Speaker 1: Hi, I'm Molly John Fast and this is Fast Politics,
Speaker 1: where we discussed the top political headlines with some of
Speaker 1: today's best minds and Republican Jefferson Griffin has conceded the
Speaker 1: North Carolina as Supreme Court race to Justice Riggsay, finally,
Speaker 1: we have such a great show for you today. MSNBC's
Speaker 1: The Weeknight host Michael Steele stops by to talk about
Speaker 1: Republican dysfunction. Then we'll talk to entrepreneur Chris Hughes about
Speaker 1: his new book, Market Crafters, The one hundred years Struggle
Speaker 1: to shape the American economy.
Speaker 2: But first the news Somali, there's a war between Jerome
Speaker 2: Powell and Donald J. Trump, and Jerome Powell has chosen
Speaker 2: to keep rates on hold because of Donald Trump's tariff shock.
Speaker 2: What are you thinking about this?
Speaker 1: So Donald Trump doesn't quite understand a lot of stuff.
Speaker 1: He understands that if you lower interest rates, the stocks
Speaker 1: go up.
Speaker 3: That's all he understands.
Speaker 1: He doesn't understand why you raise interest rates. He doesn't understand.
Speaker 1: Like when he was president the last time, he would
Speaker 1: just spend much of his time like tweeting you got
Speaker 1: a lower rates because he knew it would pump up stocks.
Speaker 1: And look, Trump's whole thing is to just sort of
Speaker 1: puff up everything, the economy, the numbers, the sort of
Speaker 1: juice things. Now here is the problem. We are still
Speaker 1: an economy reeling from inflation. So if Jerome Pale lowers
Speaker 1: interest rates, what's going to happen is that inflation's going
Speaker 1: to go up. The reason you raise interest rates is
Speaker 1: because it slows inflation. So what Trump wants to do,
Speaker 1: Trump really really really wants to fire Jerome Powell and
Speaker 1: put in someone who will do whatever he wants. But
Speaker 1: he does not have the presidential power to do that,
Speaker 1: so he would be breaking the law. And I think
Speaker 1: it's important because Trump is always sort of musing about
Speaker 1: doing things that are really illegal, like running for a
Speaker 1: third term, and I think it's important we take him
Speaker 1: seriously and really explain this. But he can't fire Jerome Powell.
Speaker 1: So even when he says like and luckily for you,
Speaker 1: I'm not going to fire him, you don't have the
Speaker 1: power to, buddy. But Jerome Pal it would be malpractice
Speaker 1: right now because these tariffs are going to be very inflationary.
Speaker 1: So if you lowered interest rates, Trump thinks it.
Speaker 3: Would juice the economy.
Speaker 1: But what it would really actually do is juice the
Speaker 1: inflationary stuff, and we would have even more inflationary problems.
Speaker 1: There's a real scenario where we are sort of heading
Speaker 1: into stagslation. Things get more expensive, and we're in a recession,
Speaker 1: and that's all because of this stupid tariff crap. So
Speaker 1: I don't think that you know this is what it is.
Speaker 1: Whatever it's stupid, Trump's going to be furious.
Speaker 3: And Palell had a.
Speaker 1: Really good quote, which which is the level of tariff
Speaker 1: increases and now so far are significantly larger than anticipated.
Speaker 3: Duh.
Speaker 1: The same is likely to be true of the economic effects,
Speaker 1: which will include higher inflation and slower growth. Right, higher
Speaker 1: inflation and slower growth, those are the two things you need.
Speaker 1: When those two things get really bad, that's stagflation. And
Speaker 1: that's where we're careening to unless Donald Trump can make
Speaker 1: ninety deals in the next two weeks or whatever, however
Speaker 1: much time he has left.
Speaker 2: So another feature of the Trump presidency is the grifting
Speaker 2: ed I've become personally obsessed with understanding meme coins in
Speaker 2: the culture around them, because I find it funny. But
Speaker 2: seven hundred and sixty four thousand Americans lost money on
Speaker 2: Trump meme coins, well, only fifty eight profited. That's what
Speaker 2: we call a rug pull in that business. And that's insane.
Speaker 1: Like so many things in Trump world, this is a
Speaker 1: Ponzi scheme Trump launched. Meant, by the way, Jimmy Carter
Speaker 1: had to put his peanut farm in a blind trust.
Speaker 1: Two million accounts have purchased the Trump coin. By the way,
Speaker 1: what even is it? It's just nothing, right, it's just
Speaker 1: a it's nothing.
Speaker 2: It's like you're buying into an idea, which Navault Perrari
Speaker 2: would argue that we're all doing that with currency. But
Speaker 2: this is just the stupidest version of it.
Speaker 1: Like most of our society, meme coins based on Internet
Speaker 1: jokes or fast moving cultural trends. I mean, so here
Speaker 1: are the people who made money on meme coin, his friend, I.
Speaker 3: Mean, I don't know.
Speaker 1: We don't know because we don't really have the reporting yet.
Speaker 2: This is such an unregulated space. They did even more
Speaker 2: deregulation to make it so that they could get away
Speaker 2: with more of this bullshit.
Speaker 3: Right, So we don't know, but it seems pretty sketchy.
Speaker 2: You could say that. So we have a Trump budget
Speaker 2: and there are medicaid cuts. Were really shocked to hear this.
Speaker 2: We never would have seen them doing this. But the
Speaker 2: CBO has just scored it, and it's not looking good
Speaker 2: for the people of America.
Speaker 1: Some Democrats are saying, and I actually think this is
Speaker 1: pretty smart messaging that this is the largest transfer of wealth.
Speaker 1: I think Burscher said it to us on the podcast.
Speaker 1: Largest transfer of wealth from poor peoples of rich people
Speaker 1: is the Trump budget. The analysis requested by Democrats says that.
Speaker 3: Per capita caps for.
