1 00:00:01,720 --> 00:00:06,439 Speaker 1: Call Zone Media. 2 00:00:07,840 --> 00:00:10,760 Speaker 2: Welcome to it could Happen Here, a podcast about things 3 00:00:10,800 --> 00:00:15,640 Speaker 2: falling apart this week featuring an entire three sentences about 4 00:00:15,640 --> 00:00:19,120 Speaker 2: putting it back together again. I am your host, Bio Wong, 5 00:00:19,920 --> 00:00:24,600 Speaker 2: and today we are gathered here to talk about tariffs. 6 00:00:26,079 --> 00:00:29,600 Speaker 2: Oh boy, it has been a massive two weeks of 7 00:00:29,680 --> 00:00:34,040 Speaker 2: tariff news, the most important aspect of which has been 8 00:00:35,240 --> 00:00:38,320 Speaker 2: finally getting a resolution to what was going on with 9 00:00:38,400 --> 00:00:41,120 Speaker 2: the Liberation Day turf tariffs that Trump tried to impose 10 00:00:41,159 --> 00:00:43,800 Speaker 2: at the beginning of his time in office. On July 11 00:00:43,920 --> 00:00:47,360 Speaker 2: thirty first, we finally actually found out what those tarrists 12 00:00:47,360 --> 00:00:49,320 Speaker 2: are going to look like, and what those troists are 13 00:00:49,360 --> 00:00:55,680 Speaker 2: going to look like is prisciannen Effectively, what happened is 14 00:00:55,720 --> 00:01:00,080 Speaker 2: that roughly, if the US runs a trade deficit with you, 15 00:01:00,080 --> 00:01:02,920 Speaker 2: you get a fifteen percent tariff, and you get a 16 00:01:03,000 --> 00:01:05,840 Speaker 2: ten percent tariff if we run a trade surplus with you. 17 00:01:06,400 --> 00:01:09,319 Speaker 2: Now there's a bunch of other individual rates. We'll get 18 00:01:09,319 --> 00:01:12,040 Speaker 2: to some of them in a second, but it's worth 19 00:01:12,120 --> 00:01:19,559 Speaker 2: emphasizing that this doesn't make any sense. So okay, before 20 00:01:19,560 --> 00:01:21,560 Speaker 2: we get into the structural effects of this, I want 21 00:01:21,560 --> 00:01:25,800 Speaker 2: to sort of look at what the nominal stated justification 22 00:01:25,959 --> 00:01:28,759 Speaker 2: for imposing these tariffs are and how they're at odds 23 00:01:28,760 --> 00:01:30,920 Speaker 2: with each other. And this is the point where we're 24 00:01:30,959 --> 00:01:33,839 Speaker 2: turn to later. Part of the justification for the tariffs 25 00:01:33,920 --> 00:01:37,039 Speaker 2: is that, okay, they're trying to use tariffts to replace 26 00:01:37,080 --> 00:01:42,400 Speaker 2: the income tax. That's nonsense, it's gibberish. You literally cannot 27 00:01:42,480 --> 00:01:44,840 Speaker 2: raise enough money through tariffs to replace the income tax. 28 00:01:44,959 --> 00:01:47,760 Speaker 2: But okay, that's the thing that they want to do. 29 00:01:48,920 --> 00:01:52,040 Speaker 2: The other nominal justification, and this is what's being used 30 00:01:52,720 --> 00:01:56,000 Speaker 2: in negotiations and is the thing that is causing individual 31 00:01:56,040 --> 00:01:59,480 Speaker 2: tariff rates to randomly sort of be jacked up, is 32 00:01:59,480 --> 00:02:03,080 Speaker 2: that Trump is pissed off that the US runs trade 33 00:02:03,080 --> 00:02:06,960 Speaker 2: deficits with countries. And again, like this is basically nonsense. 34 00:02:07,000 --> 00:02:09,560 Speaker 2: The US pays for things in its own currency. We 35 00:02:09,639 --> 00:02:12,639 Speaker 2: don't actually need other places currency. It doesn't matter if 36 00:02:12,639 --> 00:02:16,400 Speaker 2: we run trade deficits. I really hate that Rand Paul 37 00:02:16,840 --> 00:02:19,320 Speaker 2: is right when he said I run a trade deficit 38 00:02:19,360 --> 00:02:22,240 Speaker 2: with my grocery store. But like, that's how the American 39 00:02:22,240 --> 00:02:25,679 Speaker 2: Empire is supposed to work. These people do not care 40 00:02:25,800 --> 00:02:27,720 Speaker 2: that this is how the American Empire is supposed to work. 41 00:02:27,760 --> 00:02:30,960 Speaker 2: They have been handed the most sophisticated imperial machinery that 42 00:02:31,000 --> 00:02:33,760 Speaker 2: has ever existed in the entirety of human history. And 43 00:02:34,760 --> 00:02:37,560 Speaker 2: they see numbers on a chart which says we pay 44 00:02:37,560 --> 00:02:39,960 Speaker 2: them more money than we're getting and they're pissed about it. 45 00:02:40,760 --> 00:02:43,679 Speaker 2: But again, okay, if that's the state of justification, right, 46 00:02:44,440 --> 00:02:46,919 Speaker 2: then why are you imposing a terra fund countries? We 47 00:02:46,960 --> 00:02:49,440 Speaker 2: have a trade serplus two that doesn't make any sense, 48 00:02:49,480 --> 00:02:52,200 Speaker 2: and the difference between them is only five percent, So 49 00:02:52,639 --> 00:02:55,800 Speaker 2: what are we doing here? It's nonsense, like our trade 50 00:02:55,800 --> 00:02:59,920 Speaker 2: policy is being run by people who don't understand how 51 00:03:00,160 --> 00:03:02,480 Speaker 2: any of this works and are operating off of, you know, 52 00:03:02,560 --> 00:03:06,760 Speaker 2: effectively just pure anger and rage. So I'm going to 53 00:03:06,840 --> 00:03:10,080 Speaker 2: talk about a few of the really really high rates. 54 00:03:10,320 --> 00:03:11,760 Speaker 2: We're not going to focus on much on the thirty 55 00:03:11,800 --> 00:03:16,639 Speaker 2: percent South Africa, for example, but oh boy, so Syria 56 00:03:16,840 --> 00:03:20,720 Speaker 2: is at forty one percent, which is absolutely fucking hideous. 57 00:03:21,440 --> 00:03:24,919 Speaker 2: Syria is a country that I don't know anyone who 58 00:03:24,960 --> 00:03:26,799 Speaker 2: listens to this show is aware of the extent to 59 00:03:26,800 --> 00:03:29,880 Speaker 2: which Syria has been devastated by the civil war, and 60 00:03:30,000 --> 00:03:35,040 Speaker 2: this is an incredible blow to their economy. Laus and 61 00:03:35,120 --> 00:03:38,840 Speaker 2: Me and mar are also being terriffed at forty percent, 62 00:03:39,480 --> 00:03:42,760 Speaker 2: and we promised in the executive disorder to explain how 63 00:03:43,040 --> 00:03:47,000 Speaker 2: Trump recognizing the junta. So Joe Biden had refused to 64 00:03:47,080 --> 00:03:51,360 Speaker 2: recognize me and Mar's like military coup government. As long 65 00:03:51,400 --> 00:03:53,600 Speaker 2: time listeners of this show are aware, there is a 66 00:03:53,640 --> 00:03:56,560 Speaker 2: military coup in in memr There is a large gale 67 00:03:56,600 --> 00:04:00,240 Speaker 2: revolutionary process attempting to overthrow this government. My co host 68 00:04:00,320 --> 00:04:03,640 Speaker 2: James Stout and Robert Evans have done a lot of 69 00:04:03,760 --> 00:04:05,840 Speaker 2: very good reporting on this that you can go find. 70 00:04:05,920 --> 00:04:08,280 Speaker 2: You should find it. It's some of the best journalism 71 00:04:08,280 --> 