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Language: en
So this is Senator Warren promoting and
endorsing Zoran Mamdani. He is a
infamous now socialist candidate in New
York City.
>> The issue is affordability. Do you know
how many working families are chased out
of New York City every day because they
can't afford housing? They can't afford
groceries. They can't afford child care
to live.
>> Nobody disagrees with that, Senator, but
raising taxes in order to do it.
>> Why is that the answer?
>> Oh dear. Are you worried that
billionaires are going to go hungry? No,
I'm worried that they're going to leave
and spend their money elsewhere.
>> You know, they've threatened to do that
over and over and over.
>> And they have. They've left.
>> She has no idea what actually happens in
reality, evidenced by history when you
start cranking up the taxes.
>> People in the chat saying, "Who cares if
billionaires want to stay? How many
billionaires are there compared to
normies?"
>> I love you guys, but that's full [ __ ]
It is a total misunderstanding of how
tax dollars are paid. So the reason that
you care about whether billionaires
leave or not is it will determine the
amount of tax dollars that you have to
spend in the state. The wealthy
basically pay all of the taxes full
stop. I don't there's like 136 that
number is directionally correct if not
literally correct. Uh billionaires in
New York if enough of them leave it will
have a substantive impact on the tax
revenue. Once you start getting into
what they call capital controls where
you tell the billionaires you can't
leave you are now an authoritarian
dictator. You're the bad guy. But let's
do that next step because I think what a
lot of people are saying is like, okay,
well, the billionaires can leave. That's
going to open up opportunities for us.
What would the city of New York lose?
How would they not benefit from people
fleeing? Give me the second.
>> If billionaires leave, what happens?
>> If Yeah. If billionaires,
>> you can't pay for things. You have to
start neglecting things. Let's look at
what happened to the Bronx. Like, when
people think of the Bronx is like, "Oh
my god, it's like this really hard
place." It did not have to be this
really hard place. It became this really
hard place because of rent controls. And
so they went in and they said to the
owners of those buildings, "You're not
going to be able to raise the rents."
And the building owners are like, "But
hold on a second. The plumber is not
going to suddenly charge me less because
rents are controlled. If I need to do
physical repairs, the contractors aren't
going to charge me less. The building
costs don't change, but now you're
telling me that I can't make enough
money to cover it." And so they start
not repairing things. So if you want to
watch New York fall into a state of
disrepair, they'll start cutting things
like police departments, fire
departments, social work. Like you just
start cutting all the things that cost
money. So you start looking at your P&L
as a city and you go, "What can we
afford? What can we not afford?" Unlike
the federal government which can just
print money adnauseium, the local
governments can't do that. Now they'll
appeal to the federal government for
sure, but then the money is still going
to be printed and sent to them. In the
world's financial center for you to not
be able to generate the tax revenue that
you need is literally ridiculous.
>> Billionaires leave. Where would they go
essentially? Cuz I remember when we had
>> they'll go to a red state, they'll go to
Florida, they'll go to Austin. it's
Miami, Tennessee, or Austin.
>> While we see capital flight happening,
we'll find the biggest impact to city
services and things like that. But a lot
of people are still kind of like, "Yeah,
it's cool. We'll be all right."
>> Are these New Yorkers saying, "Yeah,
it's cool. It'll be all right." Are
these people in Wisconsin who are like,
"Yeah, it'll be all right." When I look
at this, I really want people to
understand there there's cause and
effect in the economy. Taxes is a huge
part of this cause and effect. Balanced
budget, huge part of the cause and
effect. the reason you can't afford a
house, which is devastating,
devastating, devastating. If you can't
afford a house, you like the generic
you, if you can't afford a house, you
are in trouble. If you're the president,
if you're in Congress, you're in the
Senate, there should be a few like alarm
bells that you just put on your mirror
so that you see them every morning. And
it's like, can somebody working like the
median paying job, can they afford a
median house? And if the answer is no,
it's like alarm bell because that is the
only asset that people understand
intuitively. So, you know, okay, if if
I'm the senator or whatever and I'm
looking at that and I'm thinking, okay,
why is this an alarm bell? It's an alarm
bell because we we have modern monetary
theory. I won't even ask people to
abolish the Fed. We have modern monetary
theory. That means that we're in a high
inflation environment. People are people
want to think 2% it's no big deal. First
of all, it's not 2%. In the last 5 years
alone, it's been 25% at least. Some
people say the real number once you stop
messing with the CPI is closer to 100%.
