Latest / Words & Numbers / Episode 409: Buy, Borrow, Die

Transcript

Episode 409: Buy, Borrow, Die · Words & Numbers

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Hi, I'm James and I'm Anthony. And this is words and numbers
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brought to you by the good people at Khaki, the Center for
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American Culture and Ideas. Ant, what's new and exciting in
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your world this week? I ran across an article, I
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believe you saw it as well, that Google is falling as the
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preferred search engine. In fact, I think they're still
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above 85% worldwide for search, but they've fallen for the first
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time to below 50% for paid searches.
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What's eating their lunch is artificial intelligence, which
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is very interesting because I think Google in a way has itself
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to blame here. For years leading up to
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artificial intelligence, Google had arranged it so you could
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basically type a question into the Google search box, type it
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in English, it would read it, and then come back and give you
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all sorts of websites. But now, of course with AI you
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could, which I do this frequently.
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You type the question into AI, it doesn't give you a bunch of
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websites. It gives you the answer that
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you're looking for with a Bigfoot.
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Note that sometimes it's grossly.
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Wrong. Incredibly wrong.
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And look, this kind of rings true with me, right?
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Because I have been arguing with you about how useful AI is for
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some time, and the only use for it that I have found is as a
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search engine replacement. And it's actually a pretty good
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search engine replacement. The answers I get are more
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comprehensive and they strike more to the heart of the
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question I I'm asking right rather than what a standard
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search engine can typically do. Now if I'm looking for a bunch
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of links, I stick with the search engine.
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If I'm looking for a pretty brief but thorough answer to a
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very specific question, I head over to an AI application.
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A lot of other people are doing the same.
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And even there with the AI, you know, I'll ask it and it'll give
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me whatever the answer is. And if I want the links, I just
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tell it give me citations. Then it gives me a bunch of
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links. Now having said that, half of
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them give me a 404 error. There's nothing there.
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Right. And as usual, caveat emptor with
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whatever you get out of an AI. But you know, it was always
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caveat emptor with the search engine too, right?
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And you know, the big issue I have is whoever designed the
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thing has a lot to say about the answers I receive.
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Whatever their motivations are, be they commercial, political,
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ideological, philosophical, take your pick, whatever their
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motivations are, they're going to filter into the results.
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You've got to be mindful of that.
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And that's probably more easily apparent, more more obviously
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apparent, I should say, with economic things and with
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philosophical things. But the same problem exists with
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both. I've got a interesting thing
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that kind of caught me by surprise.
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It's by Gallup about euthanasia. What do you think?
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Well, let me ask you 2 questions.
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What is your view on euthanasia? Wow, that's a good question,
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James. I don't think I've ever thought
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really carefully about it. My knee jerk reaction is I think
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it should be left to the individual.
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Well, does that mean the individual can decide he wants
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it and the state should look the other way?
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Yes. Interesting.
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And what about when, as is in the case with certain European
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countries who have walked that road, when you get to something
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like the powers that be deciding that you would have decided for
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euthanasia if you were in full control of your faculties?
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Yeah, that's a big problem. The government should had
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absolutely no say. What?
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It shouldn't even have a whiff of a say on a topic like this.
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What do you think, in broad strokes, the American people
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think about euthanasia? What percentage do you think
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would be in favor of? It Oh well that's a good
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question. I bet you that it runs more.
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Is conservative the right word more conservative than abortion?
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When abortions like roughly plus or minus is 5050 I believe.
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I would not be surprised if there's 67% against euthanasia
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in the US. You're very, very close.
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Really, it's 71% in favor. Oh, in favor.
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In favor. Wow, did I get that?
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Wrong. There's a certain difference in
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how you phrase the question, but the answer seems to be 66 to
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71%. A lot different than what was it
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30 years ago. Kevorkian was Doctor Kevorkian
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was thrown in jail for assisted suicide.
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And we were all losing our minds over.
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It right, Yeah. Turns out Doctor Kevorkian, Dr.
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Death, as he was known at the time, he seems to be on the
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front edge of a a new cusp. I'm here to tell you, you can't
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find something that 71% of the American people are in favor of
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that doesn't sooner or later find its way codified into law,
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right? Start bracing yourselves,
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because the fight for assisted suicide is around the next bend,
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and by all early accounts, it's going to win easily.