00:04:11,960 Speaker 2: that I've ever encountered. But the US's official position has 72 00:04:12,000 --> 00:04:14,480 Speaker 2: been that we don't recognize the coup government because it is, 73 00:04:14,520 --> 00:04:19,200 Speaker 2: and this is true, a coup government. But Trump just 74 00:04:19,400 --> 00:04:21,479 Speaker 2: sent the junta a letter of it says you're tariff 75 00:04:21,520 --> 00:04:22,960 Speaker 2: to forty percent. And the thing about this is the 76 00:04:23,000 --> 00:04:26,000 Speaker 2: Junta was like, oh shit, hell yeah, Like that means 77 00:04:26,000 --> 00:04:28,560 Speaker 2: you recognize us, right, because you're sending us official fucking 78 00:04:28,880 --> 00:04:31,920 Speaker 2: notices of shit. So you're recognizing US as the legitimate 79 00:04:31,920 --> 00:04:34,080 Speaker 2: government of mean Mar. And so the Juta is like 80 00:04:34,200 --> 00:04:37,920 Speaker 2: thrilled by this. There's some evidence of like the US 81 00:04:38,040 --> 00:04:42,400 Speaker 2: lifting sanctions on them after. It's kind of messy, but yeah, great, 82 00:04:42,760 --> 00:04:46,600 Speaker 2: somehow in the attempts to sort of just like squeeze 83 00:04:46,640 --> 00:04:49,880 Speaker 2: every last drop out of all of these countries, we 84 00:04:49,920 --> 00:04:55,760 Speaker 2: have recognized an incredibly brutal military dictatorship. Hate that back 85 00:04:55,800 --> 00:04:58,560 Speaker 2: to the more direct tariff stuff. The tariffs on Laos 86 00:04:58,600 --> 00:05:01,800 Speaker 2: is also going to be devastating for Laosian economy, which 87 00:05:01,839 --> 00:05:05,599 Speaker 2: is a lot of the economies in Southeast Asia are 88 00:05:05,960 --> 00:05:09,960 Speaker 2: pretty heavily export driven, and it's one of the places 89 00:05:10,000 --> 00:05:13,120 Speaker 2: where a lot of textiles manufacturing takes place. After the 90 00:05:13,160 --> 00:05:16,640 Speaker 2: sort of increase in labor prices and increase in resistance 91 00:05:16,680 --> 00:05:20,240 Speaker 2: from the labor movement in China kind of pushed all 92 00:05:20,279 --> 00:05:23,480 Speaker 2: of that capital down the make Cong River delta. This 93 00:05:23,520 --> 00:05:27,000 Speaker 2: is going to absolutely fucking suck for everyone in Laos. 94 00:05:27,080 --> 00:05:28,880 Speaker 2: And you know, this is something I want to keep 95 00:05:28,880 --> 00:05:32,559 Speaker 2: emphasizing over and over again that these turf teriffs, people 96 00:05:32,640 --> 00:05:36,200 Speaker 2: they hurt the most are workers in places like Laos, 97 00:05:36,200 --> 00:05:38,840 Speaker 2: in places like Syria, right, who are going to just 98 00:05:38,920 --> 00:05:44,800 Speaker 2: be absolutely fucking devastated by it. Now, let's also talk Switzerland, 99 00:05:45,160 --> 00:05:47,640 Speaker 2: which was the other country that had a terriff at 100 00:05:47,640 --> 00:05:52,839 Speaker 2: like forty percent This one is genuinely really funny, which 101 00:05:52,880 --> 00:05:55,280 Speaker 2: is that it seems to largely be driven by Trump 102 00:05:55,320 --> 00:05:57,440 Speaker 2: being pissed off of the trade deficit, which is like 103 00:05:57,839 --> 00:05:59,800 Speaker 2: compared to like the scale of the US economy, that 104 00:06:00,160 --> 00:06:03,320 Speaker 2: deficit is like zero dollars. But the funniest part of 105 00:06:03,320 --> 00:06:05,400 Speaker 2: this is that the trade deficit is largely driven by 106 00:06:05,400 --> 00:06:08,800 Speaker 2: gold imports. Now, this is extremely funny because if you 107 00:06:08,800 --> 00:06:11,720 Speaker 2: know anything about the American Right, you know that a 108 00:06:11,720 --> 00:06:13,760 Speaker 2: lot of the ways that they did their funding, especially 109 00:06:13,800 --> 00:06:16,599 Speaker 2: when they were sort of building their operations, a huge 110 00:06:16,600 --> 00:06:19,200 Speaker 2: source of their funding is getting their followers to buy gold. 111 00:06:19,560 --> 00:06:22,200 Speaker 2: This was the original Alex Jones grift right. I think 112 00:06:22,240 --> 00:06:24,039 Speaker 2: he still does it a little bit now. Before he 113 00:06:24,080 --> 00:06:26,599 Speaker 2: sort of pivoted into supplements, he would partner with like 114 00:06:26,680 --> 00:06:29,320 Speaker 2: gold salesmen and like silvia salesman. This and this has 115 00:06:29,320 --> 00:06:31,800 Speaker 2: always been a huge source of these people's money. Now 116 00:06:32,360 --> 00:06:34,400 Speaker 2: there's there's been a little bit of decrease in the 117 00:06:34,680 --> 00:06:39,440 Speaker 2: prominence of gold as a thing. There's a very good 118 00:06:40,120 --> 00:06:45,200 Speaker 2: Folding Ideas video about this incredibly bizarre Indrius Elba Weird 119 00:06:45,240 --> 00:06:47,839 Speaker 2: gold promotion documentary which talks about the ways in which 120 00:06:47,880 --> 00:06:52,080 Speaker 2: gold has been sort of threatened by bitcoin, and well 121 00:06:52,160 --> 00:06:54,360 Speaker 2: mostly bitcoin, but it's like cryptocurrency in general is like 122 00:06:54,839 --> 00:06:57,760 Speaker 2: the scam you're trying to sell all of these sort 123 00:06:57,760 --> 00:07:02,000 Speaker 2: of weird prepper and like hard lia line quote unquote 124 00:07:02,040 --> 00:07:06,240 Speaker 2: sound money libertariany types. But it is very funny that 125 00:07:06,279 --> 00:07:09,400 Speaker 2: this is in effect a self reinforcing cycle, because the 126 00:07:09,440 --> 00:07:10,760 Speaker 2: thing about the price of gold is that it is 127 00:07:10,840 --> 00:07:13,280 Speaker 2: largely determined by how fuck the rest of the economy is. 128 00:07:13,920 --> 00:07:15,720 Speaker 2: The old people who are trying to sell gold are 129 00:07:15,720 --> 00:07:17,280 Speaker 2: trying to sell you on the fact that the economy 130 00:07:17,320 --> 00:07:20,400 Speaker 2: is about to fucking explode. But this is a cyclical effect, 131 00:07:20,520 --> 00:07:23,440 Speaker 2: right where these terff rates go up and the economy explodes, 132 00:07:23,440 --> 00:07:26,600 Speaker 2: and so people buy more gold from Switzerland, at which 133 00:07:26,640 --> 00:07:29,720 Speaker 2: point are trade balanced with Switzerland gets worse. It works, 134 00:07:29,720 --> 00:07:33,080 Speaker 2: it worse, so and any other like Swiss watches or 135 00:07:33,080 --> 00:07:34,800 Speaker 2: another sort of major source of export currency so off, 136 00:07:34,800 --> 00:07:37,640 Speaker 2: which are again all worn by all these fucking maga 137 00:07:37,680 --> 00:07:41,280 Speaker 2: grifters with their like fucking ten thousand dollars watches or whatever. 