But whatever it is, they're they're
taking all of the technological
deflation plus at least 2%. And so you
are losing money over time. Forgive me
for using these words, but smart money
understands, oh, I'm in uh an
inflationary environment. I have to be
in assets. Cool. So they just put their
money in assets. as we print money to do
deficit spending, then the asset prices
are going up and I'm stealing buying
power. So, you get this like double
whammy. Now, they may more or less
balance each other out, but given how
we're able to actually other factors
have led it so that wages are stagnant
to possibly trending down and asset
prices are going up, it's technically
that delta that puts them out of reach.
Anyway, this is where the complexities
cause people problems. You get a delta.
Yeah,
>> in an inflationary environment, you get
a delta between asset prices and how
much people are able to afford. Once you
break the only asset that people
understand intuitively, that means the
vast majority of people will not own any
assets, they will get eaten alive by
inflation. Think of owning assets as
owning a mosquito net. Wherever in the
world you find the most mosquitoes and
people dying of malaria, so it's like
cool, you know, I've got a mosquito net,
so I don't care. or maybe I've even had
my shot of quinine, so I'm not going to
get sick from malaria no matter what.
But all these other people, they are
going to get eaten alive. They are going
to get malaria. That is for sure. If you
are in that position, you have to have
that alarm on your mirror. So every day
you remind yourself in a modern monetary
setup, people must be able to afford a
home. You can have one or the other. You
cannot have both. You can't have a
modern monetary system and a place where
the medium income does not buy a median
home. you just you can't do it. People
shouldn't have so much money that them
leaving would destroy our economy. There
are people willing to make millions
instead of billions and billions. He's
already wrong. And this is where I'm
like, okay, we we really really really
have to understand the difference
between income and wealth. Known or
unknown to him, he has switched over
into wealth. When you talk about
billionaires, you're not talking about
income. You're talking about wealth.
when they transfer. Look, they can do
loans and stuff like that, but we've got
to separate that out. When you take
somebody like Elon Musk, who liquidated
a bunch of his stock, he was almost
certainly the largest taxpayer of all
time. He's paying his taxes, okay? What
they're bothered by is that these guys
on paper have this insane level of
wealth, but people confuse that for
income. And so all hell breaks loose.
Now, if people want to focus in on the
um delta between what an average worker
in a company makes and what the CEO
makes and that ratio, how it's gone from
like 20x to like 450x or whatever. Okay,
cool. We can talk about that. But that
has different causes. The reason that
these um prices are going absolutely
crazy is we have made this shift where
we've got the new railroads. Okay, the
new railroads are Facebook, Instagram,
uh X. It's in this modern era. Everybody
wants to know behavior. So, they need
that data or AI. They need that data.
Okay, that's made these companies
insanely valuable. It's the new oil.
It's crazy thing is Brian Johnson of all
people that Brian Johnson came on the
show nine years ago and said data is the
new oil. And I remember at the time
thinking, this guy's out of his mind.
That doesn't even make any sense. He was
right. So, you've got these companies,
they're worth a fortune. And if you look
at the stock market, you've got the S&P
493. I'm not kidding. It's doing like 2%
growth. That's a tragedy. A literal
national tragedy. And then you have the
MAG. Seven. Seven. Seven companies that
do all of the gains. Once you start
parsing all that out, then it's like,
okay, these guys invented oil,
railroads, whatever. So, you can't be
too mad. It now generates all this data
that's incredibly lucrative. Everybody
has a chance to buy into these stocks,
just most people don't. Now, it's like
those things are going to the moon
because they're valuable and because we
print money and that drives the value of
these assets up because they created the
company, they own the stock. It's all
mythical. It's not real yet. And so when
we look at the $452 billion, that's
their stock ownership. Go buy some of it
from them. Like if you believe in it, go
buy some. If people would separate out
the wealth versus the income, you have
access to the wealth. You choose not to
do anything or you do it poorly.
Unfortunately, a lot of people just
don't know how to invest. But you can.
And so the question is, are you
>> We talk about wealth and debt and money
printing as the biggest problem to the
middle class right now. We talk about to
get out of that situation, we need a
beautiful deleveraging. One of those
beautiful and on those four points of
beautiful deleveraging, we do have to
raise taxes. So what is that balance
between what Mandani is trying to do by
raising taxes in New York and Ray
Dallio's philosophy on the wealth redist
the wealth redistribution?
>> I'm going to talk as if Ray Dallio were
a millennial. Listen, bro.
people going to people and if you take
all of their [ __ ] they're going to stop
producing or they're going to leave. So
listen, we're going to have to tax them
more for sure, but if you're not
careful, they leave. Mom Donniey's like,
"That's my [ __ ] I'm going to take it."