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And then there's all kinds of problems that open up there.
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I ran across a story maybe a month ago of some European
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country that has assisted suicide.
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And they were setting up things so that you had a nice, you
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know, it was inviting. So you could come in, you sit
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down, someone would talk to you and listen to your stories,
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whatever it is, and all of this thing.
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And then they put you to death. If you have something like that
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in this country, we'll have it anywhere.
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What happens with people who are, I don't even want to say
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mentally ill people who are who are, and I don't even say
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depressed in a clinical sense. Somebody who's going through a
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rough time and you know, oh look, they've got this nice
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place. Someone will listen to me in
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this nice music and, you know, whatever it is.
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And it becomes, let me ask the in a question for him.
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Should it be that easy to escape your problems?
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And then there was the recent problem, I think it was in the
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Netherlands, where somebody went into the suicide tank where, you
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know, the the oxygen is, is slowly replaced with something
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that is not oxygen. It malfunctioned so they opened
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it and strangled him. Oh wow.
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Well, yeah, but look, he got what he wanted, right?
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And your your discomfort with that is telling.
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Oh yeah. He got what he wanted, but
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somehow you think he shouldn't have wanted that or he shouldn't
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have wanted it in that way or 100 different other ways that
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you could phrase that. These are the fights that we're
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going to start having. No, I think you're right.
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And I could see it going down the same kind of route that the
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abortion debate went down that you can get compelling question,
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excuse me, you can get compelling examples on both
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sides, but the compelling examples are really not where
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people get concerned. People get concerned in the
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middle cases like you just described.
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Look, if I give you a situation where somebody is living in pain
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and they're going to continue living in in exorbitant pain and
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there is no escape from this, should that person be allowed?
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Yeah, it's that person's call. But now you know the case that
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you bring up, that's an entirely different matter.
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I've always taken a common sense approach to this.
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Suicide is already very, very available.
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It's right if you need somebody to help you.
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Maybe you didn't want to do it badly enough, and I don't see a
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way around that simple common sense observation, but we're
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going to address this sooner or later.
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Now, moving from there to something we've been addressing
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in the here and now, let's talk for a moment about our gender
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foolishness. In the great state of what,
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aunt? Take a guess.
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Washington, CA. California is the correct
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answer. It's something that touches the
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Pacific. The Pacific Ocean, that's right.
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That's not Hawaii, Oregon or Washington.
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It's so it would be would be California.
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So I'm on the Attorney General Rob Banta's websites in
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California and he's offering something under the the heading
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ahead of the holiday season. Attorney General Bonta warns
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consumers of shopping scams and fraud.
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That sounds pretty great, doesn't it?
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OK, you don't want people getting screwed over around the
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holiday season. Probably even less than the
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usual times. Gift card draining, things like
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hidden fees, gender based price differences.
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Wait a second. What?
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You can pick on him for that if you want, but the next one Lack
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of a gender neutral products section.
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Lack of a gender neutral product section?
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That's right. So you want a razor that's
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neither pink nor blue? No, not exactly, because this is
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about children. Does your department store the
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Attorney General's begins have a gender neutral children's
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section? Because under California law, it
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must. And what goes in this gender
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neutral section I. Don't know a gender neutral fire
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trucks and Barbie dolls? I don't know.
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But you must have one. And here's where it gets fun.
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If you do not see an adequate gender neutral product section
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in a large retail department store in California that you
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believe is covered by this law, you may take pictures, document,
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and file a complaint with our office.
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The Attorney General of California is deputizing the
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entirety of the population of California to make sure that
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every large department store has a gender neutral product section
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for children that they might not have.
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This would indicate to me that the market doesn't demand one
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right? If the market if people, and
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that's what the market is, people.
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If people wanted this, it would already exist.
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When only some people want this, then they enlist the apparatus
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of the state to guarantee it. Which one are you more
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comfortable with? The market declaring what it
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wants or politicians telling you what the market must deliver.
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I'm still trying to puzzle out how this would work in practice.
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I'm picturing a store responding to this law by looking at its
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suite of toys and saying, OK, here are toys that we can all
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agree are toys that girls would want, and here are toys that we
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can all agree are toys that boys would want.
