughts for

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Speaker 1: the day, coupled with the Q and A. So it's

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Speaker 1: a way if you want to absorb in chunks or

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Speaker 1: if you want to do it all at once. My

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Speaker 1: feeling is, in this day and age, you know you're

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Speaker 1: in charge is the consumer. We're putting all the content

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Speaker 1: out there and we want it. We want you to

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Speaker 1: be able to consume it anyway you want, not forcing

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Speaker 1: you to consume it the way we want you to

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Speaker 1: consume it for what it's worth. I do think of

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Speaker 1: it as one one whole meal, sort of thoughts of

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Speaker 1: the day, something you know that I've been thinking about,

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Speaker 1: an interview on a topic that I think you should

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Speaker 1: know more about, and then responding to your question. So

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Speaker 1: I do think of it as sort of a complete meal.

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Speaker 1: But I also know in this day and age, people

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Speaker 1: you want to grab Hey, I'm curious of this, So

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Speaker 1: that's an interesting interview, but I want to listen to

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Speaker 1: that later totally get that. So we want to provide

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Speaker 1: the opportunity to give you, to give you basically both

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Speaker 1: options and of course if you want to watch, that's

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Speaker 1: what YouTube is for as well. So we appreciate all

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Speaker 1: the different ways. And that's the thing I've learned since

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Speaker 1: going independent, which is I preached it all the time

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Speaker 1: when I was at NBC. Platform neutral. Don't force consumers

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Speaker 1: to take your content the way you want it. You

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Speaker 1: got to sort of meet them where they are. And

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Speaker 1: this is another attempt of me trying to meet you

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Speaker 1: where you are. Speaking of that and the information ecosystem,

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Speaker 1: there actually was a huge development and how you consume

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Speaker 1: information that is going to have a gigantic impact on

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Speaker 1: local news and it's probably a headline you had no idea.

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Speaker 1: I was going to single out this morning about it,

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Speaker 1: but I want to make a brief mention of it

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Speaker 1: since I talk about local news all the time and

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Speaker 1: how I think, really, we're not going to repair the

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Speaker 1: reputation of national news until we clean up the local

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Speaker 1: news ecosystem. But we're about to see another devastating blow

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Speaker 1: to local news this morning. There's a merger that was

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Speaker 1: announced next Star Media Group and Tegna essentially buying out

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Speaker 1: Tegna merging. Of these these are the two largest at

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Speaker 1: this point. Now this is going to be the largest

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Speaker 1: single company that owns local affiliates. So your local channel four,

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Speaker 1: channel ten, channel nine, channel seven, whatever market you live

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Speaker 1: in some way, your single digit markets, your local ABC affiliate,

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Speaker 1: your local NBC affiliate, your local Fox affiliate, your local

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Speaker 1: CBS affiliate. These are not the O and os. Sometimes

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Speaker 1: the networks we call them O and os owned and

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Speaker 1: operated where the national network also owns the local news.

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Speaker 1: If you live in New York and LA, for instance,

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Speaker 1: those local channels KNBC, WNBC, WABC, KABC, those are owned

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Speaker 1: by ABC and NBC. But if you live, say where

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Speaker 1: I grew up in Miami, one of the affiliates is

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Speaker 1: owned by by one of the big networks. The local

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Speaker 1: NBC affiliate is owned and operated by NBC National, NBC Universal,

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Speaker 1: but the other ones are not. Channel ten was the

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Speaker 1: ABC affiliate, they've now they're now an independent channel. They

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Speaker 1: have no network affiliation. Channel seven is the Fox affiliate.

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Speaker 1: They now also are the ABC affiliate. And this is

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Speaker 1: what I want to get to, this merging. We are

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Speaker 1: going to see consolidation in the local TV sector, just

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Speaker 1: in the same way we saw consolidation twenty years ago

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Speaker 1: when it came to local newspapers, right, the morning papers

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Speaker 1: and the afternoon papers that we used to have. Essentially

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Speaker 1: that all collapsed the day of the internet. You didn't

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Speaker 1: need the whole afternoon paper. And essentially we saw that

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Speaker 1: sort of consolidation take place in the eighties and nineties

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Speaker 1: and it has left us with the with the mess

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Speaker 1: that we have today in the local newspaper news.

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Speaker 2: Arena.

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Speaker 1: Well, now we're going to see it on the TV

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Speaker 1: side of things, this consolidation. You're going to have something

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Speaker 1: that you're going to see show up in some of

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Speaker 1: your markets now called doopolies. And what that means is

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Speaker 1: one local affiliate will be the same place you go

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Speaker 1: to for ABC programming and CBS programming, or for NBC

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Speaker 1: in Miami, now it is ABC programming and Fox programming.

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Speaker 1: The same local entity will be who serves you up

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Speaker 1: that programming. And instead of now having two distinct local

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Speaker 1: news organizations, you'll now have one. Right, That's what this

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Speaker 1: consolidation is going to lead to. So we're going to

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Speaker 1: have a few local journalists. You know, in theory, you should

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Speaker 1: mean you take one outlet and make it bigger, but

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Speaker 1: that is never how this stuff works out right. It

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Speaker 1: is simply the consolidation does not You do not have

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Speaker 1: take two entities and hope that then you take two

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Speaker 1: hundred percent and say cut that in half, but you

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Speaker 1: still have, say a greater amount of resources than one alone.

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Speaker 2: That is not how this.

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Speaker 1: Is going to work, sadly, and this is why I'm

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Speaker 1: so obsessed with trying to reanimate and recreate the local

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Speaker 1: news information ecosystem, community based news that is more platform neutral.

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Speaker 1: I think you have everybody's in retreat right now. Resources

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Speaker 1: are collapsing just at a time when there's actually demand

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Speaker 1: for more local information. So this this was something that

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Speaker 1: was going to happen. The FCC is going to allow

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Speaker 1: likely allow more and more looser regulatory decisions. The point

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Speaker 1: is this is a big deal that's going to get

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Speaker 1: very little coverage, but the impact on local communities fewer resources.

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Speaker 2: Covering what's going on locally.

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Speaker 1: It is only for me motivating me to try to

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Speaker 1: figure out this larger idea that I really believe we've

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Speaker 1: got to scale the expansion of local news.

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Speaker 2: Reanimate it.

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Speaker 1: I believe youth sports and high school sports is maybe

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Speaker 1: the connective tissue that can sort of bring trust back,

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Speaker 1: unite different communities to do this but this is a

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Speaker 1: this is a transformative moment today and the impact on

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Speaker 1: how you get local information is going to be dramatic.

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Speaker 1: You may not notice it in the next six months,

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Speaker 1: you certainly are going to notice it over the next

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Speaker 1: eighteen months to two years. This has huge you know,

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Speaker 1: this means fewer local entities to put on debates, fewer

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Speaker 1: local entities to give candidates access to the public. So

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Speaker 1: this has a lot of impact on our political communications,

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Speaker 1: on how we campaign politics, all of those things, how

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Speaker 1: you get basic information about your community.

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Speaker 2: So this is a.

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Speaker 1: Huge you know, as more developments happen, I obviously want

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Speaker 1: to we'll be doing my best to surface this.

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Speaker 2: But this gets it. This is this is the moment.

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Speaker 1: This is why, oddly I actually think there's opportunity, right

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Speaker 1: whenever there's consolidation, that's actually the opportunity, Right, You have

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Speaker 1: a whole bunch of big entities that are in retreat,

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Speaker 1: nothing like a little startup to show up and actually

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Speaker 1: try to expand. And so it's something something I want

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Speaker 1: to focus there. Obviously, one other big obviously, the other

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Speaker 1: big actual political headline has to do with Zelenski's trip to.

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Speaker 2: Washington, d C.

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Speaker 1: With with his super friends in this case, the super

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Speaker 1: super European friends, right, the G seven allies, the heads

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Speaker 1: of Italy and France and the UK and Germany. And clearly,

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Speaker 1: you know, everybody has figured out how to play kate

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Speaker 1: Donald Trump, right, every thing is about placating him. And

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Speaker 1: you know, whether I think somebody referred to the phrase

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Speaker 1: tongue bathing Trump is what Zelensky's finally learned to do.

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Speaker 1: Even showed up at a nice looking, very modern looking suit.

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Speaker 1: Let me just tell you if I would hope that

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Speaker 1: this becomes the model of what is considered dressing up

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Speaker 1: in Washington because there was no tie, right, how great

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Speaker 1: was that there was no tie? Looks looks sleek. You know,

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Speaker 1: the all black look helps you look thinner. I need

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Speaker 1: to look thinner these days. So hey, I endorse it.

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Speaker 1: Let's see it come. But in all seriousness, you could

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Speaker 1: see that this was a case where they were there,

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Speaker 1: that the European Allies and Zelensky were hoping if they're

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Speaker 1: the last person in the room, and I you know,

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Speaker 1: and as you could see, Trump seems to be vacillating.

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Speaker 1: And it's interesting here that he sees himself more as

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Speaker 1: a mediator between the two sides, rather than as an

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Speaker 1: ally of the West. It is weirdly head scratching, right,

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Speaker 1: He's the one that would leave the room and go talk,

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Speaker 1: go talk to Putin for forty minutes to see what

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Speaker 1: was possible, right he was, he was the go between.

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Speaker 1: Now he does have the best relationship among the G

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Speaker 1: seven leaders with Putin. Right before Trump, when Biden was

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Speaker 1: in office, and even actually during the Biden assuming the

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Speaker 1: Obama years, and even the first Trump termam it was

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Speaker 1: thought of his Merkle who had the best relationship with Putin,

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Speaker 1: in part because he spoke German and so they seem

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Speaker 1: to be able to communicate better than the other world leaders.

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Speaker 1: These days, it really is Trump who apparently has the

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Speaker 1: best relationship with Putin. So look, I think it all

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Speaker 1: went it could have. I guess the best headline on

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Speaker 1: all of this over the last ninety six hours is

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Speaker 1: it could have been worse. Right, It wasn't Helsinki when

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Speaker 1: it came to Putin, and it wasn't February when it

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Speaker 1: came to Zelenski. And for that, I think everybody's grateful,

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Speaker 1: and I think part of that is the effort the

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Speaker 1: Europeans have made. I mean, in some ways, perhaps Trump

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Speaker 1: deserves some credit for this, both in action and in action.

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Speaker 2: Right.

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Speaker 1: The inaction has sort of forced the Europeans to start

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Speaker 1: working more together, to start thinking about security, which actually

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Speaker 1: is some of the rhetoric we've heard from some on

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Speaker 1: the right who've said, hey, you know, you heard jd.

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Speaker 1: Vance say that Europe has been a bit free. I

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Speaker 1: think he'd referred to him as freeloaders at one point

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Speaker 1: when it came to American security. And the fact is,

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Speaker 1: if you know, this is not you know, I think

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Speaker 1: what Trump's been a wake up call to Europe, right,

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Speaker 1: which is the assumption that America was always going to

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Speaker 1: be there. You never know which way America could turn,

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Speaker 1: and suddenly now the instability of the partnership with America

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Speaker 1: has forced Europe to to rethink how it conducts its alliances,

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Speaker 1: rethink its continent security. And in that sense, if you're

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Speaker 1: you know, if you're on the right of center and

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Speaker 1: and wanted the US to have a smaller footprint when

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Speaker 1: it came to our national security, our commitments, then this

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Speaker 1: is a victory. Because it's Europe that's taking the lead

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Speaker 1: on defending Zelenski. It'll be a European I'm trying to

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Speaker 1: figure out, you know, how the Russians view you know

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Speaker 1: he you know, Putin's red line is no NATO troops

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Speaker 1: in Ukraine to providing security. But if it's a collection

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Speaker 1: of European troops, what's the difference if and if all

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Speaker 1: those European countries are members of NATO. Is that is

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Speaker 1: that a distinct different distinction without a difference or is

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Speaker 1: that just enough to play Kate Putin?

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Speaker 2: Right?

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Speaker 1: I think that's going to be an important, an important moment,

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Speaker 1: There's no doubt there's Look, politically, you're not gonna be

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Speaker 1: able to sell in this country putting American troops in Ukraine. Okay,

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Speaker 1: So this is not that that is off the table.

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Speaker 1: I'm not sure there would be bipartisan support for that,

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Speaker 1: to be honest. There is definitely an exult austion from

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Speaker 1: American national security commitment still when it comes to Iraq

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Speaker 1: and Afghanistan. So I don't think that there would be

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Speaker 1: the political will in this country for that. The question

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Speaker 1: is if it's an alliance of European countries that are

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Speaker 1: providing it, you know those you know, how to me,

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Speaker 1: NATO and European countries are kind of one, and the

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Speaker 1: same thing is that the way Putin is going to

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Speaker 1: see it, which sometimes he chooses to see it that

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Speaker 1: way and sometimes he doesn't.

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Speaker 2: So I think that's an important sticking point.

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Speaker 1: But I want to get at one aspect to this

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Speaker 1: that is still which to me and perhaps it's why

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Speaker 1: Trump is still gettable by the West here for them

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Speaker 1: to take their side. First of all, I think it

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Speaker 1: is pretty clear that unlike most issues, there really is

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Speaker 1: multiple points of view inside the West wing in Trump's

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Speaker 1: here that unlike many other issues, there's a healthy debate

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Speaker 1: internally about Ukraine that see Putin and Russia much more

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Speaker 1: as a threat to the West than others see Putin

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Speaker 1: and Russia.

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Speaker 2: So I think the.

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Speaker 1: Fact that there's that spirited debate inside the West wing

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Speaker 1: and that Trump seems to vacillate a little bit.

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Speaker 2: Is why we have.

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Speaker 1: This sort of weird sort of takeaways from this last

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Speaker 1: ninety six hours, right, which I do think, and I

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Speaker 1: think there's part of the more Europe flatters Trump. It

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Speaker 1: clearly works right, just like it's worked for Putin. The

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Speaker 1: Europeans have figured this out. Trump just wants respect, right.

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Speaker 1: He may not have earned the respect, but he wants people.

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Speaker 1: I was saying this before. He's in some ways desperate

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Speaker 1: for it, right. It goes back to his complex about

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Speaker 1: you know, being an outer Borough kid trying to make

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Speaker 1: it in Manhattan. He's you know, at the end of

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Speaker 1: the day, he's been wanting to be respected by the

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Speaker 1: New York Times, respected by the elites. The less they

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Speaker 1: give him respect, the angry or he gets, and the

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Speaker 1: more it goes against the elites. But even as he

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Speaker 1: goes against the elites and he tries to build his no,

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Speaker 1: you know, if he's paid, you know, he.

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Speaker 2: Still wants the elite awards. Right.

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Speaker 1: If he doesn't actually care about the elites, why does

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Speaker 1: he want to Nobel Peace Prize?

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Speaker 2: Right?

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Speaker 1: But in some ways it's he still craves it, right,

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Speaker 1: And I think that that the Europeans have finally figured

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Speaker 1: this out and are placating him in ways that you

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Speaker 1: look at it and you may just shake your head

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Speaker 1: kind of laugh that this kind of stuff works. But

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Speaker 1: it does get me at one point, and a huge

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Speaker 1: miscalculation by Putin. You know, I do think that Putin

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Speaker 1: really has very low regard for Trump and thinks Trump

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Speaker 1: is really easy to manipulate. Why do I say this

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Speaker 1: because he's given Trump nothing and and you know, he

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Speaker 1: pays him lip service. Right, he tells Trump what he

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Speaker 1: wants to hear about mail in voting. You know what

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Speaker 1: Trump wants to hear about whether the war would have

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Speaker 1: started if Trump been president or not. But he never

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Speaker 1: actually gives Trump a win that Trump is asking for. Right,

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Speaker 1: the fact that Putin couldn't even give him a one

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Speaker 1: week cease fire, couldn't even give him a ceasefire during

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Speaker 1: the time that they were meeting in Alaska, couldn't give

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Speaker 1: him a ceasefire just for the seventy two hours that

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Speaker 1: he was playing Shuttle diplomacy between Putin and Zelenski, that is,

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Speaker 1: that is total disrespect by Putin, right, It totally should

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Speaker 1: undermine the idea that Putin wouldn't have launched this invasion

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Speaker 1: of Ukraine and Trump had been president if he respected

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Speaker 1: Trump so much? Why is any Why can't even give

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Speaker 1: him a temporary ceasefire? And I think Putin thinks he

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Speaker 1: can just pay lip service and not actually have to

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Speaker 1: match the lip service with an action. I think he's miscalculating.

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Speaker 1: I think this is success. I think over time Trump,

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Speaker 1: you know, he has said it a few times. I

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Speaker 1: think Putin's tappened me along. I remember he said that

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Speaker 1: at one point, and the fact that you know, this

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Speaker 1: is where Putin's never going to have. You know, maybe

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Speaker 1: he has ambition that he's going to have an even

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Speaker 1: more pro Russian, more pro Putin president after Trump. I

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Speaker 1: don't know who that would be, but maybe he somehow

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Speaker 1: fantasizes about that. But I think it's safe to say

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Speaker 1: this is going to be the most friendly leader that

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Speaker 1: he's ever going to have in the United States.

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Speaker 2: So to not.

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Speaker 1: To not enhance his reputation at a time when he's

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Speaker 1: desperate to enhance it, not to help him get his

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Speaker 1: seaes Fire, get his Peace Prize, give him more credibility

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Speaker 1: with the West, with the guy that you have influenced,

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Speaker 1: really seems to be a mistake on Putin's part, and

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Speaker 1: I think it's shorted. I think it tells me how

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Speaker 1: myopic Putin is, how sheltered Putin is, how much he

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Speaker 1: doesn't quite see the world very well, and the miscalculations

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Speaker 1: he's making on this right, he thought he was going

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Speaker 1: to roll over Ukraine. I mean, he is not getting

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Speaker 1: very good intelligence. It's pretty if he was, he never

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Speaker 1: would have probably done the invasion in the first place.

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Speaker 1: They really thought this was going to be quick and easy,

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Speaker 1: and they were wrong. And they continue to be wrong

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Speaker 1: on some of the military capabilities of Ukraine. They continue

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Speaker 1: to be wrong about the ability to divide Europe from

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Speaker 1: the United States or to divide Europe amongst itself. And

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Speaker 1: so I think he's done it again, and he had

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Speaker 1: an opportunity to give Trump more leverage.

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Speaker 2: Trump has more leverage over him than he refuses to choose. Right.

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Speaker 1: I mean to me, it's a simple way to get

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Speaker 1: him to get Putin here, just say, look, come out

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Speaker 1: and say, you know, the more I think about it,

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Speaker 1: I'm going to put Ukraine in NATO because I don't

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Speaker 1: ever want to see another war again. It's pretty clear

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Speaker 1: Putin won't touch a country that's a member of NATO.

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Speaker 1: And see how fast Putin might suddenly retreat and talk

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Speaker 1: about a ceasefire. But he's never used that leverage, right,

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Speaker 1: Trump has not used the leverage that I think he has.

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Speaker 1: But the same goes for Putin has an opportunity here

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Speaker 1: to essentially give a few wins to Trump that would

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Speaker 1: enhance his reputation, and only while still preserving that personal

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Speaker 1: relationship he has with him. So again, you know a

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Speaker 1: lot of times I really want to be just passionate

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Speaker 1: and looking at these things and just sort of like saying, hey,

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Speaker 1: wait a minute, forget what you think is the right

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Speaker 1: thing to do. Try to figure out why ISN'TY doing this?

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Speaker 1: And this is a bit of a mystery to me,

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Speaker 1: but I think it has to do with he's getting

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Speaker 1: bad information, he's getting bad intelligence, or he thinks that

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Speaker 1: little of Trump, that Trump has been so easy to

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Speaker 1: manipulate with words, that he doesn't have to bother with

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Speaker 1: an action or two to give to give Trump a

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Speaker 1: win or two that would ironically strengthen him. It's in,

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Speaker 1: which of course would be, but that would be long

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Speaker 1: term thing, and normally Putin's usually thinking long term. He

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Speaker 1: really is miscalculating this one, and I think does leave

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Speaker 1: it up for grabs, and you know it. I think

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Speaker 1: the more you look at Putin's actions, you realize he

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Speaker 1: is nothing but a thug who wants to take over

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Speaker 1: a sovereign nation, and there's only one person that can

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Speaker 1: stop the killing. It's him, right, Ukraine could put down

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Speaker 1: arms tomorrow, and he's not going to stop the killing

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Speaker 1: until he gets that country, so it is on him,

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Speaker 1: and so it's a I think we need to ask

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Speaker 1: ourselves that question. And there's certainly a question that I'd

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Speaker 1: love to get more clarity from our Intel community, but

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Speaker 1: I'm not sure how public any of that can be

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Speaker 1: because it's so sensitive when it comes to dealing.

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Speaker 2: With Donald Trump.

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Speaker 1: Right, But why is Putin sort of not giving Trump

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Speaker 1: a little something here because it would actually help him

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Speaker 1: both of them in the long term, which you would think, Again,

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Speaker 1: I go back, Putin's never going to have a president

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Speaker 1: who's this let's just say, supportive, probably in one hundred years,

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Speaker 1: and if not even more maybe ever. So it is

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Speaker 1: this is where I think Putin is making some strategic

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Speaker 1: mistakes here, because he's now unified Europe in a way

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Speaker 1: that Europe wasn't unified before the invasion. Right, it continues.

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Speaker 1: He may have successfully, you know, cracked the American partnership

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Speaker 1: with Europe thanks to Donald Trump, but in doing so,

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Speaker 1: he's united Europe in a way that the US could

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Speaker 1: have only dreamed about ten years ago.

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Speaker 2: All Right.

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Speaker 1: That takes me to my substat column this week, and

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Speaker 1: it is in some ways it's more of the longer

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Speaker 1: term exercise that that I've been using this podcast for

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Speaker 1: and using my substack for, which is simply trying to

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Speaker 1: explain how he got here and trying to offer up

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Speaker 1: idea is to get us out.

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Speaker 2: Of this mess? Right? What do I mean? Right?

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Speaker 1: Well, let me put it this way. If there's a

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Speaker 1: through line in the way I've been analyzing politics lately,

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Speaker 1: it's this how we got here and how we get out?

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Speaker 1: And what do I mean by here? I mean the

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Speaker 1: politics of division, the politics where we emphasize what separates us,

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Speaker 1: not what we share, Where every identity slice gets thinner,

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Speaker 1: every disagreement gets sharper, and the incentive structure rewards conflict

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Speaker 1: over consensus. It's not a new thought for me. You've

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Speaker 1: heard me talk about this before, so I'm not naive.

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Speaker 1: Politics has always had conflict, that's not the point, But

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Speaker 1: it hasn't always been this polarized, this performative, this locked

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Speaker 1: into division as the strategy itself. So today I want

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Speaker 1: to walk you through two moments, two sort of forks

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Speaker 1: in the road, if you will, that I think actually

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Speaker 1: go a long way in explaining how we ended up here,

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Speaker 1: and perhaps it actually by figuring out how we got

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Speaker 1: here it's perhaps a path for a better politics than

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Speaker 1: frankly for a potential future president to take advantage of.

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Speaker 1: So here's FOURK one. It was two thousand and four

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Speaker 1: in the age of micro targeting. Before two thousand and four,

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Speaker 1: campaigns treated undecided voters as moderates centrist types, vacillating between

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Speaker 1: the two parties. That's why the closing TV ads of

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Speaker 1: your Youth used to sound so bipartisan. Democrats would brag

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Speaker 1: about working with Republicans, Republicans like John McCain or Republicans

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Speaker 1: like you know, jib Bush or something like that. Republicans

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Speaker 1: would point out deals that they cut with Democrats, Democrats

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Speaker 1: like Ted Kennedy. You know, you'd pick the most you know,

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Speaker 1: even the most ideological candidates in their final ads wanted

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Speaker 1: to look like they knew how to be consensus builders.

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Speaker 2: Right.

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Speaker 1: You know, why did we find out about orn Hatch

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Speaker 1: and Ted Kennedy Because the oarrn Hatch wanted it, brag

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Speaker 1: about it.

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Speaker 2: He thought it was good politics for him.