Speaker 1: Medicaid expansion population would save two hundred and twenty five
Speaker 1: billion in federal spending and result in one point five
Speaker 1: million more uninsured people by twenty thirty four. Blocking provider
Speaker 1: taxes could save six hundred and sixty eight billion and
Speaker 1: lead to three point nine million losing coverage.
Speaker 3: So here's the idea.
Speaker 1: Medicaid pays for nursing homes, pays for rural hospitals, pays
Speaker 1: for the pediatricians who see the poor kids. In a
Speaker 1: lot of states. You cut all of this, here's what happens.
Speaker 1: The nursing homes close, the rural hospitals close, there is
Speaker 1: no pediatrician to see your kid. So if Republicans can't
Speaker 1: prevent elections, which they may try. It will be the
Speaker 1: single you know, they will never win another election if
Speaker 1: they do this, because you will see your hospital close,
Speaker 1: your nursing home close. Why is why is Grandma coming
Speaker 1: home to live with us? Because there's no nursing home.
Speaker 1: It's closed, right? Why is great Uncle Milton living on
Speaker 1: the street because the nursing home is closed.
Speaker 3: Because they cut medicaid.
Speaker 1: I mean, that's what this looks like in real time,
Speaker 1: and it means like you're not driving forty miles to
Speaker 1: a hospital, You're driving one hundred and forty miles to
Speaker 1: a hospital. So these are real things that people in
Speaker 1: Red states are going to see. And in some ways
Speaker 1: this is just indulge me for another minute because.
Speaker 3: It's my fucking podcast. Exe's my friend.
Speaker 1: The brilliance of Obamacare, the brilliance of it and medicated
Speaker 1: space was that I remember when I was a kid,
Speaker 1: we had people who weren't insured and those people went
Speaker 1: to emergency.
Speaker 3: Rooms for treatment.
Speaker 2: I was one of them.
Speaker 3: Yeah, they had no choices.
Speaker 1: And what we did with Obamacare and this is really
Speaker 1: honestly like, we gave people medicine and now I'm telling
Speaker 1: you the Medicaid expansion you know, some states have rejected
Speaker 1: it because they're you know, Republicans, but largely the states
Speaker 1: that have it, like Andy Buscher who we talked to,
Speaker 1: like this has been a game changer.
Speaker 4: Right.
Speaker 1: There are hospitals where there were no hospitals, so Republicans
Speaker 1: would have to get rid of these hospitals. And I'm
Speaker 1: just not convinced that they want to take the poison
Speaker 1: on this.
Speaker 2: And what we see in the Houses, they're bullying a
Speaker 2: lot of members to pass this so that they can
Speaker 2: fundraise off this, saying that the Senate will strike it down.
Speaker 2: Don't worry, guys, You'll be fine. And they're trying to
Speaker 2: get some of the more wavery Republicans on board with
Speaker 2: it that way.
Speaker 3: Good luck team. Yeah.
Speaker 2: I'll just say this mine, if my in laws were
Speaker 2: forced to come to live with me, I voted lifelong
Speaker 2: Democrat all my life. That would change real fast, That's
Speaker 2: all I'm saying. If they forced that, I'd be some
Speaker 2: real borsch belt humor for you all.
Speaker 3: Okay, bomb bomb never follow a dog up.
Speaker 2: A judge's blocked Trump's dismantling of three different agencies, which
Speaker 2: yet again, let's just thank god for the courts. I think.
Speaker 2: I never thought I'd be saying it's.
Speaker 1: So good they wanted to By the way, I just
Speaker 1: want to say the three ones they wanted to get
Speaker 1: rid of, Okay, the Institute of Museum and Library Sciences.
Speaker 3: First of all, it is like you, how many people
Speaker 3: work in that? You know?
Speaker 1: It's point zero zero zero zero zero one percent of
Speaker 1: the Pentagon, right, I mean it's like ten people. The
Speaker 1: Institute of Museum and Library Sciences. They wanted to kill that.
Speaker 1: The Minority Business Development Agency obvious reasons because they're not
Speaker 1: interested in that. And the Federal Mediation Services, which, by
Speaker 1: the way, I'm just gonna tell you, mediation is like
Speaker 1: a way to save money versus you know, lawsuits, you know,
Speaker 1: and I'm sure this is about workers' rights. But the
Speaker 1: point is they tried to close it. Like yet again,
Speaker 1: we're seeing the Trump world just absolutely lose it in
Speaker 1: the courts, as they should, as they will continue on
Speaker 1: as they deserve. Michael Steele is the co host of
Speaker 1: The Weeknight along with Slomone, Sanders Townsend, and Alicia Menendez.
Speaker 1: It airs Mondays from seven to nine pm and Tuesdays
Speaker 1: through Fridays from seven to eight pm on MSNBC.
Speaker 3: Welcome to Path Politicists.
Speaker 4: Michael Steele, Okay, what's up.
Speaker 1: I'm so excited that I get to have I get
Speaker 1: to have you, Alicia and Simone on my podcast to
Speaker 1: promote your show. But like, here's the trick. I actually
Speaker 1: would have you on anyway to talk about politics. So
Speaker 1: it's like there are occasionally are times when what I
Speaker 1: want to talk about and doing something that is sort
Speaker 1: of what is needed or wanted coincide, but almost never.
Speaker 1: So I'm very excited about this and I'm extremely happy
Speaker 1: to have you here, and I'm gonna I think we
Speaker 1: should start by talking about the hundred days of I
Speaker 1: told you so? Do you remember what you wrote on
Speaker 1: a piece of paper on election night at three o'clock
Speaker 1: in the morning to make no okay, so eight o'clock
Speaker 1: in the morning, I am to say that I am
Speaker 1: like I have never I'm out of my body. I'm
Speaker 1: so upset, I am like watching myself. We are on
Speaker 1: the set and I look over at you and I'm.
Speaker 3: Like, holy, what are we gonna do?
Speaker 1: And you write down at a piece of paper, We're gonna
Speaker 1: at least won't be able to say we told them so.