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And these other ones in the middle.
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That's what goes into general neutral.
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So in other words, it's not altering any of the products,
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it's just altering how they're arranged on the shelves.
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Oh, and you've got somebody in the back scratching their heads
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about what is a feminine toy versus a masculine toy.
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Seems to me you've achieved the exact opposite of what you
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wanted. Perhaps, but all California
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locations must maintain a gender neutral section where a
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reasonable selection of the childcare items and toys for
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children that they sell must be displayed, regardless of whether
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these products are traditionally marketed for girls or boys.
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So, all right, so we're going to take all of our toys.
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We're going to have a boy section where we have all the
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toys, a girl section, which is all the toys again, and the
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gender of neutral section, which is all the toys a third time.
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Just we're just going to duplicate everything three
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times. So we've in effect segregated
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our customers. I think that would be a very
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clever way to get around this law.
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Yeah, and it's not a matter of getting around.
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It is trying to figure out what the hell did they want us to do.
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I think what they really want you to do is complain and report
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the company to the Attorney General's office.
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That is the only part of the law that is clear.
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I think that's what they really want the most.
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What God? Once again, the great state of
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California coming in for the foolishness of the week.
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For One Stop shopping for all things James and Aunt, visit our
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website wordsandnumbers.org. We give a special shout out to
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our Patreon sponsors who help us keep the lights on.
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If you'd like to contribute, go to patreon.com/words and
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Numbers. This week I wanted to take some
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time to answer some listener questions.
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We've got several from the last couple of episodes that were
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actually pretty interesting. Can I go first because I got a
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listener? Question.
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Oh yeah, please do. I have a listener who writes.
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Why is Anthony always like that? You don't count as a listener,
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James. You're not allowed to send
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questions in. But I do listen, do you?
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Technically do you now do you? Really.
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Technically, I guess it would go to your definition of listening,
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James hears. So you're not going to take up
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that question? No, I'm not, Joel Fox writes.
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I heard about the concept of buy, borrow, die recently in a
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Vox video about how the rich payless in taxes.
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Specifically, the idea that somehow there's no capital gains
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tax triggered when you die and pass on your estate.
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This does strike me as odd, a possibly unfair loophole, but
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I'm curious as to whether there's another side to the
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story. And Joel has a second question,
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but let's hit this first one here, because I've heard this
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repeatedly. Here's what is true.
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You can purchase stock, and under current law you don't pay
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tax on gains until you sell it, which is the way it should be
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because you haven't gained anything.
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If the value of the stock goes up, you'd haven't realized that
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value until you sell it. So here you are.
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You bought some stock, and let's say the value goes up and up.
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If you sell it, you pay tax on the difference between what you
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bought it for and what you sold it for.
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So you bought it for 50 bucks. You sold it for 75.
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That's a $25 gain. You pay tax on the $25.
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That's the way it works. Now suppose you die before you
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sell the stock. And let's be clear, most people
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who own stock die before they sell the stock.
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Yeah, people who have a nest egg, generally speaking, are
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going to die, leaving something in the nest egg.
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You die, you haven't sold the stock.
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You pass the stock on to your heirs.
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And what happens is, let's say I bought the stock for 50 bucks,
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it rose to 75. I died.
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I left it to you, James. That'd be great.
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You inherit this one share of stock.
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I'm going to leave you it's worth $75.
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Now you don't have $75.00 cash. You've got a share of stock.
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It's worth $75. What happens is under the law.
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The law says this treats it as if you acquired the stock at a
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price of 75. So when you sell it, let's say
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you sell it at 80, as far as the tax man is concerned, you only
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owe tax on $5, the $80.00 you sold it for, minus the 75 that
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it was worth when you received it.
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The cost basis, right, It just becomes whatever it was the day
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you received the stock. Right.
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Yes. The thought behind this is a
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perfectly rational one. Why should I be on the hook for
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$30.00 worth of taxable income when I only made 5?
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Right. You could say that.
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No, James, you made 80. But let's be honest here.
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I got it. It was worth 75.
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Why should I pay tax on anything other than the growth from 75,
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right? And so there's a name for this,
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by the way, it's called stepped up basis.