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Speaker 1: By the way, Kennedy thought it was good politics for

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Speaker 1: him to brag about his relationship with orn Hatch. Because

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Speaker 1: the belief was simple. Undecideds were wouable if you could

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Speaker 1: sound more consensus oriented than the other guy. But two

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Speaker 1: thousand and four changed that. Karl Rove and the Bush

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Speaker 1: reelection campaign team pioneered what we called what we called

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Speaker 1: then and what we still kind of call micro targeting.

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Speaker 1: They built detailed voter files that told them exactly what

436
00:24:17,520 --> 00:24:21,360
Speaker 1: church you went to, what magazines you subscribed to, Yes, magazines, now,

437
00:24:21,359 --> 00:24:26,199
Speaker 1: of course it would be what subscriptions you have on

438
00:24:26,240 --> 00:24:30,040
Speaker 1: the internet. But stay with me here, what causes you supported?

439
00:24:30,040 --> 00:24:33,600
Speaker 1: And suddenly campaigns didn't have to guess about undecided They

440
00:24:33,600 --> 00:24:37,320
Speaker 1: actually knew who they were. And the big discovery the

441
00:24:37,359 --> 00:24:41,840
Speaker 1: undecideds weren't centrist, not at all. They were independent, but

442
00:24:41,880 --> 00:24:44,480
Speaker 1: they were independents who didn't fit neatly into either party.

443
00:24:45,560 --> 00:24:48,840
Speaker 1: But they had strong views on certain issues right, which

444
00:24:48,920 --> 00:24:51,320
Speaker 1: kept them from being in one party or the other.

445
00:24:52,640 --> 00:24:55,240
Speaker 1: But if you hit those pressure points, if you told

446
00:24:55,280 --> 00:24:57,560
Speaker 1: them you agreed with them on that one issue, you

447
00:24:57,560 --> 00:25:02,120
Speaker 1: could win them over. You might find an independent who

448
00:25:02,200 --> 00:25:06,520
Speaker 1: was an economic populist but cared about gun ownership, or

449
00:25:06,560 --> 00:25:10,160
Speaker 1: you might find a fiscal conservative that cared about planned parenthood.

450
00:25:10,240 --> 00:25:11,640
Speaker 2: You see where I'm going here, right.

451
00:25:11,960 --> 00:25:14,520
Speaker 1: So the strategy flipped instead of we're all in this together.

452
00:25:15,240 --> 00:25:19,240
Speaker 1: A kind of campaigning started, sending surgical messages to activate

453
00:25:19,280 --> 00:25:22,200
Speaker 1: one slice at a time. The Obama two thousand and

454
00:25:22,240 --> 00:25:24,320
Speaker 1: eight campaign, in some ways took this to another level

455
00:25:24,400 --> 00:25:28,159
Speaker 1: with digital tools, and yeah, Obama wrapped it up in

456
00:25:28,200 --> 00:25:31,800
Speaker 1: some unity rhetoric. No red states, no blue state, and

457
00:25:31,840 --> 00:25:34,080
Speaker 1: in fact that might explain why he's the only twenty

458
00:25:34,080 --> 00:25:36,920
Speaker 1: first century presidential candidate to win by more than five

459
00:25:36,920 --> 00:25:41,200
Speaker 1: percentage points, right, essentially to have a decisive victory an

460
00:25:41,240 --> 00:25:45,200
Speaker 1: actual popular vote mandate. But by twenty twelve, and certainly

461
00:25:45,200 --> 00:25:49,560
Speaker 1: by twenty sixteen, there was no attempt at a unity messaging.

462
00:25:49,720 --> 00:25:49,920
Speaker 2: Right.

463
00:25:49,920 --> 00:25:52,720
Speaker 1: It was all about slicing and dicing. That was the

464
00:25:52,760 --> 00:25:56,000
Speaker 1: whole ballgame. And then, of course came the big accelerant

465
00:25:56,080 --> 00:25:59,680
Speaker 1: social media. Right, this all seemed to fit together. Facebook

466
00:26:00,680 --> 00:26:03,280
Speaker 1: were built on the same logic as micro targeting.

467
00:26:03,760 --> 00:26:04,080
Speaker 2: Right.

468
00:26:04,200 --> 00:26:06,159
Speaker 1: They came up, by the way, they start up just

469
00:26:06,240 --> 00:26:08,560
Speaker 1: after the micro targeting boom of campaigns and.

470
00:26:08,680 --> 00:26:10,560
Speaker 2: Four both of those entities.

471
00:26:10,640 --> 00:26:14,440
Speaker 1: Right, So it was narrow casting engagement, slicing people into categories.

472
00:26:14,680 --> 00:26:18,680
Speaker 1: Campaign ads fit perfectly into that system. Division onesn't just

473
00:26:18,720 --> 00:26:22,919
Speaker 1: a campaign tactic anymore. It became a business model. And

474
00:26:22,960 --> 00:26:26,520
Speaker 1: the uncomfortable truth is this, our politics were less divisive

475
00:26:26,520 --> 00:26:30,960
Speaker 1: when campaigns actually knew less about us, about voters, once

476
00:26:31,040 --> 00:26:35,119
Speaker 1: campaigns and these tech platforms started seeing us as fragments,

477
00:26:35,200 --> 00:26:38,760
Speaker 1: learning about us and fragmented pieces. If you will, well,

478
00:26:38,800 --> 00:26:42,200
Speaker 1: they treated us like fragments. And when all you see

479
00:26:42,240 --> 00:26:45,760
Speaker 1: are things that divide you, then it's division that becomes

480
00:26:45,800 --> 00:26:48,080
Speaker 1: your identity. And that takes me to the second fork

481
00:26:48,119 --> 00:26:51,480
Speaker 1: in the road. And that was the total complete misinterpretation

482
00:26:51,560 --> 00:26:54,880
Speaker 1: of the twenty twelve election that I think is one

483
00:26:54,880 --> 00:26:57,959
Speaker 1: of the original sins. If you will, to borrow a phrase,

484
00:26:59,280 --> 00:27:02,679
Speaker 1: Barack Obama, this reelection should have been much harder. The

485
00:27:02,800 --> 00:27:06,760
Speaker 1: economy was sluggish, unemployment was high. History said he was

486
00:27:06,840 --> 00:27:09,520
Speaker 1: more likely to lose than win because of that high unemployment.

487
00:27:09,600 --> 00:27:13,320
Speaker 1: But he didn't why well, he reframed the question. It

488
00:27:13,359 --> 00:27:15,040
Speaker 1: wasn't are you better off now than you were four

489
00:27:15,080 --> 00:27:17,880
Speaker 1: years ago? Considering he took over during the Great Recession?

490
00:27:17,960 --> 00:27:20,560
Speaker 1: That was never going to be a good way to

491
00:27:20,880 --> 00:27:24,920
Speaker 1: talk to voters. Instead, he asked, will you be better

492
00:27:24,960 --> 00:27:27,120
Speaker 1: off four years from now? And then he cast met

493
00:27:27,160 --> 00:27:30,280
Speaker 1: Romney as the wrong answer, the out of touch boss

494
00:27:30,280 --> 00:27:32,960
Speaker 1: who wasn't on your side. One of the best examples

495
00:27:32,960 --> 00:27:35,200
Speaker 1: of this strategy came on Saturdays in the fall of

496
00:27:35,600 --> 00:27:38,679
Speaker 1: twenty twelve. The Obama campaign bought up airtime on the

497
00:27:38,680 --> 00:27:41,560
Speaker 1: Big ten network, something campaigns hadn't done before at the time,

498
00:27:42,000 --> 00:27:45,359
Speaker 1: college football Saturdays, and they hammered Romney as a job

499
00:27:45,480 --> 00:27:49,640
Speaker 1: outsourcered at China. These ad barely even mentioned Obama by name,

500
00:27:49,680 --> 00:27:51,880
Speaker 1: basically just the Barack Obama.

501
00:27:51,520 --> 00:27:53,080
Speaker 2: And I paid for this. That was it.

502
00:27:53,800 --> 00:27:56,959
Speaker 1: The entire thing was aimed squarely at working class voters

503
00:27:57,119 --> 00:28:02,639
Speaker 1: in Ohio, Iowa, Wisconsin, Pennsylvania, Michigan, all five stays Obama

504
00:28:02,680 --> 00:28:05,320
Speaker 1: would carry in twenty twelve, by the way, and of

505
00:28:05,320 --> 00:28:07,520
Speaker 1: course these are the very states that that working class

506
00:28:07,560 --> 00:28:11,040
Speaker 1: coalition became the heart of Trump's mega coalition. But at

507
00:28:11,040 --> 00:28:14,360
Speaker 1: its core, what Obama was appealing to was class, not identity.

508
00:28:14,840 --> 00:28:17,720
Speaker 1: Obama won those voters by convincing them Romney didn't understand

509
00:28:17,720 --> 00:28:21,240
Speaker 1: their lives, he was out of touch, He didn't get them.

510
00:28:21,960 --> 00:28:25,919
Speaker 1: I'm with you, he's not right. Ultimately, I've always believed

511
00:28:25,960 --> 00:28:29,000
Speaker 1: that's the most important question. You know, who's with you?

512
00:28:29,320 --> 00:28:32,320
Speaker 1: Who do you think's with you? But it's not the Lesson,

513
00:28:32,359 --> 00:28:35,280
Speaker 1: Democrats absorbed from that victory in twenty twelve. Instead, they

514
00:28:35,280 --> 00:28:38,800
Speaker 1: convinced themselves Obama had won because of demographics, because of

515
00:28:38,840 --> 00:28:41,760
Speaker 1: the so called coalition of the ascendant black voters, Latino voters,

516
00:28:41,800 --> 00:28:47,560
Speaker 1: young people's, single women. They believe demographics were destiny. Ironically,

517
00:28:47,600 --> 00:28:52,360
Speaker 1: Republicans at the time, pre Trump Republicans drew the same conclusion,

518
00:28:52,520 --> 00:28:55,920
Speaker 1: just in reverse. They're twenty thirteen Autopsy said they needed

519
00:28:55,920 --> 00:28:59,160
Speaker 1: to reach out to minority voters because identity was going

520
00:28:59,200 --> 00:29:05,080
Speaker 1: to dominate future politics. Right, both parties embraced this what

521
00:29:05,200 --> 00:29:08,240
Speaker 1: now looks like faulty conventional wisdom about what happened in

522
00:29:08,240 --> 00:29:12,040
Speaker 1: twenty twelve. But what if that was the wrong lesson?

523
00:29:12,120 --> 00:29:14,360
Speaker 1: I think it was. What if the real reason Obama

524
00:29:14,400 --> 00:29:17,760
Speaker 1: won was class? What if the decisive blow was Romney's

525
00:29:17,800 --> 00:29:23,240
Speaker 1: forty seven percent remark. If that's true, then Democrats spent

526
00:29:23,280 --> 00:29:26,920
Speaker 1: the last decade chasing Lerong's strategy, doubling down on identity

527
00:29:27,000 --> 00:29:31,720
Speaker 1: politics just as class was reasserting itself. Clinton leaned into

528
00:29:31,720 --> 00:29:35,000
Speaker 1: the first woman president in twenty sixteen, break shattering the

529
00:29:35,000 --> 00:29:37,920
Speaker 1: glass ceiling. While Trump talked about forgotten men and women,

530
00:29:38,680 --> 00:29:40,720
Speaker 1: Biden tried to reclean some of the class frame in

531
00:29:40,760 --> 00:29:44,200
Speaker 1: twenty twenty, but the party still treated identity as its foundation.

532
00:29:44,360 --> 00:29:47,600
Speaker 1: Hence the promises he made about VP and about the

533
00:29:47,640 --> 00:29:52,080
Speaker 1: Spring Court, those were identity promises, not class promises. By

534
00:29:52,080 --> 00:29:54,560
Speaker 1: twenty twenty four, that coalition of the ascendant theory was

535
00:29:54,640 --> 00:29:58,240
Speaker 1: exhausted and clearly not big enough to win in the

536
00:29:58,280 --> 00:30:02,360
Speaker 1: irony here. Trump's populism, as cynical as it is at times,

537
00:30:02,840 --> 00:30:06,280
Speaker 1: actually as more in common with Obama's twenty twelve message,

538
00:30:06,440 --> 00:30:09,520
Speaker 1: even mon Nail's appeals back in nineteen eighty four to

539
00:30:09,640 --> 00:30:15,840
Speaker 1: working class solidarity than with Reagan's or Bush's republicanism. And

540
00:30:15,880 --> 00:30:21,000
Speaker 1: that's the thing you cannot ever forget right. The real

541
00:30:21,000 --> 00:30:23,600
Speaker 1: divide of our era hasn't been race or cultural identity.

542
00:30:23,680 --> 00:30:27,000
Speaker 1: It's been class. Right, It's what drove us in the

543
00:30:27,080 --> 00:30:30,360
Speaker 1: twentieth century. So what are the consequences of basically these

544
00:30:30,360 --> 00:30:33,040
Speaker 1: two forks in the road. Put them together micro targeting

545
00:30:33,080 --> 00:30:36,720
Speaker 1: and the misreading of twenty twelve, and you get today's politics.

546
00:30:37,440 --> 00:30:40,400
Speaker 1: Campaigns that no longer practice the muscle of unity, parties

547
00:30:40,400 --> 00:30:45,400
Speaker 1: that organize themselves in identity silos. Social media amplifies it all,

548
00:30:46,200 --> 00:30:50,000
Speaker 1: and it creates a self reinforcing cycle. Campaigns fragment us

549
00:30:50,000 --> 00:30:54,800
Speaker 1: to win. Platforms reward division because division drives engagement. Voters

550
00:30:54,840 --> 00:30:59,080
Speaker 1: consume difference and sort themselves more deeply into tribes, focusing

551
00:30:59,120 --> 00:31:03,560
Speaker 1: on difference rather than on what unites us, and parties

552
00:31:03,600 --> 00:31:07,760
Speaker 1: double down on identity appeals, treating consensus as weakness. Right,

553
00:31:08,480 --> 00:31:12,200
Speaker 1: the result of politics that overvalues division at the expense

554
00:31:12,240 --> 00:31:15,200
Speaker 1: of coalition. You know, be careful when somebody says, well,

555
00:31:15,200 --> 00:31:17,760
Speaker 1: you got to stand for something. Well, the something can

556
00:31:17,840 --> 00:31:21,080
Speaker 1: be to bring the country together. That's not a bullshit something.

557
00:31:21,120 --> 00:31:23,600
Speaker 1: I think it's a good something. But it shows up

558
00:31:23,640 --> 00:31:26,680
Speaker 1: not just in campaigns, now shows up in governing. Politicians

559
00:31:26,680 --> 00:31:30,000
Speaker 1: who win by scraping fifty percent plus one feel no obligation.

560
00:31:29,600 --> 00:31:30,800
Speaker 2: To reach beyond that slice.

561
00:31:31,160 --> 00:31:34,840
Speaker 1: Just look at how partisan lely both Greg Abbott and

562
00:31:34,880 --> 00:31:36,960
Speaker 1: Rond De Santis govern the state of Texas. They do

563
00:31:37,040 --> 00:31:39,160
Speaker 1: not govern the state of Texas as a whole or

564
00:31:39,200 --> 00:31:41,400
Speaker 1: the state of Florida as a whole. They only govern

565
00:31:41,680 --> 00:31:42,440
Speaker 1: the red parts.

566
00:31:43,360 --> 00:31:43,520
Speaker 2: Right.

567
00:31:43,600 --> 00:31:46,640
Speaker 1: They almost go to war with the blue cities if

568
00:31:46,680 --> 00:31:50,600
Speaker 1: they can. They think that's good politics. But here's the irony.

569
00:31:51,760 --> 00:31:54,080
Speaker 1: America's strength has always been the opposite. We're not an

570
00:31:54,120 --> 00:31:58,360
Speaker 1: ethnic nation, we're not a religious nation. We're a collection

571
00:31:58,440 --> 00:32:03,840
Speaker 1: of people from everywhere are bound by an idea, and

572
00:32:03,920 --> 00:32:08,080
Speaker 1: at our best moments, our politics reflects that. And here's

573
00:32:08,080 --> 00:32:10,680
Speaker 1: where I want to leave you. It's worth remembering the

574
00:32:10,680 --> 00:32:15,440
Speaker 1: public does respond to unity messages if they're delivered authentically right.

575
00:32:15,520 --> 00:32:18,440
Speaker 1: Think back to Reagan's nineteen eighty four Morning in America ad.

576
00:32:18,800 --> 00:32:21,600
Speaker 1: That wasn't a micro targeted message. It was a broad

577
00:32:21,600 --> 00:32:25,560
Speaker 1: appeal to shared optimism, and it worked across party lines.

578
00:32:26,160 --> 00:32:30,440
Speaker 1: Obama's twenty oh four keynote address really resonated. There is

579
00:32:30,440 --> 00:32:33,280
Speaker 1: not a liberal America and a conservative America. There is

580
00:32:33,280 --> 00:32:37,880
Speaker 1: the United States of America. Speech launched them nationally because

581
00:32:37,880 --> 00:32:42,000
Speaker 1: people wanted to believe that messaging. The lesson isn't that

582
00:32:42,120 --> 00:32:44,880
Speaker 1: unity is easy or that division will disappear. The lesson

583
00:32:44,920 --> 00:32:47,360
Speaker 1: is that politicians still have a choice. You can be

584
00:32:47,440 --> 00:32:51,160
Speaker 1: a fifty percent plus one leader and lead by division

585
00:32:51,760 --> 00:32:55,240
Speaker 1: and survive politically by division. It's a way to win,

586
00:32:55,760 --> 00:32:57,640
Speaker 1: it's a way to stay in office. It's not a

587
00:32:57,640 --> 00:32:59,720
Speaker 1: way to be in the history books. Or you can

588
00:32:59,760 --> 00:33:03,720
Speaker 1: claim to be a sixty percent consensus leader. One is

589
00:33:03,840 --> 00:33:08,480
Speaker 1: arithmetic the other is nation building. We haven't had a

590
00:33:08,560 --> 00:33:14,280
Speaker 1: nation builder as president arguably since Obama this century, and you.

591
00:33:14,240 --> 00:33:15,400
Speaker 2: Know we haven't. You know.

592
00:33:15,800 --> 00:33:18,160
Speaker 1: The irony is that that that you know, and maybe

593
00:33:18,160 --> 00:33:20,479
Speaker 1: that was the Cold War mentality that made us think

594
00:33:20,560 --> 00:33:23,440
Speaker 1: we needed to think this one because Reagan and Clinton

595
00:33:23,480 --> 00:33:27,239
Speaker 1: in many ways shared very similar rhetoric, even as they

596
00:33:27,240 --> 00:33:30,280
Speaker 1: were of two different political parties. Because that was the

597
00:33:30,280 --> 00:33:34,080
Speaker 1: twentieth century rewarded leaders who spoke to the whole. The

598
00:33:34,120 --> 00:33:36,400
Speaker 1: twenty first century so far as rewarded those who narrow

599
00:33:36,440 --> 00:33:40,200
Speaker 1: cast to the part, but pendulum swing and when the

600
00:33:40,240 --> 00:33:43,480
Speaker 1: next leader comes along, who can authentically summon the politics

601
00:33:43,480 --> 00:33:47,280
Speaker 1: of unity, not just say the words, but actually do it. Indeed,

602
00:33:48,080 --> 00:33:51,000
Speaker 1: we're going to rediscover something important. Americans still want to

603
00:33:51,000 --> 00:33:54,800
Speaker 1: hear this, they still want to believe this, and most importantly,

604
00:33:55,280 --> 00:33:57,000
Speaker 1: I think they want to see us govern that way.

605
00:33:57,560 --> 00:33:59,480
Speaker 2: So with that, we'll sneak in a break.

606
00:33:59,520 --> 00:34:02,480
Speaker 1: For those of you listening with the entire podcast as

607
00:34:02,520 --> 00:34:05,520
Speaker 1: a whole, I'm telling you this Mark Xandy conversation. I

608
00:34:05,600 --> 00:34:09,279
Speaker 1: find Zandy to be a you know, he just he

609
00:34:09,360 --> 00:34:11,520
Speaker 1: lets the data do the talking. You'll hear it in

610
00:34:11,520 --> 00:34:15,920
Speaker 1: our conversation. But bottom line, he's really nervous about the

611
00:34:15,920 --> 00:34:19,239
Speaker 1: current state of the economy, and I think we both

612
00:34:19,280 --> 00:34:21,400
Speaker 1: are collectively nervous about where this is going to be

613
00:34:21,440 --> 00:34:23,960
Speaker 1: in the spring of twenty twenty six. Politically, why does

614
00:34:23,960 --> 00:34:28,600
Speaker 1: that matter, because what the state of the economy is

615
00:34:28,640 --> 00:34:31,000
Speaker 1: in twenty twenty in the spring of twenty twenty.

616
00:34:30,719 --> 00:34:33,120
Speaker 2: Six is what voters will feel.

617
00:34:33,280 --> 00:34:36,560
Speaker 1: The economy being like when they vote in November of

618
00:34:36,600 --> 00:34:37,359
Speaker 1: twenty twenty six.

619
00:34:37,400 --> 00:34:38,760
Speaker 2: So with that a little Mark.

620
00:34:38,680 --> 00:34:53,560
Speaker 3: Zany joining me now is the cheap economist for Moody's analytics.

621
00:34:53,600 --> 00:34:55,400
Speaker 2: It is Mark Zandy.

622
00:34:55,480 --> 00:34:57,960
Speaker 1: He is a return guest and as many people who

623
00:34:58,000 --> 00:35:00,359
Speaker 1: follow me know, and is somebody I think is as

624
00:35:00,360 --> 00:35:04,560
Speaker 1: good as anybody in this sort of like data driven analysis.

625
00:35:04,640 --> 00:35:08,120
Speaker 1: It's not you know, he tells you what is not

626
00:35:08,160 --> 00:35:11,680
Speaker 1: what he wishes and so here we are market to

627
00:35:11,680 --> 00:35:11,960
Speaker 1: see you.

628
00:35:12,280 --> 00:35:15,000
Speaker 2: Yeah, Chuck, it's good to be on. We were just chatting.

629
00:35:15,000 --> 00:35:17,520
Speaker 2: I was when was When was I on? Was April?

630
00:35:17,560 --> 00:35:19,719
Speaker 1: It was early was April and April Yeah, so it

631
00:35:19,760 --> 00:35:21,960
Speaker 1: was just after Liberation Day, but about a week or

632
00:35:22,000 --> 00:35:25,680
Speaker 1: so after Liberation Day, and we were talking about well,

633
00:35:25,840 --> 00:35:28,920
Speaker 1: the delayed impact, when does it come and at the

634
00:35:28,920 --> 00:35:31,239
Speaker 1: time you said, probably the first signs are going to

635
00:35:31,320 --> 00:35:34,160
Speaker 1: be July. And well here we are in August, and

636
00:35:34,320 --> 00:35:38,399
Speaker 1: you tell me, it feels like we're seeing those signs, right.

637
00:35:38,520 --> 00:35:41,200
Speaker 1: It's like, oh, look at the Walmart prices there up

638
00:35:41,200 --> 00:35:43,680
Speaker 1: and look at you know, there are these little areas

639
00:35:43,719 --> 00:35:46,400
Speaker 1: where you starting to see the to see the impacts,

640
00:35:46,400 --> 00:35:50,560
Speaker 1: I mean fresh vegetables. That is something I think folks

641
00:35:50,840 --> 00:35:54,560
Speaker 1: didn't fully appreciate how badly that was.

642
00:35:54,520 --> 00:35:56,759
Speaker 2: Going to get impacted by these tariffs. Yeah, you can

643
00:35:56,800 --> 00:35:59,719
Speaker 2: see it in the data. You know. We got a

644
00:35:59,800 --> 00:36:04,680
Speaker 2: day that point for Producer Price Indicators at pp I

645
00:36:04,840 --> 00:36:08,320
Speaker 2: into cy pp producer price in Yes. Remind I always

646
00:36:08,360 --> 00:36:12,280
Speaker 2: say pp I never really spelled out what that is exactly.