Speaker 5: Yeah, it is true. I was having a conversation. We
Speaker 5: actually just came up on our show last night, and
Speaker 5: so one of the guests that made the comment about
Speaker 5: you know, you know, we don't want to necessarily be
Speaker 5: it saying I told you something like hello, I've forgotten
Speaker 5: that I actually written that down on paper, but it's true.
Speaker 5: I don't know why we can't say I told you so,
Speaker 5: I'm sorry. I give you every warning in the world.
Speaker 5: If I say to you, look, get out of the building.
Speaker 5: It's on fire. Get out of the building. It's on fire,
Speaker 5: and then you don't get out of the building, and
Speaker 5: bad things happened to you. Yeah, I'm going to tell
Speaker 5: you I told you so. I'm sorry. I'm that guy.
Speaker 5: I'm not just warning you to just to be a
Speaker 5: pain in the butt or to be to have trumped
Speaker 5: derangements syndrome that crazy. I'm warning you because he's warning us, right.
Speaker 1: And I think that's a really good point because we
Speaker 1: saw so many times on the trail where he would say,
Speaker 1: you know, people would say, well, you don't read mean
Speaker 1: you're gonna hunt your political enemies, and you'd say, no, no.
Speaker 3: I mean that, Yeah, that's right.
Speaker 1: You were like very high up in the Republican Party structure,
Speaker 1: and I think you were a chair of the R andCA.
Speaker 5: Yeah, I did that for a little bit something like that.
Speaker 1: Yeah, And so what I think that, I mean, there
Speaker 1: was a moment when all of this stopped making sense,
Speaker 1: when they were just like, we're going to give up
Speaker 1: on trying to be the sort of cut taxes and
Speaker 1: be you know, a little less for people, but still
Speaker 1: you know, ultimately not so different. I mean, the two
Speaker 1: parties were very were much more similar than they were
Speaker 1: different until Trump came along.
Speaker 5: I'd agree that there were, but it's interesting you could
Speaker 5: see the evolution that was occurring to both and where
Speaker 5: that was really sort of one of those moments was
Speaker 5: when you had the emergence of the Tea Party and
Speaker 5: Occupy Wall Street. They were two sides of the same coin.
Speaker 5: Interesting making the same case against Wall Street, making the
Speaker 5: same case about government intrusion, et cetera. That then crystallized,
Speaker 5: Occupy Wall Street sort of went off into crazy land
Speaker 5: with a whole lot of other stuff, so that collapsed.
Speaker 5: Tea Party held over and then but then eventually collapsed
Speaker 5: and morphed into something else, which then leveled up. By
Speaker 5: the time you get to twenty sixteen Trump. But then
Speaker 5: when you get into that election, what did you see
Speaker 5: happening during the course of that primary was the emergence
Speaker 5: of the Donald Trump you know, Bernie Sanders voter, that
Speaker 5: sort of progressive, you know, hard right conservative kind of
Speaker 5: coming together. And I met my first Bernie Sanders Donald
Speaker 5: Trump voters at the Democratic Convention in twenty sixteen. In
Speaker 5: twenty sixteen, when all the drama was going on with
Speaker 5: Hillary and not of that at that they didn't, you know,
Speaker 5: and Bernie, Bernie made the case. I still contind had
Speaker 5: he started that race earlier, or he had an extra month,
Speaker 5: he likely could have been the nominee, would have been
Speaker 5: the nominee of the Democratic Party, because that's where the
Speaker 5: momentum was going. Very much as we saw with Donald Trump,
Speaker 5: the same thing was beginning to happen on the left.
Speaker 5: So you do have these the two parties have always
Speaker 5: kind of been molly in this sort of race with
Speaker 5: each other, and along the way they dabble in some
Speaker 5: policy or they you know, they you know, have an
Speaker 5: opinion or an ideological spap, but they they find a
Speaker 5: way to get get to the point where they can
Speaker 5: get some things done that piece is not broken. And
Speaker 5: the work that the Congress, for example, used to do
Speaker 5: has stopped. It has stopped for a while. And so
Speaker 5: what you now have, interesting enough, is the two parties
Speaker 5: shifting and taking on the opposite position, where Democrats today
Speaker 5: in many cases sound like old line Republicans and Republicans
Speaker 5: sound like they just you know what, crazy.
Speaker 1: No, I'm going to ask you a question just for Jesse,
Speaker 1: because he's listening, or maybe he's gone to get a coffee.
Speaker 1: U think Bernie would have won.
Speaker 5: I look, I just look at the trend lines in
Speaker 5: that election. I mean the momentum he had, the momentum
Speaker 5: that was the big part of how a lot of
Speaker 5: a lot of Democrats felt that the party put their
Speaker 5: finger on the scales for Hitdle, that the energy on
Speaker 5: the ground was for Hillary, I mean for Bernie, and
Speaker 5: that still is true. I mean, hell, he just got
Speaker 5: thirty thousand plus people to come out. Who else in
Speaker 5: politics is talking to thirty thousand people in the stadium
Speaker 5: right now?
Speaker 1: You know. I just want to add one thing about
Speaker 1: Bernie being out there right now, which I think is important,
Speaker 1: is that, first of all two things, one is that
Speaker 1: he's doing it not because he's running for president. He's
Speaker 1: doing it for the good of American democracy, which is,
Speaker 1: you know, like this is not the most fun thing,
Speaker 1: and you know, I mean, it's good whatever, but he
Speaker 1: really is doing it for the greater good, which I
Speaker 1: think is an important data point. And then also it
Speaker 1: is Charles Schumer who is sort of sending these people
Speaker 1: out there and giving them the blessing to do it,
Speaker 1: because otherwise they wouldn't be doing it. I mean, maybe Bernie.
Speaker 1: I still think Bernie is largely has been pretty much,
Speaker 1: you know, So I do think when we criticize Schumer,
Speaker 1: that is an important that he does. He has he
Speaker 1: does have senators out there doing the stuff that they're
Speaker 1: supposed to be doing.