138 00:07:41,840 --> 00:07:46,080 Speaker 2: So that one's just funny. Trump has also announced and 139 00:07:46,120 --> 00:07:48,680 Speaker 2: this has not gone into effect yet, who fucking knows 140 00:07:49,200 --> 00:07:52,000 Speaker 2: when if it goes into effect, But I think it's 141 00:07:52,240 --> 00:07:54,240 Speaker 2: worth talking about, which is that Trump has been talking 142 00:07:54,320 --> 00:07:59,760 Speaker 2: about putting a one hundred percent tariff on semiconductors unless 143 00:07:59,760 --> 00:08:03,720 Speaker 2: you invest in the US. So Apple sort of in 144 00:08:03,760 --> 00:08:06,640 Speaker 2: response to this, pledged one hundred million dollars in investment 145 00:08:06,640 --> 00:08:08,640 Speaker 2: in the US to build chips. And I think it's 146 00:08:08,640 --> 00:08:11,440 Speaker 2: also worth looking at the ideological underpinnings of this, because 147 00:08:11,880 --> 00:08:14,880 Speaker 2: a huge part of this thing is something that you've 148 00:08:14,920 --> 00:08:18,680 Speaker 2: been seeing increasingly on the right, is this dream of 149 00:08:18,720 --> 00:08:21,440 Speaker 2: making domestic iPhones. And if you look at the people 150 00:08:21,440 --> 00:08:23,320 Speaker 2: in the tech sector, right, the sort of tech billionaires 151 00:08:23,320 --> 00:08:26,760 Speaker 2: who run all this stuff, they're openly fantasizing about like, oh, 152 00:08:26,840 --> 00:08:29,160 Speaker 2: these like soft weak liberals are going to be forced 153 00:08:29,160 --> 00:08:32,680 Speaker 2: to like work in the factories and put iPhones together 154 00:08:32,800 --> 00:08:37,360 Speaker 2: or whatever. And it's worth emphasizing that this is just 155 00:08:37,559 --> 00:08:41,000 Speaker 2: not possible, right, And this is true of a significant 156 00:08:41,040 --> 00:08:42,720 Speaker 2: number of the things that they want these tariffs to do. 157 00:08:42,760 --> 00:08:45,520 Speaker 2: They're just not possible results of the policy levers they're pulling. 158 00:08:46,080 --> 00:08:48,440 Speaker 2: A couple of months ago, I described a sort of 159 00:08:48,440 --> 00:08:51,240 Speaker 2: similar policy thing to this as like they're they are 160 00:08:51,280 --> 00:08:53,680 Speaker 2: attempting to scream at the moon in order to control 161 00:08:53,720 --> 00:08:56,680 Speaker 2: the tides and it's like it doesn't work, it's not 162 00:08:56,760 --> 00:08:59,400 Speaker 2: the right lever. It literally can't do what you think 163 00:08:59,440 --> 00:09:02,000 Speaker 2: it's going to you. And it's worth going into why, 164 00:09:02,040 --> 00:09:05,800 Speaker 2: which is that we can't make iPhones here because we 165 00:09:05,920 --> 00:09:08,520 Speaker 2: don't have the migrant labor force to do it. And 166 00:09:08,600 --> 00:09:10,400 Speaker 2: a lot of you may be thinking, oh, well, the 167 00:09:10,520 --> 00:09:13,080 Speaker 2: US has a lot of migrant workers. No, you don't 168 00:09:13,160 --> 00:09:16,320 Speaker 2: understand China, which is where most of these things are built. 169 00:09:16,400 --> 00:09:18,160 Speaker 2: Even with the terriffs, like a lot of you know, 170 00:09:18,320 --> 00:09:20,880 Speaker 2: there were some downcycling of plants, that stuff has mostly 171 00:09:20,920 --> 00:09:26,240 Speaker 2: been upcycled. Again, China has three hundred million migrant workers. 172 00:09:26,640 --> 00:09:29,719 Speaker 2: That is almost the entire population of the United States. Right, 173 00:09:30,240 --> 00:09:36,160 Speaker 2: we are talking about individual plants with two hundred thousand workers. 174 00:09:36,440 --> 00:09:38,440 Speaker 2: That is the low end estimate. By the way of 175 00:09:38,440 --> 00:09:40,960 Speaker 2: those numbers, we don't actually have very good numbers on 176 00:09:41,000 --> 00:09:43,240 Speaker 2: how big some of these fox Con facilities are. The 177 00:09:43,320 --> 00:09:46,679 Speaker 2: low end estimate is two hundred thousand. Right, and again 178 00:09:47,040 --> 00:09:51,000 Speaker 2: this is just in time production. So okay, what does 179 00:09:51,000 --> 00:09:54,240 Speaker 2: that actually mean? Right? This means that the production cycles 180 00:09:54,320 --> 00:09:57,000 Speaker 2: work a lot of For example, the way that ups works. Right, 181 00:09:57,040 --> 00:09:59,520 Speaker 2: We're like, you have a bunch of people who are 182 00:09:59,520 --> 00:10:02,040 Speaker 2: effectively seasonal or part time workers who only come in 183 00:10:02,080 --> 00:10:04,880 Speaker 2: when demand increases, so for ups, right, and it's actually 184 00:10:05,000 --> 00:10:08,200 Speaker 2: a relatively similar schedule to the way it works in China. 185 00:10:08,280 --> 00:10:10,839 Speaker 2: But it's like there's these massive surges around the holidays 186 00:10:10,920 --> 00:10:15,600 Speaker 2: with apples. It's more like September November roughly. But it's 187 00:10:15,640 --> 00:10:18,960 Speaker 2: in order to like massively be able to ramp up 188 00:10:18,960 --> 00:10:22,320 Speaker 2: production in time for you know, the sort of like 189 00:10:22,400 --> 00:10:25,760 Speaker 2: massive holiday increase of orders. Right. But in order to 190 00:10:25,800 --> 00:10:28,520 Speaker 2: do this, you need to have a production apparatus where 191 00:10:28,760 --> 00:10:31,480 Speaker 2: you have two hundred thousand workers there, but you can 192 00:10:31,480 --> 00:10:34,200 Speaker 2: also get rid of most of them and they can 193 00:10:34,240 --> 00:10:36,840 Speaker 2: support themselves doing other stuff for the rest of the year, 194 00:10:37,280 --> 00:10:39,080 Speaker 2: and then you have to be able to bring them 195 00:10:39,160 --> 00:10:42,720 Speaker 2: back in during peak season. We just do not have 196 00:10:42,760 --> 00:10:45,600 Speaker 2: the populations to replicate this, right, even if you're trying 197 00:10:45,640 --> 00:10:47,960 Speaker 2: to replace it with prison labor. The thing about the 198 00:10:47,960 --> 00:10:50,800 Speaker 2: American prison system is that it's decentralized, right. This is 199 00:10:50,800 --> 00:10:53,720 Speaker 2: actually a key element of how the US economy is structured. 