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We just had a socialist elected to the
be may mayor of the biggest financial
city in the world. Um what do you take
away from that? Do you think that that's
going to make New York City better? Is
this a good direction for um the
Democrat party or else? I feel like
everybody's overindexing on this
election a lot based on what they want
to see. The far-left people online are
saying that this is the proof of concept
that the whole Democratic party is going
to go to the socialist direction. I
think conservatives are saying this is
evidence of uh Islamic jihadists winning
elections or see that's the really
ridiculous other people saying like oh
the whole Democratic party is becoming
socialist but I mean it's New York City
it's a very blue place. Um he won his
primary when the primary was won
basically going to win. Um Cuomo
probably not the best person to try to
run against him for that. It's not his
time anymore. Um I think Montani ran a
good campaign and stuff is funny. If you
watch the videos, I almost feel like I'm
watching cutouts from like the Daily
Show from like the 2000s. He's a funny
dude. He's good on camera, which is one
of the most important things,
unfortunately, in today's media
environment. So, yeah, I think it'll
probably more or less be business as
usual in in New York City, for better or
for worse.
>> Do you think it'll be business as usual
because he'll be stymied and he won't be
able to get the policies through? Do you
think it'll be business as usual because
he calms down some of the more what I
would call socialist, like just
blatantly socialist rhetoric? What's
going to make it be business as usual?
>> Generally, the left doesn't overstep
their legal authority like I would say
MAGA or the right does. So, I think that
for a lot of stuff, it's just not going
to be possible. He's either not going to
have the funding or the legal authority
for it. Um, and then for other stuff, I
mean, I don't know, I welcome it. Um,
he's significantly to the left of me on
a lot of economic policy. So, if he
tries stuff and it fails, then I can
just point to that and go, look, like
these are bad ideas. We shouldn't do
them anymore. Uh, if he tries it and it
works, then I, you know, maybe I
reconsider. like, "Oh, maybe somehow
there's some kind of external force that
makes it so the city backing grocery
stores or the city um you know,
investing more in like rent control
property is actually a good thing." And
then I would change my views on it. So,
and
>> how are you approaching the issue? So,
um are you looking at this going, "Okay,
well, the economy is obviously broken.
We obviously need to do something
different. I have a rough idea of what
we should do, but hey, if he's got
ideas, let him go at it." or um are you
approaching this from a
building the economy sort of brick by
brick these things adhered to a set of
rules and I think that the way he's
positioning this it's more in line with
the way that economies work
>> I don't know if we've talked about this
personally or on camera before but have
we ever talked about the concept of like
red teaming
>> yes I don't know that we've talked about
it I'm intimately familiar
>> yeah I don't know if like real stuff can
happen without red teaming and I kind of
view politics uh very similarly
left
on their own.
And I would obviously say that the right
has completely abandoned all forms of
policy conversation for the past year.
So I don't think we're even remotely
able to approach solving any of the
economic issues that we have right now
in this country because there's no
serious way to have a conversation about
it. I don't consider like super big
price control policy to be a serious way
of dealing with stuff like housing or
cost of living, but there's like no
counterpart to that right now. So, yeah.
>> What do you mean there's no counterpart
to it?
>> As in I don't know what the there's not
a serious policy discussion about what
do we do about housing in the United
States. Nobody is we're not capable of
having that conversation right now
because it's a very difficult
conversation to have that's going to
require some pain in different areas
that people aren't willing to give on. I
guess
>> like for instance like when it comes to
housing people
the the thing that you keep hearing over
and over again is that housing is
unaffordable rents are too high. You you
hear that that's like the popular
talking point. The reality point is that
it's like 70% of Americans live in an
owned home.
>> So and these are your strongest voters
cuz people that have houses are probably
older. They're more committed to an
area. They're more likely to go out and
vote. If you want to bring down rents or
if you want to bring down the cost of
housing you are necessarily hurting the
people that already have homes. And
there I've never heard a single
politician confront that reality. So
there there's a delusional fantasy where
people pretend that they can protect
homeowners which are some of the most
like loyal like voting based people. But
you can also bring down rents and the
price and cost of housing for everybody
else which is not possible. And also
these the people that get hurt the most
by high cost of housing are people who
aren't even capable of voting because
technically the people that are hurt the
most are people who aren't even able to
move to an area because the cost of
housing is prohibitively high. So, it's
a really weird housing is a weird issue
that's hard to solve in a democratic
manner.
>> If I'm tracking what you're saying, the
reason that it's hard to solve in a
democratic manner is because the very
people that want the policies to be
strict, the nimism, not in my backyard,
those people are always going to try to
vote it down. They have the most
political power, they're older, they're
more entrenched, more connected, all of
that. They've got more money to back
elections. So all of that momentum
pushes them in the direction of not only
voting against reform policies, but they
have the power to like see it all the
way through the system.
>> Yeah. And it's in their interest to do
so. They should be voting that way.