Speaker 5: Chris Murphy does he, I mean, I supposed if you
Speaker 5: want to give it to him, give it to him.
Speaker 5: My issues with leadership, with the leadership of Chuck Schumer
Speaker 5: is not that he can send a senator out to
Speaker 5: hold a rally. How do you use the rules of
Speaker 5: the United States Senate to protect your interest? Right?
Speaker 3: And the master of the Senate stuff, right, I.
Speaker 5: Mean, you've gotten pulped at every turn post, especially when
Speaker 5: it comes to judicial appointments and the fact that the
Speaker 5: Democrats of the Senate capitulated and voted for in some
Speaker 5: cases or allowed the vote to go forward in all
Speaker 5: cases with the with the highly incompetent not ready for
Speaker 5: anything close to prime time nominees for various positions in
Speaker 5: our government. And there was no fight. Yeah, I mean case.
Speaker 5: So now you want to send people out into a rally, okay,
Speaker 5: But the rally was should have been before you got
Speaker 5: to this point. And so that's where I have a
Speaker 5: problem with the leadership is that, yes, you have the title,
Speaker 5: but you don't have the political instincts to know how
Speaker 5: to use the title right.
Speaker 1: And there are there are all sorts of weird Senate
Speaker 1: things you can do to come up the works. We've
Speaker 1: seen Mitch McConnell do them. We saw Harry Reid do them.
Speaker 1: That that stuff Schumer.
Speaker 3: Has not filled it with.
Speaker 1: I do want to talk for a minute about the
Speaker 1: cr because in the there was a year prior budget
Speaker 1: reversal for the District of Columbia. Now they need this
Speaker 1: money and and poor Mary al Bowser is trying to
Speaker 1: kind of get it through and now Republicans, the far
Speaker 1: right plank is giving her trouble again, which.
Speaker 3: I think that could have been an easy one that
Speaker 3: Democrats could have.
Speaker 5: It should have been an easy one for the Democrats
Speaker 5: in my view, irrespective of what you think about the
Speaker 5: District of Columbia, there's seven hundred thousand plus people who
Speaker 5: live there. I'm a native Washingtonian. My dad still lives
Speaker 5: in our family home in the city. And the fact
Speaker 5: that you would have Republicans who who fundamentally have a slightly, no,
Speaker 5: just a full on racist view of the city. They
Speaker 5: still think it's chocolate city, you know, from back in
Speaker 5: the day of Marion Barry and and the street thug
Speaker 5: life that sort of pervaded in some parts of the city,
Speaker 5: all of that that every urban community went through in
Speaker 5: the eighties and the nineties, in the early two thousands
Speaker 5: for example, that they just have this sort of pejorative
Speaker 5: view of the city, a city that they barely know
Speaker 5: because they barely spend any time in it, and it's
Speaker 5: just a federal property that they think they can do
Speaker 5: whatever they want. But they're real people who live There
Speaker 5: was no vote in the United States Congress that have
Speaker 5: fought desperately for home rule. I very much remember when
Speaker 5: home rule was passed and I worked on as a
Speaker 5: young college student on the first Amendment to the Constitution
Speaker 5: to give DC voting rights in nineteen seventy eight, and
Speaker 5: to hear these people now sort of jerk around with
Speaker 5: their money, largely these senators and members from Congress, mostly
Speaker 5: members from Congress from places that are smaller than the
Speaker 5: District of Columbia. It's offensive. Racial undertones are well documented,
Speaker 5: and it's unfortunate. And so you would hope that there'll
Speaker 5: be some friends out there who could fight for this city.
Speaker 5: To strip a billion dollars out of the budget, how
Speaker 5: the hell you think they're going to run their police
Speaker 5: and fire, how the hell you think they're going to
Speaker 5: run the school system and provide the services to the
Speaker 5: extent that your dumb ass still live in the city,
Speaker 5: and you're going to be calling up the mayor saying,
Speaker 5: why aren't you picking up the trash? Well, because you
Speaker 5: took a billion dollars out of the budget, right, and
Speaker 5: because I'm not the governor of this of the state
Speaker 5: of the District of Columbia. I'm a mayor and I've
Speaker 5: got to make this stuff work. And when you cut
Speaker 5: my money, I can't make it work the way you
Speaker 5: want it to work. So everybody kind of thinks the
Speaker 5: things you just cut and everything will continue to run.
Speaker 5: Not just run, not just run, Molly, but run better.
Speaker 1: Yeah, you know, we're starting to see Republicans are trying
Speaker 1: to pass the bill. They're now calling it this budget.
Speaker 1: They're calling it the one big Beautiful Bell.
Speaker 5: Because that's what Donald Trump calls it. So you know
Speaker 5: when you're yeah, it's.
Speaker 1: Gonna you know, when you're traveling in the Gulf of
Speaker 1: America and in this one big beautiful bill, they need
Speaker 1: to pay for these tax cuts. Right.
Speaker 3: The whole game here, doge, Everything is to pay for
Speaker 3: tax cuts.
Speaker 1: It's to pay for the tax cuts that already happened
Speaker 1: and the tax cuts that are coming. And the idea
Speaker 1: here is that these tax cuts, by the way, the
Speaker 1: new ones, I don't know, you know, the old ones.
Speaker 1: People are gonna be like, where's my tax cut? No,
Speaker 1: we just extended the other ones, right, I mean, we're
Speaker 1: not even you know, but even say the new ones come.
Speaker 1: The problem is, now Elon had all these ideas he
Speaker 1: was going to cut all this stuff.
Speaker 3: It turns out it's a lot harder than it looks.
Speaker 5: It is a lot harder than it looks because when
Speaker 5: you rob from Peter to pay Paul, you realize, hell,
Speaker 5: I gotta go and rob Paul to pay Pete. It's
Speaker 5: all Look, it's a finite amount of mine. Period. It's
Speaker 5: a bud Like any budget, there's a fine item if
Speaker 5: there's only so much that goes in and there's an
Speaker 5: amount that goes out, and you're always constantly trying to
Speaker 5: figure out the balance of those. And so when you say,
Speaker 5: as the president of the United States that you want
Speaker 5: a trillion dollar defense budget, okay, when does that come? Okay, Peter? Yeah,
Speaker 5: you know, Paul wants a trillion dollar defense budget. Guess what,
Speaker 5: I gotta grab a little bit from you to get there.