200 00:10:54,360 --> 00:10:56,640 Speaker 2: Prisons are one of the sort of three major sources 201 00:10:56,640 --> 00:10:59,439 Speaker 2: of jobs in rural areas. The other two are like 202 00:10:59,800 --> 00:11:02,240 Speaker 2: va March style service jobs, which replaced anything else that 203 00:11:02,280 --> 00:11:04,240 Speaker 2: was in the economy and the military basis, which is 204 00:11:04,280 --> 00:11:06,640 Speaker 2: part of why you know, like like this is part 205 00:11:06,640 --> 00:11:09,200 Speaker 2: of why rural politics of console reactionary because like, okay, 206 00:11:09,240 --> 00:11:16,600 Speaker 2: so if your options in the economy are soldier, prison guard, service, labor, 207 00:11:16,640 --> 00:11:21,800 Speaker 2: you're gonna generate a bunch of unhinged reactionary bullshit. But again, 208 00:11:22,120 --> 00:11:24,000 Speaker 2: even even though the American prison system has a really 209 00:11:24,080 --> 00:11:28,400 Speaker 2: high population, these people are really spread out, and iPhone 210 00:11:28,440 --> 00:11:34,200 Speaker 2: production requires sort of like mass centralization, right, that's the 211 00:11:34,240 --> 00:11:36,840 Speaker 2: only way to get these things to work. Plus, the 212 00:11:36,920 --> 00:11:39,280 Speaker 2: workers that you're bringing in have to be skilled enough 213 00:11:39,320 --> 00:11:41,000 Speaker 2: to be able to do this shit. And this is 214 00:11:41,040 --> 00:11:43,200 Speaker 2: a capacity that's built up in China over the course 215 00:11:43,240 --> 00:11:46,160 Speaker 2: of like of like decades, right, And we don't really 216 00:11:46,200 --> 00:11:48,960 Speaker 2: have this now that people have tried moving this production 217 00:11:48,960 --> 00:11:52,400 Speaker 2: into other places like Vietnam, for example, the teriff rates 218 00:11:52,400 --> 00:11:55,839 Speaker 2: there are also making this extremely difficult. But it's been 219 00:11:55,920 --> 00:11:59,880 Speaker 2: really really hard to replace. And the other issue, and 220 00:12:00,080 --> 00:12:02,040 Speaker 2: this is a technological issue, not just a sort of 221 00:12:02,080 --> 00:12:06,160 Speaker 2: issue of the systemic elements of the population of China. 222 00:12:06,480 --> 00:12:11,160 Speaker 2: The infrastructure to build microchips in the US doesn't exist, 223 00:12:11,679 --> 00:12:14,800 Speaker 2: and it's not just that the infrastructure to build the 224 00:12:14,840 --> 00:12:17,320 Speaker 2: chips doesn't exist. It's actually way worse than that, and 225 00:12:17,320 --> 00:12:19,360 Speaker 2: this is why all of the attempts, and the Biden 226 00:12:19,400 --> 00:12:21,560 Speaker 2: administration has put an enormous amount of money into this. 227 00:12:21,640 --> 00:12:23,640 Speaker 2: The Chinese government also has put an enormous amount of 228 00:12:23,640 --> 00:12:25,760 Speaker 2: money spifically into the microchip angle, and none of them 229 00:12:25,760 --> 00:12:27,360 Speaker 2: may have been able to do it. And part of 230 00:12:27,400 --> 00:12:30,280 Speaker 2: it's technological problem, but part of it is that the 231 00:12:30,320 --> 00:12:33,840 Speaker 2: machines that you need to make the chips don't exist, right, 232 00:12:34,120 --> 00:12:36,520 Speaker 2: But the machines you need to make the machines that 233 00:12:36,559 --> 00:12:39,800 Speaker 2: make the chips also don't exist. And the machines you 234 00:12:39,840 --> 00:12:42,360 Speaker 2: need to make the machines that make the machines that 235 00:12:42,440 --> 00:12:45,319 Speaker 2: make the chips also don't exist. We are so far 236 00:12:45,440 --> 00:12:47,360 Speaker 2: up the supply chain, right, and this is one of 237 00:12:47,400 --> 00:12:48,599 Speaker 2: the you know, one of the things, the thing that 238 00:12:48,600 --> 00:12:52,679 Speaker 2: they're trying to do through sort of like pure politics, 239 00:12:52,760 --> 00:12:55,200 Speaker 2: right through like just like the pure exertion of state power, 240 00:12:55,840 --> 00:12:59,640 Speaker 2: is to reshape the fundamental structural way that the supply 241 00:12:59,720 --> 00:13:01,679 Speaker 2: chain work, and the way the supply chain is worked 242 00:13:01,760 --> 00:13:06,439 Speaker 2: is by intense specialization in very very very small areas. Right, 243 00:13:06,480 --> 00:13:09,240 Speaker 2: So Taiwan for example, becomes the only place basically that 244 00:13:09,280 --> 00:13:12,679 Speaker 2: can manufacture these chips. And that intense specification means that 245 00:13:12,760 --> 00:13:14,800 Speaker 2: like the machines that make the machines that they that 246 00:13:14,840 --> 00:13:16,320 Speaker 2: are used to build this thing are only made by 247 00:13:16,360 --> 00:13:17,880 Speaker 2: like one company in social land, and like machines to 248 00:13:17,880 --> 00:13:21,160 Speaker 2: make those machines like who the fuck knows where they're built. 249 00:13:21,320 --> 00:13:24,600 Speaker 2: And this is a thing where the technology involves become 250 00:13:24,679 --> 00:13:26,839 Speaker 2: so complicated and the laborers become so specialized that you're 251 00:13:26,840 --> 00:13:29,560 Speaker 2: dealing with machines that like just straight up not many 252 00:13:29,559 --> 00:13:31,959 Speaker 2: people in the world know how to use, and not 253 00:13:32,040 --> 00:13:35,400 Speaker 2: on people in the world know how to create, and 254 00:13:35,440 --> 00:13:37,920 Speaker 2: so we're so far up the supply chain, right, And 255 00:13:37,960 --> 00:13:39,360 Speaker 2: this is also if you want to look at like 256 00:13:39,400 --> 00:13:41,319 Speaker 2: what the impact of these terrists are going to be, right, 257 00:13:41,920 --> 00:13:44,959 Speaker 2: because your supply chains are so specialized. You know, you 258 00:13:45,240 --> 00:13:48,120 Speaker 2: can think of these supply chains as like incredibly complicated machines, right, 259 00:13:49,080 --> 00:13:51,960 Speaker 2: and any sort of like little rock that you throw 260 00:13:52,040 --> 00:13:54,240 Speaker 2: into the machine, or do you know, you throw sand 261 00:13:54,280 --> 00:13:56,319 Speaker 2: into the machine and suddenly the ball bearing doesn't work 262 00:13:56,320 --> 00:13:58,680 Speaker 2: at quite the right efficiency, and so things just start 263 00:13:58,679 --> 00:14:01,640 Speaker 2: breaking down across the entire supply chain, and they think 264 00:14:01,640 --> 00:14:03,720 Speaker 2: that they can just replicate all of this with just 265 00:14:03,760 --> 00:14:08,480 Speaker 2: like pure tariffs and like throwing money at it, and no, 266 00:14:08,640 --> 00:14:11,040 Speaker 2: you can't. These are these are actual structural things of 267 00:14:11,080 --> 00:14:13,600 Speaker 2: how the economy works. Now, do you know what else 268 00:14:14,000 --> 00:14:16,600 Speaker 2: is a structural element of how the economy works? Idiot? 269 00:14:16,600 --> 00:14:18,920 Speaker 2: Is these products and services and the fact that they 270 00:14:18,960 --> 00:14:35,240 Speaker 2: fund this podcast. Woo, we are so back now. One 271 00:14:35,280 --> 00:14:37,000 Speaker 2: of the other kind of terriffs I think I've been 272 00:14:37,040 --> 00:14:40,120 Speaker 2: calling I guess like defiance tariffs. One of the things 273 00:14:40,160 --> 00:14:42,680 Speaker 2: that Shop administration has been doing is threatening to impose 274 00:14:43,080 --> 00:14:46,600 Speaker 2: a fifty percent teriff on anyone who buys oil from Russia. 