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What just happened there? There's a couple of options
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here, right? We could charge me the full
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amount. We could look at the deceased
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and say, well, you have to liquidate all of your positions
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and then your beneficiaries can have the cash after we tax it,
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or you can do what we've done right.
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And what the law has decided to do is this stepped up basis, and
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it is a bonus that you're getting in some sense, right,
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because you sell the stock for $80.00 and you've now have
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$80.00 in your pocket, but you're only paying tax on five.
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But this is the way it's designed.
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But this leads into Joel's second question, Are there good
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reasons not to tax capital gains?
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Because there's one really good reason that in this instance,
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right, we want to encourage people to some degree to buy and
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hold stocks. People are going to buy and sell
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as they see fit, but there's a benefit to everybody when people
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buy and hold. Yeah, and I don't think people
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appreciate this when what they tend to see is only half of the
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transaction. They see the guy over here
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holding the stock and the value of the stock goes up.
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What they're missing is that this guy put his money into the
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market. Now somebody else is using this
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guy's money while the guy sits back here, not spending it,
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instead just sitting on the stock.
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I think that's right. We only see it as an investment
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once, but really it's an investment twice where the guy
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is investing his own money to make a profit, but he's
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investing in a company which then takes that money and uses
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it for its own purposes. And as companies grow and the
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American economy grows, even the global economy, if you want to
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take it all the way out, everybody wins.
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It's that rising tide that lifts all boats.
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So there's this question of, you know, should we have this
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stepped up basis that gives the heirs some tax benefit here?
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And as Joel asks, should we be taxing capital gains at a lower
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rate than regular income anyway, which is what we do?
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Maybe we should not be taxing capital gains.
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At all. Well, see, and that's where I
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want to go. What other people point to and
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say, well, here's a loophole in your capital gains taxes lower,
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or it's not there at all or whatever it is I say.
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The. Capital gain shouldn't be taxed
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at all, period. The fact that there's a tax at
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all on it is a bad thing. Yeah, it's a weight around the
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neck of the economy generally. Well, it is in.
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If you start to think about it in this way, you start to see
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the injustice of it. Let's suppose you come across
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$10,000 and you spend it on a lavish vacation.
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So you're gone for weeks and drinking and eating and all of
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this and 1st class tickets and all this business and you come
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home and that's it. You spent the $10,000.
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Alternatively, you could take this $10,000 and you can put it
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into savings. And in putting into savings,
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other people make use of it. You put it into the Bank of the
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bank loans it out for somebody who's going to build a house or
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take student loans, or you put into the stock market and the
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company uses it to expand its operations or conduct R&D or
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whatever it is. Why are we penalizing you in
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that second instance but not the first?
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Well you can make a pretty good case that I am penalized in the
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1st as well with all of the taxes that I pay on the
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vacation. Ah, OK.
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But watch this. It is true that you'll pay taxes
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on the vacation and sales tax on things you buy and all of that.
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But it's also true that when I finally sell my stock and I have
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cash in my pocket and I go and spend that, I'm going to pay all
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of those taxes that you just mentioned.
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That's right. Although sales taxes occur on
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both sides of the equation here, the thing that occurs on only
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one side of the equation is for the guy who says, OK, I'm going
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to do the prudent thing. I'm not going to blow this.
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I'm going to save it. That guy we're penalizing?
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You know, Aunt, a long time ago, back before you started calling
19:47
me an economist because I'm not an economist.
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Again, for all the people who listen.
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Listen, you are way more of an economist than people out there
19:55
that politicians are calling economist.
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I'm not an economist and I just play one on a podcast, but I
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think one of the very first economics lessons I ever
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learned, and it's probably been 20 years since I learned it, and
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I've never seen it not be true. If you want less of something,
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tax it. OK?
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Do you really want less investment?
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Because that's what you're going to get.
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If you tax it, you will get less of it, and you will get less of
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it every single time to the degree that you tax it.
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You want less investment? Tax it more.
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You want more investment? Tax it less.
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It's really just that simple. And if you want less investment,
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I don't know what planet you live on.
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Yeah, the investment is literally the economy putting
20:40
off consumption now in exchange for more consumption later.
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That's something we should be encouraging people to do.