Speaker 5: And that's the way this works. So you know, if
Speaker 5: you stop and think about it, the only time in
Speaker 5: our modern lifetime we've done seen the balancing the budget
Speaker 5: was during Clinton's period. Clinton period in newk Enguage in
Speaker 5: the House, and there was this sense of trying to
Speaker 5: work towards some level of common goals, and they decided
Speaker 5: what those goals were, and they put in motion the
Speaker 5: steps necessary to do that. And while lot they balanced
Speaker 5: the budget, there were compromises. There were things that Democrats
Speaker 5: weren't happy about Republicans weren't happy about, but they ultimately
Speaker 5: resulted in a number of years of not just balance budgets,
Speaker 5: but surpluses money that was then subsequently returned to the
Speaker 5: public in some form. And so that's that's governing. That's
Speaker 5: not what we're doing now. We're trying to placate a
Speaker 5: particular class of people by giving them unfettered access to
Speaker 5: cash and wealth. And for a lot of people that is,
Speaker 5: like you just said, they're sitting here thinking that they're
Speaker 5: going to get a tax cut. Well, you didn't get
Speaker 5: a tax cut the last time, and the only thing
Speaker 5: they want to do is extend those tax cuts now,
Speaker 5: which means you still don't get a tax cut. And
Speaker 5: so that's the hard, cruel reality. And it's eight hundred
Speaker 5: and eighty billion dollars that's got to be made up somewhere.
Speaker 5: And do you think that's going to come from. It's
Speaker 5: coming from that school lunch program that you live that
Speaker 5: you need in your little Mississippi district, comes from that
Speaker 5: after school program that you need in your Alabama district. Yeah,
Speaker 5: And the communities that are often hurt the most are
Speaker 5: the ones clamoring the loudest for the thing that will
Speaker 5: hurt them the most. And that's fundamentally because I don't
Speaker 5: think they appreciate or understand just how they're impacted. I
Speaker 5: talked to one guy who got excited by the fact
Speaker 5: that he saw fifty dollars more in his paycheck every
Speaker 5: two weeks from the last tax cut, and I say, well,
Speaker 5: that's nice, because you know that guy over there, he
Speaker 5: got a thousand. So there you are.
Speaker 1: Why are people having such a hard time standing up
Speaker 1: to Trump? Why is everyone so scared of him? And
Speaker 1: I'm going to give you one example. Janet Mills, Governor
Speaker 1: Mayne says, I'll see you in court on you know
Speaker 1: the five trans kid athletes in Maine. Maybe there are ten,
Speaker 1: Probably there are two or one. She goes to court,
Speaker 1: she wins. So why is why is everyone so scared
Speaker 1: of Trump?
Speaker 5: Because they're punks. They're punks. Bullies see them, bullies pick
Speaker 5: them out. At the beginning of the school year, the
Speaker 5: bully often walks the playground the first day or two
Speaker 5: of school to size up, size up what's in the yard.
Speaker 5: And Donald Trump has, over the four years that he
Speaker 5: was waiting in the wings, sized up the yard and
Speaker 5: has made promises to a number of these folks who
Speaker 5: think they're actually going to get something right. Others he
Speaker 5: wants to make an example of, and he knows who
Speaker 5: he can make an example of. And the rest just
Speaker 5: look there and tremble and say there, but for the
Speaker 5: grace of eye God goes I. You know, I don't
Speaker 5: want I don't want that to happen to me. And
Speaker 5: my question is why not? What do you think is
Speaker 5: going to happen to you? Do you think that if
Speaker 5: you give Donald Trump a billion dollars worth of pro
Speaker 5: bono work, that he's not going to ask you to
Speaker 5: represent so very unsavory characters that got in trouble because
Speaker 5: of him. That's the pro bono work. It ain't It
Speaker 5: ain't doing what you did with the Legal Aid Society, dumas.
Speaker 5: It is exactly what Donald Trump wants you to do.
Speaker 5: And now they're coming to realize that, Molly. They're like,
Speaker 5: oh suddenly, now, oh so you mean we got to
Speaker 5: represent who? Yes, Donald Trump has a list of people
Speaker 5: that you need to take care of. Some of them
Speaker 5: maybe January sixth, or some of them may be former
Speaker 5: officials from his last administration. Whatever, I thank yourself, beholden
Speaker 5: to the thug. You're going to get caught up in
Speaker 5: thug things, and so I don't understand the fear, because
Speaker 5: there are more examples of people standing up and winning
Speaker 5: to your very point than there are people cow towing
Speaker 5: and capitulating and winning.
Speaker 3: True. Michael Steele, thank you, thank you, thank you.
Speaker 1: Chris Hughes is an entrepreneur and author of Market Chapters
Speaker 1: one hundred year Struggle to Shape the American Economy.
Speaker 3: Welcome to Fast.
Speaker 4: Politics, Chris, thanks for having me.
Speaker 1: You're an economic historian and you have this book, Market Crafters,
Speaker 1: which I want you to talk about.
Speaker 3: What is a market crafter.
Speaker 4: It's a policy maker who's guiding and harnessing a market
Speaker 4: towards some political goal. So that could be making Americans richer,
Speaker 4: making them safer, making their financial lives more stable. Their Republicans,
Speaker 4: they're Democrats. And I track a lot of these cases
Speaker 4: from the past to try to pull out lessons for today.
Speaker 4: How are we going to build back on the other
Speaker 4: side of the chaos and insanity of Trump's economic policy.
Speaker 1: Give me a counterintuitive example of someone who is in
Speaker 1: the book.