647
00:36:12,320 --> 00:36:14,840
Speaker 1: I appreciate you trying because, as I always say, we

648
00:36:14,880 --> 00:36:16,480
Speaker 1: want to speak American on this PODCA.

649
00:36:16,520 --> 00:36:19,680
Speaker 2: Yeah, yeah, yeah, PPI. That's what the prices that businesses

650
00:36:19,760 --> 00:36:22,839
Speaker 2: charge each other right before it gets to consumers. It's

651
00:36:23,080 --> 00:36:26,920
Speaker 2: kind of a leading indicator for consumer prices, the prices

652
00:36:26,920 --> 00:36:29,120
Speaker 2: we pay you and I when we go into the store.

653
00:36:29,560 --> 00:36:33,680
Speaker 2: And they jumped in July by a lot, you know,

654
00:36:33,800 --> 00:36:36,880
Speaker 2: so it's coming. And even in the Consumer Price Index

655
00:36:36,960 --> 00:36:39,680
Speaker 2: a CPI, the one that we all kind of know

656
00:36:39,840 --> 00:36:42,000
Speaker 2: and love. You can you can see it, you can

657
00:36:42,040 --> 00:36:43,680
Speaker 2: feel it. I don't know that. You know, if you

658
00:36:43,719 --> 00:36:47,239
Speaker 2: ask Americans can you feel the tariffs, that they would say, yeah,

659
00:36:47,239 --> 00:36:48,800
Speaker 2: I feel, I feel but you see it in the

660
00:36:48,880 --> 00:36:52,279
Speaker 2: data and all the direction of travel here suggests there

661
00:36:52,520 --> 00:36:54,360
Speaker 2: this is going to continue to be the case. And

662
00:36:54,400 --> 00:36:57,160
Speaker 2: I think, you know, if you invite me back in two, three,

663
00:36:57,200 --> 00:36:59,960
Speaker 2: four months, so we'll be able to say definitively Americans

664
00:37:00,040 --> 00:37:00,640
Speaker 2: are feeling it.

665
00:37:01,760 --> 00:37:03,279
Speaker 1: You know, there's been a lot of coverage over the

666
00:37:03,360 --> 00:37:06,160
Speaker 1: last three or four weeks about how, hey, the predictions

667
00:37:06,160 --> 00:37:08,760
Speaker 1: of doom and gloom on the tariffs haven't come to fruition.

668
00:37:09,680 --> 00:37:12,560
Speaker 1: And I'm thinking, why are you writing this story now?

669
00:37:12,719 --> 00:37:16,040
Speaker 1: It's too early to write this story, is it?

670
00:37:16,840 --> 00:37:17,160
Speaker 2: Or?

671
00:37:17,640 --> 00:37:22,640
Speaker 1: Or are you or is it surprising that the hit

672
00:37:22,760 --> 00:37:23,640
Speaker 1: isn't harder yet?

673
00:37:24,680 --> 00:37:28,000
Speaker 2: It's pretty much descript you know. You know, I never

674
00:37:28,080 --> 00:37:32,240
Speaker 2: thought that the tariffs and other policies that are being pursued,

675
00:37:32,400 --> 00:37:34,600
Speaker 2: like immigration policy, would be a cliff of what I

676
00:37:34,719 --> 00:37:36,399
Speaker 2: call a cliff event, you know, let me go off

677
00:37:36,400 --> 00:37:39,400
Speaker 2: a cliff. That's that's you know, immediate recession. I always

678
00:37:39,400 --> 00:37:41,800
Speaker 2: thought it was more of a corrosive on the economy.

679
00:37:42,239 --> 00:37:45,080
Speaker 2: But you know, when the economy is under such pressure

680
00:37:45,120 --> 00:37:47,799
Speaker 2: and it is, it is vulnerable to anything else that

681
00:37:47,840 --> 00:37:50,120
Speaker 2: could go wrong, and thus recession risks, in my mind,

682
00:37:50,160 --> 00:37:53,240
Speaker 2: are very high. But no, it's I think it's stuck

683
00:37:53,239 --> 00:37:55,080
Speaker 2: pretty much descript. Now. There are a few things that

684
00:37:55,120 --> 00:37:58,040
Speaker 2: have slowed down the pass through the terrorists to consumers.

685
00:37:58,560 --> 00:38:01,880
Speaker 2: You know, all the so called front loading that went on,

686
00:38:02,000 --> 00:38:05,759
Speaker 2: you know, inventory front loading. Yeah, you know, Person Trump

687
00:38:05,880 --> 00:38:08,120
Speaker 2: is kind of telegraphed very strongly that he's going to

688
00:38:08,160 --> 00:38:10,920
Speaker 2: raise tariffs, and so importer has been working hard to

689
00:38:10,920 --> 00:38:13,400
Speaker 2: get product into the United States before the tariffs actually

690
00:38:13,440 --> 00:38:16,680
Speaker 2: are implemented. And we're still working down that inventory. So

691
00:38:17,000 --> 00:38:18,520
Speaker 2: it won't be until you get to the other side

692
00:38:18,520 --> 00:38:20,760
Speaker 2: of that that you start to see the real price increases.

693
00:38:21,160 --> 00:38:24,399
Speaker 1: You know, if you watch a TV ads, I think

694
00:38:24,440 --> 00:38:27,880
Speaker 1: it's for Kia, could Behyndi. It's one of the Takorean

695
00:38:27,960 --> 00:38:33,160
Speaker 1: car companies who brag they say in their advertising, you know,

696
00:38:33,239 --> 00:38:36,040
Speaker 1: we're not passing on the tariffs to you, And I'm thinking, yeah,

697
00:38:36,040 --> 00:38:39,520
Speaker 1: because you already brought these cars over before you had

698
00:38:39,520 --> 00:38:42,560
Speaker 1: to pay the tariffs. Probably is my guest, but I thought, well,

699
00:38:42,600 --> 00:38:45,120
Speaker 1: good for them for the marketing, because they know people

700
00:38:45,200 --> 00:38:47,440
Speaker 1: are thinking about those things when it comes to buyble.

701
00:38:47,480 --> 00:38:49,600
Speaker 2: Well, you know, they're in the political spotlight too, right,

702
00:38:51,000 --> 00:38:53,759
Speaker 2: there's a big shiny light on them, you know. I

703
00:38:53,840 --> 00:38:56,359
Speaker 2: think though, with the foreign producers, we'll start to see

704
00:38:56,440 --> 00:38:58,160
Speaker 2: more of the price increases with the shift over in

705
00:38:58,239 --> 00:39:01,080
Speaker 2: the model year. That's when so we're going to the

706
00:39:01,120 --> 00:39:03,720
Speaker 2: model year change is over and that's when they generally

707
00:39:03,719 --> 00:39:05,040
Speaker 2: put in price increases.

708
00:39:05,320 --> 00:39:08,399
Speaker 1: So we need to watch that very carefully. That's right

709
00:39:08,440 --> 00:39:09,680
Speaker 1: at the beginning of that process.

710
00:39:09,800 --> 00:39:11,839
Speaker 2: Right at the beginning, Yeah, generally, you know, it's kind

711
00:39:11,840 --> 00:39:15,600
Speaker 2: of August September, you know, right and there, so we'll see.

712
00:39:16,080 --> 00:39:19,440
Speaker 1: So are the conditions there for an interest rate cut

713
00:39:20,400 --> 00:39:23,680
Speaker 1: and is it a necessity or is this something that

714
00:39:26,480 --> 00:39:31,359
Speaker 1: it's probably being done with a little political pressure. Even

715
00:39:31,400 --> 00:39:34,120
Speaker 1: without the political pressure, probably is warranted.

716
00:39:34,120 --> 00:39:36,000
Speaker 2: I mean, the other aspect of the terrorists, when you

717
00:39:36,000 --> 00:39:39,560
Speaker 2: ask me, in my surprise, is gross and in there

718
00:39:39,719 --> 00:39:43,920
Speaker 2: the economy's growth rates have really slowed very sharply, in

719
00:39:44,000 --> 00:39:47,760
Speaker 2: a significant part due to the uncertainty creative by the Terrists,

720
00:39:47,760 --> 00:39:50,000
Speaker 2: but also the teriffs themselves. And you can see it

721
00:39:50,040 --> 00:39:52,960
Speaker 2: in the job market. The job market is really throttled back.

722
00:39:53,000 --> 00:39:56,640
Speaker 2: I mean, underlying monthly job growth is you know, twenty

723
00:39:56,719 --> 00:40:00,480
Speaker 2: thirty thousand jobs. I mean, that's nothing, and you're right

724
00:40:00,520 --> 00:40:02,200
Speaker 2: on the border of a negative number. And I think

725
00:40:02,239 --> 00:40:04,440
Speaker 2: we're going to get some negative numbers here. So if

726
00:40:04,440 --> 00:40:08,000
Speaker 2: you're at the FED and you're looking at that, you're saying, oh,

727
00:40:08,080 --> 00:40:10,839
Speaker 2: you know, I'm going to put more weight on what's

728
00:40:10,840 --> 00:40:13,719
Speaker 2: going on with respect to growth in the economy that

729
00:40:13,800 --> 00:40:17,480
Speaker 2: I'm on inflation. And then you put the political overlay

730
00:40:17,520 --> 00:40:19,759
Speaker 2: on top of that. Think about if we actually go

731
00:40:19,920 --> 00:40:23,640
Speaker 2: into recession, what will happen with regard to the fedor reserve.

732
00:40:23,680 --> 00:40:27,560
Speaker 2: There's a lot of, you know, obviously discussion about then independence.

733
00:40:27,840 --> 00:40:31,000
Speaker 2: There's some talk in Congress about a piece of legislation

734
00:40:31,840 --> 00:40:35,720
Speaker 2: to change the Federal Reserve active nineteen thirteen, which would

735
00:40:36,320 --> 00:40:40,120
Speaker 2: further impair the independence of the FED. So if you're

736
00:40:40,120 --> 00:40:42,880
Speaker 2: sitting at the FED, the last thing you want is,

737
00:40:43,280 --> 00:40:46,600
Speaker 2: you know, an economy going into recession in that political context.

738
00:40:47,200 --> 00:40:52,479
Speaker 2: So they're waiting very heavily growth over inflation at this point.

739
00:40:52,560 --> 00:40:55,520
Speaker 2: So therefore I'd be surprised if they don't cut rates

740
00:40:55,520 --> 00:40:56,520
Speaker 2: when they meet again.

741
00:40:56,280 --> 00:41:02,440
Speaker 1: In September, and that should provide I had some impact

742
00:41:02,520 --> 00:41:05,640
Speaker 1: in the economy at least. I mean that's the hope, right,

743
00:41:05,680 --> 00:41:10,360
Speaker 1: that it triggers some investment, maybe delays plan layoffs.

744
00:41:10,600 --> 00:41:13,359
Speaker 2: Is that on the margin, I mean, you know, this

745
00:41:13,440 --> 00:41:17,720
Speaker 2: rate cut is well anticipated. I was just looking a

746
00:41:17,480 --> 00:41:20,920
Speaker 2: few minutes ago the market so for priced in right,

747
00:41:21,000 --> 00:41:23,799
Speaker 2: pricet in, it's priced in eighty five percent probability that

748
00:41:23,840 --> 00:41:26,120
Speaker 2: the Fed's going to do this in September, cut rates

749
00:41:26,120 --> 00:41:29,399
Speaker 2: and then cut rates on consistent bass going forward until

750
00:41:29,400 --> 00:41:31,959
Speaker 2: they so called normalized rates, could rates down to something

751
00:41:32,000 --> 00:41:34,720
Speaker 2: that probably closer right now the federal funds rate targets

752
00:41:34,760 --> 00:41:36,560
Speaker 2: just over four. If you get it down closer to three,

753
00:41:36,600 --> 00:41:38,920
Speaker 2: that would be consistent with what they think is what

754
00:41:38,960 --> 00:41:42,400
Speaker 2: they call equilibrium, where policy is not either supporting or

755
00:41:42,400 --> 00:41:46,239
Speaker 2: restraining growth. And that's that's baked in, that's discounted, that's

756
00:41:46,280 --> 00:41:49,080
Speaker 2: in the stock price in stock prices and credits president

757
00:41:49,120 --> 00:41:52,560
Speaker 2: everything else. It does help in the sense that you know,

758
00:41:52,640 --> 00:41:55,799
Speaker 2: some interest rates that you know that matter to consumers

759
00:41:55,800 --> 00:41:58,080
Speaker 2: and businesses will fall. So for example, if you have

760
00:41:58,360 --> 00:42:00,800
Speaker 2: if you owe money on your credit card, you should

761
00:42:00,800 --> 00:42:04,720
Speaker 2: see that that rate is extraordinarily high. It's over twenty percent,

762
00:42:04,760 --> 00:42:07,080
Speaker 2: I mean, close to record high. That should come in.

763
00:42:07,080 --> 00:42:09,680
Speaker 2: And if you have a home equity line a credit,

764
00:42:10,360 --> 00:42:12,200
Speaker 2: you should be you should see it pretty quickly, a

765
00:42:12,239 --> 00:42:15,200
Speaker 2: cut in your interest rate on that loan. If you're

766
00:42:15,200 --> 00:42:17,879
Speaker 2: a small business person, you have a loan from a bank,

767
00:42:17,920 --> 00:42:19,960
Speaker 2: it's usually tied to the so called prime rate, which

768
00:42:19,960 --> 00:42:21,960
Speaker 2: is tied to direct So there are some you know,

769
00:42:22,040 --> 00:42:24,920
Speaker 2: benefits if you're a borrower, but the most of the

770
00:42:24,960 --> 00:42:28,320
Speaker 2: benefit is already baked in to a significant degree because

771
00:42:28,400 --> 00:42:30,920
Speaker 2: investors already have anticipated, you know, what if it's going

772
00:42:30,960 --> 00:42:31,440
Speaker 2: to do here.

773
00:42:32,600 --> 00:42:35,920
Speaker 1: So when you look at the state of the economy,

774
00:42:36,160 --> 00:42:43,080
Speaker 1: let's start with employment. The current what's a little bit scary.

775
00:42:43,120 --> 00:42:45,680
Speaker 1: It's like, so we have multiple things happening. You have

776
00:42:45,760 --> 00:42:49,400
Speaker 1: this cut in government, right, and you have this pullback

777
00:42:49,440 --> 00:42:52,000
Speaker 1: in government funding to the states, which is going to

778
00:42:52,000 --> 00:42:53,480
Speaker 1: have a follow on effect.

779
00:42:53,560 --> 00:42:53,719
Speaker 2: Right.

780
00:42:53,800 --> 00:42:56,600
Speaker 1: If we've seen federal government workers laid off, you're going

781
00:42:56,640 --> 00:42:59,680
Speaker 1: to probably see state and local government because there's a

782
00:42:59,719 --> 00:43:01,879
Speaker 1: whole bunch of money that the federal government had been

783
00:43:01,880 --> 00:43:05,120
Speaker 1: helping states with and we know the state budget crunch

784
00:43:05,160 --> 00:43:10,160
Speaker 1: is coming. Essentially, the next legislative sessions around the country

785
00:43:10,640 --> 00:43:12,239
Speaker 1: are going to be filled with a lot of tough

786
00:43:12,320 --> 00:43:14,960
Speaker 1: choices because they've had a lot of free money, COVID

787
00:43:15,000 --> 00:43:17,400
Speaker 1: being a big factor here to do that.

788
00:43:17,440 --> 00:43:18,200
Speaker 2: So you're going to have this.

789
00:43:20,080 --> 00:43:23,480
Speaker 1: On the government sector side, a shrinking of the labor force.

790
00:43:24,120 --> 00:43:28,799
Speaker 1: Then you also have the issues that are associated with

791
00:43:28,880 --> 00:43:31,320
Speaker 1: tariffs and the cost of things. So if stuff a

792
00:43:31,360 --> 00:43:33,600
Speaker 1: fewer things are coming in, maybe you just have fewer

793
00:43:33,640 --> 00:43:36,440
Speaker 1: workers in general dealing with you. And then you have

794
00:43:36,520 --> 00:43:40,440
Speaker 1: the investment, all of the AI infrastructure investment, which doesn't

795
00:43:40,440 --> 00:43:45,640
Speaker 1: actually create jobs. So I look at that and think

796
00:43:45,680 --> 00:43:49,760
Speaker 1: as just as an amateur observer that's probably a little

797
00:43:49,840 --> 00:43:53,799
Speaker 1: overly informed, and think, boy, this is a tough job

798
00:43:53,840 --> 00:43:56,640
Speaker 1: market that's likely to get tougher in the next couple

799
00:43:56,680 --> 00:44:00,800
Speaker 1: of years, given where investments are going in corporate America.

800
00:44:03,160 --> 00:44:05,640
Speaker 1: What what do you see and what are you watching

801
00:44:05,800 --> 00:44:11,600
Speaker 1: to see whether whether this sort of job's armageddon that

802
00:44:11,640 --> 00:44:14,000
Speaker 1: may be coming for pink collar America is coming.

803
00:44:14,120 --> 00:44:17,480
Speaker 2: Yeah, yeah, I agree with you. I think it's gonna

804
00:44:17,480 --> 00:44:19,960
Speaker 2: be a tough job market, just question of how tough.

805
00:44:20,480 --> 00:44:23,799
Speaker 2: You know, whether we start getting negative employment numbers here,

806
00:44:23,880 --> 00:44:26,520
Speaker 2: you know, actual outright declines and employment. I think that's

807
00:44:26,520 --> 00:44:29,960
Speaker 2: the real possibility. The other way of you framed it

808
00:44:30,080 --> 00:44:32,399
Speaker 2: very nicely. You kind of went sector bisector and said,

809
00:44:32,440 --> 00:44:35,640
Speaker 2: where's where the job is going to come from? Where

810
00:44:35,680 --> 00:44:39,000
Speaker 2: is their job growth? Yeah? Exactly. You know. The only

811
00:44:39,280 --> 00:44:41,600
Speaker 2: and that's one reason to be very nervous here, the

812
00:44:41,640 --> 00:44:46,520
Speaker 2: only industry of consequence that's adding significantly to payrolls at

813
00:44:46,520 --> 00:44:50,560
Speaker 2: this point is healthcare. Healthcare services, hospitals, doctor's offices, that

814
00:44:50,640 --> 00:44:51,080
Speaker 2: kind of thing.

815
00:44:51,560 --> 00:44:54,880
Speaker 1: So our aging population creates jobs great, yeah, yeah, And

816
00:44:54,920 --> 00:44:56,960
Speaker 1: some of that feels like catch up because the healthcare

817
00:44:56,960 --> 00:44:59,240
Speaker 1: spector was slow to hire coming out of the pandemic

818
00:44:59,280 --> 00:45:02,239
Speaker 1: for lots and now they've caught up.

819
00:45:02,239 --> 00:45:04,320
Speaker 2: And then you got to ask yourself, well they continue

820
00:45:04,480 --> 00:45:07,480
Speaker 2: the healthcare sector continue to create jobs to the degree

821
00:45:07,480 --> 00:45:09,840
Speaker 2: that it has, And then you throw in all the

822
00:45:09,880 --> 00:45:11,799
Speaker 2: other things you just said. The thing I'd throw into

823
00:45:11,840 --> 00:45:15,919
Speaker 2: the mix is immigration. You know, we're seeing a very

824
00:45:15,960 --> 00:45:20,080
Speaker 2: sharp now decline in the immigrant labor force and so

825
00:45:20,560 --> 00:45:25,920
Speaker 2: obviously that's fewer jobs in construction, trades, agriculture, manufacturing.

826
00:45:26,040 --> 00:45:28,120
Speaker 1: Well, is that fewer jobs or is that just fewer

827
00:45:28,200 --> 00:45:29,200
Speaker 1: jobs that will get filled?

828
00:45:30,000 --> 00:45:30,160
Speaker 2: Right?

829
00:45:30,200 --> 00:45:34,080
Speaker 1: That's the question I have. And what what happens to

830
00:45:34,120 --> 00:45:37,880
Speaker 1: those jobs, what happens to the chicken processing plans for instance.

831
00:45:38,600 --> 00:45:40,799
Speaker 2: Exactly, it's not like those positions are going to go away.

832
00:45:40,840 --> 00:45:42,960
Speaker 2: They just can't film a film, so it's going to

833
00:45:43,120 --> 00:45:45,200
Speaker 2: it shows up as no job growth when you would

834
00:45:45,200 --> 00:45:48,759
Speaker 2: have you would have expected some job creation in the

835
00:45:48,840 --> 00:45:51,279
Speaker 2: construction trades or leisure, hospitality or whatever it is, and

836
00:45:51,320 --> 00:45:52,279
Speaker 2: you're not going to get it because you just don

837
00:45:52,280 --> 00:45:54,000
Speaker 2: want the You just don't have the bodies. You just

838
00:45:54,000 --> 00:45:56,600
Speaker 2: don't have the workers. The other way of thinking about

839
00:45:56,600 --> 00:46:01,959
Speaker 2: it is or framing it is higher and layoffs. There's

840
00:46:01,960 --> 00:46:06,600
Speaker 2: no hiring businesses writ large pretty much across the board,

841
00:46:07,160 --> 00:46:10,719
Speaker 2: healthcare being the exception. They just aren't hiring, you know

842
00:46:10,840 --> 00:46:14,279
Speaker 2: at this point, and that may go to the uncertainty

843
00:46:14,320 --> 00:46:16,560
Speaker 2: creat by policy and they're just nervous about what it

844
00:46:16,600 --> 00:46:19,960
Speaker 2: all means. It could go to partly to AI and

845
00:46:20,000 --> 00:46:22,000
Speaker 2: the impact AI starting to have, because a lot of

846
00:46:22,040 --> 00:46:25,920
Speaker 2: the lack of hiring is in professional services and financial

847
00:46:25,960 --> 00:46:30,279
Speaker 2: services and sectors or you expect AI. It's not like

848
00:46:30,320 --> 00:46:32,840
Speaker 2: they're laying off yet because of AI, but they're not

849
00:46:32,960 --> 00:46:34,200
Speaker 2: hiring because well, let's.

850
00:46:34,040 --> 00:46:36,759
Speaker 1: Put yourself in the shoes of a CEO wondering if

851
00:46:36,800 --> 00:46:40,240
Speaker 1: AI can create efficiencies. If I were running a small

852
00:46:40,280 --> 00:46:43,759
Speaker 1: business or medium sized business and I'm you know, I

853
00:46:43,800 --> 00:46:47,520
Speaker 1: wouldn't fill I wouldn't fill positions as needed yet, right,

854
00:46:47,560 --> 00:46:51,200
Speaker 1: I'd see, hey, can we what can we do with AI?

855
00:46:52,200 --> 00:46:52,319
Speaker 2: Right?

856
00:46:52,400 --> 00:46:55,399
Speaker 1: I wouldn't be laying people off, but i'd be I mean,

857
00:46:56,000 --> 00:46:58,759
Speaker 1: what you're describing is sort of like a very logical way, like,

858
00:46:58,840 --> 00:47:00,880
Speaker 1: let's see if AI can fill the gap here, and

859
00:47:00,920 --> 00:47:03,960
Speaker 1: if you can't, okay, then I'll hire. But I'm gonna

860
00:47:04,080 --> 00:47:08,960
Speaker 1: wait maybe six months, you know, to see how good

861
00:47:09,000 --> 00:47:12,560
Speaker 1: these tools are and whether this really is a replacement

862
00:47:13,440 --> 00:47:16,120
Speaker 1: level technology in the moment that we're living.