As if they won't leave. It's crazy. When
Ray Dallio talks about a beautiful
deleveraging, he is screaming from the
rooftops. Each of these four levers is
dangerous. when you pull them, you must
be so careful. You do it a little bit
and you watch and see what happens. Then
you pull the next one and you watch. And
he was like, two of them are
deflationary and two of them are
inflationary. And you got to like huh uh
like balance them so that you can move
forward. If this was easy, everybody
would do it. It is extremely dangerous.
Most people that try beautifully
deleveraging like you end up breaking
the economy somewhere. And so you have
to be so so so thoughtful. What people
are missing is the psychological factor.
The elites are just as dumb and
emotionally steered as the rest of us.
Trigger them at your peril. So yeah, and
people don't like that. I get it. But
nonetheless, it is true.
>> So Manny is trying to grasp at
something. I remember you used to say
groping in the dark, trying to feel our
way through. So he knows that there's
something wrong with this system. We
need to figure this out. One of those
levers he is banging on. So maybe he's
just adjusting that lever a bit too
much. Here's how I see it. Mom Donnie
comes to me and he says, "Tom, my wife
and I were just really struggling in our
marriage right now. I cannot for the
life of me figure out what it is. We've
talked and I love this woman and so I
just want to put forward an idea. Let me
know what you think we should do." I'm
going to start choking her a little bit.
Like not a lot, but just like a little,
you know what I mean? Like if she gets
out of pocket, I'm just going to choke
the [ __ ] like a tiny bit. And I'm like,
"The [ __ ] are you talking about?" That
is like the worst possible thing that
you could do. I get that there's a
problem, but the solution you're
opposing proposing is madness. It's the
thing that won't work. It's not like one
of the things that won't work. It's the
[ __ ] thing. It's the thing that will
have her run for the [ __ ] door. I get
it. Relationship problems are real. We
have to solve them. But there are
physics to this stuff. And once you can
map out like the Just look backwards.
Look backwards in history. In the 1950s,
we had a top tax bracket in America of
90%. Okay, this is what everyone's
clamoring for. Tax the rich. As I tell
entrepreneurs in Impact Theory
University, sign up today. If you're
about to do something,
ask, has anybody ever done this well
before? Look backwards. What can you
learn? In the 50s, when we had the 90%
top tax bracket, we collected less money
per taxpayer.
less money per taxpayer than we do now.
It doesn't work.
So, I get that people don't like that.
But, nonetheless, that is true. When we
talk about Ray Dalio wanting to pull the
tax lever, what he's saying is you're
going to do this briefly. You're going
to do this recognizing if you do it too
much, people are going to flee.
>> And you're going to do it in concert
with the other things that you have to
do because when you pull that lever, the
economy begins to stall. So you have to
do other things that stimulate the
economy. And if you just tax the rich,
it stalls the economy. It does not do
the thing that you hope it will do.
>> People don't understand the wealth
versus income thing. They get stuck on
that.
>> We need to break down the wealth.
>> The wealth versus income.
>> Tom, your wealth versus income
explanation may be correct, but it comes
across as a terminology trick to the
average person.
>> Oh man, I'm so glad he said that. Thank
you. I thank you guys very much for
giving me the opportunity to clarify.
Think of it this way. Income is actual
money. Wealth is maybe money. Maybe
maybe it will have value. But we don't
know yet.
>> Why maybe?
>> Wealth is only potential. Wealth is I
own an asset that maybe I could sell for
this amount. And so people go if when
when they're clocking how much wealth
you have, they go, "If you could sell
this and sell it right now and the act
of selling all of it didn't actually
diminish the value of the thing, then it
would be worth this much." Okay, that's
a lot of ifs. When they sell that thing,
then they will pay taxes
>> to turn the potential into actual usable
dollars that you can spend.
The only thing you can do is take out a
loan or sell it. Now,
>> the loan is where the beef comes in.
>> That's the beef.
>> People Yes. And if you're going to have
beef with anything, have beef with the
loans. However,
since the vast majority of humanity is
going to be like, "But wait, I need to
be able to take a loan out against my
house. That's what a mortgage is." And
the bank goes, "Well, your house is
worth something. Your house is an asset.
Your house is Say it with me now.
Wealth. So you go, "Okay, I bought my
house, but I don't want to have to pay
full price for it." So the bank goes,
"Yeah, word. It's valuable. Let's go in
it together. We're going to buy this
thing. You're going to put a down
payment. So I know there's some
liquidity here in case I have to take
this thing from you that I know that I'm
going to get that value, but like it
does have value. So I'm going to let you
take a loan against it." So unless you
want to destroy the poor middle class
where the only asset that they
understand is a house by saying you can
no longer take a loan against an asset
you're in suicide territory. So you've
got to say okay this is the thing that
we do now because we are in uh an
inflationary environment that that thing
that magical thing of being able to take
the loan is modern monetary theory.