Speaker 4: I kept focusing on counterintuitive examples that at one point
Speaker 4: a colleague who had read through parts of the manuscript said, Okay,
Speaker 4: you've got to get some more like bread and butter
Speaker 4: vanilla people. So a lot of the characters are libertarians. Actually,
Speaker 4: One that might be well known to some is a
Speaker 4: Bill Simon, who was a bond trader on Wall Street
Speaker 4: and a pretty gruff one, as they tended to be
Speaker 4: in the nineteen sixties and nineteen seventies. And he goes
Speaker 4: in auditions for a job with Richard Nixon in nineteen
Speaker 4: seventy two after Nixon wins reelection, and he thinks he's
Speaker 4: interviewing to become HUDs secretary, and in reality, George Schultz
Speaker 4: wants him to be Deputy Secretary of the Treasury. So
Speaker 4: he brings in this libertarian and they park maybe the
Speaker 4: hardest set of problems on his desk, which is how
Speaker 4: do you respond to rapidly escalating oil prices, which gets
Speaker 4: much worse when the oil embargo happens in the fall
Speaker 4: of nineteen seventy three after the Yan Kapoor War. So
Speaker 4: this libertarian who came in thinking that government was mostly
Speaker 4: not the answer, all of a sudden it has a
Speaker 4: mission stabilize oil prices in shore that there are not
Speaker 4: gas lines, and you know, in that period it was
Speaker 4: really important to make sure there was enough home heating
Speaker 4: oil in New England for that winter so that nobody
Speaker 4: froze to death. So all of a sudden, this guy
Speaker 4: becomes a market crafter. He makes very precise decisions around allocations.
Speaker 4: He sets price controlled, he creates quotas for usage, and
Speaker 4: creates a whole federal administration to a stockpile oil and
Speaker 4: gas to make sure that we don't chew through what
Speaker 4: we have too quickly. And it was hard for me
Speaker 4: to write because the guy is sort of an asshole,
Speaker 4: like he's not a nice guy in his letters. But
Speaker 4: he was successful. He actually helped heap down the cost
Speaker 4: of gasoline to a pretty modest level, particularly when it
Speaker 4: compared to what happened where doubled in Western Europe. Now
Speaker 4: later in the decade, ironically it's a disaster. That's when
Speaker 4: the gas lines that we all remember is in nineteen
Speaker 4: seventy nine and the next gas I'm shocked. But he
Speaker 4: had laid a framework for an effective market craft, despite
Speaker 4: his liber tarian politics.
Speaker 1: So we're in the middle of a kind of crisis
Speaker 1: not so different than the gas crisis in a way. Right,
Speaker 1: president doesn't understand mass decides to enact broad tariffs, totally unfocused.
Speaker 1: What it does is it screeches the economy to a halt.
Speaker 1: It reverses growth. So talk to me about what you
Speaker 1: think the president for this is and what you've seen
Speaker 1: sort of historically, how this kind of self perpetuated crisis
Speaker 1: could get thought through.
Speaker 4: Now, I went on a daily show on Monday and
Speaker 4: John Stewart called Trump a market crasher instead of a
Speaker 4: market crafter, which I thought was very clever, as John
Speaker 4: Stewart can be. And so now I think I'm going
Speaker 4: to use that term. I mean Trump is bludgeoning the
Speaker 4: American economy. I mean the uncertainty alone from the impulsiveness
Speaker 4: is causing us to likely high into recession. You know,
Speaker 4: just this morning, aren't we in it?
Speaker 1: Because of the now we're oh, it's got to be
Speaker 1: two quarters, right of negative.
Speaker 4: Growth, exactly quarters of negative growth. But the point is
Speaker 4: is the economy is right now is contracting. Consumers are
Speaker 4: less confident than they have been in five years, which
Speaker 4: you know was literally this the pandemic spring, when we
Speaker 4: were all locked up in our houses at the very
Speaker 4: beginning inflation expectations are up, investor uncertainty is up, and
Speaker 4: there's a lot of questions around whether investors are going
Speaker 4: to flee American assets and dollar denominated assets across the board.
Speaker 4: So this is a big self inflicted problem. The question
Speaker 4: is is, first off, how we're going to get through
Speaker 4: it for the next couple of years, and then how
Speaker 4: we're going to rebuild on the other side. I'm afraid
Speaker 4: it is going to get worse before it gets better.
Speaker 4: I think there will be a recession and we'll see
Speaker 4: how deep it goes. But Democrats and progressives are going
Speaker 4: to need to be able to say, hey, we understand
Speaker 4: the economic challenges that are in front of us. Right now.
Speaker 4: It's high costs, housing, groceries, care. Eventually it's going to
Speaker 4: be jobs increasingly, and we have a plan to bring
Speaker 4: down those costs and create the jobs that Americans want
Speaker 4: to see. And Americans, you know, they're wary of that
Speaker 4: after Bidenomics. But in my view, that plan is going
Speaker 4: to have to involve market crafting. It's going to have
Speaker 4: to say these are the industries of the future me
Speaker 4: to the jobs that we need, and these are the
Speaker 4: costs that need to be stabilized, and we got to
Speaker 4: use all of the tools that we have to make
Speaker 4: the economy work for everyday people, not just investors and
Speaker 4: the people who do the best.
Speaker 1: So dollar flight, let's talk about dollar flight. There is
Speaker 1: a real anxiety. The reason people have said that Trump
Speaker 1: stopped the tariffs was because of the bond market. Because
Speaker 1: the bond market usually the stock market goes down, the
Speaker 1: bond market goes up, right, because the money goes from
Speaker 1: stocks to bombs. This time the money didn't go to bonds,
Speaker 1: which meant that perhaps there was dollar flight, or that
Speaker 1: there is the possibility of dollar flight. So I want
Speaker 1: you to explain to our listeners what that is, what
Speaker 1: that means, and if there's a historical president for it.