863
00:47:16,160 --> 00:47:19,799
Speaker 2: Totally. I think that's now. Small businesses they have less

864
00:47:19,880 --> 00:47:22,880
Speaker 2: latitude to do that, you know, I think they're because

865
00:47:23,040 --> 00:47:27,879
Speaker 2: they just less room to maneuver. But bigger businesses, absolutely,

866
00:47:28,520 --> 00:47:31,839
Speaker 2: the largest employers in the country. Absolutely, that's I think

867
00:47:31,880 --> 00:47:36,759
Speaker 2: the way they're thinking. That's probably the mindset. I don't again,

868
00:47:36,800 --> 00:47:39,759
Speaker 2: they're not laying off yet, That's that's what that's That

869
00:47:39,920 --> 00:47:43,640
Speaker 2: actually is the firewall between the weak economy that we

870
00:47:43,719 --> 00:47:48,279
Speaker 2: have and the wesion in recession and if if in fact,

871
00:47:48,400 --> 00:47:51,520
Speaker 2: businesses say, oh, I can lay off because of AI,

872
00:47:51,840 --> 00:47:53,600
Speaker 2: or I need to lay off because of terriffs and

873
00:47:54,320 --> 00:47:57,320
Speaker 2: other reasons, other factors that are wing on the economy

874
00:47:57,400 --> 00:48:00,200
Speaker 2: or in my business. You start seeing some layoff us,

875
00:48:00,840 --> 00:48:03,600
Speaker 2: then that's the fodder for an economic downte because at

876
00:48:03,640 --> 00:48:08,200
Speaker 2: that point consumers will get spooked. Consumers are already very cautious,

877
00:48:08,239 --> 00:48:10,279
Speaker 2: they're not spending, They're already going to have to pay

878
00:48:10,320 --> 00:48:13,319
Speaker 2: higher prices for imported goods. Their pursing power is going

879
00:48:13,400 --> 00:48:16,600
Speaker 2: to be weakened. And and that that that all adds

880
00:48:16,680 --> 00:48:19,680
Speaker 2: up to a self reinforcing negative cycle called a recession.

881
00:48:20,320 --> 00:48:23,520
Speaker 1: I have a friend of mine who sometimes who remembers

882
00:48:23,600 --> 00:48:28,520
Speaker 1: the last couple of recessions and said, any else in economies, No,

883
00:48:28,800 --> 00:48:33,000
Speaker 1: And he's he's a poker player. Okay, we go. But

884
00:48:33,080 --> 00:48:35,960
Speaker 1: here's here's the thing. He goes to Vegas a lot. Okay,

885
00:48:36,480 --> 00:48:40,879
Speaker 1: and as he said to me last week, he went

886
00:48:40,920 --> 00:48:42,919
Speaker 1: off to try the World Series of Poker. He's somebody

887
00:48:42,960 --> 00:48:45,879
Speaker 1: you've never heard of because if once she once he does, well,

888
00:48:45,880 --> 00:48:46,440
Speaker 1: you'll hear of him.

889
00:48:46,520 --> 00:48:47,719
Speaker 2: Right, But he hasn't done that yet.

890
00:48:48,080 --> 00:48:51,319
Speaker 1: But anyway, but you know he's one of those you know,

891
00:48:51,880 --> 00:48:56,040
Speaker 1: he says Hey, nobody was in Vegas, you meaning you know,

892
00:48:56,080 --> 00:48:58,640
Speaker 1: it felt empty, It felt and he goes. It felt

893
00:48:58,719 --> 00:49:01,600
Speaker 1: very similar like what happened before the housing crisis felt

894
00:49:01,719 --> 00:49:04,919
Speaker 1: very similar. Like and that that is right, Like it's

895
00:49:04,920 --> 00:49:08,040
Speaker 1: one of the first places where's the when money's flowing

896
00:49:08,200 --> 00:49:10,280
Speaker 1: you have a little extra money, Vegas is an easy

897
00:49:10,280 --> 00:49:13,400
Speaker 1: place to go visit you don't have that extra money.

898
00:49:13,880 --> 00:49:17,040
Speaker 1: It may be the first the first thing consumers cut

899
00:49:17,080 --> 00:49:21,799
Speaker 1: back on, right, you know, are there other that? That's

900
00:49:21,840 --> 00:49:24,480
Speaker 1: an intriguing leading indicator to me, you know, one of

901
00:49:24,480 --> 00:49:26,200
Speaker 1: those unofficient.

902
00:49:25,960 --> 00:49:26,719
Speaker 2: When was he there?

903
00:49:26,760 --> 00:49:29,640
Speaker 1: When was here two weeks ago? It was two weeks ago.

904
00:49:30,000 --> 00:49:32,960
Speaker 1: Some of this is Canadian? I was going to say, yeah,

905
00:49:32,960 --> 00:49:35,720
Speaker 1: some of this is the Canadian boycott of America.

906
00:49:35,480 --> 00:49:38,040
Speaker 2: Which I think Europeans may be to something right and.

907
00:49:38,000 --> 00:49:40,319
Speaker 1: That so and that is a and I don't know

908
00:49:41,239 --> 00:49:43,680
Speaker 1: you know how much you you factor that in versus

909
00:49:43,760 --> 00:49:47,799
Speaker 1: versus domestic right, But what other indicators like that is

910
00:49:47,840 --> 00:49:50,719
Speaker 1: it worth keeping an eye on that might be that

911
00:49:50,840 --> 00:49:52,960
Speaker 1: might be foreshadowing what's coming.

912
00:49:53,320 --> 00:49:55,439
Speaker 2: Yeah, uh, you know, I tend to be a little

913
00:49:55,440 --> 00:49:58,120
Speaker 2: bit more data oriented as opposed to why you're here?

914
00:49:58,120 --> 00:50:01,520
Speaker 2: And I love that about it probably love those anecdotes.

915
00:50:01,560 --> 00:50:04,440
Speaker 2: I mean, they're always kind of cool and I go

916
00:50:05,400 --> 00:50:07,719
Speaker 2: to take a look, and sometimes they work, sometimes they don't.

917
00:50:07,920 --> 00:50:11,319
Speaker 2: Of course, there's some esoteric kind of data points that

918
00:50:11,360 --> 00:50:14,200
Speaker 2: people don't focus on, but I think are useful to gauge,

919
00:50:14,239 --> 00:50:17,040
Speaker 2: you know, whether we're headed down the dark path. So

920
00:50:17,080 --> 00:50:19,759
Speaker 2: if we're going back to the job market, there's something

921
00:50:19,800 --> 00:50:22,239
Speaker 2: called the diffusion index and the Employment Report. That's the

922
00:50:22,280 --> 00:50:25,440
Speaker 2: percent of industries covered by the Bureau Labor Statistics, or

923
00:50:25,440 --> 00:50:27,560
Speaker 2: some three hundred and fifty four undred industries, what percent

924
00:50:27,560 --> 00:50:30,759
Speaker 2: of them are not adding to payrolls, you know, are

925
00:50:30,800 --> 00:50:34,240
Speaker 2: actually laying off. And right now it's over fifty percent.

926
00:50:34,280 --> 00:50:36,359
Speaker 2: Every time it arises over fifty percent, So more than

927
00:50:36,400 --> 00:50:41,879
Speaker 2: half the industries are reducing payrolls. That's we always we're

928
00:50:41,880 --> 00:50:44,439
Speaker 2: always in recession. We always go into recession, and we're there,

929
00:50:44,520 --> 00:50:47,239
Speaker 2: right fifty three percent or something, which doesn't sound very high,

930
00:50:47,280 --> 00:50:48,759
Speaker 2: but it's pretty damn high. And it goes back to

931
00:50:48,960 --> 00:50:51,440
Speaker 2: what we were talking about earlier, the kind of the narrow

932
00:50:52,760 --> 00:50:55,719
Speaker 2: kind of app focus of the job growth. That's really

933
00:50:55,840 --> 00:50:58,320
Speaker 2: you know, in healthcare and just a handful of other industries.

934
00:50:58,760 --> 00:51:00,480
Speaker 2: The other the other one that's really yet a bit

935
00:51:00,480 --> 00:51:03,320
Speaker 2: as a check again in the job market is unfilled

936
00:51:03,360 --> 00:51:07,680
Speaker 2: positions in the manufacturing sector. Because manufacturing tends to be

937
00:51:08,960 --> 00:51:11,640
Speaker 2: very UH. It's one of the first sectors that goes

938
00:51:11,680 --> 00:51:14,200
Speaker 2: into recession because it's very sensitive to interest rates and

939
00:51:14,239 --> 00:51:17,080
Speaker 2: to the business cycle. And if they're if the unfield

940
00:51:17,160 --> 00:51:20,240
Speaker 2: positions are coming down in that sector, that's a tell

941
00:51:20,280 --> 00:51:23,400
Speaker 2: that manufacturers are starting to pull back and UH. And

942
00:51:23,480 --> 00:51:26,680
Speaker 2: if the manufacturers is going manufacturing is going into recession,

943
00:51:26,719 --> 00:51:28,040
Speaker 2: that it's going to take the rest of the economy

944
00:51:28,080 --> 00:51:31,520
Speaker 2: with it in their falling, uh, their weakening. There's fewer

945
00:51:31,600 --> 00:51:35,640
Speaker 2: unfilled positions. I also because I, you know, I my

946
00:51:35,800 --> 00:51:38,760
Speaker 2: area of expertise. I'm an economists, not you know, pining

947
00:51:38,840 --> 00:51:41,759
Speaker 2: as you know about many things, but I spend more

948
00:51:41,760 --> 00:51:45,800
Speaker 2: time on the housing and mortgage markets. So I watch

949
00:51:46,440 --> 00:51:48,880
Speaker 2: the housing market very carefully. And one other indicator that

950
00:51:48,920 --> 00:51:52,160
Speaker 2: I watch is the UH kind of the sentiment of

951
00:51:52,239 --> 00:51:55,640
Speaker 2: home builders. There's a survey that comes out every month

952
00:51:55,800 --> 00:51:59,480
Speaker 2: based on a survey conducted by home builders, and that

953
00:51:59,600 --> 00:52:01,640
Speaker 2: fell a again. They've got a data point today that

954
00:52:01,680 --> 00:52:04,080
Speaker 2: fell again to the lowest level since in the middle

955
00:52:04,080 --> 00:52:07,200
Speaker 2: of the pandemic. Or when the fight started raising interest rates,

956
00:52:07,920 --> 00:52:11,440
Speaker 2: and that's a tell you know that the economy is weakening.

957
00:52:11,480 --> 00:52:14,799
Speaker 2: So there's a whole range of those kinds of kind

958
00:52:14,800 --> 00:52:19,360
Speaker 2: of very esoteric, off the beaten track kind of indicators,

959
00:52:19,400 --> 00:52:22,799
Speaker 2: and they're all kind of saying, you know, some are

960
00:52:22,840 --> 00:52:25,320
Speaker 2: sending off red flares, some are sending off yellow flares.

961
00:52:25,960 --> 00:52:28,200
Speaker 2: It's not uniform, but they're all saying, you know, there's

962
00:52:28,200 --> 00:52:31,600
Speaker 2: an issue here with the economies is struggling. It's got

963
00:52:31,600 --> 00:52:33,560
Speaker 2: a problem.

964
00:52:34,120 --> 00:52:38,799
Speaker 1: Any counterfactuals, what's the counterfactual? Or let me let me

965
00:52:38,840 --> 00:52:41,520
Speaker 1: put it this way. A year from now, you're here, Hey,

966
00:52:41,520 --> 00:52:42,960
Speaker 1: we never dipped into recession.

967
00:52:43,200 --> 00:52:50,400
Speaker 4: Why well, I mean, the president and the Republican Congress

968
00:52:50,400 --> 00:52:55,920
Speaker 4: can act, right, They've got another reconciliation bill that they

969
00:52:55,920 --> 00:53:00,520
Speaker 4: can pass through with the next Congress or the next year.

970
00:53:00,400 --> 00:53:06,000
Speaker 2: I should say, on the other side of September into October.

971
00:53:06,560 --> 00:53:10,239
Speaker 2: They could use that to provided some additional fiscal stimulus.

972
00:53:10,640 --> 00:53:13,000
Speaker 2: So there's been a lot of discussion, for example, around

973
00:53:13,640 --> 00:53:17,400
Speaker 2: cutting so called stimulus checks, just cutting checks to households,

974
00:53:17,640 --> 00:53:21,200
Speaker 2: presumably they would be lower middle income households. And you

975
00:53:21,239 --> 00:53:25,280
Speaker 2: could frame it as I've gotten all this tariff revenue.

976
00:53:25,960 --> 00:53:28,480
Speaker 2: You the American people. We know the American people are

977
00:53:28,520 --> 00:53:30,480
Speaker 2: paying it because you can see it in the tariff

978
00:53:30,520 --> 00:53:34,000
Speaker 2: revenue that's being generated. We're going to take that tiff

979
00:53:34,080 --> 00:53:36,760
Speaker 2: revenue or some portion of that teriff revenue and rebate

980
00:53:36,800 --> 00:53:39,920
Speaker 2: it back in the form of a check, kind of

981
00:53:39,960 --> 00:53:42,279
Speaker 2: sort of what we did during the pandemic. And I

982
00:53:42,280 --> 00:53:45,680
Speaker 2: would juice things and keep the economy moving forward. We

983
00:53:45,719 --> 00:53:52,120
Speaker 2: have that supercharge inplation. It would add to inflationary pressures.

984
00:53:52,840 --> 00:53:56,000
Speaker 2: But if the economy is struggling, if we're losing jobs,

985
00:53:56,360 --> 00:53:58,640
Speaker 2: you can provide just enough juice to get the economy

986
00:53:58,680 --> 00:54:03,000
Speaker 2: back on track. No reseet that was your question. But

987
00:54:03,719 --> 00:54:06,239
Speaker 2: not generate that inflationary pressure, or not generate to the

988
00:54:06,280 --> 00:54:09,279
Speaker 2: degree that it'll push us back into recession, or or

989
00:54:09,320 --> 00:54:12,960
Speaker 2: not push us back into recession anytime soon. It's pushing

990
00:54:12,960 --> 00:54:16,600
Speaker 2: the problems down the road, so the recession doesn't come

991
00:54:16,640 --> 00:54:19,719
Speaker 2: next year, the recession comes in twenty twenty seven, twenty

992
00:54:19,800 --> 00:54:23,040
Speaker 2: twenty eight, twenty nine, suit down the road. So that

993
00:54:23,040 --> 00:54:24,840
Speaker 2: would be one way out. Look.

994
00:54:25,040 --> 00:54:28,839
Speaker 1: I look at obviously, I follow a political calendar, and

995
00:54:28,920 --> 00:54:31,560
Speaker 1: I look at economic data and wonder when does it

996
00:54:31,600 --> 00:54:35,000
Speaker 1: impact the political calendar and when it comes to the

997
00:54:35,040 --> 00:54:37,560
Speaker 1: mid terms of November, what the economy is in the

998
00:54:37,600 --> 00:54:40,880
Speaker 1: spring of twenty six is what voters will be voting

999
00:54:40,880 --> 00:54:44,640
Speaker 1: on come November of twenty six. So where we headed

1000
00:54:44,680 --> 00:54:46,520
Speaker 1: in the spring of twenty six And I asked that

1001
00:54:46,600 --> 00:54:51,319
Speaker 1: frankly personally petrified of where we may be headed in

1002
00:54:51,320 --> 00:54:55,239
Speaker 1: the spring of twenty six. But you know, look, forecasting

1003
00:54:55,320 --> 00:54:58,000
Speaker 1: is not easy, and there's always interventions that could happen.

1004
00:54:58,400 --> 00:55:00,040
Speaker 1: But as soon we get these couple of ray that

1005
00:55:00,640 --> 00:55:05,600
Speaker 1: are coming September and December, that becomes consistent. But this

1006
00:55:05,800 --> 00:55:09,960
Speaker 1: job sort of stagnation pattern continues. We have the tariffs

1007
00:55:09,960 --> 00:55:12,960
Speaker 1: are more embedded in than ever. There's it looks like

1008
00:55:13,000 --> 00:55:17,759
Speaker 1: fewer and fewer waivers that are coming or delays. What

1009
00:55:17,840 --> 00:55:20,319
Speaker 1: does what does the spring of twenty six? What's the

1010
00:55:20,560 --> 00:55:22,520
Speaker 1: what are the most likely scenarios in the spring of

1011
00:55:22,520 --> 00:55:23,040
Speaker 1: twenty six.

1012
00:55:23,440 --> 00:55:24,800
Speaker 2: Yeah, I think that's when economy is going to be

1013
00:55:24,800 --> 00:55:29,520
Speaker 2: at its weakest. That's when inflation will be at its

1014
00:55:29,600 --> 00:55:32,480
Speaker 2: highest as a result of the tariffs and the immigration policy.

1015
00:55:33,360 --> 00:55:35,799
Speaker 2: You just kind of do the arithmetic between when the

1016
00:55:35,800 --> 00:55:38,520
Speaker 2: tariffs have come in and they're still rising. There's still

1017
00:55:38,880 --> 00:55:40,120
Speaker 2: we've not seen the end of this.

1018
00:55:40,800 --> 00:55:43,399
Speaker 1: Now there's a point where it does stop rising, right, right,

1019
00:55:43,440 --> 00:55:45,480
Speaker 1: when it's all when they when you hit is it?

1020
00:55:45,800 --> 00:55:45,880
Speaker 2: So?

1021
00:55:46,200 --> 00:55:46,440
Speaker 3: Is it?

1022
00:55:46,520 --> 00:55:49,319
Speaker 1: Because I've had some people argue to me on the right,

1023
00:55:49,360 --> 00:55:52,319
Speaker 1: which is when I say the right, the new right,

1024
00:55:52,560 --> 00:55:56,040
Speaker 1: right it used to be a different type of conservative economists.

1025
00:55:56,080 --> 00:56:00,839
Speaker 1: But the argument is, well, it's not continuously inflationary, right

1026
00:56:00,920 --> 00:56:04,160
Speaker 1: that once you once it's once the price level is

1027
00:56:04,200 --> 00:56:06,560
Speaker 1: baked in, then it's stop. You're not going to you know,

1028
00:56:06,640 --> 00:56:08,719
Speaker 1: it's not going to continue to go up once it

1029
00:56:08,840 --> 00:56:12,320
Speaker 1: hits its tariff faceline. And then yes, it'll take a

1030
00:56:12,320 --> 00:56:13,960
Speaker 1: little bit for the economy to get used to that,

1031
00:56:14,000 --> 00:56:15,960
Speaker 1: but then we can have a new equilibrium.

1032
00:56:16,560 --> 00:56:20,919
Speaker 2: Is that just naive? No, Well, by itself, that's right,

1033
00:56:21,280 --> 00:56:24,239
Speaker 2: I mean, just that's just arithmetic. In that sure I

1034
00:56:24,360 --> 00:56:26,680
Speaker 2: put in the tariff, that some portion of that tariff

1035
00:56:26,719 --> 00:56:30,240
Speaker 2: gets passed through the consumers. Presumably that's a one off increase.

1036
00:56:30,320 --> 00:56:32,239
Speaker 2: And then at the end of the in the end

1037
00:56:32,239 --> 00:56:35,919
Speaker 2: of all this inflation settles back down. But you ask

1038
00:56:36,000 --> 00:56:39,960
Speaker 2: for next spring, and by next spring we're still filling

1039
00:56:39,960 --> 00:56:42,240
Speaker 2: effects of the terrace. That one off increase is still

1040
00:56:42,280 --> 00:56:45,239
Speaker 2: still going still going to see like new increase to us. Yeah,

1041
00:56:45,360 --> 00:56:48,279
Speaker 2: I mean the effective tariff of it today is ten

1042
00:56:48,320 --> 00:56:51,239
Speaker 2: percent ish. It started the year at two, we're at ten.

1043
00:56:51,880 --> 00:56:54,319
Speaker 2: Everything says we're going at least to fifteen, maybe as

1044
00:56:54,360 --> 00:56:56,680
Speaker 2: high as twenty. And that's going to play out over

1045
00:56:56,719 --> 00:56:59,279
Speaker 2: the course of the next six months. Then that all

1046
00:56:59,320 --> 00:57:01,799
Speaker 2: translates through by the spring of twenty twenty six, these

1047
00:57:01,880 --> 00:57:04,719
Speaker 2: teriff increases will be at their apex in terms of

1048
00:57:04,719 --> 00:57:07,280
Speaker 2: their impact on inflation. So just to give you a number,

1049
00:57:07,719 --> 00:57:10,680
Speaker 2: if there had been no terriffs whatsoever, my sense is

1050
00:57:10,719 --> 00:57:13,880
Speaker 2: that inflation is measured by the consumer expenditu inflator in

1051
00:57:13,880 --> 00:57:15,919
Speaker 2: the spring of twenty twenty six would have been two

1052
00:57:15,960 --> 00:57:19,000
Speaker 2: and a quarter. That's almost where it needs to be, Like,

1053
00:57:19,080 --> 00:57:23,040
Speaker 2: that's where the Fed wanted it to go. Now with

1054
00:57:23,240 --> 00:57:26,080
Speaker 2: the tariffs, it's going to be three and a half ish,

1055
00:57:26,320 --> 00:57:29,320
Speaker 2: you know, something like that. So that's a big difference

1056
00:57:29,360 --> 00:57:35,120
Speaker 2: and people will feel that now, you know. Of course,

1057
00:57:36,000 --> 00:57:38,360
Speaker 2: going back to your quickly got back to the point

1058
00:57:38,360 --> 00:57:42,640
Speaker 2: about whether the teriff increases will result in persistently higher inflation.

1059
00:57:43,280 --> 00:57:46,560
Speaker 2: You can't completely dismiss that possibility, right, because it does

1060
00:57:46,600 --> 00:57:50,720
Speaker 2: depend on whether the inflation created by the tariffs affect

1061
00:57:50,760 --> 00:57:54,240
Speaker 2: people's expectations about future inflation, and they start demanding from

1062
00:57:54,280 --> 00:57:57,760
Speaker 2: their employer's higher wages and the employers say, oh, okay,

1063
00:57:57,800 --> 00:57:59,720
Speaker 2: I can pass that through. I'll give you the wage

1064
00:57:59,720 --> 00:58:01,520
Speaker 2: and crease, and then you get into that kind of

1065
00:58:01,600 --> 00:58:06,000
Speaker 2: wage price reinforcing dynamic, which means inflation becomes more persistent.

1066
00:58:06,480 --> 00:58:09,080
Speaker 2: Now everyone's of the view, including the family start cutting

1067
00:58:09,120 --> 00:58:10,919
Speaker 2: rates that that's not going to happen. But you can't

1068
00:58:11,000 --> 00:58:13,280
Speaker 2: rule that out in the context of you know, all

1069
00:58:13,320 --> 00:58:16,280
Speaker 2: the things that we know about the inflation expectations. The

1070
00:58:16,360 --> 00:58:19,920
Speaker 2: other thing I'd say is the other policies that are

1071
00:58:19,920 --> 00:58:24,160
Speaker 2: being implemented, including the restrict of immigration policy, that's inflationary

1072
00:58:24,320 --> 00:58:36,520
Speaker 2: and that's more persistent inflation. That's not like that's going away.

1073
00:58:36,720 --> 00:58:39,640
Speaker 2: I informed of my listeners last week.

1074
00:58:39,720 --> 00:58:43,320
Speaker 1: I buy my chicken at Trader Joe's, and Trader Joe's

1075
00:58:43,520 --> 00:58:46,560
Speaker 1: clearly is having the cost of chicken has gone up,

1076
00:58:47,400 --> 00:58:51,080
Speaker 1: but instead of providing so, but they decided on shrinkflation

1077
00:58:51,240 --> 00:58:53,440
Speaker 1: so they didn't have to raise the price of chicken thighs.

1078
00:58:53,760 --> 00:58:55,480
Speaker 1: But guess what it's that of four chicken this to

1079
00:58:55,520 --> 00:58:58,160
Speaker 1: a package which you could get for about three dollars

1080
00:58:58,200 --> 00:59:01,360
Speaker 1: and fifty cents is now three chicken this to a

1081
00:59:01,400 --> 00:59:04,240
Speaker 1: package that you're getting for about three dollars and fifteen cents. Right,

1082
00:59:05,240 --> 00:59:07,480
Speaker 1: But so they're choosing and they have a you know,

1083
00:59:07,560 --> 00:59:11,320
Speaker 1: look there can they know their customer base, right, shrinkflation

1084
00:59:11,880 --> 00:59:17,160
Speaker 1: is right now where they'd rather be than not. But

1085
00:59:17,240 --> 00:59:22,480
Speaker 1: that I mean for me, am I seeing the rising

1086
00:59:22,520 --> 00:59:26,040
Speaker 1: price of chicken, that feels like direct impact of the

1087
00:59:26,040 --> 00:59:27,000
Speaker 1: immigration policy.