Okay? It's the magic. It's the reason
that modern monetary theory is a
trade-off and not just bad. As much as I
enjoy villainizing modern monetary
theory, look around you. This is the
world that it gives you. Not bad. Except
for we are inching towards the
guillotine. So, it's like it's a dance.
We want the benefits, but we don't want
to be at 122% of debt to GDP. That's
crazy. And that's just government debt.
When you look at corporate debt and
individual debt, oh my god, it gets
insane. Especially now with burritos on
layaway, right? It just literally is
madness. Okay. Uh, are people with me
yet? On an intellectual level, they may
still feel that there's something wrong
that I'm not explaining yet. Cool. But
are people with me on the wealth is
potential money, but income is actually
in my bank? They're with you on the
explanation. I don't think they're
understanding the risk involved. So, if
you can borrow against the wealth, it
doesn't make a difference. You're still
spending the money today. But then if
you borrow against the wealth and then
your assets go to zero because people
won't buy it. If it doesn't work out,
>> okay,
>> then you have to owe it. But that's like
a credit. It's like,
>> well, ask yourself this question. Why
did people commit suicide in 1929?
>> Because the stock market crashed. Why is
that a problem?
>> Because I'm overleveraged.
>> Correct. I'm not at zero. I'm at minus
some insane amount. Because I bought all
of this stuff on debt. And my assumption
was it was going to go up. So, I bought
it on debt. This is why people freak out
about easy money. Easy money means low
interest rates. If I can get money at 2%
and I know the stock market returns 5 to
7%, then I'm going to loan money all day
or I'm going to borrow money all day,
excuse me, and I'm going to put it into
the stock market and I'm going to
capture the delta. The bank gets there
two or three percent and I get the delta
between the 3% and the let's say it
makes 7% I get that 4%. I'm laughing all
day every day. Now that's available to
anybody that's able to I mean you I am
not telling you to do this. Trust me
when I say but you can get a Robin Hood
account and start trading on margin.
>> Wild because it's so dangerous but
nonetheless true. People like Michael
Sailor are going to tell you that there
are going to be times where there is a
bet. So, I don't know that he would use
the word guaranteed, but boy oh boy,
does he go hard in the paint where you
should, and he has said this, mortgage
your house and get Bitcoin. because
whatever it costs you, you were going to
make so much more on Bitcoin than you
would make on that house that like
you're just way better off gambling the
house against or gambling the money that
you have in the house against
>> the Bitcoin. The reason that I do not do
this, I owe exactly $0 and zero is
because it's a risk. And hey, if you've
got risk appetite, great, go for it. But
it is a risk. And the number of people
that get liquidated is terrifying. When
you hear about these kids are like 17,
they're in Wall Street bets. They trade
on margin and all of a sudden they're 17
and they owe $350,000.
That's how it happens. And they eat a
gun. I don't have that appetite for risk
and I got a lot of [ __ ] money. So,
uh, what people need to chill the [ __ ]
out. They need to understand some people
are going to play that game. I get it.
It's a game to be played and if you're
that savvy, go for it. But yikes, be
careful. putting it in plain terms. I
had a really like specific example of
this. Um, my mom is in the middle of
like a construction project. We finally
figured it out, but at the onset of it,
we needed additional money to like
leverage it. A friend of mine does
heliloc homes, home equity line of
credit. You can borrow against the
margin in your house because the house
was a construction loan. We couldn't get
um HELOC. He was like, "Well, if she has
a 401k, we can lend we can loan you up
to 90% of your 401k." Yeah.
>> So, if you have $100,000 in the bank,
they'll give you 90k upfront. you just
have to pay it back the entire 90K plus
I think it was like another six seven or
8% or something at that time. To Tom's
point, it's not like they're getting
this loan and they're just it's free
money and they're just walking away.
Elon Musk hypothetically is getting 90
up to 90% of the 26 billion in stock
that he just got, but he still has to
pay back all of that within a certain
calendar uh year plus
>> plus interest and things like that.
>> Honestly, I'd be shocked if he was
borrowing against his stuff at that rate
because he can raise capital so easily.
Just this idea of because I have this
wealth, I get free money. It's it's a
fallacy. It does not work like that. So
the mortgage people get obliterated all
the time. So this is people running into
the casino and rolling the dice. Do not
look at that as like this is how they
avoid taxes because yes, they can
gamble. It is a gamble. And so some
people win off of it. A lot of people
lose. Just think of it this way. The
house always wins. So be careful.