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And it has a very deep reach into the economy.
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That's where jobs come from. Yes, yes.
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With everything else stripped away right when you take away
20:55
all the nonsense, where do jobs come from?
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Jobs come from. Investors jobs come from it.
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New products come from it. Better ways of doing things come
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from All this comes from investment.
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And to make matters worse, you'll get politicians, on the
21:07
one hand, taxing capital gains, savings, this sort of thing, and
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on the other, wringing their hands over the fact that
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Americans don't save enough and they have to rely so much on
21:19
Social Security. Well, there's a reason we're not
21:21
saving enough, because you're slapping a tax on our savings
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that doesn't apply to the people who just spend their money.
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I think people are finally waking up to the fact that, OK,
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I got a job, I made some money, it was taxed.
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I took that taxed money and I went out and bought stuff that
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was taxed and then I invested some and that was taxed and I
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got something from the investment and I spent it and it
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was taxed again. Yep, right.
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And if you want to take a big step back, and we've been saying
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this for years, if you want simplicity in a tax code,
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something everybody can look at and understand, you want a flat
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tax with nothing else that will tell you how much people are
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spending and what they're spending it on.
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Yeah. And that's a good point that I
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forgot to mention. And Joel touches it on it here
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when he talks about the heirs inheriting.
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You earn money, it's taxed when you earn it, you save it and
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interest, capital gains gets taxed again.
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You spend it, it gets taxed a third time.
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And if you die with some of it in the bank, you leave it to
22:26
your heirs, it gets taxed again through a death or estate tax.
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Well, in the death or estate tax, in fairness doesn't hit
22:34
everybody. No, and that's a great point.
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No, it doesn't. Now I think we've got a respite
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with a Trump administration. Harris administration would have
22:43
put the screws to this. Very, very likely.
22:45
But here's the thing. You are correct.
22:48
The death tax kicks in at about $11 million.
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I think that's the right number, Harris one, to knock it down to
22:56
like two or three or something. And you can look at that and
22:59
say, well, $11 million, that's a tremendous amount.
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Certainly it only applies to the very rich.
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Well, about that. Yeah, well there's 2 problems
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here. 1 is you can be a middle class business owner with a
23:16
middle class, probably upper middle class lifestyle and have
23:20
$11 million worth of assets in your business.
23:23
It's not $11 million cash. You've got a construction
23:26
company, right? You've got a building, you've
23:28
got those back end loaders and dump trucks.
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Let's make it worse, you've just described every family farm.
23:34
Yeah, family farm. Exactly.
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They're wealthy on paper, but they're actually middle class,
23:41
lower middle class and how they have to live.
23:43
Yeah, in fact, James, there's a good analogy to this.
23:45
Most people will understand if you've ever been in an accident
23:49
and the insurance company totals your.
23:51
Car. Yeah, exactly so.
23:54
Every single time the insurance company says, well, the blue
23:57
book value on your car is $3000 and you say, well this car was
24:02
worth far more to me than $3000 and insurance company says no,
24:05
no, the book value is 3000. That's what we're going to give
24:08
you. Well, when you're a family farm
24:10
and farmer and you die and you leave the farm to your children,
24:14
the IRS comes along and it says you've got 1000 acres of land.
24:19
The book value on that is $12 million.
24:22
The kids shake their head. They said there's no way we
24:24
can't sell this for $12 million. And the IRS says no, no, the
24:27
book value is $12 million. Therefore, we're going to tax
24:30
you as if you inherited $12 million cash.
24:34
And the net result almost every time is that they have to sell
24:38
the farm, break it up into pieces, and then we all lose our
24:42
minds because the family farms are going out of business.
24:45
The family farms, the small businesses all going out of
24:48
business in part because of this.
24:49
Now you can say, all right, but there aren't a lot of family
24:53
farms or a lot of small businesses that cross that
24:56
11,000,000. Not anymore.
24:58
Well, but here's the thing, and I think that's right.
25:01
There aren't a tremendous number that cross the 11,000,000,
25:04
$1,000,000 mark. But if I have a family business
25:09
and it's growing and I employ a bunch of people doing this thing
25:13
and I have the opportunity to grow it further to double the
25:17
number of people I'm employing, but in so doing, I would
25:21
increase the value of the business beyond the $11 million
25:25
mark. I've got an incentive now not to
25:28
do this. I have an incentive to keep my
25:31
company smaller so that it doesn't trigger the estate tax.