1088
00:59:27,080 --> 00:59:30,280
Speaker 2: Now, oh, absolutely absolutely. And by the way that shrink

1089
00:59:30,320 --> 00:59:33,760
Speaker 2: flation is captured in the inflation at least in theory

1090
00:59:34,080 --> 00:59:36,920
Speaker 2: your labor statistics, the keeper of the data does account

1091
00:59:36,920 --> 00:59:40,000
Speaker 2: for the quote unquote the quality of the product or

1092
00:59:40,000 --> 00:59:43,640
Speaker 2: service that you're buying. So if if you're getting fewer

1093
00:59:43,680 --> 00:59:47,479
Speaker 2: peas in the in the can, plus it was three

1094
00:59:47,560 --> 00:59:49,880
Speaker 2: as opposed to four chicken though it was.

1095
00:59:49,880 --> 00:59:53,880
Speaker 1: You have thighs, chicken thies, yeah, chicken thized, okayized three four.

1096
00:59:53,800 --> 00:59:57,800
Speaker 2: Now yeah, right, essentially the same price. Yeah, just wanted

1097
00:59:57,800 --> 00:59:59,480
Speaker 2: a quick point about your question about the spring of

1098
00:59:59,520 --> 01:00:01,840
Speaker 2: twenty six. You know, it's not only about inflation, is

1099
01:00:01,840 --> 01:00:04,240
Speaker 2: about jobs because that's when the economy could be at

1100
01:00:04,240 --> 01:00:05,880
Speaker 2: its weakest too. So if you said to me, Hey, Mark,

1101
01:00:06,240 --> 01:00:08,320
Speaker 2: given everything that's going on, when do you think that

1102
01:00:08,360 --> 01:00:11,240
Speaker 2: next recession would when the recession would hit? Kind of

1103
01:00:11,280 --> 01:00:14,360
Speaker 2: sort of feels, you know, starting maybe late this year

1104
01:00:14,400 --> 01:00:16,960
Speaker 2: and then more likely early in next So spring of

1105
01:00:17,000 --> 01:00:22,520
Speaker 2: twenty twenty six economy week. But remember there's a lot

1106
01:00:22,520 --> 01:00:26,080
Speaker 2: of moving parts here, and Congress and the administration can

1107
01:00:26,080 --> 01:00:28,800
Speaker 2: come up with a stimulus package to kind of, you know,

1108
01:00:29,320 --> 01:00:31,400
Speaker 2: help paper things over for a while at least. No.

1109
01:00:31,560 --> 01:00:33,880
Speaker 1: I mean, look, Donald Trump's strategy is you know, I

1110
01:00:33,880 --> 01:00:36,480
Speaker 1: always say it's if you actually follow his business practices.

1111
01:00:36,520 --> 01:00:38,560
Speaker 1: He's always you know, I mean, it is the old

1112
01:00:38,560 --> 01:00:41,640
Speaker 1: Popeye metaphor, I'll gladly take a hamburger today. I'll pay

1113
01:00:41,640 --> 01:00:44,400
Speaker 1: you tomorrow for a hamburger today. I mean, he's constantly

1114
01:00:44,440 --> 01:00:46,400
Speaker 1: going to try to push this off as long as

1115
01:00:46,440 --> 01:00:47,040
Speaker 1: he can.

1116
01:00:47,320 --> 01:00:50,600
Speaker 2: If he can. Right, there's only so many tools that

1117
01:00:50,600 --> 01:00:53,760
Speaker 2: they have in the toolbox. Yeah, well you said it,

1118
01:00:53,800 --> 01:00:54,640
Speaker 2: not me, so no.

1119
01:00:54,720 --> 01:00:57,320
Speaker 1: I understand that, And I'm not asking you to play artisan,

1120
01:00:57,400 --> 01:01:01,240
Speaker 1: but you're not wrong to be wondering what what could

1121
01:01:01,240 --> 01:01:03,760
Speaker 1: the government do? That is his going to be his instinct,

1122
01:01:04,320 --> 01:01:07,720
Speaker 1: Hey let's do something. Yeah, and to be you know, fair.

1123
01:01:07,920 --> 01:01:10,720
Speaker 2: I think that's most politicians instinct, right, I mean, at

1124
01:01:10,720 --> 01:01:12,720
Speaker 2: the end of the day, I mean, here's you know,

1125
01:01:12,760 --> 01:01:16,160
Speaker 2: these even these tariffs, so they're done on an executive

1126
01:01:16,240 --> 01:01:19,280
Speaker 2: order and they're generating a lot of revenue, and you're

1127
01:01:19,400 --> 01:01:21,280
Speaker 2: you're thinking, well, look, I think the courts could throw

1128
01:01:21,320 --> 01:01:21,680
Speaker 2: them out.

1129
01:01:21,760 --> 01:01:24,919
Speaker 1: And then throwing out that goes that that Then then

1130
01:01:24,920 --> 01:01:28,200
Speaker 1: it becomes you know that this is in my Baillywick

1131
01:01:28,280 --> 01:01:31,200
Speaker 1: night yours. Then it becomes him asking Congress for the

1132
01:01:31,240 --> 01:01:34,240
Speaker 1: authority back, which is what he would do. And then

1133
01:01:34,280 --> 01:01:37,280
Speaker 1: suddenly it becomes a vote on a tax increase, right,

1134
01:01:37,400 --> 01:01:40,120
Speaker 1: like you know, okay, you're about to raise prices ten

1135
01:01:40,160 --> 01:01:43,680
Speaker 1: percent on everybody's consumer good. You're passing essentially a national

1136
01:01:43,720 --> 01:01:46,080
Speaker 1: sales tax of ten percent. Are you comfortable doing that

1137
01:01:46,120 --> 01:01:49,320
Speaker 1: in an election? Neer Congressman SMANGI right, like that's going

1138
01:01:49,400 --> 01:01:52,520
Speaker 1: to be Suddenly the political equation enters into this conversation.

1139
01:01:52,600 --> 01:01:55,600
Speaker 2: But also think about when you if you're thinking about

1140
01:01:55,600 --> 01:01:59,200
Speaker 2: the revenue for the budget, you're at the Congressional Budget Office,

1141
01:01:59,240 --> 01:02:01,880
Speaker 2: you'r CBO. You're thinking about what does this these tariffs

1142
01:02:01,920 --> 01:02:05,280
Speaker 2: mean for the budget over the next ten years. I

1143
01:02:05,320 --> 01:02:08,200
Speaker 2: wouldn't count on these turrets being around, going back to

1144
01:02:08,240 --> 01:02:11,800
Speaker 2: the who is ever president? Because the next recession we

1145
01:02:11,880 --> 01:02:14,360
Speaker 2: are going to get those tarts are going to come down.

1146
01:02:15,000 --> 01:02:19,200
Speaker 2: That's a natural quick way for the next president or.

1147
01:02:19,200 --> 01:02:22,280
Speaker 1: Its stimulus without having to do anything, right, without legislation.

1148
01:02:22,400 --> 01:02:24,800
Speaker 2: What's better than that? Right? So I wouldn't so I

1149
01:02:24,800 --> 01:02:27,960
Speaker 2: wouldn't count on those tax revenues, but that those tariff revenues.

1150
01:02:28,000 --> 01:02:29,880
Speaker 2: But I'm just saying that you can use those things

1151
01:02:29,880 --> 01:02:32,880
Speaker 2: to kind of manage an economy through a period of

1152
01:02:32,880 --> 01:02:35,240
Speaker 2: time when you want to do it politically.

1153
01:02:35,600 --> 01:02:37,840
Speaker 1: All right, let me ask you about two counterfactuals which

1154
01:02:37,840 --> 01:02:42,280
Speaker 1: could sort of, you know, which could sort of change

1155
01:02:42,640 --> 01:02:43,960
Speaker 1: this potential forecasting.

1156
01:02:44,040 --> 01:02:47,920
Speaker 2: One is I've read a lot about the sort of

1157
01:02:48,680 --> 01:02:49,440
Speaker 2: it that moment.

1158
01:02:49,520 --> 01:02:51,680
Speaker 1: I guess it was Alan Greenspan with a bunch of

1159
01:02:51,760 --> 01:02:55,200
Speaker 1: economists of going, hey, I don't think productivity is factoring

1160
01:02:55,240 --> 01:02:56,800
Speaker 1: in the computer age very well?

1161
01:02:57,320 --> 01:02:57,560
Speaker 2: Right?

1162
01:02:59,400 --> 01:03:02,240
Speaker 1: Is there hidden productivity not being factored into the data

1163
01:03:02,320 --> 01:03:03,280
Speaker 1: right now via AI?

1164
01:03:03,560 --> 01:03:07,200
Speaker 2: Or is that just too soon to tell? I think

1165
01:03:07,240 --> 01:03:10,920
Speaker 2: it's too soon to tell. I don't think so. I

1166
01:03:10,960 --> 01:03:13,560
Speaker 2: don't you know, I don't think that's what's happening here.

1167
01:03:13,720 --> 01:03:20,640
Speaker 2: I mean Back in the nineties, there was more evidence

1168
01:03:20,720 --> 01:03:24,960
Speaker 2: that prices were falling for different things related to the Internet,

1169
01:03:25,080 --> 01:03:27,560
Speaker 2: like chip chip technology, that kind of thing, and we

1170
01:03:28,040 --> 01:03:30,400
Speaker 2: knew that that was not being captured in the way

1171
01:03:30,840 --> 01:03:33,960
Speaker 2: the beautiful LABORISTICKS was measuring things. So there was strong

1172
01:03:34,560 --> 01:03:38,440
Speaker 2: economic statistical evidence that, you know, we were missing something

1173
01:03:38,480 --> 01:03:40,680
Speaker 2: here in the data. I don't see that in the

1174
01:03:40,720 --> 01:03:44,680
Speaker 2: current data. I don't, And I even more intuitively, I'm

1175
01:03:44,680 --> 01:03:47,480
Speaker 2: not I'm not sure AI is really lifting productivity. You know,

1176
01:03:47,560 --> 01:03:54,800
Speaker 2: for example, you're a business person, you have and I'm

1177
01:03:54,840 --> 01:03:56,480
Speaker 2: a business person, right, I run a bit. I run

1178
01:03:56,480 --> 01:03:59,240
Speaker 2: a business. I have a couple hundred comments in my

1179
01:03:59,360 --> 01:04:03,680
Speaker 2: world around the world, and I'm always thinking about productivity growth.

1180
01:04:03,720 --> 01:04:07,360
Speaker 2: And I've got in the queue a number of productivity

1181
01:04:07,440 --> 01:04:09,720
Speaker 2: enhancing things that I want to do. None of them

1182
01:04:09,720 --> 01:04:12,280
Speaker 2: are home runs. All of them are singles. But I

1183
01:04:12,320 --> 01:04:14,600
Speaker 2: know I have a high probability of hitting the single.

1184
01:04:15,320 --> 01:04:17,600
Speaker 2: But if I'm going to invest in AI, I have

1185
01:04:17,680 --> 01:04:20,960
Speaker 2: to redirect resources away from hitting the single to try

1186
01:04:21,000 --> 01:04:23,840
Speaker 2: to hit that home run, and by so doing, I'm

1187
01:04:23,840 --> 01:04:26,560
Speaker 2: giving up the singles in the interim until I hit

1188
01:04:26,560 --> 01:04:28,440
Speaker 2: the home run. And I'm hoping I hit the home

1189
01:04:28,520 --> 01:04:31,720
Speaker 2: run because I know absolutely need it if I don't,

1190
01:04:32,080 --> 01:04:33,920
Speaker 2: but I've given up these singles and I've given up

1191
01:04:33,920 --> 01:04:37,120
Speaker 2: productivity growth, So I could even argue reasonably I think

1192
01:04:37,360 --> 01:04:41,320
Speaker 2: up to this point in time in aggregate that the

1193
01:04:41,360 --> 01:04:44,960
Speaker 2: AI may be costing us productivity, not enhancing productivity. And

1194
01:04:45,000 --> 01:04:48,440
Speaker 2: the other thing about things like AI to other technologies

1195
01:04:48,520 --> 01:04:53,960
Speaker 2: is they don't really lift productivity until business new businesses

1196
01:04:54,120 --> 01:04:59,040
Speaker 2: form and optimize their business around that new technology. When

1197
01:04:59,040 --> 01:05:02,760
Speaker 2: a legacy company, these old companies built on different technologies,

1198
01:05:02,840 --> 01:05:05,439
Speaker 2: try to adopt the new technology, it creates all kinds

1199
01:05:05,440 --> 01:05:07,560
Speaker 2: of havoc. You know, You've got to change, You've got

1200
01:05:07,560 --> 01:05:09,960
Speaker 2: to restructure, you got to fire people, you got to

1201
01:05:10,000 --> 01:05:12,080
Speaker 2: hire new people, You've got to buy new equipment and

1202
01:05:12,080 --> 01:05:13,600
Speaker 2: you software, you got to do all kinds of stuff,

1203
01:05:14,520 --> 01:05:19,480
Speaker 2: and so, uh, it just takes time for these technologies

1204
01:05:19,480 --> 01:05:21,920
Speaker 2: like to diffuse in a way that really lives underlying

1205
01:05:21,920 --> 01:05:25,080
Speaker 2: product Don't get me wrong. I think AI and I'm you.

1206
01:05:25,160 --> 01:05:27,640
Speaker 2: We're using it and I'm using it now and I

1207
01:05:27,680 --> 01:05:31,040
Speaker 2: can see the power of it and I can feel it. Uh,

1208
01:05:31,240 --> 01:05:35,120
Speaker 2: and so I'm I'm confident it will left productivity growth.

1209
01:05:35,640 --> 01:05:38,280
Speaker 2: Uh not in a dystopic way that some people think

1210
01:05:38,320 --> 01:05:39,959
Speaker 2: that it's gonna wipe out all these jobs and people

1211
01:05:39,960 --> 01:05:41,920
Speaker 2: are gonna be an employ But I think it's growth.

1212
01:05:42,000 --> 01:05:43,720
Speaker 2: But I think it's gonna take some time. I don't

1213
01:05:43,720 --> 01:05:46,280
Speaker 2: think it's this year. I don't think it bails us

1214
01:05:46,320 --> 01:05:48,480
Speaker 2: out this year, where it's a little early for that,

1215
01:05:48,520 --> 01:05:48,760
Speaker 2: all right.

1216
01:05:48,760 --> 01:05:52,360
Speaker 1: And the other part of AI right now is just

1217
01:05:52,440 --> 01:05:55,320
Speaker 1: the massive investments that are taking place right whether it's

1218
01:05:55,320 --> 01:05:58,919
Speaker 1: the particularly the largest cap companies who are just what

1219
01:05:59,000 --> 01:06:03,360
Speaker 1: does it's I assume that's one time impact into our

1220
01:06:03,440 --> 01:06:04,520
Speaker 1: growth numbers.

1221
01:06:04,600 --> 01:06:06,440
Speaker 2: Yeah, you're making the investment.

1222
01:06:06,480 --> 01:06:09,160
Speaker 1: Yeah, right, when you're making these investments, you know, does

1223
01:06:09,160 --> 01:06:12,800
Speaker 1: that stave off recession because of just the amount of

1224
01:06:12,840 --> 01:06:15,240
Speaker 1: money and it is, I mean this data center now,

1225
01:06:15,280 --> 01:06:19,360
Speaker 1: it's not creating human jobs, you know, yes for electricians

1226
01:06:19,400 --> 01:06:24,360
Speaker 1: and and and some some uh IT specialists, Uh of course,

1227
01:06:24,400 --> 01:06:26,440
Speaker 1: but it I mean, that's the scary part. It's all

1228
01:06:26,480 --> 01:06:30,440
Speaker 1: this investment into a future of no employment employees. But

1229
01:06:31,280 --> 01:06:35,160
Speaker 1: I assume that has some positive impact on economic growth

1230
01:06:35,440 --> 01:06:36,280
Speaker 1: in the short term.

1231
01:06:36,600 --> 01:06:38,960
Speaker 2: It does. It is definitely a tailwind to growth. And

1232
01:06:39,520 --> 01:06:41,120
Speaker 2: you know, without that tail when we could be in

1233
01:06:41,120 --> 01:06:43,800
Speaker 2: recession already. You know, we could get you think it's

1234
01:06:43,840 --> 01:06:46,760
Speaker 2: possible that it's already so it's definitely using things, but

1235
01:06:46,800 --> 01:06:50,000
Speaker 2: it's not. It's it's a it's a modest tailwind. I mean, like,

1236
01:06:50,040 --> 01:06:54,200
Speaker 2: for example, if you look at all construction spending on

1237
01:06:54,360 --> 01:07:00,360
Speaker 2: construction from home building to amusement parks to hospital to

1238
01:07:01,320 --> 01:07:05,120
Speaker 2: data centers, it's falling. It's where the construction sector is

1239
01:07:05,160 --> 01:07:09,920
Speaker 2: in recession. And that's despite the booming growth in investment

1240
01:07:10,000 --> 01:07:15,920
Speaker 2: in data centers. So it's definitely helping chushion whatever is

1241
01:07:15,960 --> 01:07:18,200
Speaker 2: going on in the economy, but it's not enough to

1242
01:07:18,280 --> 01:07:21,960
Speaker 2: forestall you know, these broader macro forces that you know,

1243
01:07:22,520 --> 01:07:24,400
Speaker 2: they don't like play play play out here over the

1244
01:07:24,480 --> 01:07:25,840
Speaker 2: next six twelve months.

1245
01:07:26,040 --> 01:07:28,720
Speaker 1: All right, we've just discussed sort of the state of

1246
01:07:28,680 --> 01:07:31,480
Speaker 1: the economy, state of the next six months based on

1247
01:07:32,000 --> 01:07:33,960
Speaker 1: a lot of data that you give analyzed that is

1248
01:07:34,000 --> 01:07:35,240
Speaker 1: produced by the federal government.

1249
01:07:36,120 --> 01:07:41,840
Speaker 2: You know where I'm going here exactly. Yeah, what happens?

1250
01:07:42,000 --> 01:07:47,120
Speaker 1: What walk me through your life with a BLS that

1251
01:07:47,120 --> 01:07:50,640
Speaker 1: does not produce monthly data, Well, everyone's life.

1252
01:07:50,520 --> 01:07:55,680
Speaker 2: Right, I mean, think about if we don't have timely, accurate,

1253
01:07:56,480 --> 01:07:59,560
Speaker 2: comprehensive data on how the economy is performing and the

1254
01:07:59,600 --> 01:08:02,520
Speaker 2: blu pure of liberal statistics is key to that. They

1255
01:08:02,520 --> 01:08:05,280
Speaker 2: produce the consumer price index we talked about, that they

1256
01:08:05,320 --> 01:08:08,880
Speaker 2: produce the jobs numbers we talked about, that businesses can

1257
01:08:08,960 --> 01:08:13,680
Speaker 2: make good decisions about investing, hiring, firing, Federal Reserve can

1258
01:08:13,800 --> 01:08:16,360
Speaker 2: make good decisions about should I cut rates not cut rates?

1259
01:08:17,280 --> 01:08:20,800
Speaker 2: None of those investors can make good decisions about you know,

1260
01:08:20,840 --> 01:08:23,479
Speaker 2: the investment in stocks and bonds that's going to add

1261
01:08:23,479 --> 01:08:26,040
Speaker 2: to interest rates. There's a gazillion ways that we're all

1262
01:08:26,040 --> 01:08:29,200
Speaker 2: going to pay a price for that if we don't

1263
01:08:29,240 --> 01:08:34,400
Speaker 2: continue to have timely, accurate and comprehensive data. In the

1264
01:08:34,400 --> 01:08:36,920
Speaker 2: case of the peer of liberal statistics, sure they have.

1265
01:08:37,160 --> 01:08:42,639
Speaker 2: There's problems measuring things. There always is, and just given

1266
01:08:42,720 --> 01:08:44,920
Speaker 2: the scale and scope of what they're trying to do.

1267
01:08:45,320 --> 01:08:47,920
Speaker 1: But the inter after that in into your the way

1268
01:08:47,960 --> 01:08:49,680
Speaker 1: you look at things like I had somebody tell me

1269
01:08:49,720 --> 01:08:51,759
Speaker 1: it takes three months to get one month of good data.

1270
01:08:54,680 --> 01:09:00,200
Speaker 2: No, in typical times, is absolutely not true. I mean

1271
01:09:00,240 --> 01:09:03,519
Speaker 2: the revision. So he's whatever that person is, whoever that is.

1272
01:09:03,520 --> 01:09:05,799
Speaker 2: They're focusing on the revisions to the data. They're saying,

1273
01:09:06,360 --> 01:09:08,120
Speaker 2: I have to wait for three months to get enough

1274
01:09:08,160 --> 01:09:10,040
Speaker 2: responses to get enough good information to.

1275
01:09:10,000 --> 01:09:13,880
Speaker 1: Publish that by August, I'll have a good sense of

1276
01:09:13,880 --> 01:09:14,479
Speaker 1: what June looks.

1277
01:09:14,600 --> 01:09:20,320
Speaker 2: Yeah. Yeah, in ninety five percent of the times, not

1278
01:09:20,439 --> 01:09:23,280
Speaker 2: so the data when you get the first month to sort

1279
01:09:23,240 --> 01:09:25,200
Speaker 2: of data that's going to tell you exactly what you

1280
01:09:25,240 --> 01:09:28,000
Speaker 2: need to know going forward. There are times, though, when

1281
01:09:28,000 --> 01:09:31,600
Speaker 2: the economy turns, like now, when it's going from a

1282
01:09:31,640 --> 01:09:34,600
Speaker 2: good economy in twenty twenty four to a tough economy

1283
01:09:34,800 --> 01:09:37,400
Speaker 2: in twenty twenty five and a potentially recessionary economy in

1284
01:09:37,439 --> 01:09:40,719
Speaker 2: twenty twenty six, that's a turning point. When you're turning points,

1285
01:09:40,760 --> 01:09:44,759
Speaker 2: then the survey has become more complicated and the data

1286
01:09:44,800 --> 01:09:47,880
Speaker 2: becomes more murky, and the initial estimates that you get

1287
01:09:48,200 --> 01:09:50,639
Speaker 2: are less representative of the reality of what's going on.

1288
01:09:51,080 --> 01:09:55,000
Speaker 2: Because the economy's turning. It's going on, but that's information.

1289
01:09:55,439 --> 01:09:58,080
Speaker 2: So the fact that we're getting these big downward revisions

1290
01:09:58,360 --> 01:10:01,360
Speaker 2: is actually a tell. That's another tell. You ask me

1291
01:10:01,400 --> 01:10:02,880
Speaker 2: what indicators is what I look at? I look at

1292
01:10:02,920 --> 01:10:06,599
Speaker 2: that indicator. It's a huge indicator. You're getting big downlard revisions.