275 00:14:46,880 --> 00:14:49,200 Speaker 2: India has been threatened with this. India's current terrif rate 276 00:14:49,280 --> 00:14:51,640 Speaker 2: is twenty five percent. They're right now threatening with another 277 00:14:51,680 --> 00:14:54,320 Speaker 2: twenty five percent against in the fifty percent. It's sort 278 00:14:54,360 --> 00:14:58,880 Speaker 2: of unclear exactly who's going to back down here. More interestingly, 279 00:14:58,960 --> 00:15:02,120 Speaker 2: and we've talked a little bit about this, Brazil. There 280 00:15:02,160 --> 00:15:04,720 Speaker 2: was a fifty percent turf of tariff on Brazil again 281 00:15:04,880 --> 00:15:09,240 Speaker 2: for refusing to release Bolsonaro, which is very funny because 282 00:15:09,320 --> 00:15:12,200 Speaker 2: this has managed to piss off the entire sort of 283 00:15:12,280 --> 00:15:16,560 Speaker 2: political sphere in Brazil to the extent that like Bolsonaro, 284 00:15:16,680 --> 00:15:19,400 Speaker 2: has had to come out and announce this because Bolsonaro 285 00:15:19,520 --> 00:15:23,160 Speaker 2: was getting fucking torn to shreds by the Brazilian right 286 00:15:23,440 --> 00:15:26,400 Speaker 2: for being basically a trader sort of lapdog of the US, 287 00:15:26,440 --> 00:15:29,520 Speaker 2: as they're sort of, you know, imposing this direct attack 288 00:15:29,600 --> 00:15:33,120 Speaker 2: on Brazil through this fifty percent tariff. Right. It's backfire 289 00:15:33,200 --> 00:15:37,560 Speaker 2: so spectacularly that like Lula, who was floundering, is now 290 00:15:37,600 --> 00:15:40,280 Speaker 2: writing this incredible wave of sort of anti American Brazilian 291 00:15:40,320 --> 00:15:43,440 Speaker 2: nationalism from both the left and the right. So Lula, 292 00:15:43,520 --> 00:15:45,480 Speaker 2: who is who is again in a pretty strong political 293 00:15:45,520 --> 00:15:47,840 Speaker 2: position because of this, has refused that you direct talk 294 00:15:47,920 --> 00:15:50,280 Speaker 2: to the US because he was like, absolutely not fuck this. 295 00:15:50,840 --> 00:15:53,640 Speaker 2: Here's a quote from Routers. We had already pardoned the 296 00:15:53,720 --> 00:15:56,600 Speaker 2: US intervention in the nineteen sixty four coup, said Lula, 297 00:15:56,640 --> 00:15:59,080 Speaker 2: who got his political start as a union leader protesting 298 00:15:59,120 --> 00:16:01,840 Speaker 2: against the military government that followed a US backed ouster 299 00:16:01,920 --> 00:16:05,160 Speaker 2: of a democratically elected presidents. Quote. But this is now 300 00:16:05,200 --> 00:16:07,680 Speaker 2: not a small intervention. It's the president of the United 301 00:16:07,680 --> 00:16:11,120 Speaker 2: States thinking he can dictate rules for a sovereign country 302 00:16:11,160 --> 00:16:14,720 Speaker 2: like Brazil. It's unacceptable. Now. Again, as I said in 303 00:16:14,760 --> 00:16:16,760 Speaker 2: the ed, there's a lot of things now that are 304 00:16:16,760 --> 00:16:19,280 Speaker 2: worth looking at here. Right, we have, on the one hand, 305 00:16:19,360 --> 00:16:22,560 Speaker 2: this direct connection from Lula from you know, the sort 306 00:16:22,600 --> 00:16:26,600 Speaker 2: of subtle CIA backing of military coup stuff which happens 307 00:16:26,680 --> 00:16:30,600 Speaker 2: under the table to you know this just like the 308 00:16:30,640 --> 00:16:32,320 Speaker 2: president of the United States is telling you how to 309 00:16:32,360 --> 00:16:36,080 Speaker 2: run your country. And that is a subjective shift, even 310 00:16:36,120 --> 00:16:39,160 Speaker 2: if like the CIA overthrowing your government like has more 311 00:16:39,160 --> 00:16:41,760 Speaker 2: of a direct political impact on it. Right. The thing 312 00:16:41,800 --> 00:16:43,600 Speaker 2: about the thing about the way American power worked was 313 00:16:43,640 --> 00:16:45,520 Speaker 2: that it was mostly supposed to be under the table, 314 00:16:45,800 --> 00:16:48,200 Speaker 2: and it's not now. It's just it's just out there 315 00:16:48,200 --> 00:16:51,360 Speaker 2: in the open. Right. The premise that the US governments, 316 00:16:51,400 --> 00:16:52,880 Speaker 2: like the president of the United States, should just be 317 00:16:52,920 --> 00:16:55,160 Speaker 2: able to tell another country what to do is the 318 00:16:55,200 --> 00:16:58,560 Speaker 2: fucking premise of American imperialism. And now they're just saying 319 00:16:58,560 --> 00:17:01,800 Speaker 2: it out loud and noting that it's not like Lula 320 00:17:01,880 --> 00:17:04,360 Speaker 2: is some kind of like anti American radical, right, Like 321 00:17:04,880 --> 00:17:07,680 Speaker 2: Lula worked really well in his first term in office, 322 00:17:07,680 --> 00:17:11,040 Speaker 2: which was w Bush, but again because of the way 323 00:17:11,040 --> 00:17:13,040 Speaker 2: that the political winds have shifted here, right to the 324 00:17:13,040 --> 00:17:17,120 Speaker 2: extent that like Bolsonaro has had to condemn an attempt 325 00:17:17,200 --> 00:17:21,680 Speaker 2: to get him released from prison, which is so funny 326 00:17:21,800 --> 00:17:24,000 Speaker 2: because he's doing this. He is, he is, he is 327 00:17:24,040 --> 00:17:26,840 Speaker 2: pushing very hard. Now there hasn't really been a response 328 00:17:27,680 --> 00:17:31,840 Speaker 2: yet for Lula's call for organized terror resistance from China 329 00:17:31,840 --> 00:17:34,720 Speaker 2: and India and bricks. I don't know if there's going 330 00:17:34,800 --> 00:17:37,160 Speaker 2: to be. It's worth talking a little bit about what 331 00:17:37,200 --> 00:17:43,359 Speaker 2: bricks actually is here. So bricks stands for Brazil, Russia, India, China, 332 00:17:43,400 --> 00:17:47,000 Speaker 2: South Africa. It was originally like an asset class designed 333 00:17:47,000 --> 00:17:49,439 Speaker 2: by some guys at Goldman Sachs who were, you know, 334 00:17:49,440 --> 00:17:52,040 Speaker 2: trying to like classify the assets of this kind of 335 00:17:52,080 --> 00:17:55,159 Speaker 2: like developing economy thing. It was like, you know, you 336 00:17:55,160 --> 00:17:57,080 Speaker 2: can buy bonds and these things and maybe you can 337 00:17:57,119 --> 00:18:00,280 Speaker 2: you can classify their asset rates together and has kind 338 00:18:00,320 --> 00:18:03,320 Speaker 2: of become a political alliance. But you know, there's a 339 00:18:03,359 --> 00:18:05,320 Speaker 2: lot of people who will attempt to sell you on 340 00:18:05,440 --> 00:18:08,280 Speaker 2: bricks being this sort of like leftist anti imperial alliance, 341 00:18:08,960 --> 00:18:10,639 Speaker 2: you know, and as a sort of socialist thing. And 342 00:18:10,760 --> 00:18:15,600 Speaker 2: like I will simply ask, right, who is doing the 343 00:18:15,680 --> 00:18:19,240 Speaker 2: socialism here? Right? Is it a butcher of Gujarat? Is 344 00:18:19,280 --> 00:18:23,959 Speaker 2: it she quote? We must oppose Welfarerism jimping. Is it, Vladimir, 345 00:18:24,040 --> 00:18:27,399 Speaker 2: we will show Ukraine true decommunization Putin? Is it the 346 00:18:27,400 --> 00:18:30,720 Speaker 2: African National Congress of selling your country to Bank of America? 