Technically, they would you'd be making
a sacrifice to vote otherwise. Imagine
you buy a home and then the next week
they talk about building massive
highrises, you know, in your area. Well,
that's going to bring the cost of your
house down or it's not going to go up as
quickly. You don't want that. Like now
that you have a home, like you want to,
you know, how many people say the house
is the most important investment or the
largest investment of any American.
Well, I don't want you to build a whole
bunch of new properties that are going
to drive down rents and ultimately the
cost of real estate. So, you become
incentivized to vote against the greater
interest of the economy of the city or
whatever in favor of protecting your own
narrower interest of your particular
housing price.
>> It's interesting. You're very right
about that. And I think one of the
reasons that the capitalist system works
is is because we're saying humans are
selfish creatures. If you create a
structure in which they can just go be
selfish and we get to take advantage of
the outcomes of all that selfish
behavior. Look at Elon Musk, right?
Doing all this incredible stuff that's
moving us forward from a technological
standpoint. Um, also making him
fantastically wealthy, putting him in a
position where he can control like just
these armies of people building all this
incredible stuff. He can get his agenda
done. He can influence politics, all of
it. Okay, so cool. There's obviously
many people that are going to argue
about his level of influence and all
that, but the system allowed for
somebody like that to pursue their
selfish interests and it kicks off all
this technology along the way. The catch
becomes from where I'm sitting is that
when I look at the nimiism, there is a
point at which so many things have come
together where everybody is pushing for
only their sole interest that we begin
to bake into the structure of the
economic system itself, all these
deranging elements. And then it's like,
yeah, you can point at housing and you
can say, hey, well, it's really in your
best interest to do this. But once
everybody is acting like that at every
level and everybody is solidifying power
and voting for things that are good for
only them and then they don't realize
they're disenfranchising the young and
that there's a historical pattern that
says you do not want to disenfranchise
the young is they will completely flip
the tables over and they will come for
your head. Um that's where this starts
to get problematic. And so getting
people to understand that the economy is
broken in exactly uh the way that
someone like M Donnie is pointing out.
He's right like he's got his finger on
the right problem, but his solutions are
disastrous. And this is one where um
we'll differ in that you're very
sanguin. you see maybe a positive thing
coming out of this and I just look at
history and I'm like this loop has
played out so many times and it becomes
way dangerous long before anybody learns
their lesson because they're not looking
they don't have a metric that they could
say oh I'm just going to watch this
metric I'm going to try the policy I'm
going to watch this metric and we can
all agree that's a great metric right
yay and then when that metric doesn't go
up they just end up blaming something
else they don't go yeah okay this policy
really just doesn't work uh which is a
fascinating part of Um, I've heard you
lament recently about some of the, you
didn't say emotional difficulties. I'm
putting that phrase in your mouth, but
the emotional difficulties of being a
political streamer. I'm running into
those same things. Um, so for me, I'm
butdding up against something there
where I look at this, it feels very
dark. It feels very dangerous. It feels
like there's this thing happening, a
slide to the far left, that sets off all
these alarm bells in my head, and I
cannot figure out how to get people to
build a vision of the economy from the
standpoint of cause and effect. Uh, so
it's interesting to map out the way that
you're looking at it. This is a red team
moment. We need somebody to run the
experiment. Nobody's having serious
policy conversations. We're in gridlock.
People are sort of doing what they're
supposed to be doing, voting for their
own interests. And so now this is sort
of a natural beat in all of this where
somebody comes in to try a new policy
that hopefully will break up the um
distortions that have worked their way
into the system.
>> Sure. To be clear, I don't think this is
a red team moment. The thing the red
team I was hoping for was supposed to be
the Conservative party or at least more
conservative people and I feel like
they've completely abandoned the policy
discussion. So,
>> and they would red team socialism. What
would they red team? um or I wouldn't
say socialism but just more um
I guess like further left economic idea
stuff
>> you want them to cuz
>> like on a very broad on a very basic
broad sense the um the further left you
go the more price controlly people get
meaning setting artificial caps on
things like saying insulin shouldn't
cost this much it should be set at this
price or they'll set price um they'll
bring up a price floor like the minimum
wage should be this high and the further
away your price controls get from market
equilibrium, the further your market is
distorted and then other things start to
happen to compensate. So for instance,
if you bring down the price of insulin
too much, maybe companies don't produce
it anymore because it's no longer
financially worthwhile. Or if you bring
up the cost of minimum wage too much,
maybe companies start paying more and
more uh employees under the table
because it's no longer worth it to
employ them or they just shut down. And
then on the flip side, you have
generally this was this was the general
case, but again, this has not really
been the conservative party for the past
5 or 10 years, is usually they fight for
more like free market stuff. So they'll
say things like, well, the minimum wage
should be lower. Um, or you know, the
company should be able to act in in
whatever way they want. And obviously in
some ways that's not good. We have rare
diseases in the United States, so
there's not very much money that you are
incentivized to to to cure because why
would you? But when the government
offers incentives with the there's a
name for like this rare drug disease
program, but um that the government kind
of offers bounties for curing certain
diseases even though the financial
incentive wouldn't be there otherwise.