1293
01:10:06,880 --> 01:10:09,400
Speaker 2: That's a tell that the economy is sucking and wind

1294
01:10:09,880 --> 01:10:12,160
Speaker 2: and it may actually be in recession already, you know,

1295
01:10:12,400 --> 01:10:14,599
Speaker 2: if history is in any guide, So I don't buy

1296
01:10:14,640 --> 01:10:18,080
Speaker 2: into that whatsoever that you know. And the answer to

1297
01:10:18,120 --> 01:10:22,280
Speaker 2: all of this isn't stop publishing that, because the one response,

1298
01:10:23,040 --> 01:10:26,519
Speaker 2: one policy step I've heard, is well, we're not going

1299
01:10:26,560 --> 01:10:29,519
Speaker 2: to publish the data every month. We're going to publish

1300
01:10:29,520 --> 01:10:32,439
Speaker 2: it every three months. To your point that we don't, uh,

1301
01:10:32,920 --> 01:10:36,200
Speaker 2: you know. But the answer to getting better data isn't

1302
01:10:36,200 --> 01:10:39,280
Speaker 2: doing that. But answer to the better data is fund

1303
01:10:39,280 --> 01:10:42,200
Speaker 2: the bulable statistics given the resource of any In fact,

1304
01:10:42,200 --> 01:10:46,160
Speaker 2: here's another interesting point, consumer price index CPI. We're all

1305
01:10:46,320 --> 01:10:48,920
Speaker 2: focused on that like a laser beam, because that tells

1306
01:10:48,960 --> 01:10:51,160
Speaker 2: us about inflation and what's going on with inflation. The

1307
01:10:51,200 --> 01:10:54,479
Speaker 2: FED needs that information as quickly as it possibly can

1308
01:10:54,520 --> 01:10:58,200
Speaker 2: to make good, good decisions. Almost a third of the

1309
01:10:58,240 --> 01:11:02,160
Speaker 2: products that are canvas by the buer of libertys to

1310
01:11:02,160 --> 01:11:05,679
Speaker 2: construct that measure, they send They send actual people out

1311
01:11:05,720 --> 01:11:09,080
Speaker 2: there to Trader Joe's. They get that packet of chicken

1312
01:11:09,080 --> 01:11:12,519
Speaker 2: and they say see that for themselves. Right. Because of

1313
01:11:12,560 --> 01:11:15,839
Speaker 2: the cuts to BLS payrolls, because of the DOGE cuts,

1314
01:11:16,320 --> 01:11:18,519
Speaker 2: they can't send out as many people. And therefore now

1315
01:11:18,520 --> 01:11:22,439
Speaker 2: they're imputing, I mean so called imputing. That's a technical

1316
01:11:22,479 --> 01:11:26,120
Speaker 2: word for you know, coming up, making stuff up based

1317
01:11:26,160 --> 01:11:30,160
Speaker 2: on other data. It's certainly not as accurate good as

1318
01:11:29,800 --> 01:11:33,400
Speaker 2: a as a survey, and that compares to a third

1319
01:11:33,520 --> 01:11:36,880
Speaker 2: is now imputed before this, if you go back a

1320
01:11:36,960 --> 01:11:40,519
Speaker 2: year ago, is ten percent. So the answer is, please,

1321
01:11:40,720 --> 01:11:43,120
Speaker 2: you know, give the BLS more people so they to

1322
01:11:43,120 --> 01:11:46,240
Speaker 2: do more surveys and they can get better data and

1323
01:11:46,360 --> 01:11:49,559
Speaker 2: the result will be a more accurate and more timely,

1324
01:11:49,680 --> 01:11:52,400
Speaker 2: more comprehensive set of data. That's the answer. That's the solution.

1325
01:11:52,760 --> 01:11:53,960
Speaker 2: But if you're not, if you're not going to do that,

1326
01:11:54,040 --> 01:11:56,320
Speaker 2: it certainly don't cut back on the on the timeliness

1327
01:11:56,360 --> 01:11:57,479
Speaker 2: of the data that we're receiving.

1328
01:12:00,840 --> 01:12:04,040
Speaker 1: Look, if this gets so politically interfered with where you

1329
01:12:04,200 --> 01:12:07,320
Speaker 1: don't have confidence, forget, forget, forget the politics of this

1330
01:12:07,360 --> 01:12:09,480
Speaker 1: a minute, your own politics, anybody's politics.

1331
01:12:09,720 --> 01:12:10,559
Speaker 2: You're at Moody's.

1332
01:12:10,880 --> 01:12:14,479
Speaker 1: Your job is to try to assess the state of

1333
01:12:14,520 --> 01:12:17,400
Speaker 1: the economy in different aspects. And if you can't get

1334
01:12:17,439 --> 01:12:21,400
Speaker 1: reliable data from the US government, what's the alternative? How

1335
01:12:21,479 --> 01:12:25,800
Speaker 1: do you how do you backfill that yourself? And you know,

1336
01:12:25,960 --> 01:12:31,480
Speaker 1: is it realistic to create essentially a private BLS that

1337
01:12:31,479 --> 01:12:34,720
Speaker 1: that the financial community could rely on.

1338
01:12:35,160 --> 01:12:38,320
Speaker 2: Oh, there's no way to replicate what the beautiful libor

1339
01:12:38,360 --> 01:12:40,320
Speaker 2: statistics is doing in the private sector. And that's a

1340
01:12:40,720 --> 01:12:43,320
Speaker 2: classic what economy is called public good, right, I mean,

1341
01:12:43,360 --> 01:12:45,599
Speaker 2: that's the benefit of that's going to be shared broadly

1342
01:12:45,640 --> 01:12:48,200
Speaker 2: by everyone in the economy, and it should be paid

1343
01:12:48,240 --> 01:12:50,000
Speaker 2: for by everyone. And there's just no way for a

1344
01:12:50,000 --> 01:12:55,440
Speaker 2: private sector entity or entities to find the economics viable

1345
01:12:55,520 --> 01:12:57,360
Speaker 2: to do what the BLS is doing. And by the way,

1346
01:12:57,360 --> 01:12:59,719
Speaker 2: it couldn't be done because there's all kinds of privacy

1347
01:12:59,760 --> 01:13:02,800
Speaker 2: issue using security issues. And you know, if you're if

1348
01:13:02,840 --> 01:13:05,640
Speaker 2: you're canvassing a major American corporation, how many people do

1349
01:13:05,680 --> 01:13:07,639
Speaker 2: you ask them? How many people do they employ? They're

1350
01:13:07,640 --> 01:13:09,880
Speaker 2: not going to tell another private sector how many private companies.

1351
01:13:11,520 --> 01:13:14,519
Speaker 2: They already distrust the government enough. And that's one of

1352
01:13:14,520 --> 01:13:16,640
Speaker 2: the reasons why the survey responses are down, because they

1353
01:13:16,760 --> 01:13:20,320
Speaker 2: are ready to the lack of trust. So, uh, but

1354
01:13:20,479 --> 01:13:23,200
Speaker 2: we're some rusts standing still. Well, you know, we're going

1355
01:13:23,280 --> 01:13:26,000
Speaker 2: to try hard here, so there's some data we have

1356
01:13:26,000 --> 01:13:29,920
Speaker 2: a better shot at coming up with estimates of what's

1357
01:13:29,920 --> 01:13:32,479
Speaker 2: going on than others like the CPI, the consumer price

1358
01:13:32,520 --> 01:13:35,000
Speaker 2: indext we have a shot at that, right because that

1359
01:13:35,200 --> 01:13:38,160
Speaker 2: those are prices that are out there in the public domain.

1360
01:13:38,240 --> 01:13:40,240
Speaker 2: Amazon posts them, Walmart posts.

1361
01:13:40,280 --> 01:13:42,800
Speaker 1: In theory, you could put together something that would give

1362
01:13:43,080 --> 01:13:46,479
Speaker 1: give a fairly accurate you know, and in the.

1363
01:13:46,439 --> 01:13:51,639
Speaker 2: Past some have like Harvard could follow Billion Pieces project.

1364
01:13:51,920 --> 01:13:55,519
Speaker 2: He did this because of Argentina. Argentina obviously made up

1365
01:13:55,560 --> 01:13:57,080
Speaker 2: a lot of data back in the day because they

1366
01:13:57,120 --> 01:13:59,960
Speaker 2: were hiding their inflationary problem, and so as a way

1367
01:13:59,960 --> 01:14:03,520
Speaker 2: to figure out what was actually going on, he constructed

1368
01:14:03,520 --> 01:14:07,760
Speaker 2: this brilliant Pieces project to canvas Argentinian businesses to get

1369
01:14:07,760 --> 01:14:10,080
Speaker 2: a better read on what the inflation actually was. And

1370
01:14:10,080 --> 01:14:12,240
Speaker 2: it actually it worked for him, and so we're going

1371
01:14:12,320 --> 01:14:14,759
Speaker 2: to do We'll do that for CPI, but for jobs

1372
01:14:15,160 --> 01:14:17,599
Speaker 2: that's a lot harder. Now we'll rely on other sources there.

1373
01:14:17,640 --> 01:14:20,240
Speaker 2: In the case of jobs, we have ADP, that's the

1374
01:14:20,280 --> 01:14:22,200
Speaker 2: Human Resource Company and I used to I used to

1375
01:14:22,280 --> 01:14:24,800
Speaker 2: construct that data for them, and it is a very

1376
01:14:24,960 --> 01:14:29,599
Speaker 2: large sample of companies. It's not as representative because there's.

1377
01:14:29,400 --> 01:14:31,880
Speaker 1: Half of corporate America. Right, there's two big firms that

1378
01:14:31,960 --> 01:14:35,040
Speaker 1: do this, right ADP. I feel like there's a competitive there's.

1379
01:14:34,760 --> 01:14:36,679
Speaker 2: Only ADP is the largest. I think by far they're

1380
01:14:36,680 --> 01:14:39,120
Speaker 2: the largest one. There's others that are kind of smaller.

1381
01:14:40,840 --> 01:14:43,759
Speaker 2: But the problem with ADP though, if you get a payroll,

1382
01:14:43,840 --> 01:14:46,680
Speaker 2: if you're using payroll processing services, which is how they

1383
01:14:46,680 --> 01:14:49,519
Speaker 2: get the data, you've got to be a pretty good

1384
01:14:49,520 --> 01:14:51,360
Speaker 2: sized company. A small company is going to do their

1385
01:14:51,360 --> 01:14:53,920
Speaker 2: own payroll. They're not going to hire, so you're missing

1386
01:14:53,960 --> 01:14:56,240
Speaker 2: all that stuff that's going on. So it's not exactly right,

1387
01:14:56,640 --> 01:14:58,840
Speaker 2: but it's it gives you a window into what's going

1388
01:14:58,880 --> 01:15:01,479
Speaker 2: on here. But here's that's the other point. It's not

1389
01:15:01,640 --> 01:15:04,040
Speaker 2: like people aren't going to make inferences about what's going

1390
01:15:04,080 --> 01:15:06,400
Speaker 2: on in the economy and inflation if they don't get

1391
01:15:06,439 --> 01:15:08,200
Speaker 2: the data from the b all lives, they're going to

1392
01:15:08,200 --> 01:15:10,200
Speaker 2: continue to do it. This is going to do it

1393
01:15:10,240 --> 01:15:13,160
Speaker 2: based on bad data, worse data. Right, Well, let me

1394
01:15:13,160 --> 01:15:15,720
Speaker 2: ask you this. You have to you know, there's bad

1395
01:15:15,800 --> 01:15:18,720
Speaker 2: data out there internationally. Like I had an economist tell me,

1396
01:15:19,280 --> 01:15:22,600
Speaker 2: you know, who's very worried about you know, if the

1397
01:15:22,880 --> 01:15:26,360
Speaker 2: if the FED essentially gets merged with the Oval Office. Right,

1398
01:15:26,400 --> 01:15:29,720
Speaker 2: I'm being a little little dramatic, but that.

1399
01:15:31,200 --> 01:15:35,280
Speaker 1: We've seen a version of this it's called Turkey, and

1400
01:15:35,320 --> 01:15:37,920
Speaker 1: that the data you get out of Turkey.

1401
01:15:37,880 --> 01:15:39,760
Speaker 2: Is highly unreliable.

1402
01:15:39,920 --> 01:15:43,440
Speaker 1: Is that like, are there examples like that where maybe

1403
01:15:43,640 --> 01:15:46,920
Speaker 1: we could say, hey, be careful here, US Congress, be

1404
01:15:47,000 --> 01:15:49,920
Speaker 1: careful here, government entities. You don't want to end up

1405
01:15:49,960 --> 01:15:54,320
Speaker 1: like a country X here where we just their economic

1406
01:15:54,439 --> 01:15:55,800
Speaker 1: data is just not believable.

1407
01:15:56,200 --> 01:15:58,519
Speaker 2: Yeah, for sure. I mean the Turkey's a good example.

1408
01:15:58,560 --> 01:16:02,520
Speaker 2: I mentioned Argentina, Chris China is the poster child right

1409
01:16:02,720 --> 01:16:06,519
Speaker 2: for their data, the quality of their data, and private

1410
01:16:06,560 --> 01:16:08,880
Speaker 2: sources have figured out different ways to kind of measure

1411
01:16:08,920 --> 01:16:11,040
Speaker 2: what's going on. They have satellites that look the amount

1412
01:16:11,080 --> 01:16:14,760
Speaker 2: of how much how much light is emanating from Shanghai.

1413
01:16:15,160 --> 01:16:17,760
Speaker 2: That gives you a sense of GDP. That's what we're

1414
01:16:17,760 --> 01:16:22,400
Speaker 2: going to be reduced to. So yeah, yeah, that's an issue.

1415
01:16:22,640 --> 01:16:25,640
Speaker 2: But you know, having said all that, Chuck, look, I

1416
01:16:25,680 --> 01:16:28,360
Speaker 2: think the BLS has been around since eighteen eighty three, right,

1417
01:16:28,960 --> 01:16:32,120
Speaker 2: and it's a highly professional organization with lots of checks

1418
01:16:32,160 --> 01:16:35,960
Speaker 2: and balances. It's going to be pretty tough to monkey

1419
01:16:36,040 --> 01:16:38,920
Speaker 2: with that, at least quickly. I mean maybe over time,

1420
01:16:39,560 --> 01:16:42,479
Speaker 2: and maybe there's some things you can put your finger

1421
01:16:42,520 --> 01:16:44,760
Speaker 2: on the scale of here or there. And I'm not

1422
01:16:44,800 --> 01:16:47,880
Speaker 2: saying that's what's going to happen. It's possible, but I

1423
01:16:48,000 --> 01:16:51,200
Speaker 2: feel I don't feel at this point, well so I

1424
01:16:51,280 --> 01:16:53,599
Speaker 2: have to see what happens here you know exactly what

1425
01:16:54,280 --> 01:16:57,960
Speaker 2: changes actually occur, if any. But you know, at this point,

1426
01:16:58,000 --> 01:17:01,000
Speaker 2: I think it's still run in a very professional way,

1427
01:17:01,240 --> 01:17:04,719
Speaker 2: the BLS, the BA, the Census, the other major government

1428
01:17:04,720 --> 01:17:09,040
Speaker 2: statistical agencies. So I think it's We're not Turkey. Is

1429
01:17:09,080 --> 01:17:12,439
Speaker 2: it's premature to start going down that path this. I

1430
01:17:12,439 --> 01:17:15,519
Speaker 2: think we're well a long way from that, but all

1431
01:17:15,680 --> 01:17:17,599
Speaker 2: we should keep our eyes on this. It's very, very

1432
01:17:17,600 --> 01:17:19,720
Speaker 2: important to understand what's going on.

1433
01:17:21,200 --> 01:17:23,840
Speaker 1: When we talk about the potential for a recession in

1434
01:17:24,320 --> 01:17:28,599
Speaker 1: twenty six, perhaps under twenty five, you're assuming global recession.

1435
01:17:30,240 --> 01:17:32,679
Speaker 2: It's pretty tough for the US to go in recession

1436
01:17:32,680 --> 01:17:34,519
Speaker 2: and not drag a lot of other countries in with it.

1437
01:17:34,600 --> 01:17:38,679
Speaker 2: And of course Mexico and Canada already, if not in recession,

1438
01:17:38,680 --> 01:17:42,000
Speaker 2: they're even closer than we are because they're struggling with

1439
01:17:42,560 --> 01:17:45,639
Speaker 2: all the tariffs have been imposed and all the turmoil

1440
01:17:45,680 --> 01:17:46,799
Speaker 2: that's been created by the inside.

1441
01:17:46,840 --> 01:17:49,560
Speaker 1: No I mean I'm here anecdotal, I have Mexican relatives

1442
01:17:49,560 --> 01:17:52,920
Speaker 1: who tell me already they're seeing huge price spikes in

1443
01:17:53,000 --> 01:17:55,519
Speaker 1: the grocery store, like just big ones already and in

1444
01:17:55,520 --> 01:17:59,599
Speaker 1: the Walmart that they've felt And does that make sense

1445
01:17:59,640 --> 01:18:02,880
Speaker 1: to you that they might feel the effects quicker than

1446
01:18:02,880 --> 01:18:03,560
Speaker 1: we would.

1447
01:18:04,680 --> 01:18:10,479
Speaker 2: Yeah, well may I'm a little surprised, but maybe because

1448
01:18:10,520 --> 01:18:14,919
Speaker 2: they just there's no political spotlight on them in Mexico

1449
01:18:15,200 --> 01:18:18,559
Speaker 2: as compared to here in the US. Maybe. Uh, that's

1450
01:18:18,560 --> 01:18:21,960
Speaker 2: interesting though, But you know, Europe is also struggling. China's

1451
01:18:22,280 --> 01:18:26,160
Speaker 2: not going gangbusters. It's okay, that's the other major economy

1452
01:18:26,320 --> 01:18:29,280
Speaker 2: in the world. So yeah, if we go into recession,

1453
01:18:29,800 --> 01:18:31,639
Speaker 2: pretty tough to think that the rest of the world,

1454
01:18:31,760 --> 01:18:33,320
Speaker 2: much of the rest of the world won't be dragged

1455
01:18:33,360 --> 01:18:36,759
Speaker 2: along and the global sufferer downturn as a result.

1456
01:18:37,640 --> 01:18:39,880
Speaker 1: This may be asking you to do too much on

1457
01:18:40,000 --> 01:18:42,439
Speaker 1: sort of you know, I know, it's forecasting is hard

1458
01:18:42,520 --> 01:18:43,960
Speaker 1: enough when you're trying to do it month to month,

1459
01:18:44,040 --> 01:18:47,639
Speaker 1: quarter to quarter, even year to year, But the long

1460
01:18:47,760 --> 01:18:50,160
Speaker 1: term impact of this sort of you know, if we're

1461
01:18:50,160 --> 01:18:53,320
Speaker 1: going to be nationalists about our economy right and do

1462
01:18:53,400 --> 01:18:57,120
Speaker 1: everything we can to protect our economy, every other country

1463
01:18:57,160 --> 01:19:01,519
Speaker 1: has to sort of react the same way. What is

1464
01:19:01,600 --> 01:19:05,720
Speaker 1: that long term effect if we suddenly have everybody being

1465
01:19:05,840 --> 01:19:11,240
Speaker 1: nationalists with their economic policy. I mean, is it just

1466
01:19:11,439 --> 01:19:13,800
Speaker 1: things like, hey, you're not going to be able to

1467
01:19:13,800 --> 01:19:16,120
Speaker 1: just get certain things at certain times of the year.

1468
01:19:16,400 --> 01:19:17,400
Speaker 2: Did you enjoy.

1469
01:19:17,160 --> 01:19:19,679
Speaker 1: Avocados anytime you want it in the year, You're only

1470
01:19:19,720 --> 01:19:21,200
Speaker 1: now only going to get them seasonally?

1471
01:19:23,120 --> 01:19:23,320
Speaker 2: You know.

1472
01:19:23,360 --> 01:19:27,040
Speaker 1: That's one example that I've heard that we may feel.

1473
01:19:27,280 --> 01:19:30,000
Speaker 1: But what are some of the larger term impacts of

1474
01:19:30,040 --> 01:19:33,280
Speaker 1: a global race for protectionism.

1475
01:19:34,200 --> 01:19:36,599
Speaker 2: Well, this is just the flipping what the world's gone

1476
01:19:36,600 --> 01:19:38,599
Speaker 2: through over the past thirty years on its head, right.

1477
01:19:38,640 --> 01:19:42,160
Speaker 2: I mean, we've been on the process of globalizing really

1478
01:19:42,240 --> 01:19:46,080
Speaker 2: since the well bringing barriers down everywhere, right since World

1479
01:19:46,080 --> 01:19:49,320
Speaker 2: War Two. You know, we's been pretty steady process. And

1480
01:19:49,360 --> 01:19:56,080
Speaker 2: it's across trade, it's across investment, it's across immigration, you know,

1481
01:19:56,520 --> 01:20:01,360
Speaker 2: along tourism, kids come into our schools, along every dimension.

1482
01:20:02,200 --> 01:20:05,320
Speaker 2: There's been increased globalization, and I think the evidence is

1483
01:20:05,880 --> 01:20:11,600
Speaker 2: overwhelming that in aggregate we've benefited enormously the country. Just

1484
01:20:11,600 --> 01:20:12,719
Speaker 2: look low rates.

1485
01:20:12,800 --> 01:20:17,200
Speaker 1: Yeah, yeah, we think about poverty in the last fifty

1486
01:20:17,280 --> 01:20:20,960
Speaker 1: years than we did in the first, right million. I mean,

1487
01:20:21,000 --> 01:20:22,840
Speaker 1: you know how you want to calculate it.

1488
01:20:22,920 --> 01:20:27,360
Speaker 2: Yeah, yeah, I mean, unfortunately, the benefits of the globalization

1489
01:20:27,680 --> 01:20:31,160
Speaker 2: were skewed right to folks like me and you. We

1490
01:20:31,200 --> 01:20:33,519
Speaker 2: can tell our talents to the rest of the world,

1491
01:20:33,560 --> 01:20:36,840
Speaker 2: and we benefit from that. In much of many other

1492
01:20:36,840 --> 01:20:40,920
Speaker 2: parts of the US, particularly manufacturing in the middle part

1493
01:20:40,920 --> 01:20:44,080
Speaker 2: of the country in the southeast, got crushed by that

1494
01:20:44,120 --> 01:20:48,000
Speaker 2: globalization because China came in and you know that, it's

1495
01:20:48,040 --> 01:20:50,680
Speaker 2: other countries. But that's that was the poster child one.

1496
01:20:51,200 --> 01:20:53,040
Speaker 2: And I think that goes a long way too, obviously

1497
01:20:53,080 --> 01:20:56,960
Speaker 2: explaining our fracture politics at this point, because we screwed

1498
01:20:56,960 --> 01:21:01,080
Speaker 2: that up. We the collective. We didn't think about that

1499
01:21:01,120 --> 01:21:03,839
Speaker 2: everyone needed to come along for the ride here and benefit,

1500
01:21:03,960 --> 01:21:08,240
Speaker 2: not not exactly equally, because that's this is America, but everyone.

1501
01:21:08,280 --> 01:21:09,880
Speaker 2: No one should be left behind as a result of

1502
01:21:09,920 --> 01:21:12,920
Speaker 2: the globalization process. But we did. And so now here

1503
01:21:12,920 --> 01:21:16,880
Speaker 2: we are and we're in reverse. We're we are deglobalizing,

1504
01:21:17,360 --> 01:21:20,480
Speaker 2: and so stands to reason if we benefit from the globalization,

1505
01:21:20,760 --> 01:21:22,880
Speaker 2: we're in aggregate going to be hurt by the de

1506
01:21:22,960 --> 01:21:25,479
Speaker 2: globalization that occurs. And by the way, the folks that

1507
01:21:26,160 --> 01:21:29,400
Speaker 2: were hurt by the by the globalization. I don't necessarily

1508
01:21:29,439 --> 01:21:31,920
Speaker 2: think they're going to benefit from the de globalization either.

1509
01:21:32,680 --> 01:21:34,640
Speaker 2: I mean, it's not like as you point out, or

1510
01:21:34,680 --> 01:21:36,439
Speaker 2: maybe you pointed this out before we got on we

1511
01:21:36,479 --> 01:21:40,519
Speaker 2: started having the conversation here. Uh, this isn't about jobs.

1512
01:21:41,280 --> 01:21:43,559
Speaker 2: You know, even if the terror sort of bring back

1513
01:21:43,640 --> 01:21:47,559
Speaker 2: manufacturing activity factories, but by the way, I don't think

1514
01:21:47,560 --> 01:21:49,759
Speaker 2: that's going to happen. But even if it did, they

1515
01:21:49,800 --> 01:21:54,240
Speaker 2: don't employ anybody, right, these are automated. There's no jobs.

1516
01:21:54,400 --> 01:21:57,800
Speaker 2: There's no jobs there. So uh yeah, I think that's

1517
01:21:58,240 --> 01:22:02,080
Speaker 2: the consertive from from perspective. We will be diminished by that.