Speaker 4: Yeah. I think there are three ingredients that are creating
Speaker 4: a perfect storm. The first is the tariffs and the
Speaker 4: instability that Trump is introduced with them. The second is
Speaker 4: the threat to fire J. Powell and potentially other members
Speaker 4: of the Board of Governors at the Federal Reserve, which
Speaker 4: if followed through, could make monetary policy really a political project,
Speaker 4: which could mean chronic inflation as many countries have seen.
Speaker 4: And then the third issue is the existing size of
Speaker 4: the budget deficit, and what the Republicans plan to do
Speaker 4: in this tax bill. And I think the third is
Speaker 4: the least talked about and maybe the most important. Last year,
Speaker 4: the budget deficit was seven percent of GDP. That's very
Speaker 4: high for a healthy economy. And if the Republicans pass
Speaker 4: the spending package that they're talking about, the size of
Speaker 4: that is the tax cut from the first Trump term
Speaker 4: plus all of the COVID stimulus spending, plus the Biden
Speaker 4: infrastructure bill in this one bill, further running up the
Speaker 4: deficit and giving international investors anxiety. Can the United States
Speaker 4: actually make good on its commitment to pay the coupon
Speaker 4: on its outstanding debt? And so as people see that happening,
Speaker 4: they are rightly seeking for safer assets in the global system.
Speaker 4: And that could be gold, that could be European military companies,
Speaker 4: the bonds, yeah, exactly, European bonds from Germany, for instance,
Speaker 4: are attractive to a lot of investors. That can create
Speaker 4: a real flight from the dollar, significantly weaking it and
Speaker 4: making it much more expensive for us to have the
Speaker 4: kind of fiscal policy make the kind of investments that
Speaker 4: we want to make as a country.
Speaker 3: Exactly.
Speaker 1: It will also mean that our debt will be significantly
Speaker 1: more expensive to service. Explain what sort of downstream consequences
Speaker 1: of more expensive debt are.
Speaker 4: The federal government in any given year has a meaningful
Speaker 4: portion of the budget that goes to pay off the debt.
Speaker 4: But it's just like with a household if the rate
Speaker 4: on your credit card goes up, even if the balance
Speaker 4: is still the same, you've got to pay more every
Speaker 4: single month from your income to just keep servicing the debt.
Speaker 4: So the concern is that all of this excess fiscal
Speaker 4: spending will either cause meaningful inflation, which means that interest
Speaker 4: rates will have to be higher for longer, making it
Speaker 4: more expensive for government to borrow, or that we head
Speaker 4: into an extended period of stagflation when inflation is high
Speaker 4: and unemployment is low and the central Bank doesn't have
Speaker 4: isn't able to it's normal tools to get us out
Speaker 4: of it, to do the basic sort of pinsy and
Speaker 4: macroeconomic smoothing that should happen in coordination to central Bank
Speaker 4: and the Congress. So that's the concern. I think it's
Speaker 4: been a concern for a few years. Of ten years ago,
Speaker 4: it wasn't so much of a concern because interest rates
Speaker 4: had been low for so long. Now they're higher and
Speaker 4: could in theory go even higher, and so investors are
Speaker 4: rightly you watching that with anxiety and concern.
Speaker 1: So we had the dollar flight, and we have this
Speaker 1: problem with the debt. Stagflation is a word we don't
Speaker 1: talk about very much because it's so scary.
Speaker 3: I was born in nineteen seventy eight.
Speaker 1: So stagflation when I was a baby, that was like
Speaker 1: a big issue. I make everyone on this podcast explain
Speaker 1: what stagflation is, so I think that people who listen
Speaker 1: to this know that things get more expensive. But you're
Speaker 1: also in a recession, so there's just no way out.
Speaker 1: Talk to me about what Vulgar did and why that is.
Speaker 3: Sorry, I'm a real nerd here when it comes to
Speaker 3: this kind of stuff.
Speaker 4: I've come to the right place because I have a
Speaker 4: whole chapter on the Vulgar Shock, and I tell the
Speaker 4: story of this woman on Nancy Teeters, who is the
Speaker 4: first female governor of the Federal Reserve, who served with
Speaker 4: Vulcar and became the sort of person the symbolic contrast
Speaker 4: to a lot of the Vulgar Shock. So her story
Speaker 4: begins decades before, but she becomes a fed governor. In
Speaker 4: the late nineteen seventies, inflation's very high. Paul Vulker, who
Speaker 4: had been the president of New York Fed, becomes the
Speaker 4: Chair of the Federal Reserve, appointed by Carter, who wants
Speaker 4: someone to finally get inflation under control. Vulker comes into
Speaker 4: the building. He's just a few weeks in. They're doing
Speaker 4: some marginal rate hikes, and the markets balk. They think
Speaker 4: that he's not going to be strong enough. So he
Speaker 4: decides to effectively tear up the rule book that the
Speaker 4: FED has abided by since its beginning and throw out
Speaker 4: to kind of mandate for order literally well managed stable
Speaker 4: money markets, and say we're not going to target interest
Speaker 4: rates at all. We're going to do something different, get
Speaker 4: reserve targeting. The details of it don't really matter. The
Speaker 4: point is we're going to use a different framework to
Speaker 4: really really constrict the money supply. And so it's like
Speaker 4: a train screeching to a halt. It throws the entire
Speaker 4: economy into the deep freeze, and you had the worst
Speaker 4: recession in the United States since the Great Depression between
Speaker 4: nineteen eighty one and nineteen eighty three, purposefully cost by
Speaker 4: the monetary policy of the Vulcar fed now Nancy Teeters.