347 00:18:30,840 --> 00:18:32,120 Speaker 2: Is it the butcher of Haiti? 348 00:18:32,160 --> 00:18:32,240 Speaker 1: Like? 349 00:18:32,280 --> 00:18:33,720 Speaker 2: What are we doing here? 350 00:18:33,800 --> 00:18:34,080 Speaker 1: Right? Like? 351 00:18:34,160 --> 00:18:36,840 Speaker 2: This is not actually a substantively anti American political alliance. 352 00:18:37,080 --> 00:18:40,119 Speaker 2: India is a close American ally, South Africa is a 353 00:18:40,119 --> 00:18:43,919 Speaker 2: close American ally. None of this really makes any sense. 354 00:18:44,119 --> 00:18:49,880 Speaker 2: It's not a substantive political alliance. Really, people periodically make 355 00:18:49,960 --> 00:18:52,680 Speaker 2: noise about it trying to be a substantive political alliance. 356 00:18:52,680 --> 00:18:55,920 Speaker 2: But like I mean, like India and China are periodically 357 00:18:55,960 --> 00:18:58,640 Speaker 2: like at war or like almost at war with each 358 00:18:58,640 --> 00:19:01,359 Speaker 2: other over the border. It's right, these are a bunch 359 00:19:01,359 --> 00:19:04,320 Speaker 2: of countries that absolutely fucking hate each other. It's never 360 00:19:04,359 --> 00:19:06,760 Speaker 2: been a coherent political project. Lula is trying to turn 361 00:19:06,800 --> 00:19:10,040 Speaker 2: it into one, but like, I fucking I don't think 362 00:19:10,080 --> 00:19:13,320 Speaker 2: that's gonna work. So, you know, that's sort of what's 363 00:19:13,359 --> 00:19:15,960 Speaker 2: been going on on the front to sort of national resistance. 364 00:19:15,960 --> 00:19:18,520 Speaker 2: But Lula does have you know, a kind of very 365 00:19:18,600 --> 00:19:23,399 Speaker 2: very large and powerful political force behind him domestically to 366 00:19:23,480 --> 00:19:26,360 Speaker 2: resist this. We'll see what happens going forward. It's also 367 00:19:26,400 --> 00:19:28,720 Speaker 2: worth noting that China has been negotiating with the US 368 00:19:28,840 --> 00:19:31,480 Speaker 2: and their tariff increases, which are supposed to go into effect, 369 00:19:31,480 --> 00:19:34,520 Speaker 2: have been delayed for another ninety days. So we're stuck 370 00:19:34,520 --> 00:19:38,280 Speaker 2: in this holding pattern again. But let's talk about what 371 00:19:38,400 --> 00:19:41,679 Speaker 2: this means for the economy, right, And I think the 372 00:19:41,800 --> 00:19:44,439 Speaker 2: very short term answer is that I don't think anyone 373 00:19:44,520 --> 00:19:48,639 Speaker 2: really knows, right, Like, the actual macro effects of this 374 00:19:49,680 --> 00:19:53,760 Speaker 2: are things that we've only just started to see. No 375 00:19:53,760 --> 00:19:56,000 Speaker 2: one's ever really tried to model this out because there's 376 00:19:56,000 --> 00:19:58,840 Speaker 2: no reason why it whatever happened, you know, And you're 377 00:19:58,880 --> 00:20:04,159 Speaker 2: starting to see things behind the scenes, like medical supplies 378 00:20:04,200 --> 00:20:07,159 Speaker 2: being incredibly difficult to require. You're starting to see a 379 00:20:07,160 --> 00:20:11,280 Speaker 2: bunch of very very weird items and supply chains become 380 00:20:11,320 --> 00:20:15,520 Speaker 2: increasingly difficult to find. But again, the supply chains are 381 00:20:15,560 --> 00:20:17,200 Speaker 2: going to break down in ways that we just don't 382 00:20:17,240 --> 00:20:19,720 Speaker 2: really understand. What is going to happen, And what has 383 00:20:19,760 --> 00:20:22,800 Speaker 2: started to happen is inflation is increasing. I want to 384 00:20:22,840 --> 00:20:26,280 Speaker 2: sort of again review our kind of inflation theory, right, 385 00:20:26,359 --> 00:20:30,880 Speaker 2: which is largely derived from our friends as strange matter, 386 00:20:30,960 --> 00:20:34,000 Speaker 2: sort of supply chain theory of inflation. Their usis of 387 00:20:34,040 --> 00:20:37,600 Speaker 2: inflation is that, like, it's not set by just supply 388 00:20:37,640 --> 00:20:41,679 Speaker 2: and demand. It's set by cost plus markup. Because you know, 389 00:20:41,800 --> 00:20:45,240 Speaker 2: price is not set by like an autonomous thing called 390 00:20:45,320 --> 00:20:48,639 Speaker 2: the market. Price is set by like a guy with 391 00:20:48,800 --> 00:20:52,719 Speaker 2: like a price gun. Right, It's directly set by people. 392 00:20:52,760 --> 00:20:55,520 Speaker 2: And the way that those people set the price is 393 00:20:56,040 --> 00:20:58,200 Speaker 2: you know, the cost of acquiring the item, plus and 394 00:20:58,240 --> 00:21:00,719 Speaker 2: markup for their profit. Now out, One of the sort 395 00:21:00,720 --> 00:21:03,760 Speaker 2: of fundamental like insights here is that price is sort 396 00:21:03,760 --> 00:21:07,880 Speaker 2: of sticky until it isn't, right, which is that like, okay, 397 00:21:07,960 --> 00:21:10,359 Speaker 2: So the actual thing that controls price is sort of 398 00:21:10,400 --> 00:21:15,600 Speaker 2: like how pissed off consumers get at price increases, but 399 00:21:15,920 --> 00:21:20,239 Speaker 2: also comma that is also very very much tied to brand, right, 400 00:21:20,280 --> 00:21:22,480 Speaker 2: And if you raise your prices and consumers get pissed, 401 00:21:22,560 --> 00:21:24,639 Speaker 2: you even if you drop them again, that doesn't necessarily 402 00:21:24,640 --> 00:21:28,159 Speaker 2: mean those people will come back, right, So you know 403 00:21:28,320 --> 00:21:30,000 Speaker 2: a lot of times when they when they when there's 404 00:21:30,040 --> 00:21:32,320 Speaker 2: price increases, companies try to eat it. And that's and 405 00:21:32,320 --> 00:21:34,120 Speaker 2: that's been what's happening with a lot of these things, 406 00:21:34,200 --> 00:21:37,119 Speaker 2: right where at each point in the supply chain, people 407 00:21:37,119 --> 00:21:38,880 Speaker 2: are you know, people are having to sort of pay 408 00:21:38,880 --> 00:21:41,719 Speaker 2: for the tariff parts, right, and and when someone has 409 00:21:41,760 --> 00:21:44,320 Speaker 2: to pay for the tariff, they increase their prices that 410 00:21:44,359 --> 00:21:46,040 Speaker 2: they sell it to the next person in the supply chain. 