Like well that's a good thing and
conservatives would never push for stuff
like that. So yeah, you you have to have
like I think these two forces pushing
and pulling on each other and then it it
just forces you to be a little bit more
honest about what your particular
policies can do and then you settle
somewhere um not necessarily in the
middle but even if you settle more to
one side at least it's kept more honest
by your opposition.
>> You had to distill down what are the two
opposing forces? Are they politically
opposing forces or something else
>> between like the right and the left
today?
>> I Yeah, I can't tell if in that example
you're saying you need the right and the
left to be pushing on different parts of
how we, you know, move the levers of the
economy and they disagree and so they're
each pulling on different levers and
that just sort of on balance creates
something good. If that's what you're
saying or if that's what I'm saying.
Okay. So, uh, the way that I approach
this, I think the fundamental way that
people are looking at this stuff is so
broken and nobody in politics
understands, uh, the economy. Scott
Besson does for sure. That guy really
understands. Uh, but the vast majority
of people, the people he needs to
convince to be appointed, um, they don't
understand the economy. So you run into
a position where the if a politician's
job is to get elected and get reelected,
then they have no incentive to actually
learn how the economy works, they have
an incentive to learn how to make the
populace feel about something that
they're saying. This is why mom Donnie
is so impressive in that he really
understands the pain that people are
going through. He can put his finger
right on it and he can say a solution
that sounds awesome. But when you were
exp- it sounds awesome from an emotional
standpoint. It will make people feel
what they want to feel. Hope things are
going to get better, change, all that.
Even though it is uh literally he's
approaching people that are dying of
thirst and offering them salt water and
so it's just going to it's probably
worse than that. It's somebody lost in a
desert and he's offering them a chance
to lick the sun.
>> What are the worst so bad?
>> What are the huge like horrible worries
I guess you have economically for things
that he would present? It depends on if
you're talking about is he going to get
checked like when he tries to do these?
Probably. A lot of these things won't go
into fruition and so it'll be sort of
this long slow thing. But let's just
take the housing uh putting rent
freezes.
>> The reason that I'm so worried and find
myself wanting to push this into like
absolute hyperbole is because when you
play those out down the road, um what
ends up happening goes like this. the
first person gets in office and they
promise things that make people feel
emotionally good and you go in, you do
those things, you freeze rents,
whatever. And then because we've already
run this experiment in New York, uh we
know what's going to happen and that's
going to be if you tell somebody who
makes a product which is product or
service which is running that building,
uh you can only charge this amount of
rent. The problem is they have taxes,
they have upkeep, they have employees,
they have to pay all of that and it can
and will get to the point where for the
amount that you can you tell them they
can charge, they're not able to pay for
the building.
>> Yeah. So, just as a quick thing, like I
don't disagree with any of this. I think
rent control is a bad policy. Um, forget
New York. It's been analyzed basically
all over the world and it doesn't really
work. But we also do it everywhere.
>> So, I don't consider that like a massive
departure from what's going on. like
California, San Francisco, um I think
parts of LA, um have like a lot of rent
control and Canada has it like the whole
world, everybody does rent control. So
if he does more, I don't think it's
good, but I don't see that as being like
a catastrophic like a step in the
darkest direction in the same way that
all of Trump's
>> Let me make my best case. There are
three books that I highly encourage
people to read to understand just how
bad that can go. Um, I would give
different books if I were trying to get
people to be afraid of Trump and
authoritarianism because that also goes
completely pathological. You're it's
it's pathology on both sides. But, uh,
here's what I see with this and how
wrong it can go. read Gulog Archipelago,
Mao, the Unknown Story, and uh Red
Famine, and you very quickly realize
that there is a a thing uh a property of
the human experience that will trigger
every time you try to do this, which is
you're going to put these policies in
place, they are not going to work. And
because they don't work, people will
resist. And when people start resisting,
you have to say, "What am I going to do
when that person resists?" In a
democratic situation, you go and that
that you have to convince those people
whether you agree with them or not, they
can vote you out of office and
everything is fine. Um, but if enough
people vote for socialism and they want
socialism, then you start marching down
the path certainly of where Europe is
going, which we can talk about some of
the problems that are being born of
that. But right now, you will end up in
a situation where you either abandon
these as we did in New York. And then
cuz in New York in the 70s and 80s in
the Bronx, I think it was 20% of all
buildings that burned were arson. So
people could collect the insurance
payment because it was cheaper to just
burn the building and collect the
insurance than to try to get around all
the regulations. Okay. So we end up
backing out of that by reinstituting
capitalism, by reducing the regulatory
burden, letting the free market go back
and do its thing. But now here we are
looping around again. Now maybe America
has protections and we'll just always
loop. We're always going to be banded.