Speaker 4: Initially she votes for it, even though her politics are
Speaker 4: left she generally favors looser monetary policy, but she goes
Speaker 4: along with it, believing that they have to do something
Speaker 4: dramatic and rates might be able to go up quickly,
Speaker 4: but they'll be able to come down quickly. But then
Speaker 4: a little bit over a year later, she begins making
Speaker 4: these really principal dissents, which are thoughtfully considered and clear
Speaker 4: that they should stop using this experimental methodology for monetary policy,
Speaker 4: move back to something that creates orderly and stable markets,
Speaker 4: and step down from these high interest rates gradually rather
Speaker 4: than just holding on to them. And so if you
Speaker 4: look back, most historians and economists see the Volker shock
Speaker 4: as broadly a good intervention because it's squelched inflation. But
Speaker 4: they also I think that the recession didn't have to
Speaker 4: last as long as it did, and it didn't have
Speaker 4: to be as deposited, and Teeters offered a third way,
Speaker 4: a more modest route forward. And so I think her
Speaker 4: story is really important because if we're going to head
Speaker 4: into another period like that, there are going to be
Speaker 4: some people who want to pair a Paul Volker, and
Speaker 4: we need some of these templates from history to help
Speaker 4: us see how to do this in a way that
Speaker 4: is more practical.
Speaker 1: I take I'm sorry to do this too. The COVID
Speaker 1: response was a response to the two thousand and eight
Speaker 1: financial crisis.
Speaker 4: Well, the size of it definitely was Biden and the
Speaker 4: crew were very clear that they'd rather go big than
Speaker 4: go too small, because after the Great Financial Crisis there
Speaker 4: was a consensus that it was too modest. It was
Speaker 4: too modest. I think that they were right to err
Speaker 4: on the side of being more robust. It was a
Speaker 4: lot of money, It was a lot of spending. In retrospect,
Speaker 4: it probably could have been a little bit a smaller,
Speaker 4: but I think directionally it meant that we had the
Speaker 4: fastest recovery in terms of jobs than we've had from
Speaker 4: any recession, and the inflation that came afterward was not
Speaker 4: caused by that spending. I mean, the best economic analysis
Speaker 4: by centrist economists like Ben Bernanke and Alleviate Mancha and
Speaker 4: people like that say that of the nine percent peak inflation,
Speaker 4: at most two percent of it was caused by excess
Speaker 4: spending on the demand side. The rest of it was
Speaker 4: called by all those supply chain bottlenecks, and this rapid
Speaker 4: shift in consumer demand from away from services towards goods,
Speaker 4: towards lumber, towards cars, towards all those things that we remember.
Speaker 4: So I think that not just the COVID stimulus, but
Speaker 4: a lot of the bids economic agenda was actually right
Speaker 4: on point, and in the domain of politics. Because of
Speaker 4: the rapid escalation of inflation, Democrats got flowered. Biden and
Speaker 4: teams should have been paying attention to that more. They
Speaker 4: should have spoken to that as a real issue earlier
Speaker 4: and not done this thing that says like, oh, well,
Speaker 4: jobs are good and wages are going up, so don't
Speaker 4: worry too much about the inflation like this was incredibly
Speaker 4: tone deaf and wrong. And it's also still true that
Speaker 4: the core pieces of Bidenomics investment in clean energy, investment
Speaker 4: in semiconductor construction here here at home for national security reasons,
Speaker 4: the bipars and infrastructure law, the COVID student these things
Speaker 4: were good pieces of policy that helped a lot of
Speaker 4: people in the immediate aftermath of their passage and continue
Speaker 4: to today. So I think we have to be more
Speaker 4: precise when we talk about all this stuff.
Speaker 1: Yeah, I think that's right. And I also think that
Speaker 1: Chips and Science is clearly Trump when he wants to
Speaker 1: onshore manufacturing. What he wants to do is chips and science, right,
Speaker 1: What he wants to do is build in the United States.
Speaker 4: Yeah, I mean, the Chips Act started and Trump won
Speaker 4: the idea. The germ of the idea was from Keith Krack,
Speaker 4: the Undersecretary of Economic Affairs at the State Department, and
Speaker 4: some folks on the hill in Congress, and it got
Speaker 4: a lot of traction. There were, you know, advanced discussions,
Speaker 4: which meant that the wheels had increased. And so when
Speaker 4: the Biden folks came in, I mean they significantly experided
Speaker 4: its size, its scope, and rethought the structure to it.
Speaker 4: And it was a bipartisan piece of legislation that a
Speaker 4: lot of Republicans voted for. And even now, you know,
Speaker 4: Trump says he's against it. I think that's just like
Speaker 4: he's against anything that happened in the Biden years. But
Speaker 4: there are many congressional Republicans who I believe in it
Speaker 4: because it's creating jobs in their districts, and not to
Speaker 4: mention the national security implications of what it means for
Speaker 4: us to be back in the business of building and
Speaker 4: creating these advanced chips.
Speaker 3: Very very interesting. Thank you, Chris.
Speaker 4: Yeah, thanks for having me.
Speaker 5: No Mo.
Speaker 2: Jesse Cannon Bi jug Fast We know around these parts
Speaker 2: Pritzker fan club, Governor Pritzker and Illinois. Just he's really
Speaker 2: leading the way on how to fight back against this administration.
Speaker 2: And I really like this that he's going to sign
Speaker 2: the first nation executive order protecting autism data.
Speaker 3: Yeah, because honestly, fuck RFK Junior.
Speaker 2: Can we say that, Yes, that's legal to say.
Speaker 3: He's our moment of fuck.
Speaker 1: Great, Good for Pritzker yet again, this is becoming the
Speaker 1: Pritzker fan podcast. Good for him, that's correct. Don't let
Speaker 1: r of K Junior get anyone's data. And you know,
Speaker 1: by the way it is, it's worth wondering why this
Speaker 1: administration is so hot for data, right, why they're constantly
Speaker 1: fighting to get our data. It's just something interesting to
Speaker 1: think about. But yes, RFK Junior, you are once again
Speaker 1: our moment of fuck. Right.
Speaker 3: That's it for this episode of Fast Politics.
Speaker 1: Tune in every Monday, Wednesday, Thursday and Saturday to hear
Speaker 1: the best minds and politics make sense of all this chaos.
Speaker 1: If you enjoy this podcast, please send it to a
Speaker 1: friend and keep the conversation going.
Speaker 3: Thanks for listening.