25:35
And if anything, you've got an incentive to scale back.
25:39
Yeah, yeah. Because you don't want to be
25:41
anywhere close to the trigger. Well, turns out that was a great
25:45
question. Really what you getting at by
25:48
asking it is how should we treat money?
25:52
How do we see it? All I would say is I think
25:55
always remember that the people who have earned it have a very
25:58
strong property rights interest in it.
26:01
And for a government to come in and say you owe us, XI think
26:06
they have to present a very compelling case as to why and
26:09
they rarely do. At the end of this conversation,
26:13
I actually feel much more sympathetic to the idea of a
26:18
consumption tax because. Here we.
26:20
Here we go again. Here we go again.
26:22
Consumption is very clean, right?
26:24
You buy something. I buy a car, I buy a loaf of
26:26
bread, whatever. There's a tax on it that's done.
26:29
I've consumed the thing taxing incomes more complicated because
26:33
yes, I can get income from wages, but I could also get
26:36
income, you know, from capital gains, from interest.
26:39
You want to tax the one thing, the income without taxing the
26:42
other thing, the interest to capital gains.
26:44
Oh, and you've got this problem of we want to tax the idle rich.
26:49
Well, hang on a second. The idle rich are not the people
26:52
who are out there busting their butts earning lots of money.
26:55
The idle rich are the people who have a bunch of money and are
26:57
living the high life, not contributing anything.
27:00
Well, a consumption tax will hit that second guy without hitting
27:04
the first one. An income tax is going to hit
27:06
the first guy. Like the guy across the street.
27:08
I came home last week and there was a Ferrari in the driveway.
27:12
A Ferrari, for crying out loud. I've owned houses that cost less
27:16
than that. But anyway, on this consumption
27:19
tax business, see how good friends like Rich Mendoza send
27:23
T-shirts. People like Casey Crow send
27:27
books, and Casey sent me a couple of books on the Fair tax
27:32
and I promised him I would read those.
27:34
We should probably have an episode on taxation.
27:38
I don't think we've done it. If we have it, we haven't done
27:40
it for a while. There are some ideas in the
27:43
water we should probably talk about.
27:44
A couple of people over the years have said things to me
27:47
about the Fair Tax and I don't know anything about it.
27:49
So maybe what we need to do is get somebody who is an expert to
27:52
come on and talk to us. Well, I got those books Casey
27:55
sent. I'll read them.
27:56
We'll. Be OK, you'll be the expert.
27:58
There are these things, they're called books.
27:59
They've got words inside of them.
28:02
You wrote one once, as I recall. Yeah, but I didn't read it.
28:06
But anyway, yeah, ain't that the truth.
28:09
Kind of like the podcasts I don't listen to.
28:11
Anyhow, I'm assuming there were more questions.
28:14
There are, but we've run low on time so I'll just hang on to
28:17
these for a future episode. All right.
28:20
Well, that was not exactly listener questions.
28:23
It was listener question. Listener question.
28:26
I don't know. We still got 2 minutes here and
28:28
do you have anything interesting to say?
28:30
Well, maybe we can do another one here.
28:31
Pick a short one. Yeah, those are the ones with
28:33
the fewest words. Question.
28:35
I was wondering if you'd be willing to provide some
28:38
perspective on the claim that the economy was doing well under
28:41
the Biden administration. Oh, this is an easy one.
28:45
The administration's numbers about real wage growth matching
28:48
inflation seemed genuine, yet polls showed that inflation was
28:52
people's primary concern. Yeah, I can say something to
28:55
that. Let me take the first swing at
28:57
this because it's real obvious the assertion is correct, right?
29:02
The Biden administration is not lying.
29:05
However, what they're not bothering to mention is that
29:08
what normal people think, and normal people saw years of
29:12
pretty bad inflation driving prices up considerably.
29:16
And then by the time inflation got under control, well, their
29:20
purchasing power never met it. Their purchasing power is now in
29:24
lock step with it, but they lost two years worth of purchasing
29:28
power here. If prices had gone down, we
29:32
wouldn't be having this conversation.