411 00:21:46,040 --> 00:21:49,120 Speaker 2: The next person's supply chin increases their prices right now. 412 00:21:49,560 --> 00:21:51,719 Speaker 2: So the way that these terraffs play out, right, is 413 00:21:51,720 --> 00:21:53,960 Speaker 2: that each person in the supply chain is doing costless 414 00:21:53,960 --> 00:21:56,840 Speaker 2: mark up, but their costs are going up. So your 415 00:21:56,880 --> 00:21:59,480 Speaker 2: options are either you sell it at the same price 416 00:21:59,520 --> 00:22:01,760 Speaker 2: and you reduce the amount of markup you're getting, which 417 00:22:01,800 --> 00:22:05,080 Speaker 2: is reducing the raw profit you're taking in, or you 418 00:22:05,200 --> 00:22:07,320 Speaker 2: raise your prices. And these things are trying to not 419 00:22:07,400 --> 00:22:09,760 Speaker 2: raise their prices, and part of this is from direct 420 00:22:09,800 --> 00:22:13,000 Speaker 2: political pressure, right like Trump has been threatening companies to 421 00:22:13,280 --> 00:22:18,640 Speaker 2: not raise their prices from the tariffs. But prices are 422 00:22:18,680 --> 00:22:22,040 Speaker 2: starting to increase. And as this goes on, and as 423 00:22:22,160 --> 00:22:24,040 Speaker 2: more and more teriffs come into effect, that this becomes 424 00:22:24,160 --> 00:22:27,439 Speaker 2: more and more difficult to evade the tariffs. The prices 425 00:22:27,480 --> 00:22:30,040 Speaker 2: are going to keep increasing because they're driven by these 426 00:22:30,080 --> 00:22:34,240 Speaker 2: supply chain price increases. So you know cost is going 427 00:22:34,280 --> 00:22:36,639 Speaker 2: to go up. It is going to have absolutely devastating 428 00:22:36,760 --> 00:22:40,800 Speaker 2: impacts on workers across the world, primarily not in the US. 429 00:22:41,280 --> 00:22:43,680 Speaker 2: But the workers who are in these export oriented economies 430 00:22:43,680 --> 00:22:46,800 Speaker 2: are going to have to deal with just the absolute 431 00:22:46,920 --> 00:22:50,679 Speaker 2: horror of large scale economic collapse. You know what, who 432 00:22:50,720 --> 00:22:52,920 Speaker 2: else hopefully doesn't have to deal with the absolute horror 433 00:22:52,920 --> 00:22:54,840 Speaker 2: of larger scale economic collapse. It is the products and 434 00:22:54,840 --> 00:23:08,919 Speaker 2: services to support this podcast. We are back now. The 435 00:23:08,920 --> 00:23:11,600 Speaker 2: thing I want to close this episode on is not 436 00:23:11,800 --> 00:23:15,040 Speaker 2: actually a look at the economy, because I think, you know, 437 00:23:15,480 --> 00:23:17,840 Speaker 2: we kind of don't know exactly what's going to happen 438 00:23:17,960 --> 00:23:21,439 Speaker 2: with the economy other than bad. But there is something 439 00:23:21,520 --> 00:23:24,119 Speaker 2: that I think we can look at that's been broadly 440 00:23:24,240 --> 00:23:28,480 Speaker 2: ignored or miscovered, which is what these tariffs say about 441 00:23:28,520 --> 00:23:31,720 Speaker 2: the nature of the state. And I think what's happening 442 00:23:31,800 --> 00:23:35,800 Speaker 2: is that we're seeing a fundamental change in the way 443 00:23:35,840 --> 00:23:39,000 Speaker 2: that the state functions from the previous sort of neoliberal 444 00:23:39,000 --> 00:23:44,360 Speaker 2: regime to this like just really openly fascist one. And 445 00:23:44,920 --> 00:23:47,960 Speaker 2: I think the most clear example of this isn't necessarily 446 00:23:48,040 --> 00:23:51,040 Speaker 2: the terroriffs, so they are a pretty clear example. It's 447 00:23:51,080 --> 00:23:57,160 Speaker 2: this extremely weird like extortion agreement reached between Trump, AMD 448 00:23:57,280 --> 00:24:01,600 Speaker 2: and Nvidia. And to read this from CBS quote, US 449 00:24:01,760 --> 00:24:04,240 Speaker 2: chip makers in Nvidia and AMD will pay the US 450 00:24:04,280 --> 00:24:07,840 Speaker 2: government fifteen percent of revenue generated by sales of their 451 00:24:07,840 --> 00:24:10,439 Speaker 2: AI chips in China. A White House official confirmed to 452 00:24:10,480 --> 00:24:16,560 Speaker 2: CPS News this is just a shakedown, right. You know, 453 00:24:16,640 --> 00:24:20,160 Speaker 2: this is part of a negotiating process by which originally 454 00:24:20,880 --> 00:24:22,720 Speaker 2: AMD and and Video are going to be banned for 455 00:24:22,800 --> 00:24:24,919 Speaker 2: selling the AI chips to China. And in order to 456 00:24:24,920 --> 00:24:27,480 Speaker 2: be allowed to sell these ships to China, Trump was like, okay, 457 00:24:27,480 --> 00:24:29,480 Speaker 2: if you want to do that, give us like thirty 458 00:24:29,520 --> 00:24:31,280 Speaker 2: percent of your revenue, when they were like, okay, what 459 00:24:31,320 --> 00:24:36,280 Speaker 2: if we did fifteen percent? Right, this is just a shakedown. 460 00:24:37,040 --> 00:24:39,400 Speaker 2: And you know it's been described as such all over 461 00:24:39,440 --> 00:24:43,679 Speaker 2: the press, but they're missing something fundamental here, which is 462 00:24:43,680 --> 00:24:46,440 Speaker 2: that the state fundamentally is just a shakedown. 463 00:24:46,600 --> 00:24:46,800 Speaker 1: Right. 464 00:24:47,760 --> 00:24:50,040 Speaker 2: The analysis of Trump isn't from the sort of critical 465 00:24:50,080 --> 00:24:52,280 Speaker 2: press has been to view it as corruption. And it 466 00:24:52,359 --> 00:24:55,520 Speaker 2: is absolutely corrupt, right, Like, no question about this. It 467 00:24:55,560 --> 00:24:57,840 Speaker 2: is unbelievably corrupt. Like we have people just giving the 468 00:24:57,840 --> 00:25:00,280 Speaker 2: president blocks of fucking gold with an eye I phone 469 00:25:00,320 --> 00:25:04,320 Speaker 2: embedded into them. Right, it's it's hideous, open corruption. But 470 00:25:05,520 --> 00:25:09,840 Speaker 2: analysis that looks at the Trumpe administration as corruption of 471 00:25:09,880 --> 00:25:13,919 Speaker 2: an ideal type, right, that looks at it as the 472 00:25:13,920 --> 00:25:17,119 Speaker 2: transformation of the state into something that it fundamentally isn't 473 00:25:18,119 --> 00:25:21,480 Speaker 2: That kind of analysis is just wrong. The state has 474 00:25:21,600 --> 00:25:25,600 Speaker 2: always and has always only been the localized monopoly on 475 00:25:25,640 --> 00:25:28,840 Speaker 2: the legitimate use of force. Right, That's all it is. 476 00:25:28,920 --> 00:25:31,439 Speaker 2: That's all it's ever been. Everything we know about the 477 00:25:31,440 --> 00:25:34,879 Speaker 2: state today, right from the legal system to education, to roads, 478 00:25:34,880 --> 00:25:38,480 Speaker 2: to environmental regulation to the welfare state, are all just 479 00:25:38,680 --> 00:25:42,080 Speaker 2: functions that were tacked onto the core monopoly on violence, 480 00:25:42,160 --> 00:25:44,800 Speaker 2: either as part of a carrot and stick gambit to 481 00:25:44,800 --> 00:25:47,919 Speaker 2: maintain control of population or simply as a concession to 482 00:25:47,960 --> 00:25:53,040 Speaker 2: popular force. You can just have a state that is 483 00:25:53,200 --> 00:25:55,720 Speaker 2: a bunch of guys with guns who rule purely by 484 00:25:55,720 --> 00:25:58,040 Speaker 2: fiat and have control over an area. That is a state. 