But the thing that worries me is that we
really will swing to the socialist side
and we will come to the point where we
realize
people are going to disagree and the
only way to get them to stop disagreeing
is to silence them through jail or
violence. Uh which obviously has played
out over and over and over around the
world. Even the UK right now is com just
become completely unhinged with locking
people up politically. So
>> how do you rate this as an issue? So,
like there's a world where I'm I can
hear what you're saying,
>> but I feel like we've already swung so
far on the right side with Trump who
controls a much more important office
and it is ubiquitously echoed and
resonant throughout the entire
right-wing federal party like through
the House, through Congress, everything
else and then our whole executive branch
that when I look at like a mayor in New
York City, I'm like this doesn't even
register basically.
>> So, you and I have a very different
frame of reference. So, my frame of
reference goes like this. The
Republicans are unhinged lunatics when
it comes to spending. Uh the second they
pass the big beautiful bill, I knew I
cannot trust them. They are not going to
do the right things to overcome the um
wealth inequality that will lead this
country into open revolution where
people are getting killed. Uh so, okay,
well, they're not my ally. Uh so then I
say, well, is there anybody better? And
the only people worse than the
Republicans are the Democrats. So that's
terrifying. So I have these people who
are bad and then these people who are
worse. And I mean we can go through the
mechanisms. I'm not sure if we need to,
but if we do, I sort of
>> I guess like the confusing is I hear
this a lot, but then I look at like so I
was promised communism or socialism
after 8 years of Obama and I never got
it. And then I was promised communism or
socialism after four years of Biden and
then I never got it. And then on the
other side, people warned of a whole
bunch of horrible stuff that Trump would
do and a lot of it or or more happened
in the first term and then come to the
second term, it is continuing to happen.
So I just don't understand the fear of
like rolling. So I think I think we
talked about this on maybe the first
episode we did like everything that
Trump has done is like very predictable.
Like I think that from the first term it
was obvious that he wanted he he's a
crazy spender. He spent a ton when he
came into office after Obama. He doesn't
care about balancing the budget. He did
his huge tax cuts in his first term.
he's permanent made them permanent in a
second term. Um he's not capable of
leading the there's a whole bunch of
reasons to expect what's happening now
because of what happened in the first
term. And then meanwhile on the other
side again I keep hearing like socialism
and communism are going to happen under
the Democrats. It's like 98% of all jobs
made in the past like 50 years have come
under Democrats. The last balanced
budget we had was under a Democrat.
Every time a Democrat comes into office,
it's on the back of like a Republican le
disaster. And it's like I don't
understand how we're voting in
Republicans to give them another chance
when and then they destroy everything
again like they've already done because
we're too afraid of electing Democrats
because we're worried about them doing a
thing that they haven't done and don't
really show any inclination of doing.
It's really hard for me to understand.
>> We might have uh different things that
we worry about. So I don't need them to
usher in socialism in name. uh what I
need them to do for them to be a not
only moral hazard but a literal physical
hazard for the United States is to
deficit spend. So I just rank order the
parties by how much they're going to
deficit spend.
>> In that case the the Democrats still
easily win.
>> The Republicans like No, no, no, no.
That the Republicans add more to the big
beautiful bill. If they were saying
government is shut down until we balance
the budget, I'd be on team Democrat. But
they're not. They're saying just add
these things back into the bill. That is
again, this is not a I'm going to bat
for Republicans. This is like the what
the Republicans are doing is completely
unacceptable and will drive us off a
cliff. And then the Democrats are like,
"But wait, let's go faster." That's the
part where I'm like,
>> "No, it was because the Republicans did
a whole bunch of like tax cuts, increase
for funding for ICE, and a whole bunch
of other stuff like this." And they cut
the B the way they balanced it was by
cutting.
>> They haven't balanced it
>> food. Well, the way that they make this
kind of work in the way that they didn't
um it really and it doesn't work, right?
>> Yeah. I was going to say we see this
very different. But the way that they've
balanced anything, when I say balanced,
the way that they brought back a little
bit of the budget is by cutting things
like SNAP and Medicaid.
>> Yeah. But I couldn't care about
bringing it back a little. Like this is
it's deeply problematic. The what the
Republicans are putting forward is
within 10 years you go off a cliff.
>> Sure.
>> So now I'm just saying you've got the
Democrats going, "No, no, no. We can do
it in eight." And so
>> but all the the big beautiful bill is a
Republican bill.
>> Yeah. What the So I think you
think I am either identifying as a
Republican or I'm going to back
>> No, I'm not thinking that. just you're
saying that the Democrats are worse
because they want to reinstate SNAP and
Medicaid for for to bring back the old
requirements, but it's like those were
things that Americans already had
expected and then the Republicans are
cutting them to give dumb tax cuts and
other like bad spending measures, but
you're saying since the Democrats want
to add these things back, they're worse.