29:33
But prices didn't go down. We all live with the new reality
29:37
now. Yeah, I think you're absolutely
29:38
right. We had inflation come up and
29:40
then wages did come up, but they came up like 12 or 18 months
29:44
later. And so as of right now, wages
29:48
and prices are moving at the same rate.
29:51
And so you look at that and say, well, you know, inflation's 2%
29:54
and wages going up 2% were OK, But you're forgetting, as you
29:58
say, the 12 or 18 months that you've lost.
30:02
And the only way to get it back is to go through 12 or 18 months
30:05
where your wages are rising at 5% while inflation is 0.
30:11
Then at the end of that 12 or 18 months, then we'll be even.
30:14
There's some anecdotal data that wages are in fact starting to
30:18
eclipse inflation, but they're barely eclipsing inflation.
30:22
You're not getting that purchasing.
30:23
Power back? Yeah, they're not eclipsing
30:25
inflation nearly as much as inflation equipped wages back in
30:29
2022. So the Biden administration
30:32
telling the God's honest truth, They're just not telling enough
30:35
of it. Ain't that like a politician?
30:38
In defense of Biden, the thing you have to remember is the
30:42
economy is very much like a gargantuan ship.
30:46
Picture, an ocean liner that you've got to decide a couple of
30:50
hours ahead of time that you want to turn left or right.
30:53
You know, the thing's got a stopping distance of like 15
30:57
miles. So to the economy.
30:59
And so things that are going on in the economy today that are
31:02
going to cause, let's say, a recession or inflation, those
31:07
things aren't going to become manifested possibly until the
31:09
next guy is in office. Yeah.
31:12
And you know, if you want to take a shot at Trump, well,
31:16
what's going to happen if the tariffs get applied across the
31:19
board? We can already tell you prices
31:22
are going up on everything if we have universal tariffs.
31:27
Prices are going to go up. The economy is going to slow.
31:30
Now the question is how long does it take Trump to get this?
31:33
If it takes him two years, let's say that by the time these
31:37
effects start to manifest, you'll now have a Democrat in
31:41
office and people be blaming the Democrat for the high prices at
31:44
the slow economy when in fact it was Trump's tariffs.
31:47
And we've said this before many times, and I think it bears
31:49
repeating. Presidents don't have that much
31:52
control over an economy. They benefit from a good one.
31:56
They get slaughtered when it's a bad one.
31:59
But how much of it do they actually control?
32:01
And the answer is not much until you see something like tariffs.
32:06
If Trump can wander in and just throw his arms up and say we now
32:10
have tariffs, you're going to see massive increases in the
32:14
prices of everything. All right, so I have a political
32:17
question for you. I know that tax law has to come
32:20
through Congress. So raising income taxes, for
32:23
example, this is a congressional thing.
32:25
Yeah, the president can sign it or veto it, but it's a
32:27
congressional thing. Are tariffs different from that?
32:30
Does the president just have the ability to just declare a
32:32
tariff? Yeah, but comma colon dot dot
32:38
dot, that's another episode. OK, So stay tuned.
32:43
Maybe we'll get into that just before he takes office and crawl
32:46
into the various details of that sort of thing.
32:51
I sense it will take a while and it'll take me a minute to get up
32:54
to speed, frankly. Yeah, I think that would be a
32:56
good thing to discuss right about January 15th.
33:00
Yeah, somewhere around there. All right.
33:03
Well, that's all we've got for you today on words and numbers.
33:06
Should I go through the closing? We haven't done that in so long.
33:08
Go ahead, I just keep using the same one.
33:11
Should we have a different 1 so people can maybe say, well they
33:14
tried a little harder this week? We used to do a different one
33:17
every episode and I just got tired of that and just cut and
33:20
paste the same one. Well, that's all the time we've
33:23
got this week on words and numbers.
33:25
Be sure to join us next Wednesday at noon Eastern for
33:28
something about 10:30 at least as interesting as really, we've
33:32
changed the time. No, it's always been 1030. 1038
33:36
Q. See This is why I cut and paste
33:39
the other closing. Have a great weekend.
33:44
See you next week, James.