1518
01:22:02,120 --> 01:22:04,479
Speaker 2: And actually there's a great case study. Just go look

1519
01:22:04,520 --> 01:22:08,920
Speaker 2: at the UK. UK began deglobalizing in earnest with Brexit

1520
01:22:08,960 --> 01:22:13,280
Speaker 2: in twenty sixteen. Do a chart of UK GDP, you know,

1521
01:22:13,320 --> 01:22:16,400
Speaker 2: over the last thirty years, and you can see you'll

1522
01:22:16,439 --> 01:22:19,360
Speaker 2: see very clearly a step down during the financial crisis.

1523
01:22:19,640 --> 01:22:22,000
Speaker 2: Then you'll see Brexit, and then the slope of the

1524
01:22:22,040 --> 01:22:25,920
Speaker 2: line bends down. So here we are growing in a

1525
01:22:26,000 --> 01:22:28,400
Speaker 2: nice pace and now it's bent down. And then of

1526
01:22:28,400 --> 01:22:30,920
Speaker 2: course you see another step down because of the pandemic.

1527
01:22:31,320 --> 01:22:36,120
Speaker 2: So UK is a shadow today of what it would

1528
01:22:36,120 --> 01:22:38,920
Speaker 2: have been if if Brexit had never happened. And that's

1529
01:22:38,960 --> 01:22:41,720
Speaker 2: a great case study for our future if we go

1530
01:22:41,760 --> 01:22:42,479
Speaker 2: down this path.

1531
01:22:42,840 --> 01:22:46,880
Speaker 1: By the way, just as an economy, we came out

1532
01:22:46,880 --> 01:22:50,519
Speaker 1: of COVID about as well as any major economy around

1533
01:22:50,520 --> 01:22:50,960
Speaker 1: the world.

1534
01:22:50,840 --> 01:22:52,000
Speaker 2: Did better than anybody.

1535
01:22:52,400 --> 01:22:55,080
Speaker 1: Yeah, yeah, better than I mean, that's I mean, that's

1536
01:22:55,080 --> 01:22:56,880
Speaker 1: really you know, it's one of those things I've said

1537
01:22:56,880 --> 01:22:59,080
Speaker 1: this before. It's like, look, I'm aware of the politics

1538
01:22:59,080 --> 01:23:02,839
Speaker 1: and pandemics. I mean, you know, nineteen seventeen and eighteen,

1539
01:23:02,880 --> 01:23:05,000
Speaker 1: you know, we were at each other's throats, and you know,

1540
01:23:05,080 --> 01:23:07,280
Speaker 1: we didn't trust each other either. I mean, this isn't

1541
01:23:07,280 --> 01:23:10,479
Speaker 1: a new phenomenon, right, this is human nature. We don't

1542
01:23:10,680 --> 01:23:13,640
Speaker 1: you know it is, it is something distinct. But it

1543
01:23:13,680 --> 01:23:19,720
Speaker 1: does feel as if, collectively, despite our polarized politics, our

1544
01:23:19,800 --> 01:23:22,960
Speaker 1: lawmakers responded correctly to this crisis in a way that

1545
01:23:23,000 --> 01:23:25,919
Speaker 1: they didn't to the financial crisis of a nine totally.

1546
01:23:26,040 --> 01:23:29,240
Speaker 2: Totally. I mean, they were fully committed. Both Republican and

1547
01:23:29,320 --> 01:23:33,000
Speaker 2: Democrats ultimately came together and did what was necessary to

1548
01:23:33,000 --> 01:23:33,800
Speaker 2: get the comfort roma.

1549
01:23:34,040 --> 01:23:37,320
Speaker 1: I mean, the choice was, as I said, inflation or recession,

1550
01:23:37,360 --> 01:23:39,160
Speaker 1: and we chose inflation right.

1551
01:23:39,640 --> 01:23:43,480
Speaker 2: Well, even there, I you know, I think the inflation

1552
01:23:43,680 --> 01:23:46,960
Speaker 2: would have happened almost regardless because of the supply chain

1553
01:23:47,000 --> 01:23:50,080
Speaker 2: disruptions in the Russian War and prices. So even that,

1554
01:23:50,160 --> 01:23:53,040
Speaker 2: I'm not the inflation that we got because of the

1555
01:23:53,200 --> 01:23:58,760
Speaker 2: fiscal support that was by design. I mean, you know,

1556
01:23:58,880 --> 01:24:01,280
Speaker 2: at that point, the FED was trying to get inflation

1557
01:24:01,320 --> 01:24:04,679
Speaker 2: above target because they wanted to compensate for the below

1558
01:24:04,760 --> 01:24:07,000
Speaker 2: target inflation that we've seen since the financial crisis. So

1559
01:24:07,240 --> 01:24:09,639
Speaker 2: I don't think there was anything undesirable about the inflation

1560
01:24:09,760 --> 01:24:12,200
Speaker 2: right up until Russia and in Ukraine in twenty twenty

1561
01:24:12,200 --> 01:24:15,439
Speaker 2: two and the North places went skyward, Agricultural prices went skyward,

1562
01:24:15,479 --> 01:24:17,960
Speaker 2: and that's when inflation became the real problem that it was.

1563
01:24:18,000 --> 01:24:21,519
Speaker 2: But the US, in my view, managed through the pandemic

1564
01:24:21,560 --> 01:24:25,559
Speaker 2: admirably well. Now was costly five trillion dollars twenty percent

1565
01:24:26,120 --> 01:24:29,840
Speaker 2: that to GDP, so that was was not cheap. We

1566
01:24:30,160 --> 01:24:33,960
Speaker 2: got the economy back up fully of running up in

1567
01:24:34,360 --> 01:24:37,599
Speaker 2: a full swing, well before anybody else, you know, go

1568
01:24:37,720 --> 01:24:41,080
Speaker 2: compar us to China or Europe or anyone else. And actually,

1569
01:24:41,080 --> 01:24:44,040
Speaker 2: if it's hard to believe, but if you just think

1570
01:24:44,080 --> 01:24:47,680
Speaker 2: back a year ago. The conversation was about American exceptionalism.

1571
01:24:47,760 --> 01:24:50,479
Speaker 2: We were doing better than anybody else, everybody else, and

1572
01:24:50,600 --> 01:24:52,320
Speaker 2: everybody wanted to be us. They want to be just

1573
01:24:52,360 --> 01:24:54,600
Speaker 2: like Mike, you know, they wanted to they want to

1574
01:24:54,680 --> 01:24:57,120
Speaker 2: be the un What are you guys doing that we

1575
01:24:57,160 --> 01:24:59,240
Speaker 2: should be doing? So we're doing something wrong, but you know,

1576
01:24:59,280 --> 01:25:02,120
Speaker 2: obviously we're It's a very different story now, all right,

1577
01:25:02,200 --> 01:25:03,559
Speaker 2: let me get you out of here on this. Which

1578
01:25:03,600 --> 01:25:04,799
Speaker 2: is the debt question?

1579
01:25:05,200 --> 01:25:05,360
Speaker 4: Right?

1580
01:25:05,439 --> 01:25:06,040
Speaker 2: Which is this?

1581
01:25:06,920 --> 01:25:10,759
Speaker 1: You know, there's a lot of a lot of smart

1582
01:25:10,800 --> 01:25:13,920
Speaker 1: people that I talked to, very worried about the debt.

1583
01:25:14,360 --> 01:25:17,439
Speaker 1: Continue to wonder when is you know, when is this

1584
01:25:17,560 --> 01:25:19,759
Speaker 1: the moment that we're not crying wolf and the wolf

1585
01:25:19,840 --> 01:25:20,639
Speaker 1: actually is here?

1586
01:25:22,280 --> 01:25:26,400
Speaker 2: What's say you? I think we're as close as we've

1587
01:25:26,400 --> 01:25:29,720
Speaker 2: ever been. I mean, I look at three measures. They're

1588
01:25:29,760 --> 01:25:35,200
Speaker 2: all they're all flashing red. One is the deficit to GDP.

1589
01:25:35,560 --> 01:25:38,280
Speaker 2: That's the size of our deficit each year. Six percent.

1590
01:25:39,479 --> 01:25:42,439
Speaker 2: That's extraordinary, even excluding the interest payments on the debt,

1591
01:25:42,439 --> 01:25:45,240
Speaker 2: it's three percent. That's called the primary deficit. We're at

1592
01:25:45,240 --> 01:25:49,760
Speaker 2: full employment, everyone's employed. He's what happens when we go

1593
01:25:49,800 --> 01:25:50,479
Speaker 2: into recession?

1594
01:25:50,560 --> 01:25:54,360
Speaker 1: Six percent, where we find it out stimulus, Yeah.

1595
01:25:54,240 --> 01:25:58,519
Speaker 2: Three percent is extraordinary. Primary. Second, our interest payments is

1596
01:25:58,520 --> 01:26:02,720
Speaker 2: a share of revenue or GDP, it's almost at a

1597
01:26:02,760 --> 01:26:04,840
Speaker 2: record high, will be at a record high immediately. We're

1598
01:26:04,880 --> 01:26:06,720
Speaker 2: spending more on our interest now than we are on

1599
01:26:06,880 --> 01:26:09,639
Speaker 2: our own defense. All the trend lines there look, you know,

1600
01:26:09,720 --> 01:26:13,000
Speaker 2: pretty ugly. And then the debt to GDP. That's the

1601
01:26:13,040 --> 01:26:15,320
Speaker 2: amount of debt we have out saying that's one hundred percent.

1602
01:26:16,240 --> 01:26:18,800
Speaker 2: It's now at one hundred percent debt to GDP. It

1603
01:26:18,840 --> 01:26:20,960
Speaker 2: was just to give a context, it was closer to

1604
01:26:20,960 --> 01:26:23,240
Speaker 2: twenty five to thirty percent before the financial crisis. So

1605
01:26:23,280 --> 01:26:26,160
Speaker 2: that's how bad how quickly things have turned in terms

1606
01:26:26,160 --> 01:26:29,360
Speaker 2: of our fiscal situation. And here the direction of travel

1607
01:26:29,479 --> 01:26:32,680
Speaker 2: is also very disconcerting. We know exactly going forward what's

1608
01:26:32,680 --> 01:26:37,320
Speaker 2: going on. So we've we've rarely been in this situation

1609
01:26:37,560 --> 01:26:40,360
Speaker 2: where all these indicators are saying the same thing. We

1610
01:26:40,439 --> 01:26:44,879
Speaker 2: got a problem, and global investors are nervous, they're skittish.

1611
01:26:44,920 --> 01:26:48,639
Speaker 2: That's why the euro But are we still the cleanest

1612
01:26:48,680 --> 01:26:50,719
Speaker 2: pair of dirty underwear? And the well, we're still the cleanest,

1613
01:26:50,720 --> 01:26:53,559
Speaker 2: but we're pretty dirty. And then global investors aren't noticing

1614
01:26:53,640 --> 01:26:56,479
Speaker 2: you're the dollar is not appreciating and all this it's

1615
01:26:56,600 --> 01:26:59,360
Speaker 2: falling in value. Gold prices are a record high, as

1616
01:26:59,360 --> 01:27:02,000
Speaker 2: crypto is at a record high. That you know, is

1617
01:27:02,000 --> 01:27:06,000
Speaker 2: indicative of some concern by global investors in the in

1618
01:27:06,479 --> 01:27:09,160
Speaker 2: the willingston ability of us to pay on our debt

1619
01:27:09,160 --> 01:27:12,640
Speaker 2: in a timely way. And so yeah, I think I

1620
01:27:12,720 --> 01:27:15,120
Speaker 2: don't know when the day of reckoning is, but the

1621
01:27:15,160 --> 01:27:17,120
Speaker 2: trend lines here suggests that there will be one, and

1622
01:27:17,120 --> 01:27:18,760
Speaker 2: it may not be as far often the future as

1623
01:27:18,800 --> 01:27:19,280
Speaker 2: people think.

1624
01:27:19,520 --> 01:27:22,400
Speaker 1: Sounds like if we were a company and not a country, Uh,

1625
01:27:23,160 --> 01:27:24,599
Speaker 1: the advice would be to sell the stock.

1626
01:27:25,680 --> 01:27:29,360
Speaker 2: Yeah, except we can print our own money. So that's

1627
01:27:29,400 --> 01:27:32,000
Speaker 2: that's the next step here. So you could if you're

1628
01:27:32,040 --> 01:27:33,840
Speaker 2: a company, you can print your own money, you know,

1629
01:27:34,040 --> 01:27:35,600
Speaker 2: so that buys you a lot of time. Yeah, I

1630
01:27:35,640 --> 01:27:36,840
Speaker 2: think only Amazon does that.

1631
01:27:36,960 --> 01:27:39,439
Speaker 1: I don't know, okay, go, I have no idea, right

1632
01:27:39,520 --> 01:27:43,679
Speaker 1: right right? Just more more prime, more prime, right right? Well,

1633
01:27:44,840 --> 01:27:48,080
Speaker 1: you sound like you're cautiously pessimistic about the near term economy.

1634
01:27:48,120 --> 01:27:50,840
Speaker 2: Is that a fair description? Yeah? Look, I think the

1635
01:27:51,040 --> 01:27:53,720
Speaker 2: you know, the underlying strength of American economy is under

1636
01:27:54,840 --> 01:27:58,480
Speaker 2: you underlying at all is strong. We are a dynamic economy.

1637
01:27:59,479 --> 01:28:01,800
Speaker 2: Just look at our tech companies. I mean, they're just

1638
01:28:01,800 --> 01:28:04,000
Speaker 2: a marrow. Will still rather be US than China or

1639
01:28:04,080 --> 01:28:09,080
Speaker 2: anybody else on the planet. It's just that economic policy

1640
01:28:09,240 --> 01:28:13,040
Speaker 2: is making life very difficult and that is raising a

1641
01:28:13,080 --> 01:28:16,360
Speaker 2: lot of concerns about pushing the economy into recession when

1642
01:28:16,640 --> 01:28:18,519
Speaker 2: it really doesn't need to be this at all.

1643
01:28:18,920 --> 01:28:20,280
Speaker 1: Well, I was just going to think, can you think

1644
01:28:20,320 --> 01:28:24,360
Speaker 1: of a time when when essentially politicians created a recession.

1645
01:28:26,320 --> 01:28:31,080
Speaker 2: Us? Certainly not like this, well, not this direct where

1646
01:28:31,120 --> 01:28:34,160
Speaker 2: it really is. I mean, policies always plays a role.

1647
01:28:34,439 --> 01:28:36,640
Speaker 2: Usually some it's like you're in the middle.

1648
01:28:36,360 --> 01:28:40,320
Speaker 1: Of some mess, right, and a miscalculation or miscalculation. Yeah, right,

1649
01:28:40,360 --> 01:28:42,640
Speaker 1: there's a misc This is not a miscalculation. This is

1650
01:28:42,680 --> 01:28:46,599
Speaker 1: an intentional ye, believed by intent. Yeah, I can't think

1651
01:28:46,640 --> 01:28:48,519
Speaker 1: of I can't think of anything, no.

1652
01:28:49,240 --> 01:28:51,280
Speaker 2: Ah, Marcuzany.

1653
01:28:51,320 --> 01:28:53,120
Speaker 1: I always learn a lot from talking with you, and

1654
01:28:53,160 --> 01:28:55,599
Speaker 1: I think, like I said, you speak American.

1655
01:28:55,920 --> 01:28:57,600
Speaker 2: How many economists not how to do that? Oh? I

1656
01:28:57,640 --> 01:28:59,959
Speaker 2: really appreciate that. Thank you, Chuck. Anytime.

1657
01:29:00,920 --> 01:29:03,280
Speaker 1: Well, look at least be a football season to distract

1658
01:29:03,320 --> 01:29:07,120
Speaker 1: us from this weekening Eagles Eagles. Oh okay, Well, you've

1659
01:29:07,120 --> 01:29:10,559
Speaker 1: been spoiled. You've been spoiled. Now are you Phillies too?

1660
01:29:10,640 --> 01:29:15,760
Speaker 2: I was just in the Natch games this weekend? Yeah, man,

1661
01:29:15,960 --> 01:29:17,280
Speaker 2: it is, it's been.

1662
01:29:17,439 --> 01:29:19,559
Speaker 1: It's been pretty good to be a Philly a Philly

1663
01:29:19,640 --> 01:29:21,000
Speaker 1: area fan these days, isn't it.

1664
01:29:21,280 --> 01:29:25,400
Speaker 2: Yeah? Yeah, we've had with good string I Revens fans.

1665
01:29:25,479 --> 01:29:27,880
Speaker 1: Usually you're more fun when you're when you're not winning,

1666
01:29:27,880 --> 01:29:28,879
Speaker 1: because you, guys get.

1667
01:29:28,880 --> 01:29:35,840
Speaker 2: We complain, complain regardless too much winning, yeah yeah, Or

1668
01:29:35,880 --> 01:29:38,320
Speaker 2: you're not winning enough, you're not winning gracefully enough.

1669
01:29:38,360 --> 01:29:40,720
Speaker 1: You know what I do like is your fan base

1670
01:29:40,800 --> 01:29:43,200
Speaker 1: went from questioning Jalen Hurts to now saying, hey, you

1671
01:29:43,240 --> 01:29:46,040
Speaker 1: don't speak bad about our quarterback. We'll speak bad about

1672
01:29:46,040 --> 01:29:47,439
Speaker 1: our quarterback, but you don't.

1673
01:29:47,360 --> 01:29:50,719
Speaker 2: Want to do it right, right, right, So that's right.

1674
01:29:51,160 --> 01:29:54,439
Speaker 2: Oh but you're out here eating my Rosebush. I'm gonna hustle.

1675
01:29:54,520 --> 01:29:56,559
Speaker 2: I'm gonna hustle you got it. Take care of now,

1676
01:29:56,680 --> 01:30:01,639
Speaker 2: Chuck as always save your savior, shrubbery. Got that's my prize,

1677
01:30:01,720 --> 01:30:03,280
Speaker 2: Rose Bush. Talk to you a little here.

1678
01:30:15,200 --> 01:30:20,519
Speaker 1: Well for those listening continuously, are you messing around with

1679
01:30:20,560 --> 01:30:21,639
Speaker 1: your four owe k already?

1680
01:30:21,960 --> 01:30:22,960
Speaker 2: Anyway? Be careful.

1681
01:30:23,479 --> 01:30:24,800
Speaker 1: This is where I feel like I should put the

1682
01:30:24,800 --> 01:30:28,639
Speaker 1: disclaimer that don't hold me accountable for how you're doing

1683
01:30:28,680 --> 01:30:31,559
Speaker 1: your investments. What I'm trying to provide you is real

1684
01:30:31,600 --> 01:30:36,160
Speaker 1: information for you to make decisions on your own and

1685
01:30:36,560 --> 01:30:41,280
Speaker 1: to you to understand sometimes how complicated things can get

1686
01:30:41,320 --> 01:30:44,800
Speaker 1: with our economy. But the bottom line is this turned

1687
01:30:44,800 --> 01:30:49,519
Speaker 1: towards nationalism and our economies around the world. The biggest

1688
01:30:49,560 --> 01:30:53,439
Speaker 1: loser is us, the consumers. I think that is becoming

1689
01:30:53,760 --> 01:30:56,360
Speaker 1: crystal clear. All right, that, let me take a few

1690
01:30:56,439 --> 01:31:03,440
Speaker 1: questions ask Chuck. First. One comes from John in Memphis,

1691
01:31:04,479 --> 01:31:07,360
Speaker 1: and he says, I've really enjoyed how your new media

1692
01:31:07,439 --> 01:31:10,160
Speaker 1: venture lets you take off the gloves when analyzing the news.

1693
01:31:10,800 --> 01:31:12,200
Speaker 2: It's interesting that you put it that way.

1694
01:31:12,200 --> 01:31:14,519
Speaker 1: I feel like I've always been this, but I might

1695
01:31:15,160 --> 01:31:18,680
Speaker 1: I will confess to you maybe rounding the edges in

1696
01:31:18,760 --> 01:31:22,040
Speaker 1: order to please bosses at times. Right, As he said,

1697
01:31:22,040 --> 01:31:24,120
Speaker 1: it's been refreshing and insightful. For years, I've been trying

1698
01:31:24,120 --> 01:31:25,720
Speaker 1: to understand the mindset of those who took over the

1699
01:31:25,760 --> 01:31:27,800
Speaker 1: GOP and the Trump earrow, and your ability to cut

1700
01:31:27,800 --> 01:31:31,040
Speaker 1: through the contradictions is invaluable. My question is about the

1701
01:31:31,240 --> 01:31:34,120
Speaker 1: Republican diaspora. Do you think there's a sizeable group of

1702
01:31:34,120 --> 01:31:37,559
Speaker 1: classic Reagan Conservatives outside of the Cheneys and Kinsingers who

1703
01:31:37,600 --> 01:31:40,400
Speaker 1: are horrified by today's GOP but too quiet to see

1704
01:31:41,680 --> 01:31:43,680
Speaker 1: if so, have they given up or where are they?

1705
01:31:43,760 --> 01:31:46,719
Speaker 2: Well? I think that's the million dollar question, right.

1706
01:31:47,560 --> 01:31:49,880
Speaker 1: I think we found out how many of them show

1707
01:31:49,960 --> 01:31:54,960
Speaker 1: up to Republican primaries. What was NICKI Haley's vote total?

1708
01:31:55,000 --> 01:31:59,040
Speaker 1: Somewhere somewhere between twenty percent and maybe thirty five percent

1709
01:31:59,120 --> 01:32:03,479
Speaker 1: depending on the stage. So it's about a third of

1710
01:32:03,479 --> 01:32:08,240
Speaker 1: the party, Okay, And I think this is what's made

1711
01:32:09,280 --> 01:32:12,600
Speaker 1: the Democrats have a hard time figuring out how to

1712
01:32:12,640 --> 01:32:16,120
Speaker 1: talk to these folks and why in some ways they

1713
01:32:16,120 --> 01:32:18,920
Speaker 1: haven't won them over very well because the Democrats are

1714
01:32:18,920 --> 01:32:22,960
Speaker 1: in their own sort of what identity crisis? Right with

1715
01:32:23,520 --> 01:32:27,040
Speaker 1: sort of progress you have the consensus Democrats versus probably

1716
01:32:27,040 --> 01:32:29,760
Speaker 1: the progressive Democrats, right, those that look at what the

1717
01:32:30,040 --> 01:32:32,559
Speaker 1: look at Trump's success and say, hey, he stood for something,

1718
01:32:32,560 --> 01:32:34,680
Speaker 1: and this gets it to my whole point. Yeah, but

1719
01:32:34,720 --> 01:32:36,840
Speaker 1: he did it through the politics of division and in

1720
01:32:36,880 --> 01:32:39,559
Speaker 1: some ways progressive. You know, to stand for something in

1721
01:32:39,600 --> 01:32:42,479
Speaker 1: progressive politics, you're also sort of embracing a form of

1722
01:32:42,479 --> 01:32:45,080
Speaker 1: that politics of division, because you know, it's an US

1723
01:32:45,080 --> 01:32:46,679
Speaker 1: and against you know, in some.

1724
01:32:46,640 --> 01:32:47,200
Speaker 2: Form or another.

1725
01:32:47,200 --> 01:32:50,840
Speaker 1: And I don't know if that can successfully woo that

1726
01:32:50,920 --> 01:32:54,240
Speaker 1: center right voter. Right that it's really the we used

1727
01:32:54,240 --> 01:32:56,800
Speaker 1: to call it the managerial class, right, this where the

1728
01:32:58,120 --> 01:33:04,200
Speaker 1: white collar workers, the the ones that are homeowners, that

1729
01:33:04,360 --> 01:33:07,320
Speaker 1: were classically sort of Eisenhower Republicans.

1730
01:33:07,560 --> 01:33:09,720
Speaker 2: You know, I think of the happy days.