But the Democrats would have never
passed a thing that looked like the big
beautiful bill. The bill that the
Democrats would have passed would have
been fiscally better than the big
beautiful bill. If if I'm hearing what
you're saying, uh, which is I think
>> if we had just elected the Democrats and
not the Republicans, then we would be in
a better fiscal place. We would be
closer to a balanced budget. Okay? Given
their movements now, I have no reason to
believe that that's true.
>> The easiest reason why I'm 100% correct
is because they wouldn't have solidified
the Trump tax cuts, which have been one
of the biggest things that have pushed
us more into debt is having these huge
tax cuts, reducing your income without
decreasing your spending.
>> Okay. My takeaway on that is when I look
at mom Donnie, that feels to me like
that's where the energy is in the party,
which is way farther left. It's way more
give thanks for free. It's way more tax
tax.
>> Wait, but why? He's just one mayor.
>> Yeah. Yeah. But if you think about So my
base assumption is that he's
representative of where the party is
going to go. If you believe he's just a
random guy,
>> but he's literally just the mayor of New
York City.
>> But look at how much energy he gets, how
many people in the party are talking
about him. Look at the coverage. the
coverage is big and there's people
online talking about it, but most he's
not that the reason why so people are
really critical of Hakeem Jeff and Chuck
Schumer for not endorsing him. The
reason why is because he's not actually
that popular at large with the
Democratic party. So,
>> listen, it's entirely possible that uh
the rumors aren't true and that part of
why Chuck Schumer is holding this up is
he's worried about getting primar.
>> Probably holding it up because he wants
snapping Medicaid back for Americans and
not just more deficit spending at
Republicans that refuse to do anything.
Well, the deficit spending, that's where
your argument weakens because they're
willing to increase the deficit. They
are saying, "I care more that people get
these things than I care about the
deficit." That one thing is where my
brain switches on either party. The
second a party says, "I'm willing to
deficit spend," what they're actually
saying is, "I'm willing to increase the
wealth inequality. I'm willing to make
the rich richer and the poor poor."
Deficit spending is that that is it
mechanistically.
>> Okay. Let let me try this. I'm curious
how you feel about this. Okay. You and I
are in LA. Yep.
>> Okay. And we have $1,000 and we want to
take a road trip to Vegas. Okay. And on
the road trip to Vegas, I want to be
able to buy my 12-pack of Red Bull.
Okay. This is my Red Bull. We're
guaranteed this. Let's say that at some
point you bring two more friends. Okay.
So, we're have $1,000 budget. We're
going to Vegas. I want my Red Bull. And
let's say that you're like, "Actually, I
want to take a road trip to Portland."
I'm like, "Port? That's going to cost
like $3,000." And you're like, "Yeah,
we're going to do the Portland thing."
And also you don't get any Red Bull. And
eventually I'm like, "Okay, hold on. You
got all your friends running against me.
All right, we can go to Portland if you
want, but I'm keeping my Red Bull."
Yeah.
>> In that situation where you've increased
the cost of trip from $1,000 to $3,000
and then you've cut my $20 Red Bull. For
me to say, "Well, I at least want my Red
Bull." For you to go, "Oh, so you want
to spend $3,000? $20. You're even
worse." Well, that's not true because I
wanted to go to Vegas the whole time. Y
>> for the Democrats would have never
solidified those tax cuts and which is
the big which even under Biden it was
the interest and the additional well the
lack of revenue collected that was even
pushing a lot of deficit spending under
Biden and and now to have those
solidified they would have never been
solidified under the Democrats the the
budget would have been closer to
balanced it was coming closer to being
balanced under Obama and Biden than it
was under Trump who was massively
deficit spending more than Biden or I'm
sorry more than Obama at the end of his
term even though Trump came in under a
good economy. I just don't understand
how we ever look at them and go they're
worse because they want to fight for
SNAP and Medicaid when it's the
Republican budget that was so much more
dumbly done. That's just crazy to me.
>> Okay, fair. But I I will fair in that
you're a smart person. You're looking at
it. You have a frame of reference. You
sound like you're missing a key point
from where I'm sitting.
>> Okay.
>> And that key point is I don't have to
look at hypotheticals. I I just need to
ask we're in the situation that we're in
and how are they behaving? So, your
example is great in terms of I totally
get the emotion of like, hold on a
second now. The one thing I said I
wanted, I'm not even going to get and
we're driving somewhere else. What what
is happening? And so, I am still going
to get my thing and I don't care if it
costs more money. And so what I'm saying
is even if I can't get you to agree that
I think that that analogy is kind to the
point of being nonsensical, but even if
I can't get you to agree to that, that's
the surface. What I'm what I am
literally kept awake by is the fact that
the entire nation is arguing up here
what my wife and I call never talk about
the tea. So the biggest argument I've
ever been in with my wife was over a cup
of tea. And after two hours of screaming
at each other, almost ruining an entire
vacation, I was like, there's no way I'm
this mad about a cup of tea. So, what am
I actually mad about? Then I got into
the like building blocks of what was
actually going on. We started talking
about that, which had everything to do
with insecurities, and all of a sudden,
we were able to resolve the issue. What
I'm saying is all the stuff that
manifests up here at like we've got to
give this to that person, and I want my
Red Bull is everybody needs to get on
board with. It is a um the government
has a moral obligation to balance the
budget. So I have all of these
base assumptions in my brain that run
that paint my worldview. One of them is
when you look back in history every time
minus Japan every time a country has
spent more than 18 months at over 130%
debt to GDP they've gone into open
violence. So, revolution, civil war, or
just default, which leaves people
starving in the streets. So, it's
happened every time except once. Again,
Japan being the only exception.