485 00:25:58,440 --> 00:26:00,200 Speaker 2: Everything else that we think of as being part of 486 00:26:00,200 --> 00:26:03,119 Speaker 2: a state is tacked on, and trump Ism as a 487 00:26:03,160 --> 00:26:05,840 Speaker 2: political force has simply reverted the state back to a 488 00:26:05,880 --> 00:26:09,560 Speaker 2: pure mode of extraction. Right, the state is men with 489 00:26:09,680 --> 00:26:12,600 Speaker 2: guns who take shit from you to pay for those guns. 490 00:26:13,320 --> 00:26:17,040 Speaker 2: And it becomes breathtakingly clear that this is, you know, 491 00:26:17,160 --> 00:26:19,600 Speaker 2: how the state is functioning. Try and Trump administration, because 492 00:26:19,600 --> 00:26:23,399 Speaker 2: the Trump administration has been slashing benefits while handing tax 493 00:26:23,440 --> 00:26:27,000 Speaker 2: breaks and giant government contracts worth billions of dollars to 494 00:26:27,040 --> 00:26:29,280 Speaker 2: the tech elite, and they've been spending tens of billions 495 00:26:29,280 --> 00:26:31,679 Speaker 2: of dollars, you know, to hand to the men's with 496 00:26:31,760 --> 00:26:33,760 Speaker 2: guns and to recruit new men with guns for the 497 00:26:33,760 --> 00:26:37,719 Speaker 2: mass deportation regime. Right, this is just a pure version 498 00:26:37,840 --> 00:26:41,040 Speaker 2: of the state as an extraction regime, as a regime 499 00:26:41,040 --> 00:26:42,920 Speaker 2: that fucking takes money for you a gunpoint to buy 500 00:26:42,920 --> 00:26:44,560 Speaker 2: more men with guns so it can take more money 501 00:26:44,560 --> 00:26:47,920 Speaker 2: from you. Trump Ism imagines that you can collect this 502 00:26:48,080 --> 00:26:51,480 Speaker 2: money to pay for the apparatus of violence and terror 503 00:26:51,520 --> 00:26:54,080 Speaker 2: from just pure extortion of foreigners in the working class, 504 00:26:54,800 --> 00:26:56,320 Speaker 2: you know. And we talked about this a bit at 505 00:26:56,320 --> 00:26:58,840 Speaker 2: the beginning, right, this is part of why they want 506 00:26:58,920 --> 00:27:01,600 Speaker 2: to do tariffs, as they think can replace the income tax. 507 00:27:02,080 --> 00:27:05,000 Speaker 2: You know. The income tax is just like absolutely despised 508 00:27:05,040 --> 00:27:07,480 Speaker 2: by the extra state elements of the ruling class because 509 00:27:07,760 --> 00:27:11,680 Speaker 2: rich people hate paying taxes. But there just isn't enough 510 00:27:11,880 --> 00:27:14,919 Speaker 2: capital to run a state like that with unemploying some 511 00:27:15,040 --> 00:27:17,720 Speaker 2: kind of like mmts money printing, which is alienated a 512 00:27:17,800 --> 00:27:21,200 Speaker 2: huge part of from Sosterity coalition because his quote unquote 513 00:27:21,200 --> 00:27:24,280 Speaker 2: deficit reduction stuff hasn't actually reduced the deficit. So the 514 00:27:24,280 --> 00:27:26,879 Speaker 2: people who like really really care about that shit ideologically 515 00:27:26,920 --> 00:27:30,520 Speaker 2: are pissed. But also on a fundamental level, this is 516 00:27:30,600 --> 00:27:35,000 Speaker 2: already how most city governments operate, right. They are enormous 517 00:27:35,000 --> 00:27:37,960 Speaker 2: police budgets extracted at gunpoint, either from the city council 518 00:27:38,040 --> 00:27:41,560 Speaker 2: directly or directly from the working class, from fees and 519 00:27:41,600 --> 00:27:45,080 Speaker 2: fines and tickets, like just leveled at working class people directly. 520 00:27:45,800 --> 00:27:49,920 Speaker 2: And this is something that is a little different from 521 00:27:50,040 --> 00:27:54,120 Speaker 2: how previous regimes of neoliberalism has functions, because those previous 522 00:27:54,119 --> 00:27:57,119 Speaker 2: regimes of neoliberalism did a lot of these same things, 523 00:27:57,160 --> 00:28:00,199 Speaker 2: but they were run through regimes of debt extraction, right. 524 00:28:00,680 --> 00:28:03,280 Speaker 2: It was you know, it was the imf right coming 525 00:28:03,320 --> 00:28:05,960 Speaker 2: into your country and being like, okay, if you want 526 00:28:05,960 --> 00:28:09,160 Speaker 2: to pay back these loans that this dictator took out, right, 527 00:28:09,280 --> 00:28:12,040 Speaker 2: you're going to have to like sell your entire fucking 528 00:28:12,080 --> 00:28:14,960 Speaker 2: working class into pe andage so that your entire economy 529 00:28:15,040 --> 00:28:17,240 Speaker 2: is going to be reoriented towards paying this debt back. 530 00:28:17,720 --> 00:28:21,520 Speaker 2: But again, that was debt extraction, base and finance based. 531 00:28:21,520 --> 00:28:24,200 Speaker 2: Trumpism wants to take out the middleman and just straight 532 00:28:24,280 --> 00:28:25,600 Speaker 2: up set give me all your money if you want 533 00:28:25,640 --> 00:28:29,840 Speaker 2: to live. But this is not a particularly smart strategy. 534 00:28:30,400 --> 00:28:33,040 Speaker 2: There's a reason that the state takes on other guises 535 00:28:33,080 --> 00:28:35,399 Speaker 2: than just a man with a gun asking for your wallet. 536 00:28:35,640 --> 00:28:35,800 Speaker 1: Right. 537 00:28:36,920 --> 00:28:40,760 Speaker 2: A more literal regime, a more direct regime, a regime 538 00:28:40,760 --> 00:28:43,560 Speaker 2: where the violence is just out in the open, invites 539 00:28:43,680 --> 00:28:46,400 Speaker 2: more literal resistance than a sort of symbolic regime, or 540 00:28:46,400 --> 00:28:50,800 Speaker 2: a regime that operates through more principles. All regimes of accumulation, 541 00:28:51,080 --> 00:28:54,200 Speaker 2: of dispossession of resources, taking by violence to produce more 542 00:28:54,280 --> 00:28:58,440 Speaker 2: violence come to an end, brick by brick and stone 543 00:28:58,480 --> 00:29:01,000 Speaker 2: by stone. Trumpism too will be torn to the ground 544 00:29:01,000 --> 00:29:02,720 Speaker 2: by the hands of the people who had thought it 545 00:29:02,720 --> 00:29:07,440 Speaker 2: could exploit forever this husband It could happen Here. 546 00:29:10,760 --> 00:29:13,240 Speaker 1: It could happen Here is a production of cool Zone Media. 547 00:29:13,400 --> 00:29:16,480 Speaker 1: For more podcasts from cool Zone Media, visit our website 548 00:29:16,560 --> 00:29:20,120 Speaker 1: coolzonmedia dot com, or check us out on the iHeartRadio app, 549 00:29:20,200 --> 00:29:22,200 Speaker 1: Apple Podcasts, or wherever. 550 00:29:21,920 --> 00:29:23,200 Speaker 2: You listen to podcasts. 551 00:29:23,520 --> 00:29:25,440 Speaker 1: You can now find sources for it could Happen here, 552 00:29:25,480 --> 00:29:28,440 Speaker 1: listed directly in episode descriptions. Thanks for listening.