1731
01:33:09,479 --> 01:33:11,599
Speaker 1: That used to be the first place where you saw

1732
01:33:11,600 --> 01:33:14,200
Speaker 1: that the kids were for Stevenson and the parents were

1733
01:33:14,200 --> 01:33:18,720
Speaker 1: for Eisenhower, that sort of mindset. So it is I

1734
01:33:19,920 --> 01:33:26,080
Speaker 1: So I do think there is that the it's it's

1735
01:33:26,120 --> 01:33:29,560
Speaker 1: sort of the business class, right, the ones that want stability,

1736
01:33:30,800 --> 01:33:33,760
Speaker 1: that's really what they're craving stability. It's why I think

1737
01:33:33,800 --> 01:33:37,799
Speaker 1: some of these why Biden seems so appealing to this crowd, right.

1738
01:33:37,760 --> 01:33:38,679
Speaker 2: Do why John Kasick?

1739
01:33:38,920 --> 01:33:41,560
Speaker 1: John Kaysick in some ways is probably the best avatar

1740
01:33:41,680 --> 01:33:45,400
Speaker 1: for the Republican you're asking me about. He left the party,

1741
01:33:45,960 --> 01:33:48,840
Speaker 1: he supported Biden, and he couldn't support him again, right,

1742
01:33:48,920 --> 01:33:51,680
Speaker 1: He thought Biden was going to be a consensus Democrat

1743
01:33:51,960 --> 01:33:56,200
Speaker 1: and instaid Biden, you know, govern more to the left right,

1744
01:33:56,280 --> 01:33:59,080
Speaker 1: more progressive, sort of leaned in on that end of

1745
01:33:59,120 --> 01:34:01,400
Speaker 1: the of the spectrum, and I do think it turned

1746
01:34:01,439 --> 01:34:04,200
Speaker 1: off that group of Republicans. I don't know where they

1747
01:34:04,240 --> 01:34:06,479
Speaker 1: went right. Some of them, I think clearly voted for

1748
01:34:06,520 --> 01:34:10,320
Speaker 1: Trump more as an against vote. Some of them may

1749
01:34:10,320 --> 01:34:11,840
Speaker 1: have voted third party, or some of them may have

1750
01:34:11,920 --> 01:34:15,240
Speaker 1: skipped the ballot in the presidential a little bit. So

1751
01:34:16,280 --> 01:34:18,879
Speaker 1: I think we're going to the twenty twenty eight primary

1752
01:34:18,920 --> 01:34:22,120
Speaker 1: could tell us something, right, I guess the real question

1753
01:34:22,280 --> 01:34:26,879
Speaker 1: is if Trump is considered to be a failed president,

1754
01:34:27,080 --> 01:34:30,720
Speaker 1: And to me, it'll be how what does the economy

1755
01:34:30,720 --> 01:34:33,120
Speaker 1: look like in the fall of twenty seven when the

1756
01:34:33,120 --> 01:34:37,000
Speaker 1: presidential campaign is starting to kick in. Is his theory

1757
01:34:37,000 --> 01:34:38,040
Speaker 1: of the case right or wrong?

1758
01:34:38,160 --> 01:34:38,360
Speaker 2: Right?

1759
01:34:38,439 --> 01:34:42,360
Speaker 1: Did the tariffs work? Or are they considered a spectacular failure?

1760
01:34:42,840 --> 01:34:44,920
Speaker 1: And I think by the fall of twenty seven will

1761
01:34:44,960 --> 01:34:48,240
Speaker 1: have a clear answer on this. And if it's a failure,

1762
01:34:48,360 --> 01:34:53,160
Speaker 1: I think you will see this silent minority of Republicans

1763
01:34:53,160 --> 01:34:57,400
Speaker 1: begin to speak up. But if it's seen as semi successful,

1764
01:34:59,439 --> 01:35:02,200
Speaker 1: some of them may become like Marco Rubio and just

1765
01:35:02,520 --> 01:35:09,599
Speaker 1: acquiesce and move closer into that direction. So, like I said,

1766
01:35:09,640 --> 01:35:12,880
Speaker 1: the polling indicates if you look at the primary season

1767
01:35:12,880 --> 01:35:18,200
Speaker 1: in twenty four, it's somewhere in the twenty to thirty five.

1768
01:35:18,320 --> 01:35:20,000
Speaker 1: You know, I think it's about a third of the

1769
01:35:20,040 --> 01:35:25,400
Speaker 1: party that fits your definition there. The question is whether

1770
01:35:25,520 --> 01:35:29,800
Speaker 1: they're in many cases they're the donor class. That's the

1771
01:35:29,840 --> 01:35:34,320
Speaker 1: irony here, the big donor class. I don't think they

1772
01:35:34,439 --> 01:35:38,280
Speaker 1: like this economic model that Trump is put together. Do

1773
01:35:38,320 --> 01:35:39,160
Speaker 1: they reassert them?

1774
01:35:39,200 --> 01:35:39,280
Speaker 2: So?

1775
01:35:39,479 --> 01:35:41,760
Speaker 1: I think if it's seen as a collective failure in

1776
01:35:41,760 --> 01:35:44,840
Speaker 1: a couple of years, I think this willing.

1777
01:35:44,600 --> 01:35:45,759
Speaker 2: Tries to reassert itself.

1778
01:35:47,000 --> 01:35:52,040
Speaker 1: Next question comes from overseas, Paalo from three Esta, Italy.

1779
01:35:52,320 --> 01:35:54,519
Speaker 1: Dear mister toddam an Italian engineer who has followed your

1780
01:35:54,520 --> 01:35:57,080
Speaker 1: works in twenty eighteen, and I appreciate how you called

1781
01:35:57,160 --> 01:35:59,439
Speaker 1: out Health Secretary Kennedy and the gang of ding Dongs

1782
01:35:59,479 --> 01:36:02,559
Speaker 1: for under my the USL system. We faced a similar

1783
01:36:02,560 --> 01:36:05,519
Speaker 1: situation in Italy when two anti VAXX figures were appointed

1784
01:36:05,520 --> 01:36:09,280
Speaker 1: to our National Vaccine Council until public pressure forced their removal.

1785
01:36:09,520 --> 01:36:11,800
Speaker 1: I've just finished Why the South Won the Civil War

1786
01:36:11,840 --> 01:36:13,840
Speaker 1: by Heather Cox Richardson, and I was struck by the

1787
01:36:14,080 --> 01:36:16,840
Speaker 1: parallels between the oligarchs of eighteen sixty fighting to preserve

1788
01:36:16,880 --> 01:36:19,880
Speaker 1: privilege in today's elites working to restore it, except now

1789
01:36:19,920 --> 01:36:22,280
Speaker 1: the president seems aligned with them. My question is, have

1790
01:36:22,360 --> 01:36:23,800
Speaker 1: you read the book and do you think history is

1791
01:36:23,840 --> 01:36:27,040
Speaker 1: repeating itself in this way. I've not read that book,

1792
01:36:27,520 --> 01:36:31,480
Speaker 1: and I actually sort of I have a similar thesis,

1793
01:36:31,920 --> 01:36:34,160
Speaker 1: but it isn't it's less. I mean, there was some

1794
01:36:34,200 --> 01:36:37,360
Speaker 1: of that. I think it's I think the better comparison

1795
01:36:38,000 --> 01:36:41,439
Speaker 1: is really twenty years later and sort of what we

1796
01:36:41,520 --> 01:36:47,240
Speaker 1: saw the Republican Party of the late nineteenth century morph into,

1797
01:36:47,760 --> 01:36:50,000
Speaker 1: which did turn into sort of the you know, where

1798
01:36:50,000 --> 01:36:53,840
Speaker 1: they sort of aligned themselves with the industrialists, if you will,

1799
01:36:53,920 --> 01:36:57,519
Speaker 1: And you know, there was you could argue that in

1800
01:36:57,880 --> 01:37:00,640
Speaker 1: eighteen sixty there were different you know, you had some

1801
01:37:00,840 --> 01:37:04,439
Speaker 1: that were making a business case against slavery and some

1802
01:37:04,560 --> 01:37:08,840
Speaker 1: that were making a business case against disrupting the southern economy,

1803
01:37:09,200 --> 01:37:11,960
Speaker 1: which is one of the arguments that gets made about

1804
01:37:12,080 --> 01:37:15,320
Speaker 1: that period of time. I think it's just a clearer contrast.

1805
01:37:15,360 --> 01:37:20,960
Speaker 1: But you know, it's just all about what are you

1806
01:37:21,000 --> 01:37:23,600
Speaker 1: comparing it to the essentially the eighteen fifties, or are

1807
01:37:23,600 --> 01:37:26,639
Speaker 1: you comparing it what I think we're sort of repeating,

1808
01:37:26,680 --> 01:37:31,280
Speaker 1: which is circa eighteen eighty to nineteen nineteen twenty eight, right,

1809
01:37:31,320 --> 01:37:35,200
Speaker 1: which you know culminated with the Great Depression, and that

1810
01:37:35,320 --> 01:37:38,599
Speaker 1: was a huge right. And in that sense you had

1811
01:37:38,600 --> 01:37:42,080
Speaker 1: the Republican Party of that era align itself with the industrialists.

1812
01:37:42,120 --> 01:37:46,920
Speaker 1: And the protectionism was about protecting American business because back

1813
01:37:46,920 --> 01:37:50,320
Speaker 1: then trade seemed complicated, and if anything, we were always

1814
01:37:50,320 --> 01:37:55,120
Speaker 1: trying to protect our borders. It is you know, today's

1815
01:37:55,160 --> 01:38:00,280
Speaker 1: big business would prefer to be global. The industrialists of

1816
01:38:00,320 --> 01:38:03,400
Speaker 1: the eighteen nineties through the nineteen twenties they wanted they

1817
01:38:03,400 --> 01:38:05,799
Speaker 1: didn't they didn't see any money to be made overseas.

1818
01:38:05,840 --> 01:38:11,080
Speaker 1: They wanted to protect their investments here. And so that's

1819
01:38:11,080 --> 01:38:14,320
Speaker 1: where I think the brologarchs and the industrialists at that

1820
01:38:14,400 --> 01:38:17,280
Speaker 1: era sort of that that is where the commonality is.

1821
01:38:17,280 --> 01:38:19,360
Speaker 1: So I don't like I said, I think I think

1822
01:38:19,400 --> 01:38:25,960
Speaker 1: there is. They definitely think that. I guess I'm more

1823
01:38:26,000 --> 01:38:30,880
Speaker 1: of post civil war. Our post civil war politics is

1824
01:38:30,920 --> 01:38:33,880
Speaker 1: where what today feels like more so than than the

1825
01:38:33,920 --> 01:38:39,240
Speaker 1: pre civil war politics. But you know, from sixty thousand feet,

1826
01:38:39,680 --> 01:38:42,599
Speaker 1: her thesis and my thesis look look more similar than

1827
01:38:42,640 --> 01:38:47,519
Speaker 1: different on that, so I do needed to I've read

1828
01:38:47,560 --> 01:38:51,559
Speaker 1: her columns on this but I will She's not. She's

1829
01:38:51,560 --> 01:38:54,639
Speaker 1: not the first one to sort of frame that, right.

1830
01:38:54,840 --> 01:38:56,920
Speaker 1: You know, there's always been this idea that the South

1831
01:38:57,000 --> 01:38:59,720
Speaker 1: lost on the battlefield but won the culture, right, and

1832
01:38:59,720 --> 01:39:02,040
Speaker 1: the longer we go right, they won the post war

1833
01:39:02,080 --> 01:39:06,320
Speaker 1: with all the rise of the anti Ballum movement and

1834
01:39:06,360 --> 01:39:09,479
Speaker 1: all that business that they've they've done a better.

1835
01:39:09,720 --> 01:39:09,840
Speaker 2: You know.

1836
01:39:09,880 --> 01:39:13,519
Speaker 1: It's sort of like the Russians, right, lost, the lost

1837
01:39:13,560 --> 01:39:16,160
Speaker 1: the Cold War, yet Putin has done a better job

1838
01:39:16,240 --> 01:39:21,200
Speaker 1: spinning things on Russia's behalf sometimes than the West has.

1839
01:39:21,600 --> 01:39:24,280
Speaker 1: And in this case, the South has done a better

1840
01:39:24,360 --> 01:39:27,720
Speaker 1: job spinning things and winning the culture even as they

1841
01:39:27,800 --> 01:39:31,160
Speaker 1: lost on the battlefield and lost in at the ballot

1842
01:39:31,200 --> 01:39:32,400
Speaker 1: box for a time.

1843
01:39:33,160 --> 01:39:34,760
Speaker 2: Next question comes from anonymous.

1844
01:39:35,640 --> 01:39:39,160
Speaker 1: All Right, isn't anyone worried about the fact that Trump

1845
01:39:39,240 --> 01:39:40,880
Speaker 1: might be trying to take over the Capitol so that

1846
01:39:40,920 --> 01:39:43,120
Speaker 1: he can dictate the results of the next presidential election.

1847
01:39:43,240 --> 01:39:44,960
Speaker 1: He tried to do the same thing last time around,

1848
01:39:45,000 --> 01:39:47,400
Speaker 1: but the DC police stopped him. With Republican States sending

1849
01:39:47,400 --> 01:39:49,559
Speaker 1: the National Guard into DC, it would seem that the

1850
01:39:49,600 --> 01:39:52,040
Speaker 1: stage is being set for conflict between the Red and

1851
01:39:52,040 --> 01:39:59,559
Speaker 1: Blue States. Well, I am as you know, I think

1852
01:39:59,560 --> 01:40:02,760
Speaker 1: it's a you can look at things through one eye and.

1853
01:40:02,720 --> 01:40:05,640
Speaker 2: Say, Jesus, this is This goes back to a bit

1854
01:40:05,680 --> 01:40:08,400
Speaker 2: of the last question. This is the eighteen.

1855
01:40:08,160 --> 01:40:11,240
Speaker 1: Fifties, and we're on our way to some sort of

1856
01:40:12,600 --> 01:40:13,639
Speaker 1: war between the states.

1857
01:40:13,800 --> 01:40:14,000
Speaker 2: Right.

1858
01:40:14,080 --> 01:40:18,120
Speaker 1: This redistricting battle between Texas and California is a proxy. Right,

1859
01:40:18,160 --> 01:40:21,600
Speaker 1: it's a war between the states. Right, The fight for

1860
01:40:21,680 --> 01:40:24,960
Speaker 1: political power of the country is being waged date by state.

1861
01:40:26,960 --> 01:40:29,479
Speaker 1: That's a similarity. That's a little bit uncomfortable think about.

1862
01:40:32,560 --> 01:40:40,360
Speaker 1: Look at this point, I still believe in the will

1863
01:40:40,360 --> 01:40:44,800
Speaker 1: of the voter to win out. But I do think

1864
01:40:44,880 --> 01:40:48,760
Speaker 1: it's obvious that Donald Trump is not a constitutionalist, right.

1865
01:40:48,840 --> 01:40:52,280
Speaker 1: I mean, you know, I'm of the if we're going

1866
01:40:52,360 --> 01:40:55,760
Speaker 1: to sort ourselves right now, let's sort ourselves properly. Are

1867
01:40:55,760 --> 01:41:01,760
Speaker 1: you a constitutionalist or aren't you? You don't have to

1868
01:41:01,800 --> 01:41:05,519
Speaker 1: be an ideological agreement on ideas on what to do

1869
01:41:05,520 --> 01:41:07,479
Speaker 1: with the economy, what to do with healthcare, things like

1870
01:41:07,520 --> 01:41:10,280
Speaker 1: that to be on the same side when it comes

1871
01:41:10,320 --> 01:41:14,080
Speaker 1: to the Constitution. And it's clear he doesn't believe in it,

1872
01:41:14,160 --> 01:41:17,439
Speaker 1: he doesn't care about the separation of powers that stuff.

1873
01:41:17,760 --> 01:41:21,120
Speaker 1: I mean, you know, it's frustrating to me when somebody

1874
01:41:21,160 --> 01:41:24,519
Speaker 1: is in that high of elective office and probably has

1875
01:41:24,600 --> 01:41:28,439
Speaker 1: never read a federalist paper. You know, I sort of

1876
01:41:28,479 --> 01:41:31,880
Speaker 1: look at this, you know, I want somebody who wants

1877
01:41:31,920 --> 01:41:34,160
Speaker 1: to be a Senator or a member of Congress to

1878
01:41:34,280 --> 01:41:37,600
Speaker 1: know more about this stuff than I do. And it

1879
01:41:37,720 --> 01:41:40,559
Speaker 1: bugs the shit out of me when it's crystal clear

1880
01:41:40,880 --> 01:41:47,320
Speaker 1: these people hold offices that are that only exists because

1881
01:41:47,360 --> 01:41:49,920
Speaker 1: of the Constitution, and yet they've never bothered to read

1882
01:41:49,960 --> 01:41:52,400
Speaker 1: the history. You know, when I join a company, I

1883
01:41:52,479 --> 01:41:54,360
Speaker 1: like to know the history of the company. How did

1884
01:41:54,360 --> 01:41:55,240
Speaker 1: it become what it is?

1885
01:41:55,400 --> 01:41:55,559
Speaker 2: Right?

1886
01:41:55,600 --> 01:41:59,160
Speaker 1: I like, you know it is. It is startling to

1887
01:41:59,160 --> 01:42:05,200
Speaker 1: me how few, how few folks really and truly understand

1888
01:42:05,439 --> 01:42:09,080
Speaker 1: right that the Constitution was a compromise, right, the entire

1889
01:42:09,160 --> 01:42:15,000
Speaker 1: country was formed. The Republic was formed as a compromise

1890
01:42:15,439 --> 01:42:18,200
Speaker 1: because we didn't have consensus on what kind of breakoff

1891
01:42:18,240 --> 01:42:20,840
Speaker 1: country we should be, so we came up with the

1892
01:42:20,840 --> 01:42:24,000
Speaker 1: best way to create compromise anywhere we could find it.

1893
01:42:25,120 --> 01:42:29,360
Speaker 1: And when you see, you know, he just doesn't believe

1894
01:42:29,520 --> 01:42:34,600
Speaker 1: in these things, and so, you know, I'm concerned he

1895
01:42:34,680 --> 01:42:37,800
Speaker 1: could use he could sort of use the will of

1896
01:42:37,840 --> 01:42:40,760
Speaker 1: the people in his head. You know, Hey, this is

1897
01:42:40,760 --> 01:42:43,240
Speaker 1: what they wanted, So I'm gonna abide by that as

1898
01:42:43,280 --> 01:42:48,280
Speaker 1: a way to break constitutional restrictions like when it comes

1899
01:42:48,280 --> 01:42:50,320
Speaker 1: to the vote count, running for a third term, etc.

1900
01:42:53,560 --> 01:42:59,759
Speaker 1: I will say this. One of the reasons I'm less

1901
01:42:59,760 --> 01:43:03,479
Speaker 1: worked up about Trump running a fourth time, trying to

1902
01:43:03,479 --> 01:43:06,600
Speaker 1: get a third term, or whether he abides by the

1903
01:43:06,600 --> 01:43:11,880
Speaker 1: elections or not, frankly, is is he doesn't live a

1904
01:43:11,960 --> 01:43:15,880
Speaker 1: very healthy life and he you know, I don't think

1905
01:43:16,080 --> 01:43:18,679
Speaker 1: you know, I just don't think he's I don't think

1906
01:43:18,720 --> 01:43:21,360
Speaker 1: he's going to be healthy enough to run for president again.

1907
01:43:21,560 --> 01:43:23,400
Speaker 1: And I think that's going to get clear and clear

1908
01:43:23,479 --> 01:43:26,519
Speaker 1: all the time. We've seen some of the some of

1909
01:43:26,520 --> 01:43:31,439
Speaker 1: the symptoms that he seems to have, so he's he's

1910
01:43:31,439 --> 01:43:33,559
Speaker 1: going to have to you know, Mother Nature and Father

1911
01:43:33,640 --> 01:43:38,760
Speaker 1: Time are both undefeated on that front. But you know,

1912
01:43:38,800 --> 01:43:41,920
Speaker 1: he certainly is feeling his oats and he is There's

1913
01:43:41,960 --> 01:43:45,600
Speaker 1: no doubt that he has an information feedback loop that

1914
01:43:45,800 --> 01:43:50,320
Speaker 1: is really warped that he doesn't sort of understand how

1915
01:43:50,400 --> 01:43:53,479
Speaker 1: unpopular he actually is outside of his group of folks.

1916
01:43:56,840 --> 01:44:00,360
Speaker 1: But you know, I understand here's the thing. I always

1917
01:44:01,160 --> 01:44:03,960
Speaker 1: two years ago, I would have dismissed your comment as alarmist,

1918
01:44:04,080 --> 01:44:06,680
Speaker 1: and I'm not going to do that now. I just

1919
01:44:06,800 --> 01:44:10,559
Speaker 1: think we should be prepared for anything, and we should

1920
01:44:10,560 --> 01:44:13,720
Speaker 1: be prepared for anything. I still have faith in the

1921
01:44:13,760 --> 01:44:17,000
Speaker 1: American voter. I still have faith in over time we're

1922
01:44:17,040 --> 01:44:19,599
Speaker 1: going to get it right and that the voter sentiment

1923
01:44:19,680 --> 01:44:22,880
Speaker 1: is going to win out and that there are there's

1924
01:44:22,920 --> 01:44:28,200
Speaker 1: still there's still a there's still some good in Darth Vader,

1925
01:44:28,240 --> 01:44:35,120
Speaker 1: whoever you view as Darth Vader in this moment, I'm

1926
01:44:35,120 --> 01:44:37,400
Speaker 1: going to leave it at that, on that uplifting Darth

1927
01:44:37,439 --> 01:44:40,760
Speaker 1: Vader moment, right, We've got to hope that maybe Star

1928
01:44:40,800 --> 01:44:44,320
Speaker 1: Wars shows the way just a little bit, just a

1929
01:44:44,320 --> 01:44:49,920
Speaker 1: little bit. There's always there's always someone who can't, who

1930
01:44:50,000 --> 01:44:53,439
Speaker 1: can't truly, you know, somebody is going to step up.

1931
01:44:53,800 --> 01:44:55,519
Speaker 1: I'll put it this way. It's something I said to them.

1932
01:44:55,880 --> 01:44:59,320
Speaker 1: I've said to my own family members over time. Be

1933
01:44:59,360 --> 01:45:02,120
Speaker 1: careful judge some people in the moment, because you never

1934
01:45:02,160 --> 01:45:03,920
Speaker 1: know when one of these people you don't like in

1935
01:45:03,960 --> 01:45:07,679
Speaker 1: the moment becomes the hero that stands in the breach.

1936
01:45:09,200 --> 01:45:13,200
Speaker 1: Think Mike Pence January sixth, Think Liz Cheney, I think

1937
01:45:13,280 --> 01:45:16,320
Speaker 1: John Bolton. These are people that I bet you some

1938
01:45:16,360 --> 01:45:21,720
Speaker 1: of you listening to circa twenty sixteen didn't have you

1939
01:45:21,760 --> 01:45:24,280
Speaker 1: didn't think much of them. What do you think about

1940
01:45:24,280 --> 01:45:32,360
Speaker 1: those people today? There's you know, I still think that

1941
01:45:32,080 --> 01:45:34,680
Speaker 1: that you sort of have to at the end of

1942
01:45:34,720 --> 01:45:40,000
Speaker 1: the day, right, Democracy only thrives if the will of

1943
01:45:40,000 --> 01:45:42,439
Speaker 1: the people is respected and if the will of the

1944
01:45:42,439 --> 01:45:44,519
Speaker 1: people is noticed. And I guess i'd like to think

1945
01:45:44,560 --> 01:45:46,120
Speaker 1: that both of those things are still going to be

1946
01:45:46,160 --> 01:45:50,760
Speaker 1: true with just enough people to keep us from totally collapsing.

1947
01:45:51,479 --> 01:45:53,640
Speaker 1: But I can't dismiss your question and your concern that

1948
01:45:53,760 --> 01:45:57,360
Speaker 1: I can all right, but that we'll take a twenty

1949
01:45:57,360 --> 01:46:00,960
Speaker 1: four hour break until we upload again. Hey,