>> And we're at 122%. And growing rapidly.
We add a trillion dollars to the budget.
So, you can look at a spreadsheet and it
really is it's it's somewhere between 7
and 10 years from now, barring some
miracle, we cross that 130% mark. And
given that we are already at each
other's throats, like this all breaks.
So I'm just like any step in that
direction and I'm just like this is
crazy.
>> Sure, I can kind of understand what
you're saying. So in my analogy, right?
Well, it's $3,000 is a lot for that
trip, but like $20, that's even more
money.
>> By the way, I'm screaming at why the
what are we how are we already
doing a $3,000 trip?
>> Sure. I understand. I guess my question
then is do you acknowledge or would you
say then that had Kla been elected if
there was a Democrat Congress we would
have been closer to a balanced budget
than we got under the one big beautiful
bill.
>> It is uh a hypothetical rerun that I
have a natural inclination to say no
history disagrees all the history points
walk you through the beats because dude
honestly I'll I'll give a 30-se
secondond pitch about why I don't care
Republican or Democrat.
>> Okay. Uh
I really believe this country is going
to default on its debt and that will end
America for a 100red years in terms of
anything that people think of as America
being important on the world stage,
having a stable economy, being a place
where people are safe, that goes away
for a hundred years. It's just the
normal cycle of this stuff. Even China
had their hundred years of humiliation.
Look at what happened to Argentina. Same
thing. It took a hundred years. They're
still not back yet. Maybe they'll make
it, maybe they won't. But it's like when
when a country defaults, it is so
catastrophic. It doesn't sound scary,
but it's like terrifying because you
become uninvestable. And so now the part
of debt that's useful goes away and you
can't raise it. And so your country just
gets stuck and it that is a nightmare
scenario the likes of which I really
don't want to live through. Uh and then
if it's some lesser version of that,
there's still going to be some untold
number of people that get murdered in
the streets. It just plays out over and
over and over.
>> I I don't disagree with a single thing
you've said so far.
>> Perfect. So now it's like, okay, when I
look at if if everything driving my
thinking is economic, I'm going to look
at the candidate that seems to have a
better grasp of economics. Okay?
>> And I don't expect you and I to agree on
this, but Kla Harris completely ruled
herself out when she started saying
words like what M Donnie is saying. He's
more crystallized. he's farther down the
road, but she was talking about the same
thing, price controls and things like
that. And for me, when somebody says
that, it's just a disqualifying
statement. Now,
>> what do you think? Cuz Trump has said so
many more things and more.
>> We're never going to agree on that.
>> Well, no, but there are some things that
you would just be objectively, factually
incorrect on. So, for instance, if
you're worried about socialism, how do
you feel about the fact that Trump now
the United States is getting shares, the
United States government is getting
shares in like Intel or US Steon Steel?
Like that's like a social that's like an
AOC Bernie Sanders wet dream. Oh, the
government has like shares, voting
shares or whatever.
>> Capital letters moronic.
>> Yeah. But a Democrat would have never
done that. That so this came from Trump,
right? And then when we look at things
in terms of like catastrophic impact on
the economy, nothing that has said and
Democrats say a lot of dumb things is
the equivalent to the tariff regime that
we have right now that is continuing to
our currency devalued 10% over the past
year. Um our trade relation
>> the tariff thing is very complicated
because you're going to you have to
devalue the dollar. There is no way out
of this without devaluing the dollar.
You have to generate more tax revenue.
Tariffs are a tax.
>> He look Trump is bordering on
indefensible. So you even what you just
said doesn't make sense because if
you're trying to generate more tax with
a tariff,
>> why can't you just raise income taxes?
>> Wouldn't that be so much easier? And it
wouldn't hurt our trade relations with
the rest of the world or because this
because bumping up your income tax by a
few points in every bracket is going to
raise you hundreds and hundreds of
billions of dollars. It's the easiest
way to raise a ton of money. But the
import tax is damaging. It's destroying
our relationship with so many other
countries around the world and it's
hurting our domestic economy and it's
having disproportionate impacts on the
people that probably need the money the
most.
>> I think this is going to have to play
out before we know if it's helping us on
an international stage or hurting us. I
honestly don't know.
>> Okay, we've got zero deals in however
many days. We said we would have 90
deals in 90 days. We have none so far.
>> Well, that's not true. We do have deals.
>> We don't trade deals. Real trade deals.
No, we've got some truth.
>> Define real.
>> A trade deal would be like a marketwide
deal that dictates different terms
across the different sectors of your
economy. Like these are usually hundreds
of pages long that it's not like we'll
tariff you 10% and you tariff us 10%.
Because there's a lot of there's like
markets are sophisticated things
depending on how you run it. Like let's
say that like like oh I buy you know
milk from you and I also sell milk to
you. And you're like okay cool. Um, and
in our economy, we also have a thing
where if you produce milk, you pay 0%
taxes. Well, that's not like a tariff,
but that's a pretty advantage
that you guys have. That's not really
fair. These are the types of minutia
that you get into when it comes to
actually writing a real trade deal. It's
not just saying like, oh, blanket
tariffs. We'll get back to the show in a
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the show. But are you saying that
leading into this that things were going
well? Yes, phenomenally.
>> Donald Trump is that up.
>> So, we've at least now identified the
base assumption that we do not share.
Okay.
>> So, I'm looking at the international
trade deals that we have and I'm like, I
cannot believe we have allowed this to
happen. We are now in Thusidity's trap.
We let China grow powerful because we
were idiots and this is a tale as old as
time. We could have could have and I'm
sure there was somebody that's been
screaming about it from day one
predicted that this is exactly what was
going to happen which we let happen.
Wait, what was the bad thing that was
going to happen?
>> That we have now completely gutted um
manufacturing out of America,
>> but the manufacturing is is the highest
point it's ever been. It was at Biden.
It was the highest point it's ever been.
We've we've exported a lot of low-level
manufacturing, but we don't have people
to manufacture everything. Like, China
is not trying to expand their low-level
manufacturing. China's trying to grow
into the manufacturing that we do.
>> Yeah. Let me give you an alternate
version of this is what I think actually
happened. China admits this is what
happened. The VCs are finally talking
about this is what happened. Uh, it's
the '8s and China is backwards. Um, Deng
Xiaoping comes into power, realizes Mao
was killing people on mass and is
basically like, "Thank God he's dead.
We're not going to repeat those
mistakes. We're actually going to let
people get rich, but we don't know how
to let people get rich." They ring ring
America, can you please teach us how to
be rich? We go over there. In fact, they
first it starts with a conversation, I
believe, with the Japanese. Japanese
give them indications about how they're
going to have to do this by
decentralizing banking. They contact
America. America goes over and basically
helps them get all of the uh capitalist
system up and running. How you need to
decentralize who gets loans. You need
thousands of banks, not a single bank.
Uh you need a VC environment. And so
literally, American VCs fly over there,
of course, selfishly thinking that
they're going to reap all these
benefits. They get all of these
companies to go over to begin teaching
them. Deng Xiaoing has an official
policy to b your time and never take the
lead. and he's like, "This is a part of
this long plan. We're eventually going
to take over, but first we've got to
like get all this information." And so
we realize, "Oh my god, we can get
everything cheap by sending our
manufacturing over there." But China's
playing a different game. And they're
like, "We're going to start with those
things, but we're going to get them to
send their best and their brightest.
Look at what they did with Tesla." And
they say, "Hey, uh, Elon, we're going to
let you build a Tesla factory over here.
Normally, we would force you to have 50
to 51% Chinese ownership. We're going to
let you keep the whole thing, but you're
going to teach our engineers. Tesla now
over whatever 10 years, 12 years that
they've been manufacturing in China is
now some tiny fraction of the EV market
when it used to be 100%. And they have
just learned everything they needed from
him and now have surpassed him, you
know, however much massively. And so
that's the game that they've been
running. And uh Tim Cook said, I don't
know, a couple months ago, he was like,
"I don't know what you guys think
manufacturing is in China, but these are
the best high-end manufacturers." If you
run the stats of America post World War
I, leading into World War II, we were
the dominant manufacturing power for an
industrial age economy. We have now, and
that's by the way why uh the probably
apocryphal quote that the Japanese
admiral said when he bombed Pearl
Harbor, I fear all we did was wake a
sleeping giant and filled him with a
terrible resolve. What he was referring
to is that America could just outproduce
everybody in terms of ships, tanks,
aircraft, everything. And so we just
turned all that machinery on to building
the war apparatus. Now flash forward,
we're headed into the same style
conflict with China, except China looks
like us in terms of all the meaningful
manufacturing like we did before World
War II. So now if we go into a head-on
collision with China, we will not be
able to come anywhere near their
production levels. So now it's like I
get it.
>> How would we ever expect a country of
330 million people to be able to
outproduce a country of what is China
1.7 billion? I don't know how many.
>> Of course. How? by keeping these things
yourself, making sure that you don't let
go of them, building the incentive
system to keep people focused on
manufacturing, high-end manufacturing
the same way that we're doing with AI
with massive investments.
>> But I'm saying, where are you going to
get, if you want us to continue the
high-end manufacturing we do now, what
are we taking from to start doing
low-end manufacturing again?
>> What do you mean from a budget
perspective?
>> No, from a human capital perspective,
our unemployment is like 4 and a half%.
Where are we getting all the people to
do the low-end manufacturing?
We have to move people from high
productivity jobs down to lower
productivity jobs. We're going to have
to give in some
>> reject that wholeheartedly. So right now
we have it's like 4% unemployment
technically 3.8 something like that. But
once you factor in all the people that
have just checked out of the job market
it's like 12%. So it's a massive number
that for some reason nobody talks about.
>> So the reason why people don't talk
about it is because we have there so
there's different ways to measure
unemployment. The most common way is
just called the unemployment number. It
doesn't include discouraged workers.
This is the U3 unemployment number.
You're talking about the U6. People like
to bring up the U6 when they say the U3
is fake. The reason why the U6
unemployment isn't the thing that
economists look at the most is because
there's a lot of reasons why people
might stop looking for work. They might
be in education. They might be totally
agree. But I would put forward the
biggest one right now, certainly the
most meaningful and important is that
there is a type of person for whom a
certain type of manufacturing job is the
jam and those have gone away. We've
shipped something like two million jobs
overseas in in that core type of
manufacturing job. And the stats anyway
show that that is the biggest reason
that your average worker has been unable
to up their wages. Um it hasn't been the
breaking of the unions. That's not
correlated in the private markets to
increase wages basically at all. And so
but if you have a bunch of jobs that
need a bunch of workers now all of a
sudden the workers have the power to
actually negotiate better salaries. Uh
now if we need to bring in labor like I
think the whole world the whole
developed world is about to be in a
really weird position where we just
don't have the birth rates and so we are
going to have to bring in immigrants to
fill these roles. So having a sensible
policy about how we fill in those gaps I
don't think would have been a problem at
all. I think we took a suicidal approach
to it, but there would have been a smart
approach to get people in. If there were
jobs that truly Americans, they had all
the manufacturing jobs they could eat,
then I think we'd be fine.
>> So then just as a so then your
assumptions are that one, if we were to
bring back a whole sector of
manufacturing, we wouldn't have to take
from anywhere because there's this
there's like a magical section of people
that would be able to work these jobs
that wouldn't
>> You say wouldn't have to take from
anyone. You mean people
>> as in you wouldn't have to move people
out of higher productivity jobs to lower
productivity jobs?
>> I think you're going to have to do high
to low. Certainly as the things change,
but you might have to as technology
advances, but you might have to import
people. I'm perfectly fine with that. So
numbers, so that's the first thing. And
the second thing is, so I'm just curious
how I don't know the population of
China. It's 1 something billion.
>> Call it 1.4.
>> Okay. How would you expect us to be able
to outmanufacture a country that's like
five times our population?
>> It comes down to where you're putting
your resources. So, China was way bigger
than us and we were still out producing
them because they didn't
>> have years of being supported by the
international banking community trying
to spin them up. They didn't have people
going over there and helping them
>> uh to do everything our way. We did not
see them as a competitor and so we
essentially traded cheap goods to build
our biggest competitor.
>> But eventually they're going to figure
it out, right? So
>> like how like how are you keep China
from like is the assumption that there's
a
>> number you can I think on a long enough
timeline you're going to find yourself
in that situation. I'm just saying don't
be in a situation where they are both
stronger than you
>> based on size and stronger than you
because you have outsourced your entire
way of life to make sure that those
prices come down. But then it feels to
me then like if we know that we can't
win on mass production like that that
our goal would be to produce to have
higher and higher productivity jobs.
American work is some of the most
productive in the world. Um where
economically productivity is measured
for how much a labor hour costs or in
one hour how much like stuff can you
produce basically right? So it feels
like the the goal then would be to move
to higher and higher productivity jobs.
So when we look at like what are the big
things that people talk about right now,
it's stuff like AI or stuff in computing
and these are the areas that America is
still the leader on.
>> Do you steer by efficiency? Like as you
try to map this stuff out in your head,
>> what do you mean efficiency?
>> Uh are you thinking along the lines of
it is an obvious north star to steer by
um whoever is better at this thing. So
Americans are better at getting um high
output per hour work. Therefore, we
should focus on that.
>> Oh, kind of. Well, the economic concept
you're talking about is called
comparative advantage, right? Yes. Um
the I'm just looking when I just I look
at productivity broadly because
productivity can tell you the amount
basically of like
>> But is that your north star just so we
don't talk past each other?
>> A bit a bit. Yeah. Because the more
product the more productive your labor
is, the more your workers are able to
produce for the world given the amount
of time.
>> I have a totally different northstar
which Yeah. What's that?
>> Explain. So my northstar is round it to
um national security and international
dominance.
>> Yeah. But national security is your most
productive stuff. Like what was one of
the big like one of the big reasons why
we won World War II was because we had
all of the best and brightest minds